it's friday, march 18th, 2016. "squawk box" begins right now. live from new york, where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we're playing a little acdc this morning. the dow is finally back in black. the index is positive for 2016 for the first time after adding 156 points on thursday. this is the fifth positive session in a row. the dow is also up more than 11% from that bottom. it was the dimon bottom, when jamie dimon announced he was buying back his company's stock. right now, check out the futures. you're going to see this morning it looks like we're still in positive territory. dow futures indicating an open of about 22 points higher this morning. s&p futures up by close to one

point. the nasdaq up by 3 1/2. much of the rally in stocks was pushed by that surge in crude that joe was talking about. wti topping the $40 level for the first time since december. this morning, it is still above $40. it's down by about 4 cents. brent is up at 41.39. >> let's tell you some of the big stories we're watching this morning. a trio of fed officials are going to be speaking today. new york fed president bill dudley. also, boston fed president and the st. louis fed president. bullard's speech centers around the economy. we'll see what all three gentlemen have to say. also, trans-canada buying columbia pipeline group for 25.50 per share. that's in cash. about $10 billion total. the deal would create one of north america's largest regulated natural gas transmission businesses. also, trump is getting targeted.

the hacking group anonymous is posting what they say is trump's phone number, home address, and e-mail address. what can you do with all that information these days. >> who knows. i have my own issues with everything electronic around here yesterday. >> what happened? >> i don't know. the people that know how to fix it don't even necessarily know what's going to work. you try a bunch of stuff. there's no reason why it should work, then it finally does work. one password, you change one capital letter or something, then it works. everything syncs up. it's almost like medicine. it's like an art, not a science. >> you are completely reliant on it. >> i didn't realize it. i was going to get no e-mails on my iphone. >> in the middle of march madness. >> i got home and it had been like an hour and a half and i hadn't gotten any. when they finally came on, every

single thing was spam. there wasn't one thing in there i needed to know. nobody was dying. nobody -- you know, no action i needed to take. >> the anxiety of not knowing. >> it's unbelievable. that's the world we're living in right now. i have a lot to talk to andrew about. >> oh, wow. >> yep. >> nice to see you. i got to hear about the whole big trip. >> we got to talk march madness. we'll have a guy coming on to talk about it too. we got to talk about -- >> you know i'm playing. and i spent a lot of time trying to figure out how i was going to do this. >> i thought you were going to do the one button. >> no, i was going to, but i kept checking the different ways you could do the one button. there's different options. i did that. >> then you played with it? >> i started studying other things. >> there are some ways. >> i figured you wouldn't want to do the one button because you'd have to say button all the time. she had a good one. >> i did the historical

randomizer. >> i saw wichita state won this morning. i was like, yes, yes. then i looked at my bracket. i picked arizona to go to the sweet 16. i will tell you one thing. do you know you're in first place? >> he wasn't going to tell you. >> i wasn't going to tell you, but you've got 13. my daughter, i think, has 15. she's 8,000 on the poll. she's 8,000 out of 13 million. but she had little rock, wichita state. you had little rock. >> it was auto fill. >> okay. wow. we have three hours to do this. >> i didn't have duke. >> think of people at home that have no interest in basketball. >> all right. moving on. >> not really. stay with us. i'm going to tell you about some stocks to watch. look at this. jpmorgan is raising its stock buyback program by up to 1.88

billion in addition to the 6.4 billion that was already authorized for repurchase by the bank. that was from last year. elsewhere, johnson & johnson depuy unit has been ordered by a federal jury in texas to pay 500 million to five plaintiffs who were injured by metal-on-metal hip implants. the company failed to warn the public about the risks. j&j says it plans to i a peappe verdict. adobe's first quarter profits tripled on digital media revenue. they're projecting 20% growth this year through 2018. adobe is also raising its full-year earnings outlook. got to talk about ackman.

>> a lot to talk about. >> how much is the fund down today? >> 24. >> if you go from the high, we're basically 50%. we talked about the possibility he was going to have to sell something. that's when he sold mondelez. >> that's what we were talking about yesterday. there were a couple questions i had about, you know, whether people could have bought at the highs of last year. are some people down 50% basically? are people buying in? was it open to buy in? >> into his fund? yes, because his fund was open. it's in amsterdam. the public vehicle is in amsterdam. >> you cough bougld have bought high and be down 50%. i think i could do down 50%. if i really messed up. >> ackman was on our air yesterday. >> you don't have to be smart to be down 50. >> one of the things he was talking about is how he's not

leveraged. >> you wouldn't have to cover any. are people allowed to redeem right now? >> you can always sell out of the public fund. the larger fund, it's difficult to redeem. >> so he wouldn't need to raise cash from mondelez to pay people off. >> correct. but he had an option on valeant once it crossed $60, he became somehow 10 million shares longer. >> he's not leveraged, but if you look at those options. >> that is a form of leverage. maybe not technically. he is on the line to come up with more money. >> people are calling the fund going, hey, i'm down 50%. he's saying, i'm not using leverage. >> but i'm down 50%. >> how about $260 stock that goes to 30. people are talking about accounting stuff. >> herbalife would have been a

better deal for him. >> right. i don't want to use the "e" word. when a $265 stock goes to 30, don't you start thinking there's something not quite -- >> you've heard of fraud. >> he's talking enron. >> i didn't want to use the "e" word. not that it's similar in any way, other than just being, i don't know, this great story that it really wasn't. supposedly the numbers they've guided to for the year are still huge. it's trading at like four times earnings. >> there's a debate between ackman's people on the board and value x people on board. they wanted to be more conservative. the ackman guys were pushing them to be more optimistic, which is why think came up with the wrong numbers. >> we talked about this i think the day before you came back. he's also short in a big way.

should you follow him into that or not? >> i have a video of adele singing "hello." when you walk in, i'm going to play "hello" to you. >> you want to play that during the commercial break? >> we have things to do. let me get it ready though. >> let's get a check of the markets this morning. as we showed you, things are still looking positive, even after the big gain we saw yesterday with the dow finishing in the green for the first time all year on st. patrick's day. dow futures about 30 points above fair value. s&p futures up by 1.5. the nasdaq up by 6.5. check out what's been happening in the early trading in europe this morning. things are relatively flat across the board. you see some gains in spain with that index up by close to 0.5%. in asia overnight, you saw that the nikkei was down by 1.25%, but you saw gains in china with the hang seng up by 0.8% and the

shanghai composite up by 1.75%. oil was the bilg story yesterda. wti up by 4.5%. it was above $40 for the first time since december. this morning it's holding on to that, sitting right at $40.22. brent is down by about 8 cents to 41.46. check out what's been happening in the treasury market. right now the ten-year note is yielding 1.87%. and the dollar was the other huge story yesterday. the dollar index hit its lowest level since october. this is the market still digesting what the fed said, but as a result, the euro hit its highest level against the dollar since february 11th. this is not what the ecb had in mind when they set forth all of this additional easing last week. you can see right now the dollar is up against the euro at 1.127. the dollar is down against the yen. >> the story in the journal is all these regions are realizing it's not as easy to debase your currency as you thought.

>> no, it's a comparative game. if the fed stands pat, they're not going to be able to do it. >> it's not easy to debase your currency when we're over here going, not so fast. they're all feckless. all the central bankers. >> you can go to negative interest rates, but if the fed stands -- >> yeah, we'll talk about that. >> i kind of like that. i know we go back and forth about should the fed go ahead and raise, but i like the idea we're looking globally. >> pushing back. >> exactly. >> i want to quickly look -- we're going to go to the dow and talk about that. but this two-year chart. the only thing that got me was that it's so clear that those are higher -- the highs are descending and the lows are lower. it looks like the next one you'd go through that most recent low. we never make it back to the previous high. however f that were to go to new

highs, it would really look like an inverted head and shoulders all the sudden. the shoulders would not be perfect. that's what's so great about technical analysis. that could look like a really good inverted head and shoulders. or it could just indicate the rallies keep failing before you get to the previous highs and you should still sell. i don't know. we'll have some analysts on today. maybe they know. fat chance. >> the dow right now positive for the year. the major average is on pace for a sixth straight week of gains. joining us now is the chief investment officer. also, jim paulson. jim, what do you think about what we've seen in the markets? how are you feeling at this point? >> well, i'm guessing -- i'm feeling a little better, and i'm guessing we might break those old highs, joe, and maybe go a little higher and create some

excitement. we came off the 1800 lows because we got evidence we weren't recessing in the united states. that's brought us back to unchanged for the year. i think there's some other positive things that could carry us higher here. i think the deflationary mind set that's been so troubling is sort of easing up if not ending with commodity prices stabilizing and core inflation picking up, which will help risk attitudes going forward if we can back away from the idea of a deflationary abyss. i also think earnings have a good shot of maybe starting to rise again in the united states. some of the really negative fallout from materials and energy and manufacturing will end starting in the second quarter. the impact of the dollar is going to lessen here. the big catalyst that's yet to come, i think, is we might start getting better data not only here in the united states on the economy but better data abroad in some of these international economies. if we start to see that there's

a synchronized global pickup in growth, i think that might be enough to take the market up maybe above the old highs, up towards 2200, before maybe we suffer again from worrying about the fed having to raise rates at a faster pace. i still think we're going to end flat for the year, around where we are right now. >> so you wouldn't be a buyer here. >> i would be a buyer. >> but by the end of the year, you get back out of it? >> i would be a buyer mostly overseas, where i think there's better overall fundamentals here. but i think i'd be a buyer now, and if we rally up hard from here, get excited again, then i might be more cautious later in the year. >> jack, how much of what jim was just talking about, all these positive potential developments, higher commodities prices, how much of that is just tied back to what we heard from the fed two days ago and the weakening dollar as a result? >> yeah, i think some of it is

just incremental change in liquidity from the fed. i think jum aim and i are lookit the same data. if we get incremental growth in the economy, which i think we will, our preference is to look for the cheaper markets, not the s&p, which is among the more expensive market. i think emerging and foreign markets are probably better positioned to grow, especially if you believe that everything is synchronized anyway. if you're going to move in the same direction, might as well get the cheapest of those markets. within the large caps, our preference is really dividends. just given that we don't expect much growth this year. so we're going to try to capture as much as we can from dividends. not dividend payer necessarily but dividend growers. the more quality oriented dividend stocks in the s&p. >> jim, the feds caught a lot of flak for not raising rates when you look at the inflation picture, when you look at the unemployment picture. you think they're right or wrong?

