>> you did very well. >> "power lunch," more bleeding, 1:00. >> andrew, see you tomorrow. >> from north carolina. >> remote tomorrow and see you back here next week. that's it for now. make sure you join us tomorrow. "squawk on the street" starts right now. good thursday morning. welcome to "squawk on the street." i'm karl quintanilla with jim cramer at the new york stock exchange. reversing gains over corporate news. more pfizer fallout, yahoo! a new "star wars" trailer and more. europe's mixed. japan finally caught a bid, the first of eight sessions, and claims roughly in line. oil's pretty steady, too. our road map begins with three ceos speaking out and making waves. jp dimon releasing a letter that has wall street buzzing. >> and pfizer ceo ian reid also

speaking out after abandoning his potential mega deal with allergan, calling out the treasury in an op ed. >> and jeff immelt taking on bernie sanders in an op ed of his own, saying "we create wealth and jobs instead of just calling for them in speeches". let's take dimon first. jpmorgan's jamie dimon warning increased volatility is likely to stay. he writes, "the good news is that the system is resilient enough to handle the volatility. the bad news is that we don't completely understand why this is happening." dimon discussed the bank's healthy balance sheet, showed some disappointment in the stock performance compared to the benchmark over the past decade on the heels of that "journal" op ed the other day. >> look, he talks about what the balance sheet really means. best line in the letter was, you can see in the table below that jpmorgan chase alone has enough loss absorbing resources to bear all the losses assumed by the 31 largest banks in the u.s. that's the good news. bad news, you know there was a

thing called the whale. >> there was. >> and the whale was bad. and there was regulation in part because of this, in part because banks did things wrong, and that's completely overlooked in the letter. all that we hear about is the blowback from the regulations. so, you know, we -- yes, it's true, they're spending $9 billion now, and that's just dead weight loss on all these people that are in -- 24,000 goes to 34,000 in compliance. but you know, there's a reason, and the reason was, there were bad actors, and there was a lot of money lost with whale. where is that in this letter? where is that? >> it's not there, i don't think. there is a pretty straightforward discussion of what he believes is his failure to do particularly well in the stock market, keeping up with the s&p. >> right. >> but not really, and outpacing many of the other financials but not outpacing the s&p 500. and that is interesting when you

go back. i mean, it's a long way now that this stock -- >> 2002. >> yeah, like '04 since the bank one deal. ,a long time. >> well, yes, the neighborhood's bad, okay, and he's the best house in a bad neighborhood. frankly, i'd rather be in a good house that doesn't lose $8 billion. you know, when you read mark zuckerberg's conference call, he doesn't talk about the $8 billion loss he had while setting up a web page in, i don't know, australia. you know -- >> the whale was six, wasn't it? maybe it wasn't eight. >> well, i don't know. "the new york times" said it was six, then it was nine -- >> you're right. looked all over. >> wasn't a tempest in a teapot, that's your point. >> no. and you go down to the justice department, you may think the justice department's totally unfair. >> well, it is. then they fine them because they had their own screw-up, even though it didn't hurt anybody on the knwhal. >> i'm saying dsh. >> he's made that point many times. >> that's a good reason not to own a stock, isn't it? you guys are bad, so we're going to fine you more money for losing money. >> when i was at goldman sachs -- yes, i was at goldman,

oh, my god! there were revenue producers and people who weren't. and if you were not a revenue producer, you just kind of sneaked around. you were under the desk, like ooh, i don't produce revenue. well, there's $9 billion worth of people who don't produce revenue, people in controls. you can say the government mandated that, or you can say listen, they needed controls. and i am wondering whether this blowback letter is too soon. it's too soon. now, bernie sanders had some interesting comments in the "daily news," which i usually read the sports section, but suddenly, it got pretty exciting. it's more exciting than -- how many runs did the yankees have? >> 16. >> 16? where he's breaking up the banks by saying hey, you know what, more treasury, banks are broken up. that's all simplistic, but the two extremes of listen, we did everything you wanted and our stock didn't go higher, and let's break them up, it's somewhere in between. >> karl, interestingly, though, i would say the stuff on the brexit, which we haven't talked

a lot about. >> no. >> is worth sort of focusing on in part because we haven't that much. in other words, there was a recent investment conference where i think paul tutor jones also had some things to say, very worrisome, and dimon no exception here, saying you know, the best you could hope for is a great deal of uncertainty for years to come. the worst, a lot worse. >> yeah, even though some of the polls, i mean, they go both ways. >> that was jarred. >> but the way they're selecting their sample makes a difference, too, over there. june's going to be here before you know it. >> yeah, and we have got reporting coming up. in fairness to jamie, let me say, he has written extensively about what's going on. i'm just saying maybe it's a little too soon to start talking about, hey, you know what, it's okay now. and he's not blaming the regulators necessarily for the performance. the world is a changed place,

the world. brexit. who would think you have to worry about brexit? but i do think in terms of picking stocks, a big mutual fund has to own some financials, and they do own jpmorgan. that's the one they own. but when you read the letter, brexit -- but he also talks about how argentina's a great opportunity. well, brexit, argentina. general mcchrystal, nice comment about hiring vets. >> britain brexiting the european union is potentially more scary than the opportunities in argentina. just saying. >> well, i -- you've got to -- look, jamie writes the letter, okay, and this is not like, you know, the letters of general eisenhower. it's a letter, but it's a good letter, it's thoughtful. it's a thoughtful letter. >> it is thoughtful. we've got a few thoughtful op ed pieces also that we want to talk about this morning. we start with ian read, pfizer's ceo calling out the treasury in an op ed after walking away from the huge deal with allergan, calling it off yesterday

morning. in the "wall street journal," mr. read writes "this week's treasury action interprets the tax laws in ways never done before. this ad hoc and arbitrary attempt to single out and damage the growth opportunities of companies operating within the current law is unprecedented, unproductive and harmful to the u.s. economy." allergan ceo brent saunders, of course, joined us on the set yesterday morning, also was critical of the government's decision. take a listen. >> these rules, this three-year lookback, was designed i think very specifically to target this deal. i don't believe based on initial review it impacts any other deal in virtually any other circumstance. >> case remains the same, we are without corporate tax reform, without even any possible hope, it would seem, in the near term that that will become a reality. and mr. read's point is one we've made a number of times, which is, okay, you've now drawn perhaps a wall, created a wall -- these are the words of brent saunders yesterday.

so, those of us who are not foreign companies are at a disadvantage against those very same companies. i wanted to actually become a non-u.s. taxpayer in part because the rules here are antiquated and i wanted to get a hold of all my overseas cash. mr. read doesn't say this, but this is the main reason in part so he can bring the cash back to invest in the u.s. that at least is the argument of any of these companies. >> right. >> the other side is you depend on the u.s. for so much and you just don't want to pay taxes here. of course, they do pay taxes on all their earnings in the u.s. the other impact of the change at treasury in terms of earnings-stripping may actually result in higher tax bills for already inverted companies and foreign companies that have u.s. subsidiaries. but jim, we're still sitting here without any hope of corporate tax reform, and they say we're penalized, and the end result will be we get bought by foreign companies because we can't compete. >> yeah. but look, yesterday there was the greatest biotech rally in a year, and it was caused by a man sitting there just saying,

listen -- i've got the great deal going and you put a wall around the u.s. and an illusion other people want to put walls on. brent was on his game, brent saunders, ceo of allergan. but yeah, it's like shooting fish in a battle for foreign company. do with we want that? "usa today" cover story, the government versus business. >> how about page one of "the washington post"? i'm quoting here -- "the president seems to have shed any hesitation to take actions that critics might dub antibusiness." >> exactly. >> you couple that with the baker hughes action yesterday, the doj, long time in coming and perhaps way too long. i mean, if they really felt that way, why did they wait 18 months? but the two coming so close together certainly do have that feeling. >> i'm going to put it right to you. >> okay. i'm ready. >> is dell/dupont dead? >> whoa! i don't think so. >> why? do you think the president -- >> i don't think the overlaps are that large.

