it's tuesday, may 3rd. 2016. and "squawk box" begins right now. ♪ >> announcer: live from new york where business never sleeps, this is "squawk box." ♪ good morning, welcome to "squawk box" right here on cnbc. i'm andrew ross sorkin. joe kernin. becky quick is off. she makes her way back from omaha what. taking a look at equity futures at this hour. dow looks like it opened up 122 points. nasdaq looking to open off 32.5 points and nasdaq as well down 14.5 points. in asia, interest rates to an all-time low of 1.5%. this is the rba's first policy citing lower inflation, subdued

growth and uncertain growth. the aussie dollar is falling sharply on that news. australian stocks, on the other hand, rallying more than 2% on the news. in asia, japan's markets were closed for the constitution day holiday. china's manager's index shrinking to a 14-month -- for its 14th month coming in below forecasts. a bit of a mixed picture. shanghai compost up 2%. and hang seng almost the lower. >> all eyes on? >> yeah, go for it. >> moving forward, in pretty negative territory. and germany is lower than 2. ftse lower than 1%.

italy and spain off by more than 2% perhaps because the eu trimming its 2016 growth forecast to 1.8% from 1.9%. it's 2017 growth forecast from 1.9 to 2%. also cut inflation forecasts despite their efforts to do everything possible to try to lift inflation. watching european financials, ubs reporting a sharp decline in management wealth business. which was supposed to be all the european banks going into wealth management, they were going to be smoother when it comes to their earnings profile. hsbc reporting a smaller than expected 14% decline in quarterly profits. strong revenues from its commercial banking unit helps offseat a weak trading business. french back bnp paribas topping increase in 10% net profit. this after the banking division took a hit from the volatile

environment. >> why didn't europe go up because of australia used to be when we'd get a rate cut, everybody would go up? because it's barely working. we've thrown everything in the kitchen sink at it everywhere. >> ale shapple shares, speaking consensus and some -- took a wrong turn on wait to a trillion-dollar market cap. looks like it could fall below 500 billion. the 512 falling since yesterday. last time on a losing stream was back in 1998 at the same time it had declining revenue. apple finishing lower on monday 11 out of 12 last sessions down 30% from all-time high of just under $133 a share. apple's ceo tim cook talked to jim cramer about the stock and why the tech giant is buying back shares.

>> we tend to be opportunistic in buying it. so we don't have some regimented program, you know, x shares a day or whatever. opt t opportunistic to me means you buy when we believe the company is undervalued. and we believe the company is undervalued. >> things change significantly in the stock market. it was about six months ago when people like icahn and every on the street said it was a slam dunk. it was trading at seven times earnings. it's the cheapest tech stock in the universe. >> 200 billion cash. >> yeah. it was ly loved. you heard what he said, iphone isn't dead and the company isn't dead. within six months, that's how quickly things can change. society headline is the iphone's not dead. it's not quite dead.

it's got a couple -- it's not dead. >> it's not dead. >> well, it was a headline. >> $93? do you remember the morning the dow fell 1,000 points in a nano second. 93 is where apple went to that morning. so if you were very good that morning, you were able to get in at 93, 95. and now it's back. >> we say these numbers so easily. 500 billion this morning. it's a $512 billion company. exxon is not. microsoft. google. that's a gadget maker with a $512 billion gap. >> i think of it more than just a gadget maker. >> i know, really, that's what it does. it makes smartphone gadgets. if someone decides with better features -- about two weeks ago, the lead on grudge is that there was a gentleman in china, talking about new technology

that chinese companies are developing, mocking apple's technology. instead of the internet itself. >> can i just make two comments? >> are you putting a buy out? you can't because you had a buy all the way down. >> that's fine. two thoughts for you. it doesn't ultimately matter whether this market continues to rise as long as they take a bigger share of it and that's possible. there's nobody talking about what's happening in india right now is living in a 3g world, right? they'll eventually get to an lte world in the next 18 months. think about all the phones that will have to get upgraded. >> will they be an apple phone? >> that's the question. >> stock will start to rebound and reflect that if it's going to be apple. >> i'm just suggesting to you i think there's still some opportunity. i also think we will definitely -- >> okay. >> we'll see.

the real question is back to 110, 115 or down to 80. 75 or 80. it could be a $400 billion company without the end of the world, easily. to assume that they're going to sell 50 billion plus, and sell that many every quarter, that's a huge hurdle to try to -- >> there's also the old general rule of thumb when you have margins like that, somebody wants to draw the chalk, right? that's a signal that there's opportunity there, go. >> and you know how smart people are everywhere. >> yes. >> these young -- i'm watching 22 year olds, 23 year olds, they're writing code for these smartphones right now all over the world. >> they want to find a startup. >> we'll see. there are some barriers, obviously. it doesn't mean that they have a birth right to be always the smartphone. we'll have much more on tim cook and apple throughout the show. hedge fund manager david einhorn exposing a new

investment. einhorn said the business review site could double. shares of yelp rising on that news. einhorn tells investors he's made new bets in natural gas and exited positions in greek banks and financial services company delta wood. and working on yelp, it's long been considered a takeover target for given what it does. people actually thought that apple was a company to put it in with maps. it has a lot of underlying data. >> and google maps, the old apple maps. i use google maps. >> i use google maps on an apple phone. we should tell you harsh words from valeant and warren buffett on "squawk box." buffett said, quote i don't think you'd want your son to grow up and run a company in a manner that valeant was run." he called the drugmaker a sewer.

hedge fund manager bill ackman defending his stake in the pharmaceuticals yesterday. >> companies made some mistake, i think where munger is wrong. it's wrong to indict an entire company on the basis of a few mistakes. and a leader that is no longer with the business now. >> shares of valeant have tumbled nearly 70% thus far this year. it was an astounding interview. i think back to the original valeant investment that was about allergen? remember the hue and cry about that? i'm surprised that he stuck with it as long as he did. >> is it a few mistake or a business model based on -- >> it was a business model mistake. >> well he just said it's a couple of mistakes. plus when we would ask pearson, what is your biggest drug? you know what the biggest drug

is -- it's tofu or jublia? >> jublia. i think he made 5, 6,000 for a ten-minute voiceover. but still, jublia. >> those three athletes -- >> i've been fascinated with the relationship between charlie, warren and bill. you know, bill likes to compare himself-to-favorably to warren. he goes out every year to some out there in omaha. >> right. >> they do this whole thing and yet you have -- >> you don't sound -- >> no, no, charlie and warren will very rarely say anything negative in particular about bill ackman personally. in fact, becky tried i think to elicit an answer specifically about bill.

