here. >> and governor kasich -- >> don't forget kasich. >> don't hold back. >> two weeks. >> i don't hold back. i think kasich's going to be a great president. and by the way, i don't want any job, nothing. >> tell us what you really think. don't sugar coat it. >> join us tomorrow, "squawk on the street" begins right now. good wednesday morning, welcome to "squawk on the street." the new york stock exchange, a study premarket to follow-up the best start to a month in three years as stocks have now narrowed their losses for the year to about 3%. super tuesday obviously a huge story as the front runners sprint ahead. europe is mixed, china 4% overnight. and back at home, 214 as oil inventories are on the way. super tuesday fallout, the bold

shots fired cross the bow by candidates last night. and where we go from here. charged with conspiracy, what the former head of chesapeake energy is facing. ted olson will join us about the company's next move. but it was a big win for front runners donald trump and hillary clinton on super tuesday. both winning in seven states. clinton showing her strength with minorities in the south and trump taking on states from massachusetts to the deep south. marco rubio landing his first win in minnesota. here are some highlights from last night. take a listen. >> instead of building walls, we're going to break down barriers and build -- [ applause ] build ladders of opportunity and empowerment.

>> i am a unifier, i'm going to go after one person, hillary clinton, on the assumption she's allowed to run which is a big assumption. i don't know that she's going to be allowed to run. >> take a look at the math, trump is about a quarter of the way to the delegates for the nomination. won a majority of the 15 contests so far. i see clearly pivoted to the general already last night, jim. >> look, as long as the other two guys stay and it's hard to see if he loses, one of them has to drop out. cruz or rubio. and if not, you're going to see what some people thought was the stageman like trump. other people say, what can i say? i mean he's a great uniter of the people who are angry. that's who he's uniting. but now, i hear, can you trump

my portfolio. how do i make money off of trump? i did not get that two weeks ago. now people want to see what is your favorite trump stock? and its become, and it's not like the joke. before it'd be like a cement company because of the wall. no, no, it's now like what may be, he's going to analyze what it is. there is a sense of let's build the trump portfolio and let's find out what is bad under trump, maybe it's the pharmaceutical companies. >> anything having to do with international trade would be at risk, right? >> let me give you one that's bad. starbucks. starbucks leading ambassador, leading ambassador of the united states, it's the non-ugly american. the book ugly american. we came there and doesn't matter what we did, we were ugly because we had our baggage. well, i have to tell you that if i were starbucks, and i were howard schulz, i'd be saying, i should have run for president for heaven's sake because i just

think starbucks is civil. it's a civil. >> so you believe the people will actually oversea's not go to starbucks in protest if he were to become president? >> i think it's going to be caught up in it. >> certainly among, on a list of company, he has specifically criticized, along with macy's and apple and kraft, ford, and others. >> well, i mean those, macy's, you know, it's a decision. macy's obviously doesn't need that. more worried about jc penny than they are about trump. i would be concerned that if your general electorate, which has a fabulous relation, honeywell -- ge, honeywell, they are doing well with china. if you've decided to take it to the chinese and not just the big that riff that was added last time for steel, but say hey listen, we're going to shut them down. i don't think they're going want to take prep or think about the

kimberly clark diapers. they make everything there too. >> i know. listen, there's no ground swell of support for mr. trump within the business community. i don't think it means a thing for those who are supporting him. >> right. >> i don't think they care in fact, it's probably seen as a positive that there aren't any, and there any, and people that have come out, meg whitman on sunday who are vehemently opposed to his candidacy. >> what's ironic, if you're an american worker, yes, said point-blank, but he's for -- he's got a very old line, lyndon johnson, democratic position, when it comes to the american worker. which is that these guys should take their jobs away. they're polluting and taking your jobs away. that would have been, i don't know, hew better humphrey would have said that. >> you're saying trump is bad for stocks. stop me short of that. >> he's bad for stock that are international. he ain't bad for kroger. i might want to go buy department store he likes.

you know, niemann marcus, i don't know where he gets his stuff, but i do think you have to understand that the companies are that representative of the united states could feel a backlash. especially companies like starbucks, which has worked so hard to be an international company, not an american company, i think you perceive this, in other words, i don't think hollywood is going to get boycotted, but if i were bob, i would not be contributing to trump's company, i've got shanghai disney opening up. >> does apple get hurt? which makes the bulk of its devices in china. >> apple has a lot of -- yes, i know. apple has a lot of stores that are visible, american stores overseas. look, is all this going to happen? does he soften his rhetoric? it may be so, but if i were one of the international companies, i don't need this headache, i have the strong dollar. now i have the president saying

things where maybe i've got to do -- cisco has a fabulous relationship with france. okay. rel done a fabulous partnership. does chuck have to go over there and say hey listen, the president, he's just the president. pay no attention to that man behind the curtain. he's the president of the united states. that's different. now, if i were them, i'd say hmm, you know, kind of in time. honeywell has 7% defense. i would want to be in the defense business. i may go into the dfls business. >> right. >> and by the way, does taser do better than smith and wesson? >> i don't know. >> i don't know. >> that's why you're here. >> it's like president bush, kinder, gentler weapon. >> i don't know. >> let's get to john harwood who manned the election desk all night and is looking at some of the internals this morning, hey john. >> i want top mention another company that trump has been ripping on the campaign trail,

and that's carrier for moving its manufacturing to mexico and said he would slap a big tariff on the units coming back to the united states. let's look ahead to the effort to stop trump. the effort, many in the business community are raising money to stop trump and many establishment republicans and as well as his rivals are trying to get together and figure out how to deny trump on the journey. here's the road forward. first of all, look at march 8th in in michigan, that's the next big state to vote. donald trump has got a 20-point lead in michigan, john kasich hopes to demonstrate midwestern progress and try to gain some momentum there, but he's got an uphill fight. then you go to ohio, which votes on march 15th, john case sick running closer behind donald trump. he's got a decent chance to compete with him there, but of course donald trump gained momentum last night. those polls could get more difficult for him. then you go to florida, marco

rubio is significantly behind. 20 points behind in the average. he has got to win that state to stay alive. they're going to be a lot of negative ads against donald trump in florida. and then finally, north carolina, that's another big state that votes on march the 15th, again, donald trump with a double digit lead. ted cruz hopes to break through there, ted cruz had three victories last night, that's promising for him at least to keep alive, but this is a difficult road for all of the non-trump candidates as well as those in business and elsewhere, rallying to try to stop him, guys. >> hey john, david mentioning meg whitman along with rickets and paul singer trying to lead an eigh anti-trump push. how serious is that to be taken? >> very seriously. all the money players who think conventionally, who share the assessment that jim was mentioning, that donald trump might be negative for american business, for the markets, the whole idea of trade conflict

with china, border wall with mexico, there's going to be a lot of money put in behind that effort. this is a last-ditch, and you combine that with sort of the conservative intellectuals who just like donald trump because he doesn't follow the conservative line on a lot of issues. you're going to have a major push. it's just that from all the evidence we've seen so far, donald trump has got more in support from rank and file republican voters than that money and opposition can overcome. >> certainly a look at the counties in georgia alone would explain that, john, quite a night. thank you very much, back at hq. >> technology, obviously we'll talk more about honeywell, there was someone, everything's filmed these days. when they announced that carrier plant to move to mexico, which is going to boost the technology, part of their 2017 film plan. television filmed on youtube. and you can see american workers losing their jobs in realtime to mexico. and i can tell you, from the companies that, you know, place where i have a house in mexico,