>> president's -- how about he calls, i don't know, epa, says dupont's -- >> the only thing i will say is when it comes to antitrust, you do have the courts to go to. in the case of odp staples, for example, the courts are weighing in. baker hughes/halliburton, they say they're going to court. where pfizer and allergan might have been able to go to court, but to have standing, they would have actually had to do the deal. it was impossible for them to take that risk. >> two of the largest chemical companies in the world. do you think the president wants that? >> i don't know what he wants. >> doesn't sound like you do. >> my travel trust owns dow. i'm kind of worried. >> yeah. >> now, i will say this, this is unprecedented, and i still go back to what jack lew said to us, which is that in response to senator glassley saying, listen, he said code doesn't really allow us to block these. someone said to jack lew, find a way to block the allergan deal. now when i look at the chain of command -- >> i think you're right. >> i haven't seen hamilton yet,

so maybe there's something i don't know. >> me, too, haven't seen it yet. counting down the days, though. we've got tickets. >> you have tickets? how did you get tickets? >> we bought them a year ago! >> i thought you might have used pull. >> no. >> but i do come in, so, like i think the president said something to lew. i also think that that airline merger, that was the top. >> you mean alaska -- >> no, no, american -- >> united, continental, american. it's like, let's get together and everybody's tickets went up and it's extremely full-flight -- also, can you please put your baggage on another plane? and people got fed up, and i think that was the highwater mark of mergers that raised prices. and i think this dow/dupont.i tried to get a hold of somebody today, but i'm just worried. i think the president can just say hey, you know what, that's wrong, and then they can challenge it. they can sue. they can -- >> we are still a country of laws. >> hey, you know what? >> although changing laws is

what read would say. >> although those aren't laws. that's the problem. they're just administrative actions. >> i thought there was a moment in jamie dimon's letter that was eye-opening. he said that brazil's a rule-of-law country, which made me think, kind of interesting. i didn't think brazil's a rule-of-law country. very optimistic on brazil and argentina. >> yeah. they've got an ad hoc committee working -- >> just in terms of, like jamie, i'm sure he's watching. hey, jamie. so, i'm bringing up the positive mention of brazil. >> you're a bright, shining light every morning. >> yeah, i am. you know what? >> of hope. a beacon. >> i'm a hole in one. >> yes. >> which no longer means that much. >> apparently not, not in augusta. when we come back, jeff immelt taking on bernie sanders in this op ed in the "washington post," saying ge's destroying the moral fabric of america. senator sanders is about to speak in philly. we're going to monitor that and see if he has any response to mr. immelt. meanwhile, take a look at futures, weak to start the open. more "squawk on the street" from post nine in a minute. here at the td ameritrade trader group,

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just two days after senator bernie sanders called out ge for being among corporations he called "destroying the moral fabric of this country," jeff immelt speaking out against the

democratic presidential candidate in an op ed to the "washington post," writing "u.s. companies have to answer to their shareholders every day. ge operates in the real world. we're in the business of building real things and generating real growth for a nation that needs it now more than ever. i'm proud of what we can do and how it figures into the fabric of america is so plain to me. it seems senator sanders is missing the point." bernie sanders is set to speak at a news conference this morning in philly. if he mentions immelt, we'll take that directly. also says never been a big hit with socialists in the century-long history. >> this is jeff just talking, dictated and it's very coherent. >> it's a really strong letter. >> it's really good, isn't it? >> it was. >> how about the fact that they have a big plan for -- >> he seems to be reminding senator sanders of all the jobs that they actually are responsible for in vermont and the economic activity that they're responsible for in the state, as though perhaps the senator's not aware of that. >> and immelt says has never been to -- >> right, has never visited a plant. >> repeating a lie over and over

about ge not paying taxes? remember, that was the story about ge. >> they worked very hard to keep their tax rate as low as possible. >> but you always come out for tax reform. somebody said in on twitter. it's not true, but i'll just say it. >> corporate, not comprehensive, but everybody keeps linking them and that's why nothing will ever happen. >> ge says even if it raises our tax rate, we want a comprehensive. i've got a soft spot. i thought the letter made sense. >> the "daily news" interview with senator sanders is worth a read, because when it came down to specifics, how would you go about breaking up the banks, he didn't really have a lot of answers. and then he sort of kind of went to ge as a bad actor somehow. >> yeah. >> and it was unclear to me exactly what he meant. and perhaps unclear to mr. immelt. >> yeah. i mean, i read this. i was thinking, when he talks about -- he mentioned that he would give a tour. i didn't know they had such a

big aviation outfit and how many people they had in vermont. maybe he should pick on a company that used to be in vermont. but do you think picking one sanders is now going to cause a war against ge? >> from -- you mean a sanders/ge war? >> these guys, you pick on -- if you respond to sanders, i want to hear everything sanders says today, because maybe he starts talking about ge and the hudson river. i mean -- >> there's also ford/trump, right? >> geez. >> adding mexico's small car production in the face of trump's criticism. this is going to go on all summer long. >> you've got to keep your head down. you really do. you have to keep your head down if you're in business right now. >> and there doesn't appear to be anybody in the race really stepping up to the plate being, yeah, business. >> yeah. i don't think you're going to hear hillary saying you know what, i've been with lloyd for a while, lloyd blankfein, and he's got real good ideas -- >> what i was struck with reading the "daily news" interview with bernie sanders,

there was paragraph after paragraph if you didn't say it was sanders, you could think it was trump. they're saying the same thing about trade, about jobs, almost virtually identical. >> i know. they're the same. i mean, this is -- >> i mean on that. >> it is incredible that we have candidates basically saying the same thing, coming at it from different directions. but now, by the way, if sanders -- in the sanders regime, sanders, i think he stays the same in terms of how much money he makes and stuff. i think trump would be hurt more. >> yes. >> right? >> but are you -- you're not arguing the market's pricing any of this in as a reality. >> i just think that -- immelt, when he blasts sanders, is now -- i mean, i think that sanders has some staff guy right now going over the 47 things that ge has really done wrong versus the vermont plan. i'm just saying, to take these guys on, it's like the mccarthy hearings where mccarthy was going nuts and attacking that guy and attacking this guy and that guy in the '50s, not -- this is the original senator

mccarthy, then suddenly took on the army. i'm waiting for someone to say, like ten business executives to get together and say enough. >> you mean, have you no decency, sir? >> have you no decency. mr.ch. >> they're getting together against some of the laws being passed, whether it's mississippi or georgia -- >> that's marc benioff. >> well, it's more than him. >> but he's rallying a cause and he's getting people, a diverse group of people. but i just keep waiting for the business leaders to say enough is enough, because it's immelt says enough is enough and jamie says enough is enough, but these guys -- new york primary coming up, guys. >> april 19th. >> holy cow. >> already cruz on the front page of the "daily news" today. >> by the way, way to go "daily news" making themselves relevant again. that headline -- >> i don't think we can show it.

>> we don't have a "u" train. we do have an "f" -- >> the "u" train is chronically late and packed. i thought that was the headline until i saw the "u" train. >> i don't believe we have a "u." i take the subway a lot. >> are you sure the "l" doesn't meet the "u" somewhere? wow. >> we will get cramer's "mad dash" after the break. counting down to the opening bell. one more look at the opening market. "squawk on the street's" back in a minute. hey dad.

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this is when i remember what day it is. it's thursday. >> holy cow! >> holy cow. how did that happen? >> baseball started. >> we've got a mad dash -- it has. it's cold out. >> a little too cold. dave, one of my heroes is wynn, okay? it should be spelled w-i-n. why? because right here, this man came in, bought $100 million worth of stock. you have to include february because he bought it then. now look at this. why? he just said my stock is too cheap. well, he had a presentation yesterday. they are opening -- basically, he's building a beach in las vegas. he's saying we're going to have white sand, we're going to have a beach. well, there's no water there, there's no ocean. he's building an ocean! he's got the great boston harbor, a second casino coming up. obviously, you could say why didn't you upgrade it here? but see -- >> is it more about macau? >> macau's coming back. i don't know about the junkets. he took on the communist party in that last call. talk about taking -- listen, you can take on bernie sanders. he took on the party. it looks like the party

listened! i mean, the party, it's a party. >> it's a party. >> in the end, it's a big party. they're having a party. it's having a good time. it's like the coke's in the ice box, sam koch. so, i think it's a remarkable turn, they saw it coming and i think you'll want to buy stock ahead of the presentation. >> at 5 bucks a share? >> it used to be much higher. not at 5. this boston harbor casino, we'll go up there, catch a hockey game or something, then we're going to go -- this is the only integrated casino resort in the greater boston market. then we'll go to the ocean he's building in vegas and then macau. >> i'm looking forward to that. >> that will be some trip. >> let's get that on the calendar. >> and we'll do shopping. macau has great shopping. did you ever see the art collection he has? >> yes. >> it's like -- >> incredible. >> you could be the curator, steve wynn, it's like the best

job in the world. i love steve wynn. spend some time in philadelphia. >> we've got the opening bell coming up after this.