warren said praised by name and category. >> so he could have said the category. it's clear what his intention was. if i were bill ackman i would have taken it personally. >> warren has made a living out of being the evunkular -- >> uncle -- >> i guarantee you over the years, he's taken advantage of pricing flexibility. >> that's what the business with a motive. >> and there were times not to raise insurance premiums and he was fine for that. which i'm not faulting him for that. not faulting, i don't want to be no sanctimonious about it. >> because it would be hypocritical? >> right. he has turned into -- people who have dealt with him over the last 40 years he was tough.

>> he can get tough. >> he should raise the price of blizzards because they aren't healthy and people shouldn't be eating them. if he should help the american people he should raise the price of blizzards. >> and munger talking about mcdonald's how people get their start. learning how to show up on time, learning how to cash a paycheck. learning how to pay taxes. i think he called the minimum wage growing up, i think he called asinine. i think that's the word that he used, in reference to mcdonald's, as we know is killing everyone. causing diabetes and obesity and really the end of the world here in the united states, right? it's like a scourge. coca-cola, mcdonald's, both of those things are responsible for 90% of our problems. >> no, no -- i asked him -- >> throw in the airlines, it's

mcdonald's, coke and the airlines. >> no, no, i've been making a valeant defense influence. i would make a valeant defense of coca-cola and mcdonald's. >> okay. >> the question is, given the price point of those products and the income level of a lot of people who go there and use the products, and the global health issues we, that's the issue. it's not that we cannot have it all in moderation. i'm not saying to tax it -- >> no, no, one basic point. >> are you saying -- >> no i'm not. i'm just saying there's a disproportionate number, the problem -- >> i was just going to say, you know what, in most of the world, poor people are starving. we have a very unique problem in the united states. >> so, interestingly, in mexico where you spend time all the time traveling they put that tax in. >> right. >> apparently, it's reduced

obesity in this short period. i don't know if it's true. i don't know if it's true. i'm just saying that's what they say. i'm just saying clearly there's an obesity problem. and to some degree, it is related to certain types of products. the question is how can you educate people and what do you have to do economically toe en incentivize that behavior. display lot of problems associated to obesity. and big gulps, or sugary drinks. >> you know what we just added since we both have trainers -- >> you're going to talk to that now? >> wait. what did we decide. did we decide, is it food or exercise, it's still 80% food. it's still 80% food. >> sleep is say big story. >> but food is a major component. >> intake. >> intake is the dominant issue. anybody who has worked out and

also eaten a lot at the same time, tells you it doesn't work. you're on the treadmill for 600 calories - let's be clear, it's not just sitting on the couch behavior. it's also your intake behavior. >> i think that minimizes all of the other benefits from exercise. the psychological benefits. >> i'm not telling people not to exercise. >> you're talking about as far as obesity, you can't control it through exercise? >> well it helps to control it. >> it helps to stay active. you can see that both of us -- >> it's mano/mano. >> looking great. >> what time are we hitting the gym, bud? >> i went yesterday. >> you don't go every day. >> i don't do -- >> he needs to rotate. he needs to run. u.s. equity futures sharply lower, this morning, supposed to be higher. joining us now, philander

manager at fed raerfederrated. and on the economy. somebody making a point for 500 billion for a hardware company that is under massive competitive threat not necessarily the smartest move. and some people didn't like it. anyway, so, phil, you've gotten more cautious as i've seen you recently. what struck me today, i don't no david stockman, he's been saying that the sky's been falling for a while. he's got a point here we are, barely above speed, globally. you can't imagine central bankers doing more than they've already done. and this is what we get for. does that mean when finally there's none of that stimulus,

eventually, there's a day of reckoning or not? >> no, i think that's right. when you look at the gdp report up 0.5% of 1%. the market is sort of ignoring that saying it's just the first quarter. second quarter week going to pop back to 4%, 5%. we're not in that camp. if you look at the first quarters of the last two years, you had brutal winters that allowed you to pop back in the second quarter where you got a more than one weather environment. we had a pretty easy winter here. our expectation is we're looking at 2% give or take, not 4%, 5%. i think the market is getting ahead of itself. we think we're looking at a full year the 1.7 from a gdp standpoint. consensus point to 2, 3, that's below the gdp rate coming out of the great recession at about the 2.2% level. right now, things are slow.

>> be careful what you wish for, steven. oil factor. and fed can't move, dollar might go up. fed can't move. dollar stays low, we'll be fine. all of that happening, there's oil for you, there's a dollar, 18-month low. market can't get out of its own way. i don't understand. i thought that was going to be it. >> well, i think what we're actually seeing, the recognition that we looked at before. you're really -- >> the policy is bankrupt? >> it is, it is. it started january 29th when kuroda went to negative interest rates and you had a short rally. and then draghi comes in with his bazooka, and lo and behold, the euro happens. the currency starts to go up

dramatically right to the opposite of that you're having the exact same thing happen here. what we're doing we're actually immunizing ourselves from the global pressures and it's something that will continue on an ongoing basis. purchasing and currencies and devalues our currency and that just gives our environment where we get a little natural benefit from that, but we don't have strong enough global growth to correct everything. and we're not going to be the leader on the growth side either. >> you talked about how weak it looks in the united states. but where else in the world do you go? >> we've got a problem right now. >> i dmiernmean, do you go to f income? >> from an s and l global allocation point we're sitting at a bond rating of 60%. we've got a lot more cash and bonds than normal. joe opens this by saying phil's a lot more nervous than normal.