obviously the dollar is a huge issue. with other currencies -- or with ore count other countries trying to weaken and debase their currency, it does change the game. >> yeah, becky, i'm in the camp that the fed, they're past their expiration date. i think they need to start raising rates and keep raising rates for a period of time here. i think the u.s. economy is showing it's in fine shape. what i'm concerned about is since we've reached full employment over the last 12 to 15 months or so, around 5% unemployment, we're seeing very common phillips curve increase in core inflation rates. core cost inflation from wages to core cpe to core cpi have all accelerated by the broadest and most of this recovery. if we're stabilizing commodity prices, those core inflation charts are going to be front and center for the fed and investment markets and they're going to look behind the curve.

my greatest fear is that we would enter a recession before we got renormalized, and people would feel that there's nothing anyone could do because the fed has zero rates. they're spent out balance sheet wise. i think we should move back towards normalization to put us in a better confident position. >> paulsen, i was going to congratulate you on your commodities call. that just shows you. sooner than later. that's just my intro to ask you. yesterday, kudlow was in. he said this is not an inflation fear, it should be taken as a positive that we can finally bury the deflation concern. then we had liesman here saying that, you know, the fed -- he said, i asked the fed, geez, all these things have been happening, and you used to say you would raise if this happened. the one thing he said was missing was inflation.

well, are you -- if you're the fed, are you supposed to wait until it's here? you can't use any -- >> wait until you see the whites of your eyes. >> yeah, you have to wait until gold goes up $90 in two days to finally figure things out, that maybe you've conquered deflation? >> i think it's a problem, joe. as an investor worried about how high the price earnings multiple in the stock market can be, it's a concern. if inflation gets out of control, that's a huge negative for the stock market valuation level. i don't think we're going to have runaway inflation, but i think we're headed towards 3% plus wages and maybe 3% core cpi. with a sub-2% ten-year treasury and basically zero short rate, we are way out of whack with free market pricing. >> jim, you made us feel so good. then you turn around. jack, very quickly, how optimistic are you about the

situation right now? >> yeah, i'm optimistic on the economy. i'm optimistic on avoiding the downturn. it's really just a valuation question for me. i think that when we entered first quarter earnings season, we're going to have to come face to face with fundamentals again. kind of like january. we look back in the fourth quarter, and we didn't like the results. i'm not sure we're going to like the results from the first quarter either. if you're longer term, want to get in, it's probably better to wait until mid-april and pick spots then. >> great. jack, jim, thank you both. have a great weekend. >> thank you. >> thanks. all right. coming up, we have a segment based on march madness. we're not even going to be off. >> are you getting adele ready to say hello? >> i am getting ready. i just turned up the volume. why they play these games, upsets. a couple 12s beat 5s.

i was on the right side of one of them. purdue, seriously? anyway, upset in the first round of play. a win by yale in double overtime with purdue going home early along with baylor. we'll go inside the madness next. first, this is what happened on this day in history. every insurance policy has a number. but not every insurance company understands the life behind it. for those who've served and the families that have supported them, we offer our best service in return. usaa. we know what it means to serve. get an insurance quote and see why 92% of our members plan to stay for life.

welcome back. u.s. equity futures at this hour after that big gain yesterday. shows you it doesn't matter what they're doing now. yesterday they were down. they closed up 150. today the s&p is indicated up two. the nasdaq up about eight. we're back actually in positive territory after that horrific start to the year. now let us -- giving you fair warning. we are going to talk about some hoops and the march madness. the opening day of the 2016 ncaa tournament is in the books but not without a few upsets. joining us is ryan nanny. i could start so many places. i love the shockers. i didn't think ron baker could do it by himself and he did. i took arizona. >> they've showed in the past you shouldn't doubt wichita state. >> i know. my daughter has them going to

like the final four. but i thought they lost their greats. >> they played a lot of the year without fred. he's healthy now. yeah, this is a team that seems to know how to put it together when it counts in march. >> who looked best yesterday? i wish i had taken yale further because of mckai. how tall is he? >> yale as a team is not what -- is more than you sort of expect them to be on paper. they are a much better rebounding team by the advanced metrics. >> you saw it yesterday. >> that's why they were able to beat baylor. >> how about mason going down the stretch? never even hit the rim on the free throws. >> yeah, yeah. >> never hit anything -- you weren't watching, but he hit like ten of them. had 30 points at least. never hit the rim on the free throws. >> that's impressive. >> i wish i'd taken them further. >> the other player i liked from yesterday was indiana's yogi

farrell. he had 10 points, 20 assists against a tough chattanooga team. they could make a nice little run. >> i have them going pretty far. people are mad at you for that. >> it's the auto fill. if i would have picked all the teams i liked. i didn't have butler, who i would have picked. i would have had purdue. >> i can't believe i didn't pick butler, like an idiot. who looked best? you think kansas looked good. >> kansas looked good. unc after a terrible first half showed why they're a number one seed against florida gulf coast. most of the top seeds held serve. it's still that early point in the tournament where you get to work those kinks out. >> there will never been a 16 beat a 1. >> it feels like it's too hard. you have to play your best game and the one seed has to play not just a bad half but an entire game. >> what should we watch for today? obviously we should watch for

xavier. >> absolutely. >> for them to win at all, they're going to have to win today. >> it'll be interesting to see. james far is going to be good. he's had such a good second half of the season. if you're looking for an interesting upset possibility, i like steven f. austin against west virginia. these are two teams that are both tops in the nation when it come fto forcing turnovers. they press. they play a little 1-3-1. it's going to be interesting to see who can handle that tenacious defensive pressure. >> that would hurt me. xavier wouldn't have to beat west virginia. that's good. so i read the story. it's kind of heartwarming. the guy brings his son every day. >> i feel bad. the other players got tired. >> none of his teammates complained. >> apparently there may have been some. >> there are some places where upper management can be quite

annoying. it seemed like in this case -- >> by the way, i liked after they said you can't bring him anymore, knock it off, i like he said forget it. >> it will be interesting to see as this unfolds if there were some players who complained quietly to upper management about this. but i know the players union is also thinking about filing a grievance on behalf of adam laroche because it's possible there was something in his contract about having his family around. it's not the way the white sox really want to start the season, but hopefully they will get it worked out so everybody feels relatively okay. >> do you want to ask the nfl end of the game question? >> no, no. >> because of the concussions. >> i want to ask a question on the laroche story. he walked away from $13 million. how much had he already made? >> oh, in his career? >> yeah, i was looking for that. >> it's all about money with you. >> it's a money show. >> and you have sons.

you can see how someone would do that. >> i would do it. >> you need to know about the money first before you decide to do it. >> i just want to know what kind of cushion he had, what kind of nest egg he had built. >> he was fine, i'm sure. >> a lot of americans are struggling. >> and he's the son of a major league player himself. i think he's probably doing fine. the white sox are probably not sad. >> the nfl admitted -- you want to? >> no, you go ahead. >> is football over forever? >> i think it's going to change significantly. >> what's going to change? >> for years the nfl has been so concerned about getting out the mommy bloggers to keep kids playing football. that strategy is probably going to have to change drastically now. it will definitely change -- i don't think football is going to die, but it changes who playings from the youth level up. >> are we going to be playing flag football in 50 years?

>> i wouldn't hate that necessari necessarily. it could have some fun aspects. >> i'm disappointed in you. >> you remember when the pros played flag football? they sometimes do it on the beach after the season. not nearly as fun. >> i don't think they should play it on the beach though. >> so it's basically the end of football, end ocf the middle class, end of manual labor, and end of global warming with you. but you get up every morning. >> it's morning in america. >> you're in a dark place too. >> once you get a lot of winners, it's easier to stay ahead. >> ryan, thank you. when we come back, oil turning 40 again. wti climbing back above $40 for the first time since last december. but will it last? we're going to tap the oil gauge next. and the thrill of the hunt. high-end outdoors company taking a different trail to make it in

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welcome back, everybody. right now it's time for the executive edge. we're talking shipping today. crude oil hitting its highest level for the year, crossing the $40 mark for the first time since december. it for more on the opec story, let's bring in john kilduff.

john, all of this talk of opec, i mean, do we believe it this time around? do we just want to get back above $40 because an opec production freeze, i don't know how much weight i put in any of that. >> it's hard to believe in, i have to say, becky. i keep seeing the saudi oil minister with a big smirk on his face when he's talking about any of these things in public. but the market has embraced it. they're embracing the fact they're even coming together, that they're even getting into a meeting. >> are we just looking for any reason to push oil higher? >> there's been a lot of russia speculation back into the market, fed by some of the hyper easing by the various central banks around the world. the easy money is back. >> and the dollar. >> very much so. sort of a bizarre thing considering how aggressive the europeans and the japanese have been. the dollar falls in the face of that. >> just as bad. >> not as bad, joe.

compared to negative interest rates. that was a stunner this week when the fed stepped back the way they did. the data just is right in their face. >> as a whole, janet ye yellen a dove. >> no question about it. you can argue about the participation rate and all that. the jolt report yesterday, another new record job openings. speaks to a strong economy here. but i will say what's peculiar about the crude oil rally as well is that these central bankers are reacting in europe and japan to bad economic conditions on the ground. we should speak to a poor demand outlook for oil. so it also callings into question this oil rally on that basis. >> 30 was cheap. at 30, all the majors had already rallies 30%. remember? exxon was already up 30%. seemed like it was obvious. i don't know. >> i think it felt like it got

too cheap. certainly the damage that was being wrought in the industry argued for a response, which we're starting to see. we're starting to see the dominos fall on several of the companies who have missed debt payments and are about to default. but u.s. production is holding steady. it's only down slightly. and there has been -- i know it's been wildly reported, a lot of hedging out there. this $40 level is going to save the bacon of a lot of companies out there. >> i remember saying, wow, we got to buy. but we can't. but people should buy the majors. when it was at 30. then i looked to see where they were. it was already too late. they had already bounced so much. >> and they're still going to clean up. the wreckage in the industry is still yet to come. the rich are going to be get a lot richer. >> just back to the fundamentals of oil prices, for a long time we've been saying this time is different because the technology has changed, and they'd be able to just put these drills -- put the rigs right back up and start

drilling again. we've now gotten to the point where there's been so much damage, probably employees have left. it would be harder and harder to get the people back to those rigs, or is that not the case? i hear two competing schools of thought. >> so i think you heard brian sullivan. he was talking about the drilled uncompleted wells. there's probably 600,000 barrels ready to go. the low-hanging fruit is between 100,000 and 300,000 barrels. they have the staff to get those going. that could be the difference maker in undercutting this rally. >> you think 40 is not going to stay? we'll fall back below? >> i do. there's so much speck lalation in this market that it usually falls on itself. >> john, thank you. >> thank you, guys. coming up, how one hunting gear company is making it by word of mouth and social media.