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you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in about a minute on this thursday, where a lot of people are watching forex. the yen continues to test over there. meanwhile, stateside, a lot of news in retail, whether it's costco with a 1% comp, lb spl splitting into a few different units. >> first of all, i thought the costco, my charitable trust owns -- it's better for some guys. it's hard to read these days because of the deflation in food, but more important, gasoline. really hard to get a feel for it. can i just say that leslie wexner is never satisfied. he does a great number. i mean, much better than expected, and he still says it's time to break up victoria's secret into pink and some other. he's a wealth-creator. and he never stops. the man never stops. and i think you've got to appreciate that and you've got

to buy his stock. >> march comps up three. street was looking for two. >> yeah! bath and body up five, amazon, bath and body, bed bath & beyond, by the way, wow! >> we'll get to bby later. there's the bell and the look at s&p at the bottom of the screen. at the big board, gts celebrating its acquisition of barclays, designated market-maker business. at the nasdaq, it's tusk, an african wildlife conservation organization. you mentioned biotech yesterday, jim. vrx is coming off its best two days in 20 years, despite the year-on-year loss. >> well, i mean, i think what happened here is that, remember, saunders did not rule out buying bausch & lomb. that was one. >> no, he did not. >> then ackman did a very pro-valeant call. and then after the close, we learned about debt forbearance.

this is getting the shorts. >> we also knew during the course of the day that it seemed likely they would get forbearance from their lenders. there's also, it's interesting, a number of the funds that are credit funds that are actually own the bonds -- >> yes. >> -- that participate in the group that negotiates with valeant to give it the amendment, go out and buy the stock, too. you know that, right? they're buying the stock because they know there will be a decent outcome on the negotiations they're conducting on the bonds side. i guess that's legal. >> so, they're conducting -- they're buying on material information, but then again, it's valeant. valeant's kind of like -- >> you're a fixed income fund for the most part. you have these bonds and you're negotiating for the committee, whatever it is, but you can go ahead and buy the stock. you'll make more on that than on the amendments they got or whatever the uptick was they got to delay their filings. where are we talking now? they're 10k now, extended to may 31st, 2016. and their first-quarter filing from this year is extended to

july 31st, 2016. so, valeant got breathing room and that's why you're seeing a big move in the stock over the last couple days, because there had been real fear -- >> right. >> -- that they might not be able to meet the filing deadlines and they'd be in default and that somebody would act on that default. it's not clear they would have. >> i guess a lot of people feel they're out of the woods. i don't know. i mean, i heard brent saunders basically saying look, we're goi gunning for their dermatological -- you know j&j is gun ining for them. i think during this turmoil, i'd like to hear about the earnings. >> they also have a lame duck ceo. >> right. >> they're searching for a ceo. mr. ackman yesterday on a conference call dealing with pershing, he's a board member. one would expect he would not be able to talk about these things publicly, but that's never stopped him. he did say he sees it as weeks, not months, before they find a new ceo. >> well, look, the stock got oversold at $26. is it overbought at $37?

i don't know, if they really have cash flow. this one just plays by its own rules. it really does. >> yeah. >> but the fact that valeant lifted and the fact that brent saunders is going shopping and the fact that pfizer may have to buy caused this incredible rally, and valeant, look, if they get debt forbearance, they've got some time, and they can sell bausch & lomb or whatever. they can do something. >> they could. they're selling some of their best assets, but yes. there you go. they still have $30 billion in debt. don't forget that. >> well, look, it's a flabbergasting situation, because i've rarely seen a company do whatever it wants. they declared themselves, we didn't do anything wrong accountingwise. we don't really have a ceo. we have a guy who we're trying to force off the board. i mean, imagine if this was like merck. merck, the guys would come out

of retirement who used to be -- the chairman would say, listen, this isn't the merck i know, but valeant is kind of a different -- >> it is. >> marches to the beat of a different drum. >> yeah. >> right? >> a lot of good sell side stuff to talk about today. one is coach, which is upgraded at william blair. no they take the target from $50 to $40. >> blair did a study. and i've been to coach and coach looks great. and they no longer -- you know when you go to an outlet center, i always felt that you're getting the same stuff with coach -- they're getting rid of that strategy. and i think a lot of these guys are really weighing on this idea that when you go outlet shopping, you're getting the same stuff. and that's going away. i think that they figured out that they were killing themselves, and coach was killing itself. >> yeah. >> so, i think this new guy's running -- he's doing a good job and coach is a buy. >> morgan stanley puts an $8

bear case on twitter, although their target remains $16. they see virtually no new user growth in '17 versus the prior $3 million estimate. that's -- their new users -- >> yeah that was a really negative piece. >> yeah. >> wow, geez. but jack doesn't have to worry, because today he's at square. remember these two companies. no, i read that piece and i said, well, i would shoot myself if that -- like, wow, okay, we're a bunch of losers. but diane von furstenburg was on earlier. we had a fabulous interview. i don't know if you heard the interview. but she was like, i feel sometimes like a big loser. if i was at itter, like, i'm a big loser. that was a really negative piece. >> no user growth for a year or two to come is not the way you want to go. >> no. >> if morgan stanley proves correct. >> yeah. this is -- yeah. does yahoo! have more growth than -- >> no, no, yahoo! doesn't really have a lot of growth either. >> no. so, what do you do with these

no-growth companies? >> did you read the swisher piece yesterday? she quotes a potential buyer who says it's like a dilapidated house in silicon valley. you walk in, you realize how much work has to be done, but there's nothing else in the neighborhood, and if you really want to live there, you're going to try to fix it up. >> i guess so. i mean, the same thing can be said about twitter. kind of a newer project. look, these are -- facebook and alphabet versus twitter and yahoo! >> can't really make that comparison. >> no? well, i am just saying, you know, there's winners and losers out there. this reminds me of bunch. anybody remember bunch? >> i don't. >> burrows, univac, ncl, honeywell, versus ibm. they're all like bunch. bunch used to be this powerful group of companies. >> i remember the power of two. that was sperry and burrows,

right? >> whatever, but if yahoo! got together with twitter, what would that do? >> nothing. >> exactly. that's my point. >> yeah. >> nothing. >> nothing. >> a couple other things to look at. southwest traffic for march of 6/2, really nice, although the stock's not moving on it. >> the airlines have been in a bear market. i thought alaska air was smart to take advantage of the balance sheet and beat out jetblue, but these airlines -- herb keller was here and he basically told you a pretty great story. and i think barring bernie sanders saying, listen, we've got to break up the airlines, these things are cheap. bernie can say anything! >> yeah, but he has no power. >> he has a microphone. he can call the "daily news" any time he wants! "the new york times," the "daily news," right? >> you're in a new york state of mind. >> yeah, yeah, yeah. billy joel. billy joel could run for president right now. >> he could. he hasn't written a new song in 25 years. >> so what! >> so what?

>> go see him at the garden. great show. >> have you ever seen him? >> he's awesome. finally on the record, one reason the dow's down more than 100 is verizon. jeffreys cutting to hold, bernstein cutting to market perform. >> what is that about? verizon is about to be the next -- >> multiple. the same reason -- >> i'm tired of this. >> verizon's up a lot this year. >> it's got a good yield, it's going to be more web-oriented, it's got fios where you can pick and choose the only staycatitiou want. >> it was up big this year. >> you want to sell verizon? >> no, i'm just saying that's a reason why you're seeing a valuation downgrade. >> i find these valuation downgrades populate all the universe. we've seen them in consumer products this week, industrials. and what happens if the dollar stays weak? by the way, versus the yen, we haven't mentioned that. threw it out there. i think a lot of these companies are really good and i would rather be in verizon than the german ten-year.

there's a piece of paper for you. how much do you pay them back that piece of paper? >> we don't pay you, you pay us. >> i think selling verizon's a mistake. i know yesterday we had a downgrade on att. people think that's overextended, why, because the stock went up? you know, stocks do go higher. >> yeah. >> companies do get better. >> as we said, dow's down 111, s&p's down 10. let's get to bob on the floor. good morning, bob. >> good morning, karl. and we have all ten sectors to the down side right now, but the big story is really overseas where a lot of traders are talking about the yen strength. remember, when stock traders start talking about things like the yen, pay attention, because it's not normally on their radar. so, it's essentially six days, maybe seven out of the last eight the yen has been strengthening. a 17-month high against the dollar. it's all the result of more dovish fed commentary, so dollar weakens, the yen strengthens, the japanese officials have been trying to talk down the yen this week.