he's absolutely right. we're still in the correction camp here and we could actually see stocks pull back 5 to 8% in the next couple months. >> gdp is just coming around, they do it weird, they've got to add it up. it would be nice if you just knew what the annualized rate was. there are a couple countries doing better than us over there. back to whatten eon the euro, 1 on the euro. just when things start going throwing in the terrorist and immigration problems i don't know what happens in europe. i wouldn't be counting on them to save us, do you? >> no, and you've got the brexit situation out there. we think the odds of brexit are low. >> you do, i don't. >> some of what we've been reading from our overseas friends, it's closer to a coin flip. >> i don't know if that would be a bad thing. remember cutting your losses

with the stock market? is this really going to work this whole european experiment? are you sure it's going to work? you cut your losses and saying you can't do this without a single fiscal authority and common currency. we put it together, god forbid that it falls apart. a lot of people saying they're afraid to go back out of the it. that would be the beginning of it, if there were a brexit, there's a consensus point? >> no it's a pribritish concern. >> how do you think it would have marked let's say we decided in the united states we're going to have the north and south american zone. bolivia and brazil all going to have the same currency, not the same fiscal authority but you can imagine -- >> the same policy for venezuela? >> and an american trade where brazil and argentina had our

currency? you can imagine -- can you even imagine? >> but that's in europe. >> maybe this slightly less different than us. but can you even imagine trying to do that? >> not for a second. >> i mean, finland and greece. how different are finland and greece. >> it's not a fixed income kind of world? >> well, it is definitely a fixed income kind of world. you should be overweight in fixed income. you might want to be market weight in terms of equities. or below. cash is where you should be spending and putting it into fixed income. we're just heading lower over time. >> all right, guys, thank you. coming up, today could be a make or break primary for ted cruz. voters in indiana are head to get polls that could pave the way for donald trump to win the gop nomination without a contested election. john harwood joins us next with the latest from the campaign trail. we're back in a moment. ♪ you're not gonna watch it! ♪

♪ no, you're not gonna watch it! ♪ ♪ we can't let you download on the goooooo! ♪ ♪ you'll just have to miss it! ♪ yeah, you'll just have to miss it! ♪ ♪ we can't let you download... uh, no thanks. i have x1 from xfinity so... don't fall for directv. xfinity lets you download your shows from anywhere. i used to like that song. so both democratic and republican primaries are being held in indiana today. gop front-runner donald trump is ahead in the polls going into today's vote and trump claim he

is will seal a nomination with a win in the hoosier state. john harwood joins us from washington. hi, john. a lot of people calling this ted cruz's last stand. are you in that consensus camp if he doesn't make it today that cruz is done? >> well, he may keep soldiering on through california, the last primary is on june 7th. but the writing is increasingly on the wall. look at these numbers from the nbc/"wall street journal" marist poll. donald trump has a 15-point lead in the state of indiana that's where cruz has made his last stand. if you look at the national numbers in the nbc survey monkey poll, you can seat opposition to donald trump beginning to wither on the republican side. donald trump has got 50% nationally among republicans in that national survey monkey poll. on the democratic side you have a similar situation, hillary clinton is up to a 14-point lead

over bernie sanders. what we see is the they'clarify of november contest which we're likely to see hillary clinton and donald trump. john kasich have primaries in new mexico where kasich says he's going to compete. >> kasich's got him right where he wants him. >> yeah. >> right in the cross hairs of -- >> no, we do have to say, joe, that we have gotten a couple surprises that differed from poll results in this primary. so, in michigan, we had hillary clinton with a solid lead. and bernie sanders surprisingly came back and won and can't rule that out. >> yeah, no, no, no. the biggest surprise was in new york and 39 or 40 organization 45 or 49. you got 60 in a couple places. that was a surprise.

>> yep. >> wouldn't you think the momentum -- mannafort has had him, that foreign policy speech that some people liked. i'd go so far as to call it trump tuesday. somebody used that term trump tuesday. >> every tuesday had he was on "the apprentice." >> joe what happens in these races, sometimes it happens more quickly than ever, is that it tends to gravitate towards the front-runner. and we're seeing that right now. >> john, right now on "the washington post" it says what kind of candidate will donald trump be in the general election and how should hillary clinton run against him? that's in the lead. what's the answer? >> i think it's going to be a very negative race. i think what you'll see from hillary clinton whose image is not all that healthy herself is to try to capitalize on the worst image that donald trump has about hispanics among women.

among college educated voters. they're going to go very, very hard. there's a new ad out in an arkansas senate race where the democrat is trying to tie the incumbent republican to donald trump. and it's' recitation of controversial statements that donald trump has made on howard stern show, the campaign trial. and that's the kind of withering fire you'll expect from democrats. and for donald trump, he's going to come back with all of the negatives, crooked hillary as he calls her and dredge up her husband's problems. >> and trump would continue to be out an outspoken candidate to say improper or imprudent things. there was a sense that maybe he would become the candidate he would not only move to the middle but sort of simmer down. >> tamp it down. >> yeah. >> this is saying a very

different -- >> he couldn't do that. he's got to say who he was, authentic, he's got to temper it down a little. >> andrew, depends on what you mean by move to the middle. on policy in some ways, impaired to standard republican ideology, he's been in the middle. it's his temperment and his tone that he's been way off to the side. menafort has indicated he's going to temper that and as joe indicated he will somewhat. >> but it's what got him where he is. >> john, the scariest thing for democrats is the consistent. underexpectations for trump from day one. consistent. and the way that it's really touched out. and it could be kind of the same -- if it's anywhere -- if it's anywhere similar to that in the general, it's something they shouldn't just write off. >> i cannot argue with you, joe. >> it's amazing the -- and you

wonder what that comes from. it wouldn't be the media, i don't think. no. anyway, thanks, john. coming up, apple's ceo tim cook speaking to jim cramer last night. much of the interview was focused on china. we'll weigh in on the opportunities and challenges that the company faces in that great nation, next.

the first stock index ♪ (musicwas createdughout) over 100 years ago as a benchmark for average. yet many people still build portfolios with strategies that just track the benchmarks.