it is the state that has the most influx of german -- big gm plant, allison transmission. >> there is no doubt, this is an issue that is worth understanding, and debating, but of course you also need the other side. which is well, anybody who's buying products is benefitting perhaps from the lower labor cost. but, and you know, we're losing jobs, there is definitely something worth discussing here. the fear i think that's going to be some sort of a trade war. again, we're going way down the road here. >> but why shouldn't people worry? the plant that lives that is not far from me is $5 an hour, free health care, very interesting -- >> you're talking -- >> yes, the state, and union pacific train line. so what does it matter if it comes from the town that, what does it matter if it comes from there versus coming from detroit? they're pretty equal. union pacific does a good job in

both places. not a takeover candidate that i know of. >> and this is the difference between lyndon johnson's america and the one we live from now. you can talk one way in 1963 and '64, a little different now when labor is portable and when you have the labor forces available around the world to do jobs for a lot less. >> and the cheapest place on earth to lake this is mexico. the bmw plant next to me, and the mercedes, and the lexus plant is next to me, it's $5 an hour. $22 an hour here. health care, fabulous in mexico. education system in this area, fantastic. unemployment, 4%. i mean, i don't know. >> you're like a walking billboard for mexico. >> well, it's the great. i love the mexican. i love mexico. it's very easy to move there. there's a ppg plant right there and a har month plant, build a car, paint the car, put the system in, bingo, car.

>> you think there are a lot of japanese and germans when it was the labor situation was different? you get on the plane, man. deutsche, and i've got to get some japanese. much more difficult. >> trust me. it is. >> do you have any interest? >> no, not even a touch. >> ohio. >> my dad was stationed in japan. that was then. >> some in the red zone can speak fluent japanese. help break the code. >> he can? >> that was one of his abilities, yes. when we come back, one of the pioneers of the u.s. shale business, indicted for conspiracy with soil and gas leases. we'll talk about that. later on squawk alley ted olson will give us his opinion. look at the premarket as the s&p has moved 9% in less than a month. 165 points from 1810. we're back in just a minute. steve, other than making me move stuff,

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we saw that big rally yesterday, all the big industries closing more than 2%. closing at the highest levels in nearly two months. adp, 1214,000 in february, that beats 190 as we get ready for jobs friday. and legendary investor stanley

on squawk box earlier this morning talking about liquid i did turns in the markets. >> we've had a huge liquidity support for a number of years, it's dissipating because china was obviously buying a lot of western assets when the reserves were increasing. now they're decreasing. saudi arabia, they were buying a lot of assets here when, when it was over $100 a barrel. now they're selling. so i think it's fed stopped injecting, so i think it's just the natural outgrowth. the markets themselves, natural outgrowth, the cessation of liquidity. >> as for yesterday, jim, market really never looked back. >> no. i mean yesterday was really interesting because oil stayed up, it didn't finish at the close, the high, i want to highlight a company, two companies actually, workday, which was down, and then came up, workday dove tails with sales force when you get the cloud back after what happened

with linkedin. you saw fang go up, and then you saw facebook, amazon, netflix, solomon, hercules, mercury, right, suzanne, and you saw the clouds stocks go up and the others connected with apple, and then apple went up. i mean, charters calls me yesterday and says do you know that apple is positive. whatever, apple was also a leader and the nasdaq was the leader. and then under current or takeover again, this time, csx. >> yeah. >> they'll go anywhere looking for an opportunity. they're multiple was once higher as they were taking costs out and doing things to that. they've been aggressive.

>> i don't think it goes anywhere. >> approval from the stb. the only one that's grandfathered is kansas city southern. beneficial. >> it wouldn't be that. the base is 33%. that's extraordinary. switching in natural gas is amazing. yet, is it helping? look out, if you run a natural gas company, you're going to do an equity offer. >> see the weatherford deal? >> it was upsized, david, i was thinking that 100 million

shares. but, by the way, the marathon deal worked. the devin deal worked, the herself deal worked. the new field expiration deal worked. >> it is the banks in '09. but if you're a banker, you're asking if you're rating, say why don't you do a deal? and they seem to be immune to one price. he was a $20 stock. >> notice the underwriters, they are all the banks that they owe the money too. if you're one of the these banks, make it up somehow, nice underwriting spread. >> as long as oil goes up or stays up, then you're going to see fewer ultra petroleums, which are energy 21s and more mare thanes. >> we count down to the opening bell. look at the premarket. more squawk on the street from the nyse is straight ahead. opportunities aren't always obvious.

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let's get to a mad dash. where are we headed? >> sometimes the facts get in the way of a good story. the good story here is bernstein says the agricultural cycle has bottomed. they're talking about monsanto, the big fertilizer companies, but they're talking about the seed companies saying this is the time you list. at the same time, when you think of seeds, you think about mon,

monsanto, they produced an ugly number. way worse than i thought. herbicide issues. they're going to miss big. the question is do you go in and buy farm equipment and buy seed, or do you -- what do you do with the chemical, telling people the numbers can go higher and dupont is certain. do you decide it's an outlier or it's worth a ton? >> right. well of course monsanto tried and failed for a merger. and goes and sells out to the chinese. >> chinese. >> so there is consolidation taking place, not to mention, dupont and dow. where the background to the merger camera out and monsanto was one of the companies mentioned. >> there's an undercard. sky every doctor who comes on my show, when is the anti-monsanto faction going to play a role? it is not. it's the feed the world place. it is, you know, the protests in

this country, about genetically -- it has nothing to do with that, it's herbicide pricing. so don't read in, wait a second, the millennials have finally gotten to monsanto. they listen to the neil young album that is all about why he hates monsanto. no, it is herbicide. and i think that monsanto should be bought on weakness, but my daughter will kill me, let's say if you want to buy it, go ahead. >> herbicide. herbicide. >> not to be herbalife. >> right. >> it's a silent h, david. silent h. >> we've got the opening bell just a few minutes away here on "squawk in the street."

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you're watching cnbc "squawk on the street," the opening bell in 90 seconds. big day on the heels of super tuesday. nice beat from adp, oil of course in the news. slew of annual meetings, including honeywell, which is a

firmed q 1 and the year, and jim has spoken, you're going to hear more of that tonight on mad money. let's take a quick listen to that. >> you might imagine for me this is an interesting dynamic during this process when they're approaching us, none of these things are a big deal and you trust not a big deal, customers should not a big deal. and then all of the sudden when the approach goes the other way, it's like whoa. >> dave was can daddy. we spent a long time on it. in tv time, light years, seven, some eight minutes. >> on honeywell's attempt to buy it. >> what he was saying is he was on fine. they were pushing it they approached him at a meeting, and it was greg hayes that did it. >> we've reported all this. >> but what i thought was interesting was, it was about to get ugly. that what happened is it wasn't

just that, you know, what thaifr saying no, but they were saying no in a way that meant if you keep bothering us, this is not going to be good for either company. so it was just, it wasn't irresponsible as you said when they were going. now, as i said look. so much bigger. and i said, yeah, right or wrong. >> i think you're right. i think it was going down an uglier path. >> yeah, it was. >> i don't think either guy wanted that. and cody brings it up. it wasn't like cote said let me talk about the brand new thermostat or engine. talk about the thing that would have saved you when the pipe burst. no, it was about how the plane itself, if you looked at it there's really -- kristene barney, not a lot of linkage. it would have been absolutely fine and talking about how the ge deal wasn't blocked by the

eu, it would be fine. and that the customers would be fine. >> they've got to move on now though, jim. >> oh, are they ever moving on. >> how about 11. >> and revisit this one day. unable to perform. >> right. >> but for now they're moving on. there was no path for them anyway to replace on the board or apply the pressure or get a proxy on the part of shareholde shareholde shareholders. they're moving on. >> he said look 104, it's not going to go there. just not going to do that. so you definitely got to sense that it is dead as a door nail, and if you bring it up, you're bringing it up historically. might be irresponsible to bring it up because it ain't going to happen to, quote -- >> as we heard someone here at this desk say. >> david cote quoting our show. that was an interview, this is mr. ace, are still really fun. >> united technology is still 95 bucks a share. and that's people who believe. i think the core is. responding, it's not that the fine.