they have been unsuccessful as you see by the chart. we were at 115 a couple days ago. these are very big moves. and look what it's done to japanese stocks. obviously, there's a concern here. this makes exports more expensive for them. toyota, of course, sells cars here as they repatriate the products to japan. they get fewer yen. you get the story here. this is just this month. it's april 7th, for crying out loud. panasonic's down 13%. kubota, the big competitor for caterpillar, which makes heavy equipment machinery all over the world's down. hitachi's down 8%, nomura's down 8%, toyota. these are pretty serious moves to the down side. if you take a look at the nikkei, just the broader japanese market it was up fractionally overnight but nobody cares. the trend generally has been down this year. in fact, the nikkei's down 17%, 18% this year. it's among the worst performers among global markets here. here in the united states, all ten sectors started to the down side. so, most everything down fractionally. consumer staples, financials.

telecom weak. you mentioned verizon with the downgrades. remember, verizon and at&t also were ex-dividend yesterday, so a little weakness there on top of that. the few retailers that still report, i thought they were pretty good. l brands were up 3%, but bath and body works, their subdivision there was up nicely there. costco might have been a little bit of a disappointment on the 1% increase. i think people were thinking more. but remember, costco was flat to negative all throughout last year. so, at least 1% is trending up. that's good. traffic was up 4%. but we're still -- bed bath & beyond's up nicely, too. they beat on the top and bottom line. they also started dividend, 12 1/2 cents. i think that's a good sign for them. but it's still very not rosy in retail. and i was talking to retail metrics this morning about how the numbers are ending out for the first quarter. this would be quarter ending in february, and they're all in. basically, look, earnings down -- 118 retailers -- earns are down 1%. same-store sales are up a little bit. revenues are up 3.5%.

this is not that great overall here. i mean, we have got really strong job gains. you would have hoped you would have seen better numbers by now, but as we see in what's up with retailers, the job gains are strong, but wage gains have been minimal. and the consumers, as we all know, are spending on home improvement, they're spending on autos, restaurant, travel, but they're not spending in the malls here. and at the same time, these retailers have had to have a significant investment in e-commerce. now, it's very hard to break this out, the e-commerce, but bed bath & beyond, who's had a decent report as we mentioned, did make some comments overnight in their earnings report that are very revealing. so, bed bath & beyond's same-store sales were up 1.7%. but almost as an aside, they mentioned that stores -- these are the regular, old stores themselves -- sales were basically flat and they went out of their way to say that online sales were up 25%. we don't have a lot of data because a lot of these companies don't break it out this way, but i think you can assume that this is the trend, that this is

clearly what's going on. online for those that are still spending a lot of money, is up anywhere from 15% to 20%. the numbers of the few we've seen that have reported. and the store sales are basically on the flat side. this is the big problem. significant investment in e-commerce growing but still relatively small part of the business, and the consumers not spending much in the stores at all. so, good news for phone and the home depots of the world. not so good if you're running macy's or the classic apparel stores. right now the dow down 105 points. guys, back to you. >> thank you very much, bob pisani. all right, want to do a "faber report." actually, we can call this the court report because we're going into the court in our nation of laws and companies are trying get together or maybe not. starting off with staples/office depot. we haven't focused too much on this deal, but a bit lately. you may recall a couple of days ago the companies decided not to

put on a -- well, not a defense -- not to actually present a defense against the government's challenge against the deal, saying we don't think the government's proved in any way that our merger is going to be anticompetitive. an interesting strategy from them. the judge said, okay, didn't expect that. i'll give you until the 19th when i'll come back and we'll have a final round of arguments before i make a decision, and maybe you guys can try to settle this thing, although they've tried in the past and not succeeded. one interesting transcript that was released a couple weeks ago by the judge involved the ftc trying to coach a gentleman in amazon business services named prentice wilson, trying to get him to basically saying, amazon has no interest in entering this business in a big way and mr. wilson was having none of it. the judge said, i'm going to release this transcript publicly because this is not right. the public ought to know the government wanted amazon to say some things that weren't true. and for his part, mr. wilson said, i was going to sign this thing -- if i was going to sign

this thing, i was going to make sure it was going to be accurate. i'm not going to alter my testimony. what was it? well, yeah, amazon could enter the business market. they could do it pretty quickly. and no, they were not thinking that they would just sit this out for the long term and they have a lot of impact on their third-party sellers as well. so, very interesting and worth the read, that transcript, from that amazon executive. >> no one's mentioned that. i mean, it basically was like saying, kind of fudge -- >> we want you to say this and this and this, and the guy's like, i don't want to say that. it's not true. >> mr. wilson! >> mr. wilson. want to move on in court land to something we hit on yesterday, ete versus williams. remember that deal? >> yep. >> we've been following it here. that lawsuit was pretty interesting. remember, it's both delaware, where williams is asking a judge to rescind that convertible that went to insiders of the company that essentially primed the insiders ahead of the common holders and might have enabled

kelsli kelcy warren to cut the dividend overall, even though they're accepting a lower dividend on convertibles, saving the company some money, but it's not something that williams felt was right. but interestingly and perhaps even more importantly, they're also suing mr. warren personally in texas court for torresist interference. their lawyer on this, rusty hardin, a well-known litigator in texas. and just worth the little, quick mention of one of the things in the complaint. mr. mcginnis informed mr. warren that williams was open to considering ways for ete to actually address financial challenges in a koordated manner." mr. warren responded in sum and substance that no one was going to tell him how to run his company. this is going to be fun. williams is going to court. at least they're telling me to make sure they keep the deal, not to break the deal apart. finally, talking about court, baker hughes.

there's a look at those two stocks which were up yesterday. baker hughes and halliburton, both of which were also up sharply yesterday. will they go to court? you know, it's april 30th is the deadline. well, not deadline. it is the opportunity for either one of the companies to walk away. in that case, baker hughes would get a $3.5 billion breakup fee. at this point, the companies seem willing to get past that and challenge the government's ruling. it was a tough, tough-worded ruling or complaint, i should say -- not a ruling -- the complaint from the government yesterday, in terms of how they see the deal with assistant attorney general bear saying "i've seen a lot of problematic mergers in my time, but i've never seen one that poses so many antitrust problems in so many markets." for their part, the two companies respond -- there's his comments. they were pretty strong. >> yeah, geez. >> two companies, "the companies intend to demonstrate the doj's

underestimated the highly competitive nature of the oil field services industry, the sufficiency of divestitures. once completed, the transaction will allow customers to operate more cost effectively, which is especially important given the state of the industry." and they go on to say, hey, we're going to keep this going. we're taking you to court for judicial review. a lot of court activity in the corporate world. >> well, this is, again, i mean, think about the arc of what we're talking about today, that candidates attacking business. you've got the courts, antitrust. this is kind of a very negative moment. you'd think the stock market would be down big. >> it's not. >> it's not. profits doing better, dollar weaker. but boy, i mean, this is a moment where there isn't anyone not taking aim at business. >> no. speaking of the stock market, actually, the bond market also comes to mind. for that, we head to rick san at the cme group in chicago. rick. >> well, thanks, david. a two-day chart of 10s really gets you on the right scent as to what's going on in the market. yesterday we did see some firming of rates, but today the

opposite. we are slipping again. as a matter of fact, the low yield's around 1.71, very much tied with the settlement of the 25th of february of this year. but boy, that's about it between where we're trading and 1.66, the current yield close year for the 10s established a few days before valentine's day on february 11th. if you open the chart up to march 15th -- the reason i pick that, of course, is because we had the minutes yesterday, so we're garnering information not only from the u.s. but from the ecb as well -- you can see it's been a pretty big slide from just barely under 2% to where we're trading today, closing in on 1.70%. now, back to the bunds, it seems as though negative rates are definitely giving that to the japanese and also to mario draghi. some statements once again renewing the, i guess aggressive demand. i don't know what to say. hard to trade when you grab sovereigns, but indeed, there

seems to be less of those around, central banks own more of them. and even though the next big move in rates may be to the up side, at this point in time, everything seems to be, well, high yield and corporates are also in vogue. if you look at the two-day dollar/yen, biggest chart on the floor, it's dropping, the dollar side, that is. as a matter of fact, this is the fifth day in a row that the dollar's weaker against the yen. if you look at an october 14th, last time we were here. but i will continue to show these long-term charts. boy, there could be a real vacuum as we get into the 108 handle in terms of dollar weakness. the euro got a reprieve, though, slipped a little bit, maybe based on ecb rumblings at their last meeting. karl, back to you. >> rick santelli in chicago, thanks. when we come back, the eu's latest investigation into google's parent, alphabet. the antitrust commissioner joins us next hour. dow's down 125. this just got interesting.