but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? it's time to bench the benchmarks. ♪ time now for the "executive edge." apple's ceo tim cook appearing on "mad money" with tim kramer. most of the interview focused on

the importance of china. >> here's what we see in china, is that the middle class is booming. about 15 years ago, there were 50 million people in the chinese middle class. five years from now, that number is going to be almost 500 million. this is unprecedented growth. >> i parsed every word of your last conference calls. you did not talk about middle classification which made us feel like something was wrong? >> no, that was my error. the long-term thesis is intact. there has never been like it in the history of the world, i'm still as optimistic as i've ever been. >> joining from us beijing, with more on the importance of china for apple, and you probably know better than we do, eunice, about what we don't know. and i just -- i would never

underestimate the engineering and innovative components of 1.4 billion people. and i know china's a huge market. i just don't know that it's always going to be apple that's capitalizing on that market. i think it's kind of reflected in the stock. >> yeah. and i think what tim cook had to say was absolutely correct when you look in theory, beijing's policy goals are all geared at creating a healthier and healthier society that has a massive middle class, as part of a five-year plan, the government wants to double per capita income to about $6,000 for city dwellers. and the whole idea is to change the economy here so it relies more heavily on consumers. the issue, though, is whether or not beijing has the formula right. because right now the consensus among many economists is that the forecast is not moving fast enough. that means that the economy is

not necessarily in the position where consumers are spending more. we're already seeing evidence of that in the smartphone market. tim cook himself said the smartphone market is not growing. so that is one issue. another issue is that just because chinese people are getting wealthier, it doesn't necessarily mean that apple is going to benefit. the company faces a lot of competition here. just in the past year in 2015, walle and shamby came in with brands. others like others you haven't heard of are investing heavily in our own technology. so that say big factor for 'ale. the third challenge that apple faces here is something that a lot of foreign companies face and that is the government's attitude towards foreign companies more generally. apple just a couple of weeks ago faced problems with regulators had that shutdown its iphone

services and that led carl icahn to dump apple's stock because he's concerned about the government factor. in fact, the american chamber of commerce came out with a white paper recently in the past couple of weeks and said one of the biggest concerns is the market access. and also the uncertainty of the regulatory environment towards foreign companies more broadly. and that's a big question mark for apple. because just because the middle class is growing, it doesn't necessarily mean that apple is going to have greater access to all of these people. it depends on what the government wants. >> like, it's tough. what have we done for you lately? you got to come up with something every time you have an investor or one of those shows where you do it. to try to leapfrog your competition. see, i never thought i'd get rid of my flip phone. i put all of my money in motorola, because the flip

phone, nobody was going to beat that. >> right, mine was pink. i miss it. >> can you imagine the pressure of tim cook to up with a 7, 8, 9. >> yeah. >> i would have stopped and got off on the iphone 6. >> one thing i wanted to talk to you guys about is the reaction in social media in china about the "mad money" interview with tim cook. a lot of people are talking about it and basically saying that they're hoping that apple is going to come up with an iphone 7 that does is come up with wiz bank technology that impresses people. there is respect for apple. people see it as iconic, tim cook, as well as steve jobs, of course. many people are hoping that the iphone 7 is going to be a big winner. of course, their tech analysts that i talked to are a little bit concerned that the expectation is so high for the iphone 7 to be absolutely

fantastic and that apple wouldn't have any other choice but to disappoint with that product. >> eunice, thank you, in china on apple. coming up, we're going to get you ready for the trading day ahead. the stock planner is next. plus the tv producer behind reality hits of brett michael's "rock of love." here to talk about the future of reality. mary buys a little lamb. one of millions of orders on this company's servers. accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack. with the help of the at&t network, a network that senses and mitigates cyber threats, their critical data is safer than ever.

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thank you! thank you! what a week! we sat down, we kicked back, and we watched tv! [ cheering ] this win is just the beginning! it doesn't end here. because your laundry can wait! keep those sweatpants on! order another pizza! and watch on! [ cheering ] don't wait a whole year for xfinity watchathon week to return. upgrade now to add the premium channel of your choice so you can keep watching. call or go online today.

time for the squawk planner. automakers are reporting their sales throughout the morning. cleveland fed president and atlanta fed president dennis walker. on the earnings calendar look for results from pfizer, clorox and sprint before the opening bell. cbs, etsy and zillow expected to

report after the closing bell. and a core media group is getting ready to set up for bankruptcy. that's the company behind hits like "american idol" "so you think you can dance." owned owned by apollo equity management. expected to join us thursday. for a check on the real world of reality tv, cris abrego. more importantly, he's got a book out called "make it reality." cris is the producer of several hits including "rock of love." thank you for being here. >> we talk all the time about streaming, netflix, amazon, hulu. all of that. most of that, it feels like, it

could be wrong is about scripted tv. people talk about wanting to watch on-demand scripted tv. if that is the world we're moving to, where does reality fit into that ecosphere? >> well, it's definitely the thing that's being talked about those are big earmark pieces for television on those streams service s but if you really loo on hulu and others, there's a lot of scripted services. in fact, they're looking for more. like any good network, ultimately, you need a little bit for everybody. >> right. >> and the bottom line is that reality isn't going anywhere. it's part of the -- >> do you think it's watched in a different way? i mean, to a lesser point in viewing and more in surfing around? >> well, all the water cooler talk is about all of the scripted shows, right? >> to some point, right. >> i think it depends on the show. it has a winner, once it's out,

you binge on it, it's done. if it's comedy series, yeah, i can see it being evergreen, being watched permanently. >> do you see services like hbo and other services out there buying into original reality with a major push as we've seen it? >> absolutely. sigh don't know if you guys are fans are shelf stable on netflix. chelsea handler is doing a bunch coming up. >> andrew just read this, how is it that the company behind "american idol," "you think you can dance" can be on the verge of bankruptcy? i mean, if ever there was a reality show, it was "american idol" accept for maybe "survivor." >> and "squawk box." >> exactly. that's in this year's election. >> how does that happen? >> you know, i don't know. i don't have the details but