the stocks should not be where it is. now it should be here next year. the magic hasn't been worked yet. the magic is about to be worked. ing and i think that mr. hayes is doing a lot of offshoring, but he's got the right products. one of the things that cote said that the miles flown, hours flown continue to get better. i didn't get great comfort about boeing. >> no? >> no. i think that it's the aerospace industry. i didn't get great comfort about boeing. stock that you should sell if you pay close is go go. because now, i know go go's got a lot of deals with airlines, but his thing, he's got a system that allows you to have netflix. and at lightning speed on a plane. and if i were go go, i would be shaking. now he did have this device before, but now it's key. put it the into every plane. whoever doesn't have a contract is going to go with this product because why do i say this? because i couldn't watch the super bowl on the way back from

san francisco because they had go go on my plane. david cote said that will not happen again next year. but of course the eagles going to be in the super bowl, i won't need to be on a plane. >> sam bradford. >> hof brady. maybe. maybe. >> more broadly, jim, the the two-year is the that the highest since january 14th. you've been looking for the economy to prove it to you -- >> right. >> is it starting to? >> well, i mean we've seen -- i go back to ford yesterday, the construction numbers that came out yesterday, the manufacturing numbers that came out yesterday, the paychecks number that came out yesterday. the automatic data number, these are numbers that would make, i think a guy, a very considered guy like dudley, why do i say considerate, he agrees with me. that's the lit mist test. maybe things are awry. also maybe the foremost thinker on the fed. why do i say that? same reason. sop they're a little more nervous because the data may not be that good on friday.

but there were some good data. >> there was, and in a way we've already had a tightening. i mean when you hear miller talking about, for example, capital being pulled out. >> right. >> that is in fact a titan when you have the fed no longer in qe, but going the other way. that is the titan. and when you can't borrow as much as you could in the high yield marker, because the banks -- that's a tightening. it's happening. >> no, it is. and money is harder to find, i talked to you about that the with dave cote. good rating, but the money is harder to find. >> right. >> but he was going to borrow a lot of, about 25, 30 million for that deal, and there was some question that hayes had not to come back to it again on what the overall rating would be of a combined company if they were to borrow that much. >> david, you're a banker. i'm going to be up front, david, i am a leading independent oil and gas company, and iktd produce 80,000 barrels a day and i would like to have $2 billion loan because i'm short on cash flow. can i have that? >> no. >> but i've ban good customer --

>> i'm sorry. >> aye been your customer -- >> actually, we're pulling all your lines. we've reassessed what you're gotten around. >> go over 100 million shares in the stock market? >> i think you better sell equity if you can. by the way, i need to be your underwriter. i wouldn't expect anybody else to be your underwriter and i'm going to take a nice little fee for that. >> and my stock when it's over? >> that conversation is happening in 30 different firms. okay. that's not a play act. that's literally what is happening at probably 30 different -- everybody other than kpon who says they have enough money to be able to raise it. >> $40 million bonds will help. >> the only difference is that david did not use any of the curse words that would typically be used by the banker because their stock is down because of it. you cleaned it up. >> i did. let's keep things nice. >> and you had a queens accent, not a houston accent. >> there's no queens accent, is it? not unless i want there to be. >> anyway, that conversation --

i want people at home to understand that when you do see 150, 45 million shares of marathon, that was not because they said, this is a great level. how about devin when they did the report say, we don't need to raise any money, then boom, hate it raise money. and that has to do with the fact that some of these banks that we see in trade are down so badly because they're on the hook. now every deal worked, but at the same time, no one wants to issue equity down here, but they have to. >> marathon hanging in there today. along were ross stores, 66 cents is a beat. 50% hike. >> it was of a fabulous day. why? because the problem with the department stores are, mana from heaven. the department stores have too much inventory, they go to ross, ross marks it up, fantastic, still cheaper than department stores. their business was extraordinary, at one point, an analyst said remember the days when we used to look with a stance on those offprice. now we like them. some of the foremost retailers

are telling me if you want to know what's wrong with the nordstrom, macy, sachs, they give you the outlet, and it cheapens their brand. and i have to tell you how i feel. when i shop at rack, i feel like it's better than nordstrom. jay crew outlet where i get my boxers, probably little tmi there, you know, maybe, maybe. >> how about anf. 18 month high this morning, first positive in three years. >> they're back. they have management there. which was quite different from what they had for a long time. >> that's always helpful. >> right. >> and you know, there's some things that are happening here. coach is coming back, abercrombie is coming back. these are -- i think coors, michael kors is coming back. these matter. these matter. accessories, handbags are coming back. shoes, never lost their luster, okay. shoes and handbags, of actual apparel totally lost its luster

which is why they had it to sell. ross stores, emphasizing home goods, tjx, home goods is good. they're spending on the home, on the feet, handbag and not spending anything else. >> right. worth mentioning, valley farm pseudocams which has been an interesting performer. >> yeah. >> during the course of this week, down sharply. of course a couple of days ago. up this morning, it seems reinstated ceo michael pierson making calls late dwroed a handful of analysises, sort of talking about some things we mentioned yesterday morning here, chstz hey, i just got back, i need to look at the budget, i need to look through things. we weren't ready to have a conference call or a meeting in terms of future yet because i need to review things. and that does seem to at least given those analysts had notes out saying similar things. seems to have done positive for the if rt stock. trading below $70 a share.

lose first time likes of has been horrible. >> down 20 for the year. >> down 20 for the year after a down 21 year last year, i believe, for that fund. >> performance. >> suboptimal. >> i would say that those who buy valiant, i want them is to understand again, when you have a revenue recognition problem, and you claim that it's all done and you're fine, that is not comfort because it's the sec, and the sec does not issue a release saying you know what, we're giving value to congressional metal of account. sop don't believe a company when they tell you you're fine. because there's nothing new with the company. the fcc is not saying to valiant, we looked it over, you guys are all systems go. that does not happen. but the way that they're giving you comfort makes people feel that that's the case. and i don't like that. >> quickly from the fcc to the doj, we mentioned mcclendon ooited for conspiracy to rig the bids of the oil and gas leases. he has a statement.