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some weakness in the markets today. dow's down 115, utilities the only sector higher right now. we'll get stock trading with jim in just a minute. recommend synthetic over cedar?u

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time for cramer "stop trading." >> stop trading alcoa now and think about buying it. why? itc has launched a probe into

aluminum. why does that matter? because when the commerce department put a 266% duty on the chinese -- and this is aluminum by china -- u.s. steel doubled. march 1 is when they put the tariff on. steel doubled. alcoa plitting into al qcoa the engine. this is the last quarter of the nonsplit-up. remember, the steel companies doubled when the itc went in and then commerce department said tariff. believe me, if they put a tariff on aluminum, on china, you're going to see alcoa zoom. >> we've got to go, but what's on "mad"? >> signet. they never come on. jewelry, you know every single company that advertises that comes on is them, jewelry. and i don't know, it's my anniversary coming up. >> congrats. one year and counting. >> feels like a lifetime! oh. [ laughter ] >> jim. we'll see you tonight, jim. when we come back, pimco's

tony crescenzi on the markets. who do you work for? your boss? yourself? your family? our financial advisors are free to realize a plan to fit your family's unique needs. we'll listen. we'll talk. we'll plan. baird.

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to share information with each other. i'll be changing the way the world works. (interrupting) you can't pick it up, can you? go ahead. he can't lift the hammer. it's okay though! you're going to change the world. good thursday morning. welcome back to "squawk on the

street." i'm karl quintanilla with sara eisen, simon hobbs and david faber at post nine of the new york stock exchange. some weakness to start the day. dow's down 114, telecom not helping, verizon downgrade. oil's not doing a whole lot, but is in the red to the tune of 2%. >> here's your road map for the next 60 minutes on cnbc. jamie dimon making waves on wall street with his wide-ranging letter talking market volatility and china. >> plus, an exclusive interview with margrethe vestager. she'll weigh in on inversions, the panama papers and the latest on google from the eu antitrust commissioner. >> and former farmer ceo will join us with his take on pfizer, allergan and the rest of the injury. first up, jpmorgan ceo jamie dimon writing "the good news is the system can handle the volatility. the bad news is we don't completely understand why this is happening." joining us at post nine, tony

crescenzi at pimco. >> nice to be here. >> nice to see you. do you have thoughts on dimon's letter? >> let me just take it higher and talk about the banking industry in general and relate it to central banks and all the recent market volatility, et cetera. the great danger to the financial system is faster rates of bank deleveraging. think of banks as factories. they produce something. what do they produce? they produce money. for decades, they produced lots of it and that's the indebtedness we have today. in terms of deleveraging post crisis, people deciding, entities, households, et cetera, to return this stuff to the banks. they don't want as much debt as they used to have, and that's the great danger and the main reason why central banks are hell-bent on printing money by buying bonds. so, janet yellen, ben bernanke, draghi in europe, kuroda in japan, buying bonds, putting money in the system to slow banks down in terms of the shrink aage that they want to engage in in terms of their loan books. imagine you go to the bank to repay a $1,000 loan because you don't want that stuff anymore.

you're returning it. what if the bank doesn't replace your loan with another one? the $1,000 you bring to the bank vanishes from the financial system, no longer available to put into the econo to buy goods and services. and that's the great danger, this lapse in aggregate demand, which can collapse, of course, the rates of growth in the economy and prices amidst lots of indebtedness. and so, looking at it at a very hard level, there are worries banks seem to have about the pressures on them to raise the. >> caller: et cetera, et cetera, to become safer and safer. and this pushes them into the risk reduction mode. >> you mentioned central banks, you mentioned kuroda. i mean, the yen is test iing al no, ma'amics like a spoiled child -- >> there's a big level it's testing. the fundamentals that the fed won't be raising rates as much as people thought and japan won't cut the rates into negative territory and the ecb.

but the technical stuff is the dollar had been rallying for a year, plus, hit 1.10. f >> we love fibanatri. >> but the bigger picture, from 2011, when the dollar hit its all-time low against the yen, at 75 or so, to the recent high of 125.80, is about 106.5. so, you're thinking bigger picture, technically, that's the level that matters. but taking it a step back on this, does the fed want the dollar to weaken this much? remember, it raised interest rates to tighten financial conditions. there's five ways to do that -- stock prices, bond yields, credit spreads, bank lending and the value of the dollar. only the value of the dollar had been working for the fed to keep the economy from moving too fast and pushing up prices on goods and services over time. so, now that's not working for the fed. and so, it can go back to the traditional tool. instead of using markets, perhaps think about raising rates. so, it does open the door for a hike in june if the weakness in

the dollar persists. and so, it's very important what we're seeing there. and it has been a hook up higher in the i.s. index, the survey on the economy, import prices less negative, new orders better than 2015 for factory sector, so there seems to be some return in the negative impact of the 20% dollar rally that occurred that ended last march and the negative effects are ending now. >> are you saying we've seen the end of the major dollar weakening as a result of what the fed has done, or is it covered up? >> because the fed was worried about the dollar's strength, because it is a way that the fed transmits its policies into the economy, worried about the strength and how it might weaken growth -- and it did -- saw a big decline in net exports, but a big increase recently in exports. so, this does open the door for the fed to act because it doesn't have to worry as much about the dollar strength. >> this is all heaps of fun, but i'm trying to work out what it means to investors. i mean, what are you saying?

what do i pull from all that analysis? >> markets these days are not priced for the fed to move -- so in the bond market, now, we're quibbling over little bits and pieces here, though. the markets are priced for one 25 basis point rate hike in the next year, maybe there will be two. in the context of history, if the markets miss by a simple quarter point, it's not really very much, so we're not looking -- not going to make tons of money betting that the fed will hike, and if it does, well, you win. but it does probably mean to be a little cautious on making bets that the fed will not raise rates. so, there are various things you can do in the bond market to say that, well, the market's a little bit mispriced, shortening the duration, for example, and maybe be a little more cautious on riskier assets as the meetings get closer. but the bigger picture is low rates through the rest of the decade globally, and that's the important backdrop. the glue that holds it together, though, to stay in the riskier assets like credit and equities, is continued economic growth. >> last question, and we only have a second or two.

trump says a massive recession is on the way. today, edwards says it's imminent -- >> the buffett-type view, don't bet against america and thank the fact that there aren't the imbalances that normally cause recession in terms of inflation and inventories and poor balance sheets at the household, corporate or bank level, so it doesn't seem imminent to us. low odds, call it 20%. historically 15% odds is pretty normal, so it's not much higher than historical norms. >> albert edwards -- >> yeah, it's good to see you, tony. >> thank you. >> pimco. ahead, fred hassan will join us live when "squawk on the street" comes back. ts. a deluge of digital records. x-rays, mris. all on account...of penelope. but with the help of at&t, and a network that scales up and down on-demand, this hospital can be ready.