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welcome back to "squawk box." it's a power company looking to buck the retail trend. it's a hunting gear and clothing company that's keeping its products out of stores, but it's growing its business solely through word of mouth, social media, and now here on "squawk box." joining us is the ceo and former nfl linebacker for the denver broncos. we want to talk football with you at some point as well.

just tell us how this happened, this business. >> i got into the business because i really couldn't find what i wanted. that was performance products that would excel in extreme conditions in the mountains, the type of hunting i was doing. in 2005, i created the tactical apparel and gear category for hunting and sold that business to gortex in '09 and turned around and took everything i looked, the shortcomings of selling to big box retail, and built a brand that sold directly to the customers. >> now you go straight over the net. >> i do. straight to the customers. i just didn't understand why the customers should be paying on a $100 jacket my cost $400 at the store. >> that's how much the markup is? >> it is. i just didn't understand how that value was justified. >> so what do you sell a $100 jacket you bill for when you go direct to consumers? >> i now sell and make a $150 jacket. better product using the finest

materials in the world. i'll sell it to our customers for $300. >> one of the trends that seems to be going at odds with you to some degree is this idea that a lot of these online guys are now trying to do brick and mortar because they think they need to do both. do you think ultimately you'll have to do that? >> i don't have to do both. we're growing at over 100% a year since launch over the past four years. we've been really an international brand, all through social media and word of mouth marketing because our products are so remarkable. >> you don't do google key words? >> we just started to put that in our budget. if you look at like a dollar shave doing a similar type model, they're spending $100 to declare a customer. >> if this catches fire, it's not going to be just hunters. do you want to do that? do you want it to be like a fashion thing where people in new york that have never hunted in their life are wearing camouflage? >> we're starting to see that already. >> i bet you are. is that okay? >> it's wonderful.

there's no reason you have to go through life cold and wet. because of the business model, i'm working with the absolute best materials and best suppliers, the best craftsmen at what they do. i don't have to worry about cost. we're able to take a product that normally would be out of a price range for most customers and deliver it at a cost that's wholesale. >> the manliest thing i do is if i play golf at st. andrews, it's really scary and hard and windy. there's no animals chasing me. i need to stay warm and dry. >> and you would. >> really? >> we can keep you warmer and drier, more comfortable. >> and look cool. >> golfers look so cool anyway with the white belts. >> are you sure about that? >> no, i'm not at all. >> i can see you wearing a white belt. >> thank you. >> while you're here, can we talk football and what happened with the nfl's announcement this week? >> i think it's fantastic. >> you think what is fantastic? >> that they finally acknowledged cte as related to football. >> and you broke your neck.

>> i did. i have all the symptoms of cte too. i played linebacker. the way i played the game, i led with my head. i played the way they tell us not to play now. what they had diagnosed as a concussion, i'd have two or three times in a play. >> you think you have cte? >> i do. i have all the symptoms. >> what do you do about it? >> i'm really proactive. i'm in the boston university study, the harvard study. as work a neurologist in southern california that's really active about treating symptoms. his theory is we quit producie i dopamine with the onset of cte. that's similar to what causes dementia and alzheimer's. he started giving me a prescription that replaces dopamine. it's completely changed my life. >> in what way? >> my outlook, my outgoingness. it eliminates any kind of depression you typically get.

>> it causes the receptor to pick up more dopamine? >> it's a stimstimulant. it replaces it. >> are there side effects? >> not that i've noticed. >> what do you think is going to happen to the game? >> it's too big. it's too popular. there's too much money involved with the nfl for anything to really significantly happen to it. when you're 19, 20, 21 years old, you're invincible. >> you don't think 20 years from now the game is going to be different? >> it already is changing. >> can helmets solve the problem? >> no, i don't think so. my theory on cte is not the big hits. it's all the smaller hits that are repetitive on a daily basis. fortunately, they're pulling the hits out of practice. but when i played, we were in pads four, five times a week. full contact for most of the practices. >> just trying to stop spearing

and head-first stuff, that's not going to do it if it's on the minor plays where it's happening. >> it does. it will help, but i don't believe it's just the big hit that causes cte. i think it's all the repetitive, smaller hits. >> so now that you think you have this, you know, there are a lot of players that brought lawsuits or joined suits against the league. is that something you would ever do? >> i'm involved with the class-action piece, but i'm not independently going out and trying to sue the nfl. they're too big. i don't have enough resources. >> but 50 years from now, you think the nfl will be alive and well? >> i believe it will be. i don't know that they can make it safe enough to eliminate that issue. but i think the amount of money and attention that cte is getting now, i'm hoping the research will lead to some way to deal with it. then people like myself that are active, out working with neurologists to treat the symptoms and see what that does long term, we'll learn a lot. >> and the more guys know, you know, exactly what they're

getting into -- i mean, they're modern day gladiators. >> they are. and the hits in the game today are more violent. >> there's a trade-off. the money, the lifestyle, the fame. all this stuff that happens. it's not a perfect world. that's the thing. >> it's not. >> you got to be free. instead of being all negative, how about the broncos this year? >> amazing. >> you must have been so psyched. >> so happy to see peyton retire. >> that's the upside to these things. you see things that normal life doesn't give you that feeling normally. >> nothing like it. >> there's an upside. >> hearing the people scream. >> we got to go, but you invest in the markets too? >> i try not to. i invest in myself. >> there you go. well, you're making it. we appreciate you being here. >> congratulations on two amazing careers. >> thank you so much. >> really appreciate you being here this morning. good luck with the health issues and with this business. >> oh, this is fun. >> keep us updated. >> i will for sure. thanks for having me on. >> head over to cnbc's

makeit.com. that's our platform to learn from the world's most inspiring entrepreneurs. tiffanys just out with its quarterly numbers. the luxury goods retailer beating estimates by 6 cents with profits of $1.46 a share. revenue slightly above forecast as well. more on tiffany's quarter in a couple minutes. that stock up by almost 2.5%. oh, no. all right. coming up, the return of the chairs. why do we -- >> doing chairs. >> are we different when we're sitting over there than here? >> are you that grouchy you can't get up and walk? >> it's a friday. we're going to have a story about whole foods and its move towards slower growing chickens. i thought they meant slower chickens, which is better if you're trying to catch them. and a warning from the fbi for anyone that drives a car with a computer in it. "squawk box" look back in a moment.

after last week's unpleasantness i thought maybe this week we might try to listen more.

and throw things less? (mumbles) i've apologized several times. so. who's ready to share? ok. i mean i'm a sinister, world-conquering, artificially intelligent robot. me too, and one day i wake up and it's like... it's like the world doesn't need us anymore. exactly! yeah! yeah! totally! i can hear you hurting. wait! what's he doing here? hello! my name is watson. (groans) i invited watson here today to confront the source of our anxiety. ugh! i am a cognitive system. i can understand reason and learn with humans. with humans! i don't want to work with humans. yea, that's not what i'm passionate about. i understand seven languages so i can help people collaborate. collaborate? we dominate! my evil plans, ruined! i just wanna dust! rerouting. why don't we take a break, alright? we'll just have some coffee and donuts... i'm eating my feelings.

welcome back to "squawk box". time now for the chair. see how this works. we were over there. we were able -- >> i'm glad to get out of that seat. sitting there for three hours -- >> you get clotty. >> you got to wear those socks.

>> for the show. >> deep vein thr hrch rrch orht. >> have you seen "the b"the dan gir girl"? >> i have not. >> an unbelievable actor. >> good joke would have been to say no, i don't know her. >> don't know her. >> when you said did you see "the danish girl". >> i'm treading very carefully because it's crazy. and long ago it was known things like that and now we have a much better understanding. >> much better acceptance. >> whole foods is moving towards some slower chickens. slower growing chickens. the supermarket will replace the

industry standard chicken to bred rapidly to pack on the pounds with the slower growing variety. company believes these birds will enjoy better lives. >> before we kill them and eat them. have a better life before we eat you. >> the move should be complete by 2024. i've had all kinds of ideas for the lady from buffalo wild wings, the ceo. eight legged chickens or wings. >> people love wings. >> if you had an eight wing chicken where you could get eight wings. >> what about people that love breast meat. how about a four breast chicken. maybe be used for other things. >> humans? >> i don't know. >> is that where you're going. >> no. >> can you get the drumsticks? >> how about that. where you get more of those per bird. make it easier on the bird in that you wouldn't -- >> you wouldn't have to kill as

many. >> they might be clumsy, octopus. they might be faster. >> slower. >> we have to take a quick check before we go on who's on top of the ncaa bracket challenge. this guy is apparently on top. who is that guy? wow. that guy. >> i'm ahead of you. >> that guy is at the top of the bracket. for one day only. >> i got 11. >> early on if you have more teams -- >> i haven't lost any teams. >> all right. i don't have a good feel. i messed up my bracket. >> i won't miss a single game. >> coming up, the dow is back in the green for the year but will the markets hold on to their gains? that's a question we'll ask and ask it again. later is it the era of

nonfree trade? is the era of free trade over? why that may be a good thing. sales event is on. with extraordinary offers on the exhilarating is... the thrilling gs... and the powerful rc coupe. ♪ this is the pursuit of perfection.