"american idol" is an incredible series of an unscripted show. >> it's just like the movie business, you could have a mega hit and still blow it? >> i'll answer for him. terribly leveraged. terribly structured. that's the beginning and end of the story. >> they thought they were going on to bigger and better things. >> yeah. different question, reality. everybody says scripted/unscripted. >> correct. >> how scripted is it really? we just had some of the ladies from "real housewives of new york" on who tried to suggest it's not all that unscripted. >> well, i'll speak to shows specifically, they always say, cris, how real say shis a show? no one is being handed scripts. it's directed. but at the same time, in reality

we adhere to the same rules in scripted. we want an "a" story, we want a "b" story. we want a protagonist. all of the things that happen in television that make it entertaining. >> andrew, do we have a prepared -- we prepare nothing. >> very well. >> you have to truly just are gifted and talented. >> yeah, you are. >> you just nailed. the music is playing. facebook live and all of these ways to make a reality show. it's so much cheaper than ever before. is that a competitive threat to the business? >> not at all. it's about premium content. that takes time for story tellers to make it. whatever medium it ends up on, they're a client that creates quality content. >> get the book. appreciate it. gifted and talented. coming up, social media 101. why ceos aren't doing enough to

benefit from platforms like twitter and facebook and how that can hurt their company. the subject of the new book "the social business imperative." the author coming up next. ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪

i like the idea of using artificial intelligence because we're so short of the real thing. >> for the first time computers can see as well as humans. >> average investing is certain to lead to worse than average results. >> one of the key due diligence items are what are we like. >> we generally fire a company every three to four weeks. we're always looking. pretty much. >> dow component pfizer out with earnings. 67 cents a share. 12 cents above estimates,

revenue was also above projections. and then pfizer raised its full-year forecast. you figured they would if they were 12 cents ahead. in this quarter. the stock is called higher as you can see. up $1.20. the market cap there. this is what we talk about. you think pfizer, huge. huge! huge! $200 billion. $300 billion smaller than apple. we'll talk social media. companies across the globe missing a key strategy to boost sales. calling for a new book to help top execs to appeal to the always connected consumer. 68% of fortune 500 ceos are not apparently socially engaged. joining us is clara shih, the author of the book ""the social business imperitive." what do you want them to be doing? >> they're on twitter, they're

wondering why they are not seeing a return. the reason is because the way they're using it is typically just for marketing and they're scratching the surface. so i believe that social is everyone's job. starting with the ceo. >> the amount of time that i see -- the people who are successful at social online, it's like a full-time job. >> how do they do anything else? it's ridiculous. >> what i've seen you say before is you have to do it yourself, it has to be authentic. you can't outsource it to a social media manager. >> it's a lot of work. >> if you're supposed to run a company all day, how do you do both? >> waiting for your cup of coffee. standing in line waiting for a cab. there are lots of opportunities. >> isn't that time you're supposed to be thinking -- you're supposed to be thinking about the next thing you're doing as opposed to sending out a tweet and making sure the picture looks nice an instagram. >> you don't have to take selfies but it's a great way to

get a pulse of the customer and really understand what's going on. >> what is the stuff they should be sending out? >> it depends on the business you are in and the audience they're targeting. right now ceos who don't go on even under a pseudonym are missing out. they're not experiencing the world as their customers do. >> of all the social mediums, which one actually works? >> i think they have different roles. facebook undeniably is the largest one. >> would you even play on twitter at this point? not necessary? >> absolutely. it depends on your core audience. b 2 b, b to c. >> snap chachat. warren buffett and president obama playing on snap chat. i did my first real snap over the weekend but i still don't understand what i'm supposed to do other than stick my tongue out and make silly faces. >> then you got it. >> you don't want a ceo to do that, do you. >> i don't get it. >> it's about customer

connection. ultimately whether it's a ceo or a head of sales, it's a front-line customer support rep, you have to be on these mediums that your customers are. they aren't now. >> facebook live? should you be doing videos constantly? >> video is a powerful way to establish a connection with your customer. >> the book is called "the social business imperitive." on the board of starbucks. too much ice in the drinks or not? >> it's up to you. as much as you want. >> you know what i'm talking about? >> yeah. >> lawsuit over too much ice. >> so you're not getting really 14 ounces. >> this is like when mcdonald's apparently had the coffee that was too hot. >> it behind. >> now there's too much ice in the drink. >> thank you. this will be on the board topic. >> on the agenda next meeting. coming up, thank you. apple ceo tim cook telling jim cramer the company is always looking for new technology to

acquire. we'll be right back.

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apple on a major losing streak, down eight straight days, the worst streak since 1998. ceo tim cook defending his company. >> we're going to give you things that you can't live without that you just don't know that you need today. >> we'll break down his exclusive interview with cramer about the stock, china and more straight ahead. inside iran. a look where the country stands on the global stage. oil, tech and leadership in focus, what the future holds for the middle east and more. special report coming up. it's primary day in the hoosier state. could this be ted cruz's last drive to the ring? counting down to the critical battle in indiana. the second hour of "squawk box" begins right now.

>> live from the beating heart of business, new york city. this is "squawk box." welcome back to "squawk box" here on cnbc first in business worldwide. i'm joe kernen along with andrew ross sorkin and michelle caruso-cabrera. the futures at this hour down 140. oil right now is $44, $45. i think it was slightly lower this morning. it's now down over a percentage point. that would be about 54 cents. this would normally help. australia's central bank cut interest rates to an all-time low of 1.75%. the rba's first easing. policy makers citing surprisingly low inflation and subdued wage growth as well as the uncertain global outlook. the decision was not expected. as a result, the aussie dollar fell sharply on the news, but

australian stocks rallied more than 2%, but that did not move to europe, which is down and we're down here. but we were up yesterday. >> here is what's making headlines this hour. drug maker pfizer reported quarterly profits of 67 cents per share beating estimates by 12 cents. revenue beat as well. pfizer raising its full-year earnings forecast. you can see the premarket it's higher by 3%. u.s. automakers will issue april sales numbers today. analysts expecting an annual sales rate of 17.3 million vehicles up from 16.6 million in march. health care data technology companies ims health and quintiles are combining. the shareholders will get .4 of a quintile share. would that be 8 that they now hold? >> i remember one of our anchors, quintilees. >> they'll own 51.4% of the

combined company will have a market company of $17.5 billion. >> remember the alaumo. >> it bellies the truth. apple right now. falling for the eighth straight day marking its longest losing streak since 1998. tim cook defending the company in the interview here on cnbc last night. more on that in a minute. before we do that, dom chu joins us to break down the tech giant's stock slide. good morning. >> if we talk about what's happening with apple. if you saw the chart, down 27% over the past 12 months. since it got included in the dow jones industrial average. it's been a weight over the last couple of weeks. since march 18th of 2015, the close then, apple still down about 27%. it hasn't had a great run since getting included in the dow. looking at that versus the s&p