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pfizer's ceo, ian read, calling out the obama administration's new inversion rules after walking away from a mega deal to buy allergan. from the "wall street journal," read writes "this week's treasury action interprets the tax laws in ways never done before. this ad hoc and arbitrary attempt to single out and damage the growth opportunities of companies operating within theu unproductive and harmful to the u.s. economy." allergan ceo brent saunders on this show yesterday also criticized the government's decision. take a listen. >> these rules, this three-year lookback, was designed i think very specifically to target this deal. i don't believe based on initial review it impacts any other deal

in virtually any other circumstance. >> joining us now here at post nine to weigh in, cnbc contributor and former schering-plough ceo fred hassan, now managing director with warburg pincus. nice to have you here. >> good to be here, david. >> they've been looking to do an inversion for some time, in part to access overseas cash, he says to bring it back to the u.s. and now he also says i'm at a competitive disadvantage against my foreign competitors in the pharmaceutical industry. do you agree? >> i absolutely agree. his effective tax rate is at 24%. if you are a swiss company, you're in the teens. so, yeah, there is a definite delta in tax rates if you're a u.s. company versus being a swiss company. >> all right, well, what happens then if you're running one of these companies, and at this point it would seem most of the avenues towards inverting a ini becoming a foreign taxpayer are cut off. what do you do? >> it's a pretty tough situation, but institutional investors expect ceos and cfos to do the best they can with tax

management. that's almost the first thing that if i durable investors ask when they talk to a ceo in private meetings. so, ceos are going to have to keep trying what they have to do for shareholders. in this instance, i believe ian has a pretty tough road ahead because he's already had two tries, and it didn't work, and there's a lot of scrutiny and it's the election season. i think if i were advising him, i would say focus on the business at this stage and focus on tax management down the road. >> yeah. i mean, he's tended to focus a lot on the tax side of things, and that's been a criticism to a certain extent. >> what's not very well known about pfizer is that it's a much bigger story than the tax story. their r&d algier began is starting to work very well. they have a very good guy at the top, and they've come up with a great breast cancer product. so, there really is an r&d story to be told for pfizer, and i think that's probably going to be his main emphasis over the

next several months. >> do you think they would be well to split the company or not? some tell me, you know, the idea of splitting and getting rid of your cash-generating units or those that support the dividend even more, it actually makes it less likely that they would move towards doing that more quickly rather than more likely. >> yeah, my own sense is not a big difference if you split or if you don't split. in the end, cash flow is cash flow, and if cash flow helps fund your r&d, then sometimes it's betteto keep it all in one place. and in this case especially, a lot of his cash flow, ian's cash flow, is coming from overseas markets where older products tend to keep going for a much longer time. and i think that cash flow can help him pay for a lot of r&d that he might conduct overseas. >> so, if he does look for a deal, who would be big enough for him to do a deal with? go back to astrazeneca? >> well, if it's not a cash inversion deal, the choices are very few. very few, indeed. because you need to be within a

certain size -- >> could you name them off the top of your head? >> well, it used to be allergan and possibly valeant at one time, but at this time, i don't know of too many companies in that zone where you can do a tax inversion. so, this has to be done on operating basics, which in any case is the right way to go about it. i think if you do it for good reasons, good size fit, strategy fit, operational fit, you can do a lot more than just doing it for tax purposes. >> his point in his op ed about there being no rules in this country, that political dogma is the rule, is that fair? because rules change from time to time. >> rules change. in this case, the treasury secretary was quite adamant about the subject. in fact, he already made his move in 2014. so, this was clearly a calculated risk that was taken, and it's true that this was an outlier action that occurred, but it was within the range of

possibilities, no question about it. >> i'm not a consumer advocate, but isn't there an argument to say, look, this is the biggest pharmaceutical market in the world, it is by far the highest margin pharmaceutical market because the system operates in a way that really favors the drugs company more than it would in europe or anywhere else, this is where people make the money to do the r&d, this is the mover as an economy for them. isn't it reasonable that the people in this country who are paying those inflated prices also demand that those companies pay their tax here? isn't that a reasonable argument as everybody heads offshore to dublin? >> i think the argument really is what is the right tax rate? the u.s. has the highest tax rate among industrialized countries. and as global companies -- >> you said the effective tax rate was 24% for them. >> for pfizer, yeah. >> that doesn't seem that high. i mean to compare it to what's happening to switzerland at 14%,

switzerland is a tax-free zone. i mean, do we have to compare everything we do in the west to what happens in switzerland? >> i do agree that you don't have to always go to the lowest tax rate, but it's a well-known fact that the u.s. does have a pretty high tax structure, and this is causing a lot of institutional investors to ask ceos and cfos to take tax management actions. this is clearly out there. >> do you think, fred, that we will see more foreign acquirers, and in this case, allergan is considered a foreign company, as are so many others that have inverted that really do most of their business here, but do you think we'll see more of them buying their u.s. competitors? >> this is happening over many, many years. if you go back to roche buying sin tex, it was primarily a tax situation at that time. if you are coming from a lower tax zone, you do have an advantage buying a u.s. company, and that is happening, no question about it. >> final question from me on valeant. got to ask, you were a board member. your timing -- i'm going to watch you in the future -- your

timing was excellent. you stepped off the board in 2014. they're looking for a new ceo. given the troubles that have taken place at that company, do you think they will be able to find someone who really has great experience? i mean, even your name has been wanted about. i can't imagine you would consider it. would you? and do you think they will be successful? >> obviously, i can't talk about valeant and my plans with valeant, but i can just say in general that valeant is a very good asset, especially the bausch & lomb business, which -- >> which you were chairman as well. >> i was chairman of bausch & lomb, and that's why i went on the board for a short time. that asset is a very good asset, and that's primarily due to the good leadership of brent saunders when he was head of bausch & lomb, because he invested in r&d and valeant has benefited from the compact lens business and the surgical business that's done very well as a result of the previous r&d at bausch & lomb. i think -- and also the otc business

businesses, the consumer businesses are very valuable. these brands go on forever, and the vitamin brands have done very well at valeant. i think the next ceo has to come into this company and establish trust and confidence, starting with the consumers. of course, they have now recently done something with the lenders, which is great, but consumers and customers have to start hearing good news about valeant. and then they have to focus on the basics of the company, the innovation pipeline. and then if all these are done well, there will be better trust and confidence among the investors. >> you've got to get back to the basics. so, if i were recommending the kind of ceo for this job, it would be somebody who knows the business and who wants to build the business. it's just not easy to keep going with financial stuff all the time. you've got to work through the business, including your own employees who might be a little confused with all that's going on right now. >> who's going to take that job, though? >> pretty tough job. >> who has a lot of experience.

>> and there is a shortage of people and there is a very aggressive effort occurring out there right now. >> fred, thank you. appreciate your stopping by. >> thank you, david. >> fred hassan, of course, ceo of schering-plough, former chairman of bausch & lomb, and we could go on and on. when we come back, europe's chief antitrust cop, margrethe vestager, joins us for a live, exclusive unto view. hear what she has to say about the panama papers, the pfizer/allergan non deal, and of course, her own google investigation. we'll be right back. [dad] i wear a dozen different hats

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the european union has been coming down hard on america's biggest tech companies looking into tax practices at apple and amazon and pursuing several investigations into google's parent company, alphabet. the eu says it is advancing its investigation into whether alphabet has been abusing its dominance in the ad space and in its android mobile operating system, signaling that more formal charges could come. joining us exclusively now from washington is margrethe vestager, the eu's antitrust commissioner. commissioner, welcome back to the program. good to see you. >> well, thank you very much. good to see you, too. it's a pleasure to be here. >> i wanted to actually start

with your meeting today with secretary jack lew of the u.s. treasury. he's fresh off of firing his new anti-inversion rules that broke apart a $160 billion merger that would have made pfizer a european company. what do you think of what secretary lew did? >> well, of course, it's a u.s. decision how you deal with inversions. for us, we approved part of the merge merger allergan early march on generics because we saw no harm to consumers on that part of the merger, and that part of the merger seems to be going on. >> but it would have brought a lot of tax revenue over to europe. do you not see it as uncompetitive, anticompetitive to change the rules of the road like that? >> well, i think it's very important for our tax system to be able to live together, because they are different in their basic nature. but i think the aim is the same for europeans and for u.s.

authorities, to make sure that taxation is fair and that not only a huge majority of companies, but that every company pay their fair share of taxes. >> companies and individuals. you know, you have made these unfair tax practices a priority for you. now that we have seen the panama papers revealing what looks to be widespread tax evasion among the global elite, are you planning to open up any new investigations into any of these cases? >> well, one can say that this is actually part of our general strategy to make sure that we have an international tax community that places who would not contribute, who would not be open about taxation issues, well, they actually or eventually end up on a black list. and we have made it much more difficult to take back to europe money that was tucked away because we have a much more open community for tax authority and

banks to exchange information, also about personal income. and i think that's a way to go also for the many, many, many taxpayers who do pay their taxes, who do it by the book, and then have to see that people who have the opportunity, they tuck away their money. >> let's talk about some of the investigations that you do have ongoing. i mentioned google, the fact that you've said that you are advancing your investigation into android and adsense. can you elaborate a little bit further as to what you're looking at there and when we can expect action, if at all? >> yeah, the thing that has concerned us is that in some markets, android has become very, very big, and we have had people coming to us with concern saying that there is a risk of tying, that you can only have the operating system if you also have a full suite of google apps, and therefore, it becomes a one-way street. that we're investigating, and of course, making it a high priority because these are

fast-moving markets, and therefore, of course, antitrust had to keep up the momentum with the market as it's moving forward. >> what about the formal separate charges that you filed against google when it comes to google shopping? how big of a fine are you going after here? we've heard reports that it could be as much as $6 billion. >> well, we're not at all in that territory yet because we're still in the process of analyzing the very, very substantial answer that google gave to our statement of objection. this is a lot of data to possess, and it takes some time, but eventually, we'll get there. also, because of course, we get help from third parties in order to judge whether or not we get the answers that we'd expect looking at our concerns. >> but where -- how is it looking from here? does it look like they're going to go to court with this, that it's going to result in fines, modified behavior? >> well, the thing is, actually it's still open.