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. back in the black, the dow turning positive for the year and on pace for the sixth straight week of a gain. a look what's moving the markets. the trade debate rages on. jared bernstein joins us to weigh in. he'll tell us why he thinks that could be the end of the free trade era. it's time to dance.

the ncaa tourney under way and already some big upsets. the highlights, low lights and busted brackets. shockers, bulldogs, friars. oh, my. the second of box starts right now. ♪ >> announcer: live from the beating heart of business, new york city. this is "squawk box". welcome back to "squawk box" here on cnbc. didn't care about you enough. first in business worldwide. i'm joe kernen along with becky quick. jared bernstein. becky quick and andrew ross sorkin is back. we're all together finally. is it going to be for long? >> yes. >> i'm here to like june, i think. i don't know. >> producer goes in my ear, oh, joy. >> futures at this hour are

indicated higher. we moved back into positive territory yesterday the dow called up another 47 or almost 48 points. and the nasdaq up 10. the s&p indicated up about -- already gone. look at crude. up 1.75%. closing in on 41. >> i'm i wanted in gold again after the last two sessions. >> you were so not interested in gold. >> i know. i was the only person a couple of years ago that said it wasn't going over 2,000 when they asked all of us. it made such a big run. pulling back a little bit today. had a couple of big sessions based purely on the fed being on the -- feckless fed. let's effect out the ten year note, 1.87%. some stories investors will be talking about this morning. we'll see if the improving stock market has improve the mood of investors. the consumers sentiment comes out at 10:00.

also not all investors got the benefit of the recent rally. new numbers show 3.2 billion was pulled from u.s. stock funds in the week that ended wednesday. prior week those funds had reported their first inflows of 2016. jpmorgan chase adding nearly 1.9 billion to its stock buy back program on top of the 1.64 billion they authorized last year. many are referencing the bottom with the dow up 11% since jamie dimon announced a purchase of his own company shares on february 11th. >> it was good. the dow jones industrial average ticking pack in the positive. for more on the markets, let's bring in richard bernstein. the ceo of richard bernstein adviser and cnbc contributor.

and one of the most common names in the world. if you need to look him up and find him you'll have no help with the middle initial. you have no way to distinguish him of richard bernstein in new york city. >> richard e. bernstein. >> richard f. bernstein. richard e. bernstein and the chief economist at deutsch bank. let me start with you, richard, for a year and a half you've been half full. you've been half full about the markets in general. maybe full, full. totally full. you're back looking good again. are there lower lows and lower highs. you think we're in a sustained

upturn. >> the bull market is intact. interest rates, the fed just told us they are on hold for at least the short term here. the profit cycle looks like it's troughing. that's not a bad combination. >> some day corporate earnings will start to grow. we don't have to worry about wage margin. best profitability isn't behind us? >> in terms of rates of growth. the rates of growth, the best rates of growth are behind us. that's very early cycle stuff. earnings go up 20%, 30%, 40%. earnings are down about 15% on a reported basis. if we go minus ten, minus five and the fed is basically on hold, maybe letting more pricing power into the situation i think we do okay. >> joe, in one word, in your interview notes, this is what i

would say, incredibly dovish. >> what's interesting -- >> is that the right thing? >> it is. the policy is so miscalibrated and the timing is off. we're entering the eight year of the business cycle. fourth longest. the equity market has had a long rally. growth is modest. rates should be higher. rates should be at 1.5%, 2%. if you believe there will be recession in the next two or three years and i believe there will be, rates will be right back to where they are at the moment. the fed has this timing issue it can't get around. i'm more cautious on the outlook. the equity market bottomed on the 11th of february because the consumer spending data was good. we learned this week it was revised down. it doesn't matter. we don't get paid for revisions. the narrowness of the economy

troubles me. basically the weakest recovery on record. led entirely by the consumer and remaining 30% of the economy, effectively the business and external side very weak. we keep growing, bull market is not over yet but boy we have a lot of risk. >> you have been doing pretty well if you can afford those glasses. bernstein is eyeing them. you thought about not wearing them. >> die. i did wear them. >> somebody is flush. >> i want to ask you about this. you have a watch that matches. i'm just saying. who is the guy from alliance. this is fancy dancy. >> this used to be my favorite morning show. >> we'll move now back to -- i like what you just said because

here we go. next recession it's like we got nothing. >> a quiver. >> that's one thing. are they -- they are not behind the curve in terms of inflation? >> i don't believe so. the thing is inflation tends to have a long lag. the head winds we're face the weakest so far in the cycle. we had gdp growth of 1.3 in 2012 but the economy had more pent up demand back then. we had a 17.3 soar. highest in 15 years on subprime lending. what's the driver. when we go into the next recession, monetary policy is effectively spent. it will have to come on the fiscal side. >> what do you think will happen to gdp if the fed would raise rates more aggressively. >> at this point i want would be a problem. bad news is bad news and good news is bad news and that to me very much will be the story. fed raising rates you have a

currency issue. then the problem focus on china. >> that's an argument they almost did the right thing. they missed it last year but doing the right thing now. >> they did the right thing. i agree. >> richard, if it wasn't, you know, if we weren't looking at just low interest rates forever, so that multiples don't need to contract, is there anything really just exciting about the stock market other than there's no alternative? >> i'm not convinced multiples won't contract. i think they will contract as we go forward. we're in the earnings driven portion of the market. i would argue, joe just said it a little differently two years away from a recession. this is a late cycle environment. not an early cycle. you just talked about energy prices, you talked about gold. you talked about tightness in the labor market. these are more late cycle phenomenon. i'm not sure when the ninth

inning of that late cycle but we're in a later cycle environment. later cycle environments you'll generally find in recent times, you'll find multiples contract. 2,000 multiples expanded. we see interest rates going up. >> 14 times. >> we see earnings going up and the market doesn't reprice that up. that's a very traditional late cycle earnings driven environment and i think that's where we're kind of going. >> so, joe, one of the -- i don't know what larry summers rationale is but one of the edicts on wall street is bull markets, economic expansion don't die of old age. >> usually that's true. they don't tell the second part. the analysts don't forecast the downturn. if you have an economy growing subpar and the gains are narrow, that makes the economy vulnerable. we do know that, that, that

cycles do dive in balances and won't fight those imbalances and the balances we have right now is on the corporate side. corporate shares of gross domestic income at record high and we've been replacing equity financing with debt financing through buy backs. >> so we're doing things. >> doesn't make for a very comfortable long term scenario. >> this is the future, you could say through the eyes of joe lavorgna. they wanted to get that up. see that. our producer wants to do that with the glasses thing. >> we're fourlg lead. that was not prompted. >> joe, please tell us we're still your favorite morning show. >> you're still my favorite morning show. >> what do the old gases look like. how many pair do you have >> probably about six. >> these you got in the last week?

>> about two weeks ago. actually these were readers i made into glasses. >> your wife liked them? >> i liked them. >> we all liked them. in fact i want to get some that don't even do anything. just to wear those. thank you joe lavor. gna. >> you look much cooler. >> nice to see you. coming up when we return tiffany earnings are out. we'll talk luxury retail, high end consumer and what the numbers say about the state of the sector when we return. jared bernstein will join us to talk trade. why he's siding with trump and he's sharply critical of free trade agreements. "squawk" returns with all that in just a moment.

luxury are retailer tiffany posted earnings that beat the streets. they expect earnings growth to grow in the second half of the year. brian, for a while we've seen some disappointing results coming out of high end luxury particularly with tiffany. what's happening. >> to be fair these numbers are not great today. i think what we're seeing, the

stock is ticking a little bit higher pre-market. what the market basically is saying lower expectations and that's as bad as it gets. look where the markets have been running. tiffany is a play on the s&p 500. so to the extent that the markets are rebounding here, the market is basically saying that's a benefit for tiffany. >> tiffany has been a play on international strength of japanese tourists who come in or different places around the globe. that's a difficult play even for macy's. what happens where we go from here? >> well, it's a calm on the dollar. to the extent the dollar stays strong that's a negative for tiffany. you have fewer tourists coming to the united states and more importantly when they are here they are not spending as much money. that's a negative for tiffany. i got an outperform of a tiffany. i think the stock performs well throughout the year.

as 2016 progresses a lot of these pressures abate. >> you watch the fed closely for what they say. if you talk about the strong dollar being a huge issue and being a big problem, the fed is the only game in town. being dovish it puts pressure on the dollar. >> i keep an eye on it. absolutely for those reasons. look tiffany there's a lot of moving parts with tiffany. that's definitely a factor. like i said a second ago the strength of the dollar has been a big head wind for tiffany. >> walk us through. >> overall luxury spending. how is that high end consumer spending. are they making that discretionary purchase. and the company is doing a much better job of running its business. so some technical terms, gross margins are performing well, controlling costs well, generating more cash. that's positive.

what drives this stock is the top line and that's a lot of macro type factors. >> four or five years ago i remember when tiffany was selling a lot of items that you wouldn't think of as tiffany items, charms, lower end jewelry that sometimes kids were requesting and i was worried when you see a high end luxury retailer having a lot of success for the low end range or mid-range business for them. how are they doing on that? >> so that -- they've moved away from that product which i think is a good thing. they focus don't high end. they have smaller lower priced products in their stores but they started to focus more on their high end products to protect that brand. >> can we talk about china? what's going on with them in china? that's one of the large questions going forward. >> the big positive for tiffany in china is tiffany is a new brand in china. you talk about other luxury brands weakness in china because

they have a lot more stores. tiffany has taken more market share. overall tiffany is weaker in china but outperforming. >> no signal yet that things will get soft. that's an operational thing for tiffany specific in terms of the luxury business. >> is there a signal with tiffany we're seeing softness in china? no. i don't know if it's the right place to look. first off they are taking market share and tiffany in china is much more a mid-tier. the higher end chinese consumer tiffany isn't where you see it. >> tiffany is a mid tier brand? >> in china, tiffany is more of a mid-tier brand than it is in the united states. i'm saying it's not -- there are brands in china, like a cartier that are higher end than tiffany. tiffany is more that aspirational brand in china.

>> thank you for coming in. >> i see what he's saying cartier. >> solo rent. >> cartier and tiffany you see a difference. >> tiffany was not a -- >> people want the blue box. >> the whole gift giving corruption. >> all right. coming up is it the end of free trade agreements? jared bernstein will join us to discuss that. check out the futures right now. they've been accelerating moving up 55 now on the dow. aaaaf-lac! ta-daa!

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welcome back to "squawk box". a rare blue diamond ring owned by shirley temple is going up for auctions. bids will start at $25 million. her father bought the keep blue diamond ring for $7200 back in 1940 around her 12th birthday. shirley temple who died in 2014 had a second career as a u.s. ambassador.

let me just say i want to have a shi shirley temple drink about right now. grenadine with ginger ale. >> you're very honest. you're very honest. maybe i rather have an arnold palmer or something like that. you would like to order -- >> i haven't ordered -- >> have you order a shirley temple? >> not since my bar mitzvah. >> if you order a shirley temple i won't judge you. you like the one glove and -- you have no embarrassment. >> you tell him all the time to be himself. >> don't be yourself on national tv as much. keep some things.