charge that's been filed against me today is wrong. anyone who knows me, my business record and the industry in which i've worked for 35 years knows that i could not be guilty of violating any anti-trust laws. >> sherman antitrust, work with my lawyer friends, sherman a. trust is real. when you go sherman a. trust, the government is trying to put you in jail. it is not like one of those things where your bank, you know, lost 19 billion and you have to write a check. this is jail. it's jail. let's not mistaken anything. this is not a slap. terminate trust, they put people in jail. they haven't put people in jail for a long time. mcclendon, obviously until proven guilty. it's not because i'm from federal, incana agreed with the government early on last year to say hey listen, maybe we were involve e ed in this big rids. who he did impartner with,

innocent until proven guilty, mcclendon. did he make a deal with the government? that's what we to want know. aubrey's innocent until proven guilty, but did kind of get there first so to speak. and the tapes don't read that good. and remember, the government, if they have incana, it's kind of like, all right, they have a guy in the other room is saying that you bid rigged. incana did not say hey listen, we ought to bid rig with ourselves. sherman h. is a very long time since the government's pursued. highway construction sherman a. trust, put people pop in jail recently. just understand, this is not the usual run-of-the-mill. >> taking it from all sides. of course he's still dealing with issues of midamerican energy, the company he started after leaving chesapeake, raised bells of dollars, many a billions to go after various fracking assets.

and that has not worked out particularly well. >> no. >> in this environment. >> the wine collection's good, but the thunder, thunder, oklahoma thund per. >> all right. >> another sports stadium with troubles today along with sports authority. we'll get to that in label the. >> look, aubrey, i e-mailed him, i'd love for you to come on, straighten out. but incana did say that they were, you know, hey, wow, and yeah, let's get to mary. >> hey there carl, we have off the lows of the session. coming into today's session, they were expecting a bit of a pullback following yesterday's big rally that pushed the dow out of correction territory. one of the reasons as was mentioned, the s&p 500 is up almost 9% over the last three weeks again. due for a pullback. of course one of the reasons we're seeing the markets

pullback today is the price of oil, of course there's been a very tight correlation between the equity market's performance and oil. right now oil is a little bit lower, following those big builds in inventories reported by the api after the market closed yesterday. of course we get the department of energy's read on inventories later this morning. we'll see whether or not it confirms the report from yesterday. crude, bhal lower, has moved off the worst levels of the morning and trading above the level. we're also watching yield. it continues to climb, given a lift this morning by the strojer than expected report on jobs from adp. of course, this comes on the back of strong day yesterday. it was one of the big reasons we saw a rally in the financials because of course they ben for a minute from the steepening yield. we'll see whether or not this continues to benefit him as well today. it is expected, but it also reflects that maybe some people think the worst is booibd us. maybe the economy isn't as quite as sluggish as we thought. and another sign that might confirm that is the pullback in

the vix. that dropped below the 200 day moving average. while it is higher today. s it it certainly has come off its recent highs. we want to check on the commodities market, once again has been mentioned, crude is under pressure, so too is natural gas. gold is higher, and also copper continues to gain, its been up since the beginning of the week. and lastly, energy continues to be a focus, exxonmobile saying they are cutting their cap x 25% this year. it's off three quarters of a point. weatherford is among the many energy companies as david and jim were mentioning earlier, that comes to the public market raising money through equity seams with an equity sale of its own. ross, wee 20u67 odden that. -- we touched on that already. nevertheless, its stock is up in monsanto. among other things the stronger dollar and pricing pressures. shares down 5%. the dow is up 32 points, dave,

back to you. >> yeah. herbicide, thank you. let's now head to the bond pits. join rick santelli, good morning, rick. >> good morning, david. you know, let's start out looking at a four year charter adp. yet it beat today, there's several things about all the jobs numbers we get that's so much different than it used to be. the variance for example. we don't have those outlier numbers as often as we used to. there's a lot of compression going on. but, exhibit one, look at the last four years of adp. it's pretty much been yes, it oscillates a bit, but for last four years, it's kind of the same as you see on that pattern. the point of this is is that the dynamics of jobs, whether you believe them represented by the data or just rhyming with it, you can't argue that it hasn't changed much really since 2012, but, what really seems to be going on is how the fed will use that in its decisions going forward. because the equity markets have

made a really nice comeback, and that was on the backs of fed. as the data starts to firm up a little bit, maybe that's going to change. it's kind of this e pulling cycle of central banking. so, let's look at year to dates all the major fixed income markets in the equities, and let's see how similar these patterns are. two year, what'd you'd really to want notice is how comeback is. when you get to fives, especially, you can see much more dramatic moves, even though the pat certain roughly the same. the fives dropped aggressively and they came back the most aggressively. if you look at tens, very similar. s&p 500, here's the love affair. now that rates have moved up and the data improved, it seems like we have a down day developing, what does that mean? doc, same thing, and when we look at the dollar index, there's a lot of push and pull regarding the catcher rate, but it has improved marketedly year to date. so in the end, we to want see if the strength today in adp fits

in with friday's bls report, why? because most likely, as what changing fed perception miekt change the charts of those equity markets. back to you. >> thank you very much. rick santelli. coming up, more coverage on yesterday's super tuesday showdown. the dow down 36 points, but being led by the bank as the yields are higher. we're back in a minute.

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in just two days, it's jobs day friday. this month's prize is a pretty nice cnbc canvas tote bag signed by the entire squawk on the street gang. wall street estimating payrolls around 200 k. which is a bit higher than earlier in the week. you'll have until 8:29 eastern to tweet us your predictions. use the hashtag nail the number. >> this is nice. >> this is the best one. i hate to write my name on this. it's gorgeous. >> it's different. >> i got to get one much these. the wife will be so crazy that i claim that i got it for her. but it's just someone giving it

to me. don't worry about it. >> we know who's guilty. >> high quality. >> i can say i bought it at the nbc store. what does she know? what a sport. >> adp came in a touch heavy at 214. the estimate was 190. we'll see if that means anything for friday's number. we'll get stock trading with jim as the dow's down 48 points, don't go away. [beekeeper] from bees to business expenses,

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>> it's a health and wellness play. it remains a strong theme. they bought a huge amount of stock back at 500. chipotle is winning. remember, it's still fattening. when you go there with me, you don't eat meat or chicken. just the salad. that stupid cleanse, i ended that cleanse, i put it right back on. every bit of it. cleanse was a nonsense, that was wrong. and all that kale juice. >> not try it again. >> don't you dare.

biggest joke in history. >> i cleanse with cook kiss. >> because i put five back on. >> end of day cleanse. >> five pounds back on. >> i like to eat as many cook kiss as possible. >> and i think that's good for you. it's working out well. >> we already know what's on there tonight because you gave us a taste. this could really help my post cleanse, i have equity on. pancakes, they're in my postcleanse versus ginger smoothies. you know what's in those? things like beets, it's not food. >> who took that leave of absence, never coming back. kind of weird, right? >> but i do think, remember, i got k.j. there. kevin johnson, technology company. and k.j. was at very big

telecommunications company. you know, kind of moved on from there. >> amazing. >> juniper -- >> basketball player was incredible too. >> k.j. was -- that's why we call him k.j., basketball player. but hey steve bachmanner is a basketball player. anybody can be a basketball player. >> k.j. has a three-pointer to beat. better than sasha. >> we'll see you tonight, jim. mad money, 6:00 p.m. eastern. when we come back, charles, the former iif chief with his take on the possibility of a brexit and the dow losing steam now, down 75, don't go away.

good wednesday morning, welcome back to "squawk on the street." at the new york stock exchange. giving a little back after yesterday's big rally to start the month, dow's down about a third of a percent, despite some decent data out of adp, all important oil inventories are coming up in half hour. >> here's our road map. trump and clinton winning big on super tuesday. what this means for the market

and your money. >> apple versus the fbi director comey admitting the fbi made miss tacks. how much damage could a brexit do to the global economy with we'll have more on leaving the european. we start with big wins for donald trump and hillary clinton, both winning seven super tuesday states, and now turning their attention to the general election. let's take a listen to some the of the highlights. >> instead of building walls, we're going to break down barriers and build -- [ applause ] -- build ladders of opportunity and empowerment. so every american can live up to his or her potential. >> i am a unifier. once we get all of this finished, i'm going to go after one person, and that's hillary clinton. on the assumption she's allowed to run, which is a big assumption. i don't know that she's going to be allowed to run.