we are following the formal procedure, which could eventually lead to a decision. and if that was negative, a fine. but it is still open to have a settlement, as we do in other cases. some of our other big cases are progressing in some of the double track, but with the google case, right now we are in the formal track and analyzing the answer to the statement of objection. >> commissioner, just changing the subject slightly. i guess you could think of you and your fellow commissioners as, in a sense, guardians of the european union. you're certainly the guys that make it work on a daily basis. there is a perception in this country that the european union could break apart. with the problems that we have with the brussels bonds, with the migrant crisis, a belief that the open borders cannot remain, if we look at the uk referendum on leaving the eu and then the opinion polls, it would appear that other countries, core countries to the project would also like a uk-style

referendum. is it your perception that the european union is weaker than it was, say two years ago, at the moment? and what happens in the future? >> well, we are seriously challenged for the reasons that you just mentioned. if you compare it to the situation when the financial crisis threw itself at europe like a tsunami, it actually also took some time before we got our act together and worked together and found the solutions. and i think we are still in that process in sort of deciding if we will be full-time europeans or just part-time europeans, because for full-time europeans, we can actually solve these things, especially, of course, for the many, many people who seek refuge from a terrible, terrible war in syria. >> and finally, in the time that we have left, commissioner, i wanted to ask you about your investigation into apple's tax practices in ireland. the "financial times" reported that you had what was a heated and testy exchange with apple's

ceo, tim cook. is that true? and where are you on apple? >> well, yes, i met tim cook. what we discussed is, of course, in the meeting. the investigation is advancing, but we took information on board and, of course, we talked with them and hear the company in order to make sure that we get things right. so, it is still very difficult to say when we will be done and when the investigation will be over. >> and finally, you've battled for a long time this idea that you're unfairly targeting silicon valley and america's big tech firms because they are dominant on the internet. is that something you're going to be discussing with treasury secretary lew today? and what is your response to that, given you are going after two of america's biggest and most powerful technology companies? >> well, these are accusations that i take very, very seriously, because it's a very fundamental value with us to have equal treatment. what we are looking at is, of

course, behavior. and i think that one of the things to see is, of course, that when you're very, very successful and you grow, we should congratulate you all the way. but if we find that your behavior sort of becomes issues of dominant position, then of course, congratulations stops. and that is no matter the origin of the company. that depends on whether or not you want to be in the european market or not. and looking back, i think you would also find that there is no bias. what we do is to make sure that citizens can enjoy the benefits of an open, competitive market, and that's what we're there for. >> thank you for joining us. safe travels back to brussels. >> it was a pleasure to be here. thank you. >> margrethe vestager is the top antitrust commissioner for the eu. okay, you may have seen the figures flashing at the bottom of the screen. elon musk is out with an update on model screen reservations. phil lebeau, take it away. >> simon, after one week, tesla says it has now booked 325,000

reservations for the model 3, the next-generation, lower-priced electric vehicle. just to put that into some perspective, tesla says those 325,000 reservations works out to an implied future sale value of $14 billion. you do the math, it comes out to about $43,000 per car. remember, it's going to start at a base price of $35,000, so according to tesla, most people when they're doing this reservation saying this is the features that i want in the car and so forth, are willing to pay about $43,000. but again, total reservations after one week for the model 3 now at 325,000. guys, back to you. >> phil lebeau, thank you for the update. we've got breaking news. let's get to jackie deangelis at the nymex. jackie. >> good morning you, sara. watching natural gas prices as the department of energy just recorded its weekly natural gas storage report. an injection of 12 billion cubic feet smack in the middle of the range that traders were expecting. now, actually, it's pretty bearish in terms of the number compared to the five-year

average, which is usually a drawdown at this time of year, but you are seeing nat gas trade up today, and it's pretty much unchanged on this number. that's because the expectations are that april is going to be a colder month than expected, even though we had that mild winter. the temperatures have been a little chilly, so we are expecting people to maybe use a little bit more supply as we head into the springtime. i do want to say this, on a relative basis, remember when nat gas was trading at 6 bucks in february of 2014? now it's trading around the $2 range. we did break that mark a little earlier this week, but relatively speaking, very cheap. i will also say that in terms of total stocks, we have come off the record highs that we saw earlier this year, but still a trillion cubic feet over where we were last time this year. so, stocks are in good shape. nat gas is sort of the outlier in the energy complex. the rest of the energy space is seeing a little bit of downside pressure today, so i want to switch gears and talk oil with jeff grossman from brg brokerage. a 5% pop yesterday in wtis

specifically. today we're seeing a little bit of sell-off. is that what you would expect? >> again, that's something you would expect. yesterday was a very good performance, certainly more than would be expected, but again, on a technical basis, the market is behaving pretty well here. the lows are a little higher than they were in the last couple of days, so the market is fairly healthy. this sell-off is nothing to be overly alarmed about. >> so, yesterday it was an inventory issue. the job owning of the price we've seen up is the opec meeting, this potential for a freeze. what do you think's going to happen in the next couple weeks? >> that's a good one to try. i still think the market will be creeping higher here. i don't see anybody really leaning on this market. most of the news that's going to come out will be friendly toward this market. again, going into driving season, i'm very optimistic about it and i think you'll see a drawdown in some inventories, which people thought could never happen. >> then we have the fed and the dollar. what are the implications there? >> again, if i knew those answers, it'd be a lot easier. but again, i don't think the dollar's going to stay that strong near term. i think it will get a little weaker and i think that will help buoy prices up. >> very good.

jeff grossman, thanks so much. meantime, back to you at post nine. >> jackie, thank you so much. jackie deangelis. when we come back, new rules for brokers could bring changes to the way your retirement investments work. we'll talk to the head of retirement accounts for janice. dow's down 160, worst day in six weeks. back in a minute. storytelling in your movies. you know, it's amazing how much information is contained in a single image. one visual can make or break a film. i am analyzing images for factory managers, sales people and healthcare professionals. that's good watson. but not exactly movie material. perhaps the healthcare professional could be played by matt damon. you're learning, kid.

thank you. ordering chinese food is a very predictable experience. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $59.95 a month. comcast business. built for business. good morning. i'm sue herera with your "cnbc news update ode.

secretary of state john kerry held talks with bahrain's foreign minister on regional security issues today. during a joint news conference, he praised bahrain's role in fighting isis extremists. belgian prosecutors have launched a public appeal for information on the person they are calling the man in the hat suspect in the brussels airport suicide bombings that killed 16 people. authorities say they're hoping someone might have filmed or photographed the man. he was seen with the two suicide bombers who died in the attacks. russian president vladimir putin has denied any links to offshore accounts and is describing the panama papers document leak as part of western efforts to weaken russia. he described the allegations as part of a u.s.-led disinformation campaign to discredit his government. about 20,000 rayon ivanka trump scarves are recalled because they are too flammable. they are made in china and sold in the u.s. through october of 2014 through january of this year in department stores and online. ivanka trump is the daughter of donald trump.