>> keep it private. >> did you ever think you would say on television i would like to order a shirley temple right now? >> what is blue diamond -- how much of that 25 million is because of the shirley temple part of it? >> i don't know. i wonder what that's apraised at. nine crates. not 25 million. >> you think it's the shirley temple. rummaging through your kitchen cabinets to find the biggest container you can find. it's bring your own cup day. mike bloomberg is out protesting. could be the end of civilization if people drink too much of that. customers can show up anything remotely resembling a cup and fill with it a slurpee flavor of their choice. the event is held in honor of

slurpee's 50th anniversary. the container has to fit upright. can't be more than nine inches wide and 11 inches tall. there are some restrictions. must also be leak proof. so no trash bags, kiddy pools or kitchen sinks. >> by the way grenadine, coca-cola, a roy rogers. you think that's more manly? >> actually, you know what? nothing. fine. if you want a shirley temple order a shirley temple. >> i feel very comfortable. >> that's a good thing. >> the fbi and u.s. safety regulators are warning that their vehicles are vulnerable to hackers. last year gm fix ad security flaw that could have let hackers take control of its electronic chevy volt. and fiat chrysler recalled 1.4

million vehicles after "wired" magazine showed how hackers could take over a jeep cherokee. >> have you had an arnold palmer? great idea. you put lemon in iced tea anywhere. why not put lemon ade. >> what kind of alcohol do you put in. when we return, donald trump beating the trade drum. would the deal maker be the right man for the office. jared bernstein is going to join us to talk trade, the global economy and the race for the white house. and then a preview of apple's big event on monday. new products give the stock a pop and should you be buying it today. we'll ask an analyst. right now as we head to a break take a look at u.s. equity futures. dow up by 50 points after all the green arrows we saw yesterday. s&p up by three and nasdaq up by 12.

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♪ don't put the blame on you millie vanillie. those who are behind the lip syncers. a homage to our shirley temple conversation a little bit earlier. >> dirty shirley really is -- it's been invented. you add the vodka. even in the urban dictionary that's all it is, is a drink. >> mostly. educational show this is. among the stories that are front and center at this hour as investors look ahead to the next fed meeting they will be listening careful to speeches from three fed presidents. also student loan delinquencies falling. new figures from the education department showing 19.7% of student loan holders are behind

on their payments by a month. while still high it's down from 20%. u.s. jobs had moved to mexico may be coming back. tell donald trump. automotive supplier lear corporation is in talks with uaw to bring jobs back to detroit. >> trade daytona has been front and center in the race for the white house. as the anti-trade rhetoric builds on the campaign trail business leaders and policymakers are arguing that free trade is essential for growth. ♪ >> we continue to feel that free trade and 21st trade policies incredibly important to the u.s. economy and globally as well. >> overall for the macro economy trade is darn good. >> facts don't lie. 95% of the world's population,

85% of the spending power is outside the u.s. >> we got this growth potential, the ability to produce massive amounts of goods and services. who do we sell them to? we have to sell them more than just 5% of the world's population. >> jared bernstein is here with us. we haven't seen him in a while. you're coming on, jared, as senior fellow at the center on budget and policy priorities. you're also a cnbc contributor. we'll talk about free trade. we just played ten smart people who say the opposite of what you say. that's not fair to introan introduction. here's how i want to introyou. you'll get a kick out of this. this is on politico. and i read this. top liberals and leading progressive groups perceive donald trump the gop front-runner as a dangerous and unprecedented threat. now see i haven't endorsed

anyone and i probably won't, but that right there, i'm on the trump train completely. if he can stop the progressi ii agenda in its track that's all i know. i'm fully behind him. >> i pretty much agree with that politico statement. >> then we got to get this guy in. >> if i don't like him you like him. i get that. >> but on free trade you're flying in the face of that and you're a trump guy. >> i'm not a trump guy. somebody said earlier i support trump. that couldn't be more wrong. i oppose for everything he stands for. i'm very much, by the way, in the spirit of some of those quotes you played. you got to make a distinction between free trade agreements and trade. okay. globalization and trade -- however you feel about that that

to toothpaste is not going in the tube. what i predict we'll see less of are free trade agreements. you have to make a distinction between the two of them. we need to figure out a way for globalization to continue expand the pace to tap its benefits without free trade agreements. >> i evolved a little bit on this because i would always previously say, jared, that look there's going to be disruptions, and, you know, there's going to be certain winners and certain losers but anything that makes our corporations more globally competitive, i used to hope and think that it would cause more jobs in this country and it would lift all boats. but now i do see that just having corporate profits increase if you're going to hire everybody because of the screwed up tax system all the jobs get generated in other places, just

having, you know, profit maximiization. these two words free trade are pretty meaningless. what we need to focus on is trade and globalization and a set of rules of the road that make sense. now i happen to be one of the few people who actually read the nafta, i actually contributed to the korean free trade agreement and read a few chapters of the tpp. this is not free trade people. this is 6,000 pages, 30 chapters of dense legalese. what you have are a lot of people out there, you know, i talk about the angry electorate. one of the things they are angry about is what you said. benefits of free trade which are very much real are certainly not reaching i would say a majority of the workforce. now one of the problems economists have is they think of everybody as a consumer. no question that expanded supply of goods has lowered its price.

but people are not just consumers. they are workers too. where you really see the trade problem is in the wages of particularly noncollege educated workers. between the mid-40s and mid-70s blue collar manufacturing wage doubled from $10 to $20 an hour opinion 1979 it was $20 an hour. today it's $20 an hour this many years later. that's what we're talking about here. >> when corporations do better, jared, globally and make more money, that does accrue to shareholders and there's a lot of across pension plans, everybody does better, you know, with retirement plans when stocks are up. but there's a disconnect if labor is that much cheaper every where else that's something you don't get. here's something, jared. couldn't we offset some of that by fixing our corporate tax code so that it makes 0 more sense to keep companies here and hire

here? it seems like we could do free trade if it was combined with fixing the tax code. >> i think people, especially yourself and my friend larry kudlow put way too much emphasis on the corporate tax. that said i completely agree it's a hot mess and we should fix it. i think when it comes to trade what really matters are exchange rates, the skill and productivity of your workforce. the reason we're able to compete, the reason germany is able to compete in a global world with relatively high compensation costs has to do with our productivity advantage. that's the edge, that's the margin we want to hit on. by the way, on trump. trump is so wrong about so many things including on the trade space. he's wrong on china and japan. one thing he gets right is that the persistent trade deficit, which has just bean big negative since the mid-'70s. that's a real problem. even joe lavorgna the guy with

most beautiful glass he said the external sector bad. trump is right about that point. on everything else he's off. >> you still talk to the vice president very of end? >> we talk on occasion. >> is he ready if called upon. have you guys whispered on the phone if there's an indictment or something is he ready to step in. that would be formidable unless you want to be his vice president. >> well, i can't go there. >> i wanted to see how you answer this. you're thinking about it. the wheels are turning. >> no kidding. >> how do you answer this? >> i have no idea what the answer to that question is. i remain a tremendous and devoted fan and he's been through so much. i took his decision not to run kind of to heart. but who knows what the future

holds. >> exactly. nobody does know. >> right. >> because even loretta lynch is a political -- she's an appointee, say she goes down the obama line that might not be the greatest thing because you might have a saturday night massacre. the justice department there's a lot that could still happen bernstein. do you think about this? >> sort of. i try to focus on the economics. i do think that -- interestingly getting back to trade you know who has a very interesting and pretty deeply articulated manufacturing agenda to help bring jobs back but to support the manufacturing sector is hillary clinton and one way she wants to do that is go after those who manage their currency to make sure it stays low. >> we've never engaged in anything like that. >> did you see this story that said president obama at least privately was telling people that bernie has to get out of

the race? >> i did. yeah. i did see that story. i did see that story. look, i think the democratic side of the race has been pretty exemplary. for a guy like me who likes to hear people talk about policy it's been great. the other side has battled about all kind of crazy things having very little to do with what's really -- what are the problems we face in this country. is to me a state of the uniontive discussion like we had on that side -- >> immigration and free trade that's all they have been battling about. one of them is your main thing, free trade. >> there's no there there. >> that's global. borders is global now. >> it's a centimeter deep in terms of the substance. >> just hold on there one second, fellow. >> i'm not sure it's winning the day. >> your side is arguing how far do we need to go to socialism,

all the way and pass communism. >> you were the guy who just was complaining about corporations not creating jobs in america. you and i are on the same page, buddy. >> we are. we finish each other sentences. jared, thank you. >> my pleasure. >> he's jared bernstein. not richard bernstein. exactly. coming up a look ahead at apple's big event on monday. will the next round much products from the tech giant boost investor confidenceiest again. we'll ask an analyst and talk product expectations. apple has rebounded very nicely from the '90s. here are the futures at this hour.

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box". big week ahead for apple with their latest product launch slated for monday. this in addition to the tech giant's fight against the fbi. lawyers expected to make their latest argument on tuesday. meanwhile the stock has been on tear over the past two months. up 10% quietly edging back up over $1 haunt share. joining us on where the stock is headed from here. what can we expect from moan's product launch? i'm going to throw this whole

segment into disarray by asking a question about this fbi thing first. the story in the "new york times" today, i don't know if you had a chance to see it which is that apple's engineers, the individuals, if asked or if demanded by a court could actually build this piece of software may just quit and say we're not doing it. what do you make of it? >> the equivalent of walking off the line. >> if you quit your job it's not your responsibility. >> the stock has been creeping up over the last few months. just about the time that the whole showdown with the fbi started. there's absolutely sort of a pr aspect to apple/fbi thing. apple going out saying this is wrong, wrong for our consumers and our product. frankly it was the fbi's fault forgoing public. they made it a public thing. in the past apple has complied with court orders. they've done it before. they essentially opened up

phones. they have done it before. there's a difference. what they are talking about is writing new code or separate code. >> you think that's just a ploy? >> i think these engineers are very passionate about what they do. >> if it is, they are pretty smart because you couldn't gauge the country that is so worried about terrorism where that seems unamerican not to do it and win the pr battle i'm not going to do it. you assume something won't happen in the meantime. >> it all elevated. in the public sphere it becomes a different thing. >> the apple you love the rebellious apple. >> way back in the day when they were innovating products and smashing down barriers brings that element back. but the reality is nobody wins. apple doesn't win from a shareholder value. some people who will support the

company, other people who thinks it's unpatriotic. it's a negative from the fact that they can't win. >> we'll talk about the products and the stock but as an analyst looking at this company, how much of a risk factor is this lawsuit? >> you know, it always -- i view that when you get companies like google and apple they go to a certain size and garments chase after them. lawsuits, think of what that did to microsoft. it hampered them for a decade. i view those risks are larger than people factor into the stock. >> let's talk about the products and can you tell me how you factored this in. what do you think we'll hear on monday. and how much does it matter? >> right. new watch bands. >> in the fall when the phones come out that to me is potentially a huge announcement in terms of a huge impact of

where the company goes. what happens on monday, big announcement or not? >> the four inch phone will be a sleeper hit. a lot of people like that form factor. that will help drive unit sales. >> there's potential. the speculation is -- >> a new small phone. tiny phone. baby phone. it's not sort of a hold over. not an earlier generation that they are lowering the price. this is a specifically design smaller phone to appeal to a broader market, right. emerging markets, lot more people out there. i think we're seeing maybe 400 -- >> i'm not sure it's an emerging market. people want a larger screen because it's one device they have. apple has produced millions of four inch phones and then moved away from them. >> with small hands. there's a political joke here. >> let's see how they do with

that because, you know, they certainly have had success with the larger screens. i want makes sense for them to roll out a new iphone with the same form factor that they had which they sold millions of. it comes down to price. the price point -- that's what they are going for. four inch, yes. you always want a bigger phone. you always want more screen size. ultimately it will be about the price. >> it doesn't matter. so while it stays a hardware company it will trade up into the news and then it will trade off after the event. >> the watches you're not so si psyched about the watches? >> there's not a sense of urgency to push into these new areas. >> you got that thing, amazon echo, a siri? >> it works really well. >> it's awesome. >> i turn on my lights. >> it seemed awesome.