>> so they're clearly treating themselves as front runners. joining us now is these two. chris, a few weeks ago, you came on the show and you predicted marco rubio would be the gop nominee, and president of the united states after last night, have you changed your mind? >> what can i say? may ya co. pa, barring, really two options here, donald trump is the nominee by mid-march, or there's a potential for sort of this brokered convention in july, but even in this scenario, i'm not sure trump does not become the eventual nominee. after last night, there are really two options and it seems highly probable that trump is the next nominee. >> a trump win was priced in in terms of super tuesday, should investors be worried at all about a trump presidency or a

clinton presidency? what would it take to destabilize the markets? >> so on the trump side, a few weeks ago, i was a little bit more worried about a trump presidency. a trump election. that was before his comments over the weekend in which he came to an answer about david duke and the klan. i think he gave hillary clinton talking points and an ability to energize the base of the democratic party in a way that she never could have done without those comments. he gained a stature for the front runner for the general. i think the risk of a trump presidency is less than 50/50. clinton side, if i could look at that for a second. i think the market isn't too worried about that right now because they're also pricing in gridlock. they think maybe the senate flips, but they're pretty convinced that the house stays republican. they have to be careful. i think the risk of a clinton win is that republicans go into

meltdown. chris mentioned a contested convention, if it goes that route and it gets really ugly, it could fracture a party that's already fractured. i mean, there's a question about the republican party staying together in the way, the coalition staying together from the 1980s and '90s, and then if the house flips, then you have a repeat of 2009, 2010, with a democratic president and a unified democratic congress. and i don't think the markets have priced that in yet. >> brian, markets trying to price in policy risk for both of democrats and the republicans in terms of sectors. there's a narrative building that hillary would hurt health care, narrative today that perhaps trump would be difficult on large cap international focus companies, are you starting to think about that? >> i am. i mean, i think the real risk with trump, there is a health care risk because of his comments on drug prices, although his math doesn't work. that's a separate subject, but i also look at his trade rhetoric

which is highly protectionist and threatens to tear apart the global economic system. and i start looking at consumer in retail because it is a threat to the supply chain for global trade. and i think that's the biggest risk from a trump presidency. >> chris, you guys have been talking a lot of big institutional investors about this election, what are their fears, scenarios, and how are they playing at three sectors. >> well it's really a bit of a binary call with trump. with president trump in theory you have senate majority leader mitch mcconnell and speaker paul ryan and a republican supreme court. so you could actually paint a pretty bullish scenario around tax reform, around dodd frank reform, et cetera. the flip side of that with president trump, the problem with the president trump is just the sheer unpredictability and volatility that would come with it. with a president clinton, you're still in all likelihood going to have that policy put in the form

of the republican house with paul ryan. so you're probably back to what brian was talking about with governing by crisis and more of the fiscal clips. but it's -- there's a pretty wide pendulum between the two. and look, the election's not for 250 days, so there's, there's a lot left to play out. >> brian, just on the point that a trump presidency will be unpredictable. if you're looking at what might happen. they're a very divided council, on the one hand you have a former dean of the yale school of management saying look, business needs to come forward, make its case and try and shore that he tracks to the middle, at the same time, you have bill mcgern, the former speech writer say look, personality driven politicians fail in government because they're not able to take on entrenched interests, entrenched interests are effective in what they are. where would you cite on that, on

the effectiveness of a trump presidency? >> i think on the latter because he doesn't have, he doesn't have personal relations. pez an eighth grade level of understanding of basic civics. so, i think in order to be effective, you have to understand how the government works and how congress and the presidency interact with each other. i don't think he has that. and so, i think he is setting up to be a failure. so for all this talk of this desire to shake things up, you know, i'm sympathetic to that. go ahead, simon, i'm sorry. >> that's a hugely volatile situation. >> absolutely. >> if off president whose tost tost roan filled as this who is failing or not failing in an investment where i think you said the gop can actually split -- >> uh-huh. >> that isn't the sort of security or predictability that a market would want, is it? >> no. i think it's highly volatile, and if you want to make a market play on this on the plus side,

maybe it's the exchanges who are going to see volumes go through the roof. with that volatility. i mean, maybe that's a ploy here, an indirect one, by a ploy nonetheless. but you know, i think politically, you're going to see a very unusual election. kind of like the 1990s when edwin edwards ran in governor in louisiana and david duke was the opponent. republicans couldn't support that, and they rallied to ade edward on the slogan, vote for the crook. it's important. you can see the party's going of going in nontraditional directions and the challenge for the markets is, how do you gain that? it goes outside of all the known rules. how do you build an algorithm to kind of predict what the response of the market will be response be to policies and politics. i think it's very difficult, and very, very dangerous. >> especially wli so many of the predictions having been proven wrong already. just final question, chris. carl mentioned health care and

aerospace. i'm curious about the financial sector. we know banks gets bashed all over the campaign trail. do we know what trump's ideas are about rolling back dodd frank or this idea of breaking up big banks? do you know what his positions are on financials? >> i mean, we don't. the thing with trump is with the exception of building the wall, that's sort of the only position that he has, you know, that he's doubled down on. i think what you're going to see with trump, if he ins, again, a lot of, you know, paul ryan and mitch mcconnell coming to the floor. but keep in mind, i mean, big banks bashing big banks is great politics across the board. so, with dodd frank, certainly some relief, no question, but the big banks remain in the cross hairs of both parties and in this race to the bottom, with trump and clinton, i mean you have probably two of the most polarizing candidates in recent history just wailing on each

other. and banks, probably, for the next 250 days. >> yep. and china and the fed and a lot of other things that the markets care about. we'll leave it there for now, thank you. meanwhile, exxon has said it'll slash cap ex 25% this year. analysis day taking place here. and morgan brennan was there all morning with the latest, hey morg. >> hey carl, exxon speaking with analysts down want hall federal here and in a meeting that's expected to go for a few more hours. now the energy giant giving more color on the plans to cut cap x by 25% to $23 billion this year. that'll mainly come from upstream operations, oil and gas production, as more projects come online. another decrease is also expected in 2017 in part from the downstream chemical operations, and ceo rex emphasizing the benefits of an integrative reduction and

defining model whether commodity downturns like this. he expects 4 to 4.2 million oil equivalent barrels through the day. about flat up slightly from 2015 levels. cash flow, however, is expected to grow over that period. and not just on the back of crude oil prices, but thanks to operational efficiencies as well, reserve replacement, which has been a focus of the street, saying at the current rate, exxon has reserved life of 16 years that exxon has the cash to continue making investments and return value of shareholders, it'll continue to grow the dividends and recently tapered share buyback program remains quote flexible and will be evaluated on a quarterly basis. the last thing i'll mention, he also touched on asset management saying, any acquisitions the company chooses to pursue will have to compete with the existing portfolio, back over to you. >> the price of a dividend, morgan, thank you very much. morgan brennan with the latest from exxon. up next on the program, stocks see nearly 4% gains since the beginning of february. can the upward momentum continue

i did dellties president will be here tale telling us what she's telling clients when "squawk on the street" comes right back. blan

woman: is that a newspaper? man: yes. woman: it's quaint. man: did you read about this latest cyber attack? woman: yeah, i read it on my watch. man: funny. woman: they took out the whole network. man: they had to hand out pens and paper. woman: yeah. man: could it happen to us? woman: no. we're okay. man: we are? woman: yeah, we brought in some new guys. man: what do they know that we don't? woman: that you can't run a country

with pens and paper. it's not just security. it's defense. bae systems. blan. delta airlines are falling 2%, the air carrier says it's passenger unit revenue, a metric of sales fell by 5.5% in february while the percentage of seats filled, something called low factor declined to around 79

prnt 7%. it was 80.3% before, now despite the declines, booking trends into the peek vacation season still strong and corporate demand remain solid, but of course, keep in mind, u.s. carriers expected benefit from low fuel prices, still increasing sales pressure because of that strong dollar in part, so again, simon, the travel business appears robust in vacations but we'll see what happens. back to you. >> ticket prices are down. now back 8% in a little over two weeks. at least of course because the economic data continues to dheer investors and you saw that today with just adp. joining us now is kathy murphy, president of the personal investment at fidelity. it says here your division has