500 a different story. it's the biggest weighting in the s&p 500. the question becomes whether or not this type of downside medium over the medium to longer term takes hold. tim cook was on with jim cramer last night talking about the idea that perhaps there are things to look forward to for apple down the line. take a listen. >> just had a -- actually an incredible quarter by absolute standards. 50 billion plus in revenues. 10 billion in profits. to put that in perspective, the 10 billion is more than any other company makes. so it's -- it was pretty good -- pretty good quarter. but not up to the street's expectations, clearly. >> the most valuable publicly traded company out there, now maybe it does make more money than efsh everybody else but it's the growth. >> 83% of analysts have a buy

rating on apple. 15 have a hold and 2%, a couple analysts out there with a sell. average price target $125 and change. which means, joe, if we do get there, it's 33% upside from current levels. though even today we could be working on our ninth straight day of losses, guys, back to you. >> we pointed that -- we talked about going into the dow, great move. you take a company with a $700 billion market cap. let's put it in the dow now. put it in the dow now. absolutely topped it out. it's not doubling from there to 1.4 trillion. they put it in the dow after it's up to 700 billion. this was in the cards. >> it's more indicative, right? if it's that big of a company, it has to be part of the dow. it's a big industrial power, right? >> expressed the universally loved -- everybody who loved apple already owned it at that point. there was no one left to buy it. it's been straight down since

then. >> the next step is look at at&t since it left the dow. >> oh, no. >> that will prove everything. >> they put aig in the dow, thanks for that, right before 2008. the slide comes after the tech giant reportedly the first ever quarterly decline in iphone sales. tim cook calls this an overreaction. >> when i read the stories, it seems like people think, it's over. how could it be that you can't have this ever or the ecosystem but it's dead? >> yeah. i -- i think that's a huge overreaction. look, we just had a -- actually an incredible quarter by absolute standards, you know, 50 billion plus in revenues and 10 billion in profits. to put that in perspective, the 10 billion is more than any other company makes, and so it's -- it was a pretty good quarter. but not up to the street's expectations, clearly.

>> here now the it hardware analyst at credit suisse and john forte. we found you because so many analysts won't come on here, col b colbin. what's your highest target. >> $150. >> you feel comfortable with that? >> the way i look at apple now is many things are hurting the share price are temporary. over the next six or 12 months it can realistically reveerse. on the iphone side what's hurting it is the upgrade. going forward i think it's important to take into account the user base has significantly grown so that the rate of replacement remains 30 months. 95% of people replace iphone them. the units will recover. the value of this year's number is wrong.

>> apple will be the first company valued at $800 billion in the history of the world? >> they've gone through a number of firsts. made the greatest ever product in consumer electronics. i don't see why not. >> that's what they said when it was going to double, too, to 1.4 trillion. what do you say the multiple is? >> the stock is trading at 9.5 times pe. >> has to go. nine times earnings. nine times earnings. got to go up. >> the earnings stream is diversifying. one thing that's under estimated is this stock is valued like every other handset company. every other handset company has gone wrong. very few companies have the retention that apple have. 95% of users replace into another apple product. once you buy an iphone or ipad, try to replace out of it.

it's very difficult. >> it sounds like the underlying conversation we are having here is that apple is a phone company and that's it. for so long we kept talking about whether or not we were going to be adding another product, et cetera, et cetera. so now the story is it's a phone company and it's got to sell in china or else it's not going to grow. >> the iphone has been so successful that it's skewing everything else. i think that's a big issue for investors. for a while it was a mac company. now, yes, it is an iphone company. they make the argument that it's a services company. that argument doesn't -- >> software company. >> it doesn't really hold up for me, the services argument. because a lot of the so-called services they have aren't even real services, like app store sales. that's more like digital retail to me than services. >> this is a phone company. >> yes. but it's a different kind of phone company in that they have specialization in software, in sort of some services that surround it.

and they have really high loyalty. so you can't value it like you valued all the other handset makers, which, by the way, aren't around anymore. >> is there anything that you look around the corner and say these other folks really will upend what apple is doing. you look at google's android and say at some point it will be -- given machine learning and the deep engineering -- >> whoever comes up with a better keyboard, dude, because i have had it with the keyboard. it makes me crazy. somebody will figure that out and that will do it. >> the way i have thought about what could cause apple to go wrong would be -- it may not always have the best smartphone or the best pc or tablet. they have the best computer experience. if you want the experiences together. in order to really disrupt that you require someone or a company or a platform to make a better pc, smartphone, tablet, to make

it cheaper and no headache to move. that doesn't exist. >> i don't think that has to happen. nobody made a better ipod. you could argue that apple made a better ipod in a sense with the iphone but it just sort of ran its course. i think the counter argument to what tim cook told jim cramer is the ipad. cook was making an argument about the long runway for the ipad, sales will outpace the pc. people love their ipads. that's true. but the ipad has been in decline for two years. it's possible that iphone units could rebound but revenues don't because the s.e. selling at $400 starting price versus $600. >> what about india? this goes to the long argument where you say you have to go from 3 g to lte. that should propel a huge number of sales. >> we looked at it and said the average north american spends