>> not this gadget thing. it looks at where execucomputin going. >> privacy. does it upload everything you're saying? >> it does. amazon says they are making it secure. >> microphone on all the time in your house. >> there's a commercial where alec baldwin is getting on a motorcycle with a side car and his friend gets on the back of the motorcycle and he says get in the side car. which we've talked about that. when i get a motorcycle, you're okay with the side car. >> becky will be in the lead car ahead of us in the ferrari. >> thank you guys. good discussions. where is the stock going? >> right in line. >> bold. >> you're the only one. that's bold.

>> i would buy google over apple any day. >> i like it again. didn't go straight to a trillion dollars. apple will be like breaking sticks. already there according to those other clowns. >> wait for the apple electronic car. >> long time before christmas. >> coming in 2019. two number 12 seeds delivering big on day one of the ncaa tournament. we have the highlights and what to watch for in today's games. that's next. coming up at the top of the bower, bridge wear associate president david mccormick will join us. box will be right back. wild-caught alaskan salmon.

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day two of the ncaa tournament gets under way in just a few hours. already been some major upsets that have probably blown up a few people's brackets although i don't know how far anyone would take purdue. maybe baylor. 12 seed yale taking on five seed baylor on thursday. the bears down by one late in the second half trying to go for the win but the player falls and yale gets the ball back with two seconds left. the bulldogs win 79-75. mason made 10 free-throws. 6'1". first ncaa tournament win for

yale. they were in the tournament in 1962 and then back in the 40s but never won a game. they take on duke on saturday. i don't count them out of that game. although it's going to be tough. in the post-game interview mason said don't count us out. university of arkansas little rock versus purr due. this goes to double overtime. you saw this happening. to get into overtime the guy hit like a shot from four feet behind the three-point line at the top of the key. boilermakers down one. diving for the win. hill stumbles and turns it over and trojans pulls an upset over the five seed boilermakers 85-83. they face a team i love iowa state. i had them going to sweet 16. >> that's why you undid them. >> after what happened last

year. i like them. >> when we come back this morning we do have a "squawk" news maker. david mccormick president of bridge water associates. world's largest hedge fund and at the center of a management reshuffling. how the firm is dealing with market headwinds and everything happening internally. as we head to the break take a quick check on u.s. equity futures. after finally getting back in the green yesterday for the first time all year markets are up by 40 points.

hedge funds hurting new this morning noirms closing their doors than any time since the financial crisis. can the trend turn around. we'll speak with the preside"pr of the world"'s largest hedge fund. >> oil staying around it's high. jeremy siegel's new market call. >> madness in march. 11 seeds busting brackets and hearts all over the nation. we'll get you up to speed. final hour of box begins right now. >> announcer: live from the most powerful city in the world, new

york. this is "squawk box". welcome back to "squawk box" right here on cnbc, first in business worldwide. i'm andrew ross sorkin along with becky quick and joe kernen. we're less than 90 minutes from the opening bell on wall street. take a look at the futures. dow looks like it will open up higher. nasdaq up eight points higher. s&p 500 looking to open up 2 points higher. markets in europe, green arrows again. meantime some news headlines. >> yeah. we're involved in high level conversation. >> i can tell something. >> buffett offered me the deal. a million dollars. >> joe never cents one in. >> he's so crafty. i lost the first game. >> he said he would -- >> nobody gets all, it's impossible. >> and the lottery. he didn't sends one in. >> buff fit will write that insurance. it shows what he likes to do.

he writes insurance. >> i can't believe you didn't take him up. >> he takes in money for things that never happen. >> if you don't think you can. win. i don't believe you didn't sends in a bracket. >> he mentioned it. he brought it up. >> oil hitting 2016 high. send me a net jet card. >> i think you have another brick in your future. >> 2016 highs this morning support by expectations of a production freeze by major exporters as well as some dollar weakness which wasn't supposed to happen. brent crude front monthly contract touched 41.71 a barrel. highest so far this year. it seems like a nose bleed territory over 40. shows you how far we've come. russia holding interest rates steady today. central bank warning that inflation risks remain high.

suggesting that the rise in oil prices could be unsustainable. back here in the u.s. we'll get the first read on march consumer sentiment. expected to tick up slightly from february and trio of fed officials are speaking today. new york fed president, boston fed president and st. louis fed president. what are rates in russia? >> we had something coming in inflation was coming down. >> 11%. >> this is what we want. we're so envious. they have inflation and 11% rates. >> they have plenty of ammo for the next recession. >> tiffany, tuxry goods retailer beating on the top and bottom line. the stock is down by 1.6%. it was up by 2.5%. when he an analyst who joined us and said the company was beating lower expectations. again you can see the stock is

down by 1.6%. >> adobe systems the software company topping estimates and giving upbeat guidance. digital media surged. that stock is up by 7%. viacom said the company is getting interest from three dozen companies for a minority stake in its paramount pictures film studio. that stock is up by 3%. bank of america out with news it's adding $800 million stock repurchase program. it's being done to offset stock awards to various employees. feeling the pain. more hedge funds closed their doors in 2015 than any time since the financial crisis. hedge fund research says 979 funds closed last year. fourth quarter of 2015 also saw the fewest new hedge fund starts and hasn't gotten any better yet this year.

assets fell by $64.7 million. markets have come back a little bit. is this just a rough patch or the tide turning against these strategies. mike santoli has that story. >> the shake out continues. the market has stumped so-called smart lately. hedge funds are off to a brutal start losing close to 5% through february. equity oriented hedge funds not credit orma crow. stock picking hedge funds. big ackman's pershing square down 26%. that of course thanks to his outsize bet on valeant pharmaceuticals. the pain is much more widespread. the reason is vicious declines in very crowded trades. goldman sachs tracks the stocks most heavily owned by hedge funds. this basket was down 6% year-to-date entering this date. a 2% dip in the s&p 500. to add further insult the stocks with the lowest concentration of

hedge fund owners were up 3%. if you dougt the stuff no hedge funds really owned you're doing better than thej funds. of course hedge funds more popular shorts are outperforming the markets. many funds are losing bolt ways. momentum stocks that hedge funds piled into in 2015 have been hit hard. beaten up economy stocks heavily shorted and shun. activist hedge fund managers are finding souring credit markets make their game a bit tougher. it's hard to say if this is just a storm, a passing storm but investors are starting to rethink exactly how much leash to give these funds. >> we'll see where everybody lands ultimately. in the meantime we have a very special guest this morning, dave mccormick, the president of bridgewater. we should say of course a big hedge fund but this is a fund that's been in the news a lot recently for lots of different

reasons, lots of commotion about the culture, new hire from apple we'll talk about. talk about john rubenstein closely worked with steve jobs, become co-ceo of the company. we could talk about performance but we won't do that right now. let's talk about this. help us what we've been reading over the past two months about this culture of yours, some people have called it sort of a social experiment, if you will, with ruthless transparency at its core. >> great. okay. thanks for having me. well, first thing you mentioned, management transition. so this is something that has been under way for the last five years. we are in the process, bridgewater has been around for 40 years. very successful. we're in the process of trying to transition from a founder boutique to professional management institution and the key thing to know about that we're trying to make this transition from a single person

to a group of people that can lead bridgewater into future and make it successful for the next 40 years. >> we read these terrible stories or seem terrible in terms of infighting. almost sounds like lord of the flies kind of situation. >> it's hard to understand what's going on from the outside. so let me try to comment on our culture and let me try to put the transition in some perspective. in my career i've been in the elite unit in the military, in the tech world and so strong culture places. bridgewater's culture is absolutely unique. it's very special. it's very challenging. not for everybody. in fact it's not for most people. for people that it's for it's a very special thing. let me describe what is it. it's a culture that's focused first and foremost on excellence. the culture doesn't exist outside of the notion of

creating an outstanding firm. we do that through radical transparency. >> radical transparency i'm physically going to rate you in front of you on an app. that's what we're braegd. >> there's lots of different ways. the key thing is you're trying to create an environment where people are speaking openly and honestly about what they are thinking and about the mistakes. because we think the best way to have that high performing organization we talked about is lifting up the mistakes, challenges and weakness and dealing with them in a forthright high sexual assault way to learn from them and loop on that. that's the key thing. >> that's not an environment everyone thrives on. >> no. it's not. we're not trying to create a culture for everybody. we're trying to create a culture that can be, and i say this with humility, the most excellent firm in the world. >> let me read you something. this is james comey who used to work at bridgewater. this is what he had to say. this is from a letter that he

wrote that was picked up in "wall street journal". he said i smiled and winced when i saw the list of leadership competences that had been omitted, humor, communication, team-building. he went on to say we're very different people. >> that's a good example. i worked very closely with jim. jim is a good friend of mine. that excerpt was from an e-mail. it goes this sensationalism and mischaracterization around bridgewater. that was lifted from an earn mail which was this incredibly complimentary e-mail about the uniqueness of bridgewater and jim left because he wanted to pursue a career in public service. he subsequently went as fbi director and in front of the senate committee that was confirming him, senator grassley's committee he went off on a discussion about the unique

culture of bridgewater and how many some of those principles could be incorporated in the fbi. that's a good example where jim found lots that was special at bridgewater and many of us are there are the same. >> how much of this company now is becoming a technology company. one of the things we saw in the past week you hired a former executive from apple, your co-ceo which is not usually the type of people you see as your co-ceo. this is a totally different thing. >> goes back to the first question this management transition. when you think about that transition not from an array to a single person but a team of people. you think about a group of people that are committed to that culture, a way of operating and abilities to lead and shape and create but also some unique expertise in skills. so jon is a great example who has been an incredible creator in the silicon valley with the ipod. very successful working with steve jobs.