$1.8 trillion under managements. it's that big. >> yes. >> okay. so obviously -- >> millions of investors. >> you're moving right at the top of the industry then, talking to the employers, talking to those that are running those funds. what view are they taking at the moment of the market and where we're going to go from here? >> so in terms on the 401 k side, plan sponsor, employers want to the offer a wide range of investments, clearly, most of their investors in a 401k situation are saving for the long-term. so, trying not to get too involved day-to-day in the marketplace when you're saving for retirement. on the other side of my business where we have millions of individual investors, we've got a very strong active investor, active trader base, they are very involved day-to-day in looking at stocks, et cetera, and this year, to date, we've had 30% more buys and sells, i think the active trader part of our customer base is seeing this largely as an opportunity. >> so how would you respond to

that as such a big business. how do you then project how we're going to handle things three, five years down the line? what changes? >> so again we, in terms of reaching our entire customer base, we to want make sure for those active traders that they've got all the tools, the research, the capabilities, to assess on their own whether they want to get in the market, when they want to get out, and so we put a lot of emphasis on research, et cetera, for those investors, we've got millions of them that really are just saving for retirement. they don't want to be that active in the marketplace. retarmt planning is really important. and so in light of this market volatility, we've had a 25% increase over the last year in people contacting us either calling us or using our tools to make sure the retirement planning is in order in this volatile market. >> there's so much noise out there. i mean pros who have been following the markets forever say you can ignore the elections, it'll always work out. trade individual stocks, the federal reserve and all the central bajs around the world, but how much concern are you

really sensing among your clients about these issues? >> you know, we have not heard a lot from our investor, either those that come into our investor centers across the country or those that do most of their trading online and in calling us. i think there's, they are probably waiting to see, have this sort out a bit and get closer to the actual election before they pay too much attention to it. >> whoubt the fed? >> that obviously is much more timely issue. and so, again, for the more active investor base, they absolutely are looking at that in terms of what to do with their trading. again, in terms of this volatile market, we've had an 11 times increase in our equity flow, 27 times nnkz increase in our fixed income flows in the first two month was this year. >> how much of a premium is being placed on cash. having a large allocation of cash in your account? >> well over the course of the last several years, we've seen a big increase in cash, again, for the largely for those folks that

are more long-term investors, trying to figure out when to, when to get in the market, how long to stay in, for the more active investor, they've actually taken cash out in order to get more buying opportunity. >> i mean, for many people who are, who have their employer provided funds or retirement plans that you're involved in, there is a big flaw in what is offer at the moment. and that's the target date funds. >> yes. >> you will say look, as owe get closer, this is a set percentage to have in bonds, set percentage you have in stocks. i think it's like a blunt instrument. i don't know with people would follow that and increasing, there was a study out yesterday that suggested two-thirds of people are actually now moving away from that. they're taking their money out, close to retirement, often times when they shouldn't do that. and i wondered if the target date funds are on the their way out in many senses. >> you know, i don't think they are. so when you think about most people in a 401 k plan, they are not actively following the stock market. the biggest issue is ier in that

where people don't investor or don't know the difference between saving a and investing. >> pot toint i'm making, we could debate there's a huge bubble, but as people are coming closer to retirement, you're pushing people into treasuries, into european bonds that could implode. in terms of the customer base that looks at target date funds, on their own, they wouldn't know what to do. they need professional help. in terms of managing their money. which is relatively cheap. they can also get a managed account at the workplace from various investment firms, but waun way or the other, they're looking to something who has more investment than they do. on their own, they don't trust themselves. >> the proliferation of et ifs over the last two years i'm sure is popular with some of your client base. there are people who are concerned about the market mechanism there, particularly

daily liquidity. dislocations in the market that we've seen. still haven't been fully explained. do you have any concern in terms of proliferation of these products? >> we want to make a wide variety of etfs available to the marketplace where we have had the most concern is on leverage dfs, in terms of liquidity issues that happened last summer, et cetera, i think it's good that the regulators are looking at that, but we personally don't have a position on it at this point. >> we could talk for another half an hour, but unfortunately the clock beats u. >> come back to talk about why there aren't more women in your industry. >> i definitely to want talk about that. >> kathy murphy from fidelity investments. >> the encryption war rages on. the fbi director admitting that they made mistakes at the beginning of the investigation. we'll have more on that. dow is down 30 points.

james comey facing a tough crowd in congress on the ongoing dispute with apple. joining us with is john fort,

trying to wrap up what was said yesterday, john. >> yeah carl, the hearing was extraordinary because of the tough droud fbi director james comey did face at the house judiciary committee meeting yesterday. it was interesting, seemed he didn't expect it for it to be as tough as it was. he went through a number of the different points. he said if apple were to help the fbi in this case to crack this iphone, they'd be able to open the phone in 26 minutes if they disabled the pass code security features and allow the fbi to do this brute force attack. comey also admitted that the fbi botched the initial password reset apple had said, i'll we need you to do is connect this to a known wi-fi network, then presumably, the phone would attempt to sync with the cloud and apple would be able to pull down the icloud information. instead the fbi reset the password and derailed that entire process. it was also plenty of talk about

the all press sen that the fbi hopes to use in this case. koem i will said, if it gets the judgment that it wants in this case, of course, it would use all ritz to access other phones. than kind of nixes the just this one phone, just this one time argument. it was a across the aisle, both republicans and democrats questioning the fbi's digital demands, suggesting as we've heard on squawk alley yesterday that perhaps the fbi has overstepped it its authority in several cases already. and of course, apple chimed in, the general of council, saying that the fbi really is is the con skrepted labor in this case. it's also a violation, he argued, the apple's first amendment right to free speech since in essence the fbi wants to change the code in this case and made that argument in a line of questioning. that was posed by new york democrat jared naddler. also congress pressed bruce,

pressed apple to propose its own encryption rules. it was repped jim, a republican from wisconsin who said, your position, since you don't have anything positive, is to leave us to our own devices. and i can guarantee, you're not going to like the result. raising a possibility that apple could win this battle versus the fbi and unlocking this particular phone. but lose the war, if congress ends up drafting rules on encryption that apple and the rest of the tech industry don't like. >> can they, can they outlaw encryption? can they say you can't create al device that's so encrypted you can't break in? >> or increase the level of protection that they are allowed to build into phones. this argument came up in the hearing yesterday, they doesn't stop overseas firms from building strong encryption into their apps and devices anyway. so in effect, u.s. citizens exposed -- >> and terrorists are going to flock to those that are well encrypted, the messaging