and that is the "cnbc news update" this hour. i will send it back to you guys downtown. david? >> all right, i'll take it, sue. thank you very much. want to update people. you may have seen at the bottom of the screen, the non-controlling shareholder of viacom and cvs, summer redstone's lawyers have reached a settlement with a former companion of his, manuela herzer, who is suing saying redstone didn't have the rights to change the health care proxy, including writing her out of his will when he did so. a settlement has been reached to require a local neutral third party to oversee the day-to-day medical care of mr. redstone. this was moving towards a potential trial in may. there were expected to be depositions of his daughter, sherry, and the ceo and chairman of viacom. those did not take place. and now we have the settlement with the los angeles superior court judge overseeing the case

expected to review the settlement by the end of this week. simon? >> thank you very much. jpmorgan's ceo jamie dimon out with his annual letter saying lower liquidity and higher volatility are here to stay. and separately, that he's not satisfied by jpmorgan's stock performance. he also defended the bank's balance sheet -- "jpmorgan chase alone has enough loss absorbing resources to bear all the losses assumed by the comprehensive capital analysis and review of the 31 largest banks in the united states." separately, of course, in the financial industry, brokers, mutual fund salesmen and insurers are coming to grips with tough, new rules that demand managers of retirement accounts put their customers' interests above their own. the white house seeking to drive what it believes are billions of dollars of hidden commissions out of the 401(k) and i.r.a. systems, incentives that it believes currently drive brokers to recommend products that have

higher fees. joining us now here at post nine is janus capital vice president and director of its retirement strategy group, matt soma. good morning. >> good morning. >> long time coming. six years? >> six years in the making. this was initially proposed in 2010, taken off the table shortly thereafter, reproposed in 2015, and we got a final rule yesterday. >> if 58% of financial advisers, 58% of financial advisers believe the compensation will fall as a result of these rules, according to the fidelity survey. does that mean that there have been massively large amounts of this product sold inappropriately in the past? >> well, up until this point, the financial adviser community followed what's known as a suitability standard. moving forward, they're going to follow a fiduciary standard, which means that they will always put their clients' interests ahead of their own. i think it's important to point out that in the preamble of the final rule, there's specific mention that fees are only one consideration when making investment recommendations to

clients. >> so, what does that mean? what are you driving at there? >> so, there are a number of factors that financial advisers ought to take into account when making investment recommendations to clients -- fees, of course, but also time horizon, risk tolerance, liquidity needs, tax situation, et cetera. >> so, in other words, they could still sell them higher-fee products on the basis of other parameters? >> if it is in the client as best interests. >> you know, this is a vast market, $12 trillion in 401(k)s and i.r.a.s. can you give us an idea of what the industry those go through to presumably in some form mathematically sort who it's dealing with, what the clients want? obviously, some got ahead of this, the insurers, metlife, aig, have sold their annuity business because it's just not going to be as profitable anymore. >> yes. so, the rule came out yesterday. it will take a few months, if not longer, for the industry to digest the regulations. but moving forward, processes and procedures will have to be put in place to make sure that

the clients' interests are always put first. there's an opportunity for advisers to still work with commission-based products using the so-called bice exemption, best interest contract exemption, but everyone will be held at a level of higher standards. >> the business will migrate away from commission-based stuff, more towards fee-based stuff? >> it is likely over time -- and this trend has been continuing over the last several years. this will accelerate that trend. we will likely see more fee-based relationships rather than client commission-based relationships. but let me say this, in the final rule there was specific mention that moving a commission-based client to a fee-based engagement has to be in their best interests as well. so, it's all about the client. >> there is a general view that maybe business is being attacked unfairly in this country. if you read what, for example, the ge ceo has written, or indeed, jamie dimon at jpmorgan,

in the shareholder letter, he says "it's tempting in today's heated public debate to frame issues as a winner takes all fight between opposing interests, big versus small, main street versus wall street." and this is the point i'm driving at -- "the u.s. financial services industry does not conform to simple narratives. it is a complex ecosystem, depends on diverse models coexisting because there is no other way to effectively serve america's vast array of customers and clients." therefore, who loses out here? >> well, he's right. and i would suggest the following. there are a number of different ways individual investors can get their needs met. there are robo advisers for people who may have small or modest balances and are simply looking for asset allocation solutions, and then there are full-service advisory relationships for wealthier individuals where their needs go beyond simple asset allocation. >> i was thinking about the other end, people whose incomes aren't high enough and you can't sell them higher fee products.

do they fall out? do people actually, i don't want to deal with this 401(k), it's too small? >> well, that remains to be seen, and we'll see how the marketplace relaxes to the new regulations over the months to come, but there are a number of opportunities currently for lower-income households to obtain financial services in the marketplace. >> thank you very much. >> thank you. >> we'll see you again. matt sommer there from janus. when we come back, the cia-back cia-backed fighting rogue traders in a joint venture, signac. the chief supervisory officer will join "squawk alley" later on.

money has been fleeing stocks and pouring into bonds. what is behind these billion-dollar moves? we'll tell you at tradingnation.cnbc.com. more "squawk on the street" coming up.

welcome back to "squawk on the street."

i'm courtney reagan. markets are in negative territory, but utility stocks are holding up. about 0.5%. first energy, con edison, southern companies and nrg company all pushing utilities higher. the sector is often a defensive play in a volatile market. it is now the best-performing s&p sector to date, up more than 12%. karl, over to you. >> thank you very much, courtney reagan. let's get to the cme this morning and check in with rick santelli and get "the santelli exchange." rick? >> thanks, karl. i'd like to welcome my guest, bill archer. bill, thank for taking the time this morning. >> well, rick, i'm always glad to be with you. >> well, thank you. you know, you've written about process many times during the current administration, the obama administration. and listen, not to pick on them, but there is a pattern here. and let's concede that -- let's say that the administration has the moral high ground on a variety of issues, okay? in this case, let's call it the

inversions. we could put immigration, we could put health care. let's stick with inversions. even if they have the moral high ground and they know what needs to be done, the fact that they avoid the process, the rule of law -- congress is the legislator, not the treasury secretary -- where do you see this showing up with regard to the damage that this may do in the macro sense, bill? >> well, i think it will be damaging. but in addition, i think it is not going to succeed in accomplishing its end result. in the end, the congress is going to have to redirect its attention to the taxation of corporate income and make us competitive in the world marketplace, because the economy worldwide is going to cause people to invest where they're going to get the best return. and taxes are an important part of the cost of doing business. we are noncompetitive in the world marketplace, and the

congress is going to have to change that. it's not going to be done by administrative action. it's going to be done by the constitutional congressional process. >> you know, bill, we're we're in a very strange political climate this election year and on the republican side there's many that say, for example, that without the first ballot win, ultimately would prevail and you could see somebody like a ryan, speaker of the house, get thrown in. last i looked congress even in an election year is supposed to do something. the notion that congress is sitting by watching the treasury secretary do this, to me, i think it's horrible. speaker ryan, why can't you -- don't you feel embarrassed by this? you should call a session and at least do something to show that the treasury secretary, we agree with it but we want congress to

do it. something. i think it's terrible. the speed limit 55. cameras everywhere. they can retroactively make it 45. say it makes us safer. maybe it does. but should i be mad when i get 20 tickets because it was retroactive? thoughts on that? >> well, i don't know about your driving, rick but certainly it's past due for the congress to completely change the way we tax corporations. when we passed the '86 tax reform act we hit it up with the lowest corporate tax rate of all the major countries in the world. now we have the highest. and corporations are going to be bought by foreign corporations. forget about the concepts of inversions. they're cheap relatively to take the corporations overseas where they will be taxed less.

that is just going to happen. >> we're out of time but i thank you for your thoughts and i guess the final thought i have is capital restraints is one of the big issues of lack of productive and growth and this isn't going to help solve that problem and could make it worse. bill archer, thank you. >> thank you, rick. rick santelli in chicago. up next potter heads from all over lining up at universal studios hollywood today for the opening of the wizarding world of harry potter. will it be able to compete with disney? we'll be right back to find out.

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75% of the park despite universal boosting park ticket prices by 20% last month. harry potter is expected to boost 20% this year that's the same they saw when they launched in 2010. now it will help better compete with disney. in 2014 they drew 8 million guests. now to make sure that it's a must visit destination it's going beyond the two rides to transport individu transport visitors. we have our butter beer and i'll be back in squawk alley with more on everything going on here in potter land. >> indeed. i wonder if they're the same in orlando. coming up on the program, re/code says yahoo!'s 2016 revenue could fall by as much as

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good morning it is 8:00 a.m. at yahoo! headquaters in california and 11:00 a.m. on wall street and squawk alley is

live. ♪ welcome to squawk alley for thursday. along with the founder and editor and ceo at business insider. first up, jeff is speaking out against senator bernie sanders days after he called out ge for being among corporations destroying the moral fabric of this country. he writes it's easy to make hollow campaign promises and take