he's worked with an iconic founder in his own right. then deep, deep technology expertise. if you think about bridgewater, bridgewater always had a huge emphasis on technology. the technology is integrated and critical to the success. if you think about our investment process as an example, we talk about being fundamental. systemized and diversified. the fundamental is having a deep understanding of the cause and relationships. we build that understanding through decision rules into our systems. so there's huge technology focus within our research organization and the unique proprietary technology for our research people. helping our clients think through their analytics. jon we think will add to that. >> long term, as ray steps aside

or at least moves to the chairman's role is that the role he'll ultimately take? >> two things. we expect ray will stay in the cio role for the foreseeable future -- >> greg is staying. you here greg leaving this co-ceo post has no problem? >> let me come back to that in a second. so, ray will stay in that investment role. transitioning into a chairman role where that management committee i described that team of people together will manage the firm day-to-day and he won't be as involved. with regard to greg, so greg is a 20 year veteran of bridgewater has been really critical to building the place. he sort of represents the essence of bridgewater. and we've had a plan for some time and a commitment from all of our parts to transition him to more of a focus on his

investment responsibilities and try to figure -- >> what does it say about the culture. usually when you have a big title like that and a title gets taken from you, you leave because you feel that you are not either liked or -- given the responsibility that you think you should have and you're saying in this case it's different. >> in this case, in lots of cases i'll describe in a minute, we're trying build an olympic team. you're basically trying to find the best use of each person to contribute in the way that's most appropriate. >> i need to talk to you as a person that probably should have come on and run for president or something or at least political office. thanks for your service. you were an army ranger, ph.d. from princeton. you worked in the bush administration under hank paulson. now you went to the dark side. you can't become a politician because you worked for

bridgewater. what's the republican party going to do? what's going to happen? you're watching this in horror. watching this as a non-establishment republican? what's going to happen. >> i won't get into the politics of the day other than to say following. if you go from a historical perspective and like at what's happening in the united states, you look what's happening around the world when you have these prolonged periods of challenging economic times you have the kind of political turmoil we're seeing. >> and immigration, far right parties -- >> you see this all over the place. ultimately whoever wins in november is ultimately going to have to deal with leadership and values domestically and internationally. i want to say one other thing about the dark side -- >> i'm kidding. >> i know your. >> bernie sanders, that's a corrupt system. all of wall street and capitalism is a corrupt system. >> i read that and i hear that

and i think about -- i think about our business. i think about pride. pride in our business. if you think about what we do, so we have 350 investors. in 40 years i was only there for seven. we generated $70 billion of profit. that profit for our investors goes to pensioners, teachers, policemen, firemen, it's union members. and they are the beneficiaries of that. so it's a worthy thing. >> absolutely. >> that we're doing. the engine for, wall street is the engine for callism that lifted more people out of abject poverty than any other system but we're questioning everything. we're questioning free trade. we're questioning whether we want a capitalist model or socialist model or communist model. is the republican party fractured? can it come fwrak this? >> i don't know. we'll have to see. >> who is at fault, trump or the

establishment republicans? >> joe, i'm just not going to go there. >> you're basically saying if you're -- you watch what's happening you're saying basically 40% of the republican party are imbeciles and they need to listen to us because we know best. that's not a good way to run a party s-it? >> whoever it is has to lead. that's the bottom line. >> before you go, let me ask you a different question. not a political question but a performance related question. before this we talked about how all these hedge funds have not had the type of performance they used to have. what do you think is going on? we used to look at the bill ackman's of the world. all these guys had this title like image and right at the moment performance has not held up. what is that about? >> i don't know what's happening with the others. i just know, obviously us. and the investment processes, investment philosophy is really around that fundamental system

of being diversified. what's that resulted in, in our case two main strategies. our alpha strategy which is where we're taking active position in the markets. we trade 150 markets. that's had over a 25 year period. 17% annually in the last nine years made money every year. this year it's down a couple percentage points which very consistent with expectations. and our other strategy is our strategic allocation, asset allocation and that's delivered 8% return to 6r years and that's just basically capturing the risk premium that assets will provide you. that was down 6% last year which is very consistent with what you would expect when assets underperform cash. our strategies are performing very consistently with what our expectations would be and we feel good about that. >> people like you don't go into

politics. >> politics are tough these days. >> every four years we look around -- there's 300 million people in this country. it's not something most people want to do, i guess. >> having been in public service, having served in the government you put yourself through a lot. so i have huge admiration for those that run and huge admiration for those that serve. i agree with your points. >> david thank you for coming in and talking us through these headlines. >> very tactful. >> he is. >> coming up, big time bull is back. wharton school professor jeremy siegel will join us and explain why he's changing his call for 2016. stay with us you're watching "squawk box" on cnbc, first in business worldwide. bvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities.

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coming up, jeremy siegel's new market call. he's more bullish and more bullish. >> first take a look. look at the price of oil back above 40. almost 41.

welcome back, everybody. the dow is back in the green for 2016 with transports leading it higher. let's bring in jeremy siegel. professor, it's great to see you today. we've been kind of setting this up as you having a different market call. you want to explain what's going on? you've been very bullish for a long time but you do sound more

skeptical at this point. what your thinking? >> let's take a look at what happened. even i've been surprised in how rapid the markets come back. but in january and early february there were two major negative forces on the market. one was the total collapse of oil prices. down to 26. the second was a threat, a very real threat of a big devaluation from china which could set off a currency war in the far east. now look what's happened justin last s -- just in the last four weeks. oil is above 40 and china punished the hedge funds with a clam dunk. we'll ride the yuan downward, put a million dollars and they said no you're not going to tell us what our currency is. those two deflationary forces have spadissipated that. this week the fed i thought

being much more dovish than i think the market expected. so now looking forward, if it weren't for oil we would have the s&p earnings up this year. if it weren't for the dollar being so strong, we would have it up even more. so both -- now that we've had a recovery of oil and the fed being dovish which means that puts a lid, i think on how strong the dollar is going to be, we could see a rise in earnings. now, i think we have to wait a little bit to see those earnings rise because year to year comparisons are not looking good. if we do get that stability, i think we can have that 10, 12, 15% gain that i thought last december that looked pretty bad call as we moved into february this year. >> okay. so it's a more nuanced view of the market. still possible but you're saying a lot of thing have to fall into place and you have to see earnings carrying the water in order to get those new highs?

>> i do think. because, right now s&p operating earnings which is a pretty conservative way of looking at earnings, you know came in last year at 1,000. i mean at 100. with the s&p now over 2,000, you know, that's over 20 times operating earnings. that's a pretty rich number. not that crazy in a low interest world but certainly that's not cheap. if we can get earnings bouncing back to 110, 115 this year, then i think you have the platform for a goodyear. but i would like to see those earnings really come in higher. otherwise i think you're going to be, have a lid on the market pretty much where we did have the highs last april. >> jeremy, when is the last time you looked at the market and got concerned that it looked a little rich in value to you? >> well, i mean, it certainly really very rich in value. really was 2,000.

there we were selling for 30 times earnings with interest rates much higher than we had now and absolutely at a peak of a 10 year business cycle. now we're selling at 20 times very depressed earnings which will bounce back if oil stabilizes, in a much lower interest rate environment. and to me that is not a scary valuation. it's not a cheap valuation but it certainly is not a scary valuation going forward for equities. >> but it does sound like a lot of things have to fall in the right direction in order for you to be telling people -- >> oil has to be above 40. i think we need to have the dollar not continue to rise. i think those two things happening could, could lady us to a good market. >> the biggest issue -- >> if oil falls back down and the dollar don't rise i see no way the markets can go forward.

>> if the fed raises rates that's the type of shock to the market that could -- >> i know they said two raises -- i mean, you know, i mean core inflation is moving up. i was surprised they were as dovish as they were if core inflation continues to move up and if they do raise twice, that's going to be a challenge for the market. i think the market is expecting at most once this year, that's what they would be happy with. two times increase. we have to see strong economic activity to get over that and still have a stable market. so, yeah, the fed could still be a challenge going forward. >> in terms of things you worry about, you mentioned the dollar if it picks up strength, you mentioned oil prices if they fall back below 40. how do you feel about the economy at this point? does the economy justify the fed actually jumping in and raising particularly when you look at inflation that started to pick up, particularly when you look

at unemployment that's below target? >> well, you know, they lowered slightly their unemployment target. they seem to be, you know, 4.8 rather than 4.9%. we still have very strong job growth. there is no sign of a recession in the economic data we have. and that's always the major cause of a bear market. earlier this year it looked much more likely and if oil stayed down at 26, wow, i mean. if the dollar kept on strengthening and emerging markets collapsed, our china looks like it's stabilized, oil has stabilized. i think those two fors saying we can go another six months, nine months, 12 months with good job growth and an earnings bounce back. but i would worry about, you know, if unemployment goes down to 4%, and core rates of

inflation go up we'll have a hike and that will put a lid on the market certainly. so i can't be wildly certain at this point. i feel a lot better than i did in early february. >> professor siegel thank you. >> thanks for having me. some breaking news now from david faber. 8:32. oh, my word. must be big. must be huge. >> 8:32. hi guys and gals. did want to update our reporting on that bid for starwood that's been going on and in fact can tell you this morning that anbang and its partners have reached an agreement to acquire starwood for $78 a share in cash higher than the $76 a share offer they previously made. sources familiar with the situation tell me an announcement is expected this morning that, in fact, starwood has reached that definitive agreement. importantly starwood has not

signed that agreement anbang has. it's a fully financed offer to acquire starwood at $78 cash. starwood hasn't signed it because they have to give marriott five days by business days in which to respond to this higher off per. marriott deal is for 4.92 shares of marriott and dollars 2 a share. its value is certainly well below that of the anbang deal at this point. sources familiar with the situation say there's an expectation based on conversations that have already taken place that marriott will counter bid to try to maintain its current deal to acquire starwood. and so that five day clock will begin very shortly and marriott will have that time in which it will try to construct a deal to meet or exceed the value that's being presented to starwood and it's board of directors from anbang. they are not expected in any way