services around the world as you see. we had a former deputy ahead of the fbi saying they are already encrypted. this is about consumer stuff, isn't it? >> that the argument that's out there. it's interesting that at least from the congressional standpoint, apple appears to have a lot of sympathy. not necessarily from the presidential candidates, at least on the gop side, but the tide's shifting quite a bit here as people get more information about how digital security differs from securing perhaps the lock on your front door. >> hasn't affected the stock price, which is back above 100 thanks to the rise in technology shares we saw yesterday. just got a stat that usually when that happens, it actually falls. a week later. >> yeah, sarah, if you look at oomz's position right now, the stock price is largely dependent on the iphones fortunes. the iphone is particularly mature in the u.s., north america, they're looking to china for growth, increasing, even looking to india for growth. that's a couple steps removed from this issue here in the u.s., though apple would argue

if u.s. hands down the ruling on encryption that apple doesn't like, other governments are going to look to take advantage. >> and that would be a threat to business. john, thank you. john fort with the latest on apple. straight ahead, clinton and trump winning big on super tuesday. cruz taking texas. the one and only larry will be joining us here at post nine. that's a treat, for his reaction right've the break.

welcome back. i'm jackie deangelis reporting from the department of energy

out with its weakly petroleum status report. we got a building crude inventory, 10.4 million barrels. this is even over what we saw from the api last night. this is a massive build when it does comele to crude. we were trading flat, now down under $34 a barrel. gasoline actually a draw there of 1.5 million barrels. what i want to see digging into this report is what happened to u.s. production on a weekly basis. sop far, we've seen five straight weeks of slight decline. so starting to see a little bit of a transforming here. also want to the see what happened in kaushing, how big that build was there and what's happening in the refinery run rate. now remember, in march here, we're going to see these build slowly come down as we head into the april. that's the start of the summer drive lg season. there is some support for oil prices, but again this number, big, 10.4 million barrels. melissa lee, over to you with the business news update. here's what's happening at this the hour, powerful shall ally earthquake hit off the

coast of indonesia. 7.8. it was centered under the ocean at a depth of 15 miles. initially issued a tsunami warning but lifted soon after. astronaut scott kelly and russian cosmonaut returning back to earth after a year in space. the extended stay was part of an test. anthem of the seas is back in port this morning. it's the second time in less man a month. the voyage has been cut short. this time an outbreak of no ro virus and severe weather forced the shift to return. small dog named fido meeting robodog named spot. despite being a third of the size. fido tries to get the want to be dog to back off. and that's your cnbc news update that the hour. i wonder how your dough would react. >> inch we're all going to be confused by that.

thanks so much. with big wins on super tuesday, on the republican side, with 595 delegates at stake, trump racked up seven wins. highlighting the broad appeal for his anti-establishment movement. his rivals now have just two weeks to stop him in the winner take all races of florida and ohio on march 15th. last night, trump was not letting up, continuing his attacks on rivals and gearing up for a general fight against hillary clinton. he did take time to praise one of cnbc's on, take a listen. >> we're going to lower taxes. i have a plan that larry kud low and so many others think is the best plan they've seen. we're going to lower taxes substantially for the middle class, the middle class has been forgotten in our country. >> joining us here at post nine, the aforementioned senior contributor, larry kudlow and you have said you like the tax plan. >> i have from day one because a, as you've heard me a million

times, best thing we can do for economic growth in jobs in this country is slash the corporate tax. b, he's got 15% rate, which i love. china's 25, europe's 25. full cash expensing, and easy repatriation. that would be the single most powerful economic growth tool. he nailed it. by the way, jeb bush, before he dropped out had a very good one. donald's was slightly better. i have talked to him about it the in interviews and so forth. i'm not part of his inner circle, but yes, that's a key part of his platform. and, we could talk seem more about this, i hope, he was totally on message. first time in three weeks, yoif had this tenth grade rank out party between these candidates. it's nuts. it's unseemly. and all the sudden, trump snapped into his message web and i think it really helped. >> to want endorse him right here on our air? >> look, i don't think it's my role or anybody's role to endorse. i mean, i got to interview these

people and hopefully continue to do so. we'll probably producer ben thomas and i probably spend some time in florida. we were up. iowa and new hampshire. so no, i don't think that would be appropriate, but, when a candidate comes out with a good policy, all right. the world according to kudlow i think it has to be praised. >> is it funded? so he's going to cut taxes. he's going to spend more on defense, more on cyber security, he's going to build a wall, someone may fund it, someone may not fund it. the question is is this an argument for ballooning the deficit? how does he pay for the things that he's going to do? because in a supply side sense, what you're saying is great, and around the world would be cheering, great for the u.s. economy, but where does the money come from. >> actually, a good person would agree with my tax cut plan by the way. look, simon, having been in this estimating business for so many years, going back to reagan's first term, don't rely on that stuff. we don't know. they don't know.

they do the best job they can. my argument about the corporate tax is within five years or so, it will fully pay for itself. fully. now, that doesn't answer all your other questions, and we've got entitlements to deal with, trump however, and i know he has not been specific, trump however is a very hard fisted, businessman. he is not a guy that's going to sit around and tolerate excesses and waste. so we'll wait, i think it's early for him to put out specifics on spending cuts, i believe you will see him, the toughest, anti-spender in years and years. it's the make-up of the men. hillary, sanders, they want to g give you everything. trump will not. trump will try to make smart adjustments. the biggest challenge of our time, seriously, the biggest challenge of our time, 1.7% economic growth in the last 15

years, under democratic and republican administrations and congresses, all right, bipartisan, for the prior 50 years, it was 3.5%. we've got to get back to 3.5%, so that the middle income and the lower middle income can get their first raise since 2000. and that's the backbone of the trump campaign. >> is that going to come from putting taxes on chinese goods and calling thenl a currency manipulator and starting a trade war? >> okay. the answer is no. in my opinion. donald and i have talked abouted this. we have interviewed about it in new hampshire. let me just say i think that position needs work. i think the trick here, in all seriousness, i'm a free trader, i don't like tariffs. chinese lies, cheats, steals, they do a lot of bad things. they're making $650 billion deal

with iran. okay. now, the question is, how to get at those sins without doing us more harm? that's the trick. and i don't think that paradigm has successfully been worked out yet. and more work will be necessary. >> you know, i think you said one of the most important things of the week in advance of super tuesday on monday, you came on the show and you said, it's a pipe dream. this establishment of the gop can reign in the situation and every day, every front page, virtually every front page has something about the republican party seeking to reign in donald trump. the argument that you're making very powerfully and in contrast to everyone else is that isn't going to be effective. >> look, yes. right. >> so where does that take us if he were to win as the republican party front chair? >> if he goes to the convention, if the requisite amount of delegates, he cannot be stopped, and he won't be stopped. they're going to try to stop him

before the convention. they will fail. and as i said several times to you and others this week, mitt romney is a fine human being. fine person, like him a lot. politically, he's a munich. carl rove, friend of mine, politically, it's a yuk uniic. they don't possibly stop this process. they are out of touch with the middle class revolution that is rebelling against the establishment, including the republican establishment, and i have a suggestion, real simple. to governor romney, again, who i love, guy's terrific, you want to spend $100 million, go after hillary clinton who's going to be the party's nominee. it ain't going to be easy. that's where you put your money. don't worry about donald trump. he's going to help the gop. look at -- look at the registration, they're already bringing out huge numbers. >> on that one last point, yesterday or a few days ago, you said the david duke thing would fade, does that not hand the

democrats an ability to build enthusiasm? to narrow that enthusiasm gap? >> carl, they're going to try like hell to make a mountain out of a mole hill. that's the way i look at it. i've known the guy a long time. i'm not in his inner circle. he is not a racist. he said he disavowed duke last week, tweeted it, said it in speeches, almost 20 years ago when they were looking at the reform party -- >> yep. >> and he said david duke's in this coalition, i'm out of here. why he didn't get specific on sunday, i don't know. i honestly don't know. might have been tired. i don't know. all i can say is, that is not going to be the prevailing issue in this campaign. the issue in this campaign is going to be economic growth and wages for the middle class, number one, and number two, national security is not going to be about some whacked out extremist, racist hater like david duke.