$600 a year buying apple products. let's take all those people and a similar level of income and assume apple reached them and replicate the same success they had in china. this could add $95 billion to apple sales over the next five years. and two markets drive it. china and india. >> the question is does that work in india and china in the same way? >> in china hit has. the middle chinese consumer spends more on apple products than the american consumer. i would argue the dynamic affordability is there. what apple don't have there is the reach. they don't have direct retail presence. they have no local support. i think overall the margins will be stable because i do think the services business -- i think the services business in terms of gross profit contribution over the next three to four years can double. >> do you ever look at charts? >> telecom, we're more

fundamentalist. we have argued there is a trough valuation between $92 and $95. >> you one of those guys excited about leicester square? >> leicester city? >> my team is manchester united. >> i love how they -- you really have a team. it's like you either follow the team or you don't. my team, otherwise i don't think about it. >> same thing here. mets, right? coming up, ted cruz -- >> thank you. ted cruz -- and thank you for waking up early. scrambling to remain in the gop race. some fearing indiana could be the final blow from donald trump for the texas senator in his bid to be president. a preview of today's indiana primary is next. later, iran stepping up its offensive in the oil market. where our own michelle caruso-cabrera just back. the country's change there and the country's future role on the

global stage. "squawk box" returns in a moment.

welcome back to "squawk box." futures right now indicated down triple digits. last we look it was 140. little better. down 123. on the dow. 15 on the s&p 500. and the nasdaq down about 34 points. candidates gearing up for a showdown in the hoosier state of the results from a new nbc news/wall street journal/marist

poll showing donald trump with a 15 point lead over ted cruz in indiana. with 49% of likely republican voters. also got bobby knight and lou holtz. ted cruz is a debater and he thinks he can win every debate so every tv "nbc nightly newssh arguing. kasich has these guys right where he wants them at third with 13%. things are going perfectly, according to plan for the nomination for kasich. in the democratic contest hillary clinton has a slight lead over bernie sanders by a mere 4%. joining us now former republican indiana -- indiana republican congressman and president for the club for growth. david mcintosh. and club for growth spent a lot of money, #nevertrump is probably a fitting description for the club for growth. i don't know where to start the interview.

let's just say this. let's say trump wins tonight and becomes the presumptive nominee. do you take your ball and go home? >> we'll wait and see. my advice to ted cruz is to stay in there because you never know what will happen with donald trump. we still think cruz has a chance to win indiana. >> say for argument's sake that the polls go like they're indicated to go. are you going to try, like so many establishment republicans we have had on, are you going to say 2020 is not far away, we're going to try to lick our wounds, minimize our losses in the house and in the senate, we'll never back trump and we'll give it to hillary clinton? are you willing to say that? will you vote for trump or clinton? >> i won't ever vote for hillary clinton. >> it's everyone's duty to vote as a citizen, so you would vote for trump. >> he would be the republican, that's probably the case. >> a lot of you guys would not in club for growth. >> we talked about that last time i was here.

look, we're doing everything possible to make sure that's not the choice. since i think cruz is a lot better -- >> you're not succeeding! news flash! it's not going to happen. >> the polls in indiana are mixed. last week one showed cruz up -- >> you sound like bagdad bob. like you got the americans right where you want them! >> we poll it every night through one of the other super pac s. 25% of people are truly undecided. i don't understand why john is in there. >> it hurts cruz. >> it has. if it's head-to-head more republicans vote against trump than vote for him. it's still the case. he claims he has 10 million -- >> because he's from ohio. >> he claims he has 10 million. 13 million have voted against him in the primaries. they know he's going to lose. they know he's not really a small-government republican. he says when he talks about health care, well, the government will run it. >> all this is in the back drop

of hillary clinton. whatever he says and on the other side you have hillary clinton. >> trump is the only one that lets hillary win. >> the first two blackjack cards. you got two cards. you can keep giving them back to the dealer and saying unh-unh but those are your two cards. you have one hand. >> why are you so convinced that trump can't beat hillary? if the world, the whole world, is anti-establishment right now, there is nobody more establishment than hillary clinton. >> you're right. i would say don't put hillary in charge of the country. it will be a disaster. >> no. but you don't think trump can beat her. >> overha half republicans don' want him. many will come around and vote for him. none of the democrats will vote for donald trump. >> that's not true. look at union members. union members are voting for trump. >> typically those are what we used to call reagan democrats.

they vote republican in the poll. >> if you dislike trump so much and dislike hillary so much, you dislike both so much -- >> it would be tempting to vote libertarian. >> here, here. >> what do you think happens under trump that you hate and what happens under hillary that you hate? >> i am a small-government individual liberty guy. both hillary and donald trump say the government should run the health care system. donald trump says, yeah, i'll raise taxes if we need to to pay down the debt. hillary says yes, if you think obama is too squishy, i'll move further to the left. i think in the end she goes back to the center left democrat that she was. both of them will try to use the government to solve every problem that comes their way. i think the best way to solve those problems is have a robust private market where people are competing and you get folks like apple and other people thinking of new technologies, new ways -- >> people say trump, you know, didn't build a great business, is not a great businessman. they say all that. but he did operate in the

private sector and make decisions as a ceo -- >> yeah. >> -- that -- okay. just that should be enough for -- and you -- you give hillary the benefit of the doubt that she'll tack back to the center. you can't give trump the benefit of the doubt that he would have smart people around him that might be small-government minded, might be less intervention, lower taxes, less regulation just for business? if he is a private sector guy and wants to lower the corporate tax rate, our own larry kudlow says he has a good tax plan. i can't believe -- you're 51 trump and 49 hillary. for a republican that's not an accurate portrayal -- >> joe, i come back to the better choice is ted cruz, who we know will shrink government. >> the better choice might be -- >> we'll see what happens tomorrow in indiana. i know a lot -- >> so that's the contested

convention. obviously he has -- he has got a vice president but he has no path to the nomination with delegates. unless there is a contested convention. >> right. i think if he wins indiana i predict we will have a contested convention and ted cruz will win it. there is still a long way to go. >> will you be around on thursday? >> i'll come back. i've eaten my words before. >> i bet bob is dead. we can't get him on. >> the alternative is very bad. what we really will do at the club is go back to focusing on our senate and house races. >> he says you asked him for money and he didn't give you any. >> what he won't tell you, joe, is he invited me up to his office and said, what can i do for you? i think he was trying to give us money to keep us out of this. we said we don't agree with you on taxes and trade. it really comes down to donald trump doesn't understand what the president does. he is not the ceo of america.

he runs the government, and the purpose of the government is to protect us but let everybody be free to pursue their dreams. >> at least this guy has run something, right? >> i agree. trump is better than obama. >> really? i -- anyway. >> i understand you -- >> you hope he wins because that's the only way hillary has a chance to win. >> the bern is out, so -- try the superior hold...