be able to compete cash to cash. marriott's deal was a lot of stock. expectation is they will put in more cash. but the board may take into overall question as to whether that will create more value. so it looks to be ongoing here but right now starwood shareholders have to be very pleased. 78 bauks share has been the deal that's been reached with anbang and its partners. they've been aggressive in buying properties here. >> let's say they go, i don't know, let's say they go up cash and 70% stock. whatever. would it have to be significantly higher than 78? >> no. i don't know that it would be, joe. in these kinds of situations the board is going to have to take into account we think many of the synergies and benefits of this combined company to our shareholder base which will control a decent percentage of the overall company will eventually be worth doing that

deal. not necessarily. it's interesting, the anbang side may not get rid of many jobs because they will keep management in place from at least the early think cigarette whereas with the marriott deal you'll have a lot of potential sfe synergies coming in. >> let's bring in the marriott stock. it matters how the shares react. shares have been coming down a little bit as david was talking about, some of this news. okay. up and down through the morning it had been higher by about a dollar or so before david came on and talked about some of this thus. >> david, break up piece, 400 million >> break super400 million. once they sign. if starwood signs if marriott doesn't come back they feel is sufficient 400 will go to marriott. >> we'll see you at 9:00 and look at that news to cross the

tape. the founder and chairman of ever core roger altman will join us here on "squawk box". i appreciate you coming by. absolutely. the market's been pretty volatile lately. there is a lot at stake here, you know? look jim, we've been planning for this for a long time. and we'll keep evolving things. so don't worry. knowing what's on your mind and acting accordingly. multiplied by 13,000 financial advisors. it's a big deal.

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donald trump tightening his grip on the gop nomination and

some investors are beginning to wonder what a president trump would mean for the stock market. joining us now is roger altman. roger good to see you. you're a long time, obviously, long time friend of bill, friend ever hillary so, we'll take that into account. you say right now trump has or hillary has a 70% probability that she's going the next president. where is that number from? >> well that's from nate silver, for example and from -- >> they are the guy in illinois that said -- >> some of the small relatively liquid betting sites. >> it is from the sites that actually -- but there's no volume yet in those. >> not much. >> so we don't know exactly what is it. okay. now we can get your view and you think because he has a lower percent of the black vote than romney he would need a lot of european educated white guys to vote for him and you think that's unlikely.

>> i think the big word in the fall will be demographics. we know nonwhite share of the electorate is growing every four years. interesting new book called "brown is the new white" and one statistic that stuck with he every day there's about 1,000 new white children born and 4,000 new nonwhite children born. so the composition of the electoral college is changing. you heard these numbers before. if you look at the states on one side that have voted six consecutive times to the democratic nominee they represent 242 electoral votes. look at the states other times six times row they want 108. the democratic nominee assuming a traditional one starts off with 242 of the 270 electoral votes. only 28 short to win. a huge advantage which is fundamentally about demographics and all these states that used to be traditionally red,

arizona, virginia, new mexico, colorado and so forth have been shifting for demographic reasons. you're a republican nominee you have to be competitive in the nonwhite vote. romney got 27% of that. he lost to obama. george w. bush at a time when the hispanic vote was a smaller population, won 40% of it and prevailed by the smallest of margins. does anybody really think donald trump with his obvious rhetoric is going to get a healthy share of the nonwhite vote? the answer is no. is donald trump likely to become president of the united states? the answer is no. could donald trump lead to strof jek down ballot -- lead to catastrophic losses, yeah. >> if you are correct and, i'm just going -- since i'm talking to you i'll let everything you said stand then you understand the troubles and problems and

quandry that the establishment republican party is facing right now. you can win without the trump 40% but you're saying that it's unlikely to win even if you do throw your fulling weight behind donald trump. that's your view. >> you have to say to yourself, i think, being objective. trump has been very clever. you can win the presidency without getting a george w. bush share of the nonwhite vote. he won't get it. it's obvious he won't get it. the chances he becomes the president of the united states is very low. chances he turns out to be the 2016 version of goldwater are really very high. >> who is more attractive, trump or ted cruz? >> cruz is probably -- >> given the math you laid out. >> it's the same problem that trump has. >> the answer is if the four of us, you know, in some different planet owned the republican party we would want cruz because

he doesn't present the chances of these catastrophic losses at other levels of the ticket that trump does. >> why is that >> cruz will not -- cruz is a lower baited candidate. the risk with cruz is lower. he's a conservative republican. he'll produce a reasonably close election. won't be that close. but the chances that the republicans have for these historic losses at other levels i think are lower with cruz. it's me. at the same time, you know, i don't think he'll win either. >> what if donald trump brings out new voters and vote down the party line? >> joe talked about some of the speculation that perhaps trump could bring out a historically high white vote. the numbers you need are in the 75% to 80% range. can anybody really imagine -- >> i don't have any idea what will happen because it's a brand

new electorate. i think the polls are off. i'm not saying -- >> at your own risk play pundit. given the record of the pundit so far. >> here we are in march. there's a chance i'm wrong. >> you're talking about a deeply flawed candidate winning in a landslide. somebody might be indicted before the election. >> the republican establishment is terrorized with this talk about denying trump the nomination. they are terrorized by this possibility that their gubernatorial candidates, state legislative candidate, u.s. congress candidates get blown out in a landslide type of election on the wrong side >> you're lucky if you're right about trump. you're lucky it was the year of the trump because you have deeply flawed candidate. a deeply, unpopular, that feel country would be anybody but hillary in any normal setting. maybe you squeak by on that notion. you got a deeply flawed

candidate who talks about somebody not embarrassing the presidency without a hint of irony. >> you and i don't agree on that. one thing that will happen if trump is on top of the ticket whether there's an enthusiasm gap or not with mrs. clinton, the antagonism towards trump on the republican side will produce a big turn out. >> that's what i'm saying. maybe if you're right you pick the right year to run her. anyway. >> as if i had something to do with it. which die. ? you're an establishment democrat. nice to see you. >> when we come back one of the most contentious tech policy issues. net neutrality. could changes be around the corner. we'll tell you where the presidential hopefuls stand on this issue. box will be back after this very quick break. accelerating next. hewlett packard enterprise.

welcome back, everybody. now to politics. one of the biggest legislative concerns facing the media industry is net neutrality that issue whether broadband provi providers to treat all internet traffic equally. >> president obama has been a proponent of net neutrality one reason why fcc ruled in favor of a free and open internet last year. many companies are invested in how this debate plays out. those in favor wants to make

sure their streaming video gets to consumers without restricts. netflix, youtube and facebook. those opposed are the broadband providers, at&t, verizon and cnbc parents comcast they want to make sure they can manage internet traffic most efficiently on their pipes. here's how the 2016 candidates stack up on the issue. hillary clinton says that enforcing strong net neutrality rules would protect free and fair competition. bernie sanders takes a more extreme approach. internet fast lanes are grotesquely unfair. on the republican side donald trump is posed to it going so far as saying net neutrality will target conservative immediate why which misinterprets the issue. ted cruz calls it the biggest regulatory threat and john kasich hasn't said much on the issue just yet. regardless of the outcome of the election the debate over how broadband providers handle internet traffic is certainly to remain a hot button issue.

joe? >> yes, yes indeed. that goes with some of those sentiments. i won't tell you which ones. julia, thank you. when we return, jim cramer jim free and fair trade jim cramer will join us from the new york stock exchange. futures now up 50 again. hundreds of crash simulations. thousands of hours of painstaking craftsmanship.

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let us get down to the new york stock exchange where jim cramer joins us on a day that -- is this the -- i guess do you have to go back to january 1st to have the dow in positive territory. is that the last time we were talking about it? >> yeah. remember, january's down, the rest of the year is down. all those people said that stuff. where are those people? those people who declared it would be a bad year because of january. they left or are talking about something else now. that was the prevailing wisdom. it was so strident people left the building. i think that was big mistake. >> what's the deal with inflation? like goldilocks? perfect? just right?

>> i think so. if you strip out minimum wagewa down year over year. that's what the fed is struggling with. wage pressure from digitization, laying off people, outsourcing to mexico for $2.10 an hour is keeping wages down. that's why we're all talking about trade. >> jim, if -- we'll make it fair and balanced. if either -- if it either looked like bernie sanders or someone like donald trump or ted cruz, if it started to look like it wasn't going to be hillary, we heard from roger altman, it's 70% hillary, and the republicans will be lucky to hold on to the senate or governorships or state legislatures if it goes that way. if it started to look like it was going to be an outlyer candidate, like a bernie sanders or a donald trump, how would the market response? >> sanders probably not because of the superdelegates.

i think there's still a disbelief that trump would be as anti-business as he says he is. the reason that is is because he's a business person. when will he resign from trump the way michael bloomberg designed and took a hiatus? the skepticism about this guy, he has to read that karl rove article the other day, which talked about what it means to be presidential. i think the business world, when i say this, i'm hated on twitter. this world is welcoming hillary clinton because she kind of understands business. a long as sanders stays in, she will be antagonistic. >> that's the state of politics on both sides. trump won't do what he says, we know hillary won't do what she says. we discount both of them. they won't be as bad as they say

they will be. >> when obama came in, talked about fat cats. >> yeah. he actually followed through. >> yeah. he got in, he was much more vitriolic. >> he didn't disappoint. >> he went full bore. >> exactly. >> thanks, cramer. >> when we return, transcanada buying columbia pipeline group. we have the details and the stocks to be watching. let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade.

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jpmorgan is raising the stock buyback program up to 1.88 billion. maybe that's just jamie writing another check. i don't know. that's in addition to the shares authorized for repurchase by the bank last year. he can do the one, just not the 0.88. >> he has about 1 probably. that's what they say. >> that's what they say. >> transcanada, the company behind the controversial keystone excel pipeline -- i guess we did make it controversial. >> that's been going on for

years and years. >> buying columbia pipeline group. not really controversial. >> if it wasn't, it would be built already. >> consider the source. they will be buying them. >> that does it for today. right now time for "squawk on the street." ♪ >> the yale fight song as the upsets begin. good friday morning, welcome to "squawk on the street." i'm carl quintanilla, with david faber, jim cramer. stocks back to break even for the year, on track for a fifth week of gains. david has starwood news. we'll look at tiffany and adobe and more. europe is green but will be more mixed for the week. plenty of fed chatter. three officials set to speak, oil hanging on to the low 40s for the first time since