donald trump has a whole history of opposing that kind of thing. so, if the democrats to want go down that road, fine, they're going to lose a lot of ground. >> larry, good to get your take on this today. important day. >> you guys have been great. appreciate it very much. >> larry kudlow. still ahead, the ceo of box will join "squawk alley live." you guessed it, why he's defending apple in the encryption battle. we're back after a quick break. [bassist] two late nights in tucson.

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today on "trading nation," we're looking at the etf that doubled in value until year. find out on our website. more "squawk on the street" coming up.

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the street," s&p's down eight points right now. financial standing out as the sector right now. you can see they're the only one in the green, clinging on to small gains. today's leaders include residential, also key corps citizens financial, and also mnt bang up by 1%. recent strength in the financial sector overall, remember it's still the worst performer in the s&p 500 year to date, down more than 8%. so financials, again, carrying on some of yesterday's gains simon, although they are small today. back over to you. >> and big rounding on european financials. we'll do that in 45 minutes partly because of walking back potentially on negative interest rates. with the dow down 81, let's go over to chicago and the santelli exchange. >> thank you simon. i'd like to welcome my special guest, peter, peter, thanks for taking the time. >> thanks. >> all right. you know as i look at job growth, it isn't terrific, but it's solid. and yes, we have our outlier

months where we're under 200, but we have outlier months above 200. adp, not bad, better than expected. peter, let me ask you a question before we get into it, why do we pay so much attention to the jobs numbers? >> well, the employment picture is hugely important, just because of you need a job to get a paycheck. you need income to spend on your life necessary distance and december krigs their items where goods need to be produced to supply that. so it's obviously part of the big chain. the question is, is -- >> so it's the correlation, we look at jobs, historically when jobs go up, everything floats higher. is that not correct? >> well yeah. it's part of the chain. but sometimes it's, it's production and income growth that then leads to further job growth and then so forth. sop it's one part of the chain. it's not necessarily the beginning. it's towards the end of the chain, but a key part of the chain. >> all right. now last i looked, we're down about 12 million jobs from the

participation rate at the beginning of the decade if we'd have held it constant. i guess my first point to hit you with is with all that job growth, where is the real economic growth? why should i pay attention every month if you end up like 2015 with 1.89% gdp? >> the missing link is the lack of productivity. productivity is actually zero. so we're creating 200,000 jobs a month, but as you say, growing less than 2%, and it's that productivity gap. let's take the financial sector for example. the tens of thousands of people that have employed in compliance, not producing anything, but they're hired bodies. it's actually a cost generating no revenue. that's an example, no productivity, but an increase in job creation. >> all right. so then my next question to you is how mad should we be if the leaders of central bank, including our fed of a all they talk about is our dual mandate, talk about jobs in the most positive of any of the other

issues they monitor, shouldn't they be talking about where's the productivity? shouldn't they be talking about what's lacking and why we have some growth -- -- they've said borrowing equals investment. well, that's proven not to be the case because companies borrow and they do other things other than investing. so we need to get back to a core of savings through higher interest rates that would encourage that. and therefore that would lead to higher investment and capital spending, it's the investment of zero money creates and the fed obviously doesn't fully acknowledge that. >> well peter, there's more. let's go to dot come and discuss what's going on, or not going on

with central bankers, shall we? sarah, back to you. >> we'll have to check it out. rick santelli up next. just how much damage could a brexit do? the former managing director will weigh in when "squawk on the street" comes right back.

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the world's largest money manager is showing an economic warning for europe. the u.k. would generate less economic growth if voters do decide to leave the european union in june. jack lew also warned a brexit would harm u.s. and british economic security. former managing director of the institute of international finance. now chairman of the americas with the partner's group. always good to see you. >> it's a pleasure to be here. >> just in terms of the brexit you represented the banks during the european sovereign debt crisis when greece would have left europe. what are the states of a brexit relative to that? >> the near term kpik state of a

brexit may not be quite as substantial as the stakes of the greek exit from the euro would have been but the longer term consequences for the u.k., for europe and for the world economy are greater. >> in losing position? >> absolutely. it's extremely adverse for the u.k. half of their trade is with the rest of europe. their financial services community is a driver of economic growth and job creation in the u.k. today and i think that europe would miss the uk but the uk would miss europe even more. >> so you're piling on that warning. we were talking about the break. there's a link here between what's happening in the u.s. and the u.k. this uprising against the financial and the political elite you're right.

we have so many populous strands both in the u.s. and the u.k. we have nationalism mass car raiding as patriotism. we have deviciveness and immigration constraint massacre raiding as job creation. these similar forces operate on both sides of the atlantic today and i think the people of the u.k. and the united states demand and deserve a higher quality of debate. >> if the u.k. leaves it creates fracture lines as everybody else tries to renegotiate their position and ultimately there's those that believe it will bring the euro zone closer to a break up. the former governor of the bank of england in which he is

suggesting that the euro zone could ultimately fall. do you believe that? >> the euro zone has been under threat for the last few years here and europe is caught at a space that's not sustainable with regard to the euro zone. they neither need to intensify the integration of physical and structural policies or they need to consider whether the long-term future of the euro zone is sustainable. a u.k. exit would put more pressure on the stability of the euro zone but other forces also are doing that and we talked a lot about the greek economy. it's not on a rebound. >> and they're flooded with migrants. they're flooded with migrants. >> they have severe, economic political and security problems they're facing. the euro zone is still not in a stable position in my view but a u.k. departure would intensify the pressures on the euro zone. no doubt about it and we're

starting to hear more questions about the faith in central bankers which is new. >> this is largely something that the markets and perhaps central bankers contributed to. we have unrealistic expectations of what central bankers can do. it can do a lot and played a pivotal role in stabilizing the world economy but it cannot create jobs. it cannot create the conditions for competitiveness, education reform. so many other areas are important. i think that the move into negative rates has come at a time when there is a broader lack of confidence when people is you is it a good time to be in markets what do you say? >> public markets are very volatile and vulnerable as you know. one of the consequences of the

fed's expansionary policy has been to inflate and distort asset prices. this effects all segments of the marketplace but it's particularly effected public equity market. i think that investors cannot run and hide. they have to look for investment opportunities but they have to look for niche opportunities. playing the broad trends is a risky proposition. >> always good to see you. >> okay. let's send it over to john fort and a look at what's coming up on squawk alley in three minutes. good morning. >> thank you. once again. super tuesday is now, there's clear front runners and two important perspectives from apple. and that's coming up on squawk alley.

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>> good morning it is 8:00 a.m. at apple headquaters in california. it's is 11:00 a.m. on wall street and squawk alley is live. ♪