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welcome back to "squawk box" this morning. among the stories front and center at this hour, vanguard investors got what they thought was a pleasant surprise, an application glitch causing some clients to see balances greater than what they actually had. when their accounts were displayed on apple devices the actual account balances were not affected. i was worried about the opposite happening, though.

of it going to zero. teen apparel retailer is planning to file for bankruptcy this week. plans to close more than 100 of its 800 stores. u.s. auto makers out with sales this morning. we'll hear from fiat chrysler next hour. it will post a 4.6% increase compared to a year ago. >> how many pairs of cargo pants can you own? >> cargo shorts? >> i am not allowed. >> that explains everything with aero postal. >> what was the all-time high? that was something we used to talk about in a list of retailers that was working fine in malls. >> the three are okay. american eagle. aeropostle and abercrombie & fitch. >> the stock is at 3 cents. sad. >> that's what happens. >> i wonder what the high was at one point.

>> i don't know. i have to go buy cargo shorts and them them out. >> it's all on you. i saw someone wearing them the other day and said, i'm going to get me a pair. >> why do we like them? >> there are pockets. you can put stuff in them. >> long or short? >> i like them long. >> right below the knee. >> the fashion police don't -- >> are they fashion shorts? i have had the long pants. >> i have too. i am not allowed to wear those either. >> are you talking about long shorts? >> long shorts and pants. i have lots of cargo. >> i love cargo but i am told i am not allowed to. >> doesn't your wife want you to be happy? you should ask that. don't you want me -- i do all the time because i don't dress very well at home. >> if laura is watching and you want to call in and join the conversation, she is welcome to do that. we can talk cargo shorts. >> what about yelp. >> it's not good new york

fashion. >> speaking of yelp. >> we're yelping. >> the cargo pants are probably rated on yelp. hedge fund manager disclosing a new investment in, yes, yelp. in a letter to investors einhorn says it could double revenue. shares rising 4.5%. einhorn also telling his investors he has made new bets in natural gas and positions in green banks. >> greek. >> greeks banks. >> you need glasses. >> not really glasses. >> greek banks are not green. >> financial services company delta lloyd as well. joe. harsh words on valeant pharmaceuticals from warren buffett and charlie munger yesterday on "squawk box." buffett said, i don't think you would want your son to grow up and run a company in the manner that valeant was run.

it would be better than like if he was a heroin addict. he's running a company at least. >> is this relative? >> berkshire vice chairman charlie munger called the drug maker a sewer. hedge fund manager bill ackman defended his stake in valeant pharmaceuticals yesterday on the halftime report. >> company has made some mistakes. i think where munger is wrong, he's wrong to indict an entire company on the basis of a few mistakes and, you know, a leader that is no longer with the business now. >> shares of valeant have tumbled nearly 70%. 7-0. 70% this year. i'm just back from iran, guys, you were kind to have me on the show last week. >> i was nervous. >> you were nervous? >> i'm over here sitting in new york and i was nervous. you are intrepid. >> it's not that scary a place. >> you read about -- how come we always hear about people that -- >> go to jail, yeah.

they do put journalists in jail. >> did you bring a phone. >> we brought a burner phone. >> a burner phone? >> it was to look at the economy, really. >> would you call it a beautiful country when you were there? >> yes. you're surrounded by snow-capped mountains. you ski until june in tehran, it was amazing. >> not that you would investigate such a thing, but is there any night life or -- >> it's behind closed doors. >> dancing or alcohol? >> it has to be behind closed doors. if you're caught with alcohol three times you can be executed. >> come on! >> that being said, you -- >> a westerner even? >> not that many westerners go. they only had, you know, 3 million, 5 million tourists last year. they probably avoid -- iranians drink alcohol, a lot of it, behind closed doors. >> no kidding. >> yeah. >> so what about hotels? >> they're all almost government

controlled. there is one foreign hotel that opened up three weeks ago near the airport, which is an hour and a half outside the city, which brings us to the story that i am trying to do here which is to invest in that economy, still incredibly difficult even though sanctions have been lifted. the financial action task force still thinks it's abetting money laundering. the state department thinks the government and banks there fund terrorism. there is this issue -- i interviewed an economist who served time in prison. he is now running a bus manufacturing company. the bane of investors over the world. >> the main problem has been and will be mismanagement of the government. >> mismanagement by the government. just -- you have so many quasi government institutions that control various businesses. it's tough.

>> in -- it's a theocracy, too, isn't it? >> it is. >> right? >> supreme leader ultimately decides everything, yes. >> even there, they're meddling too much, the government. in the private -- you could -- >> oh, yeah. >> could a theocracy ever be -- >> you have different incentives besides pleasing a shareholders. >> let's talk about iran's transition into the banking system. a senior associate of the carnegie endowment for international peace. thank you for joining us. do you take issue with anything said here? what's your assessment of the iranian economy and its ability to move forward? >> i agree very much with your observations from iran that it's very difficult to run a modern international economy when you have a country which is really

governed by an unelected theocracy. and iran is a country, is a society, with enormous potential. it's a very old civilization. very strong national pride in a region which is unraveling. enormous human capital. but as we have seen elsewhere throughout the world, you can have enormous potential but if you don't have the right leadership, that potential will be squandered. so i am skeptical that iran is really going to manage to take its economy off the ground and become an emerging market which attracts global capital. >> when i interviewed the head of the central bank, he told me that they are meeting with the financial action task force. this is an international body that looks at whether or not there is enough anti-money laundering laws in a country, whether or not a banking system is financing terrorism. and iran remains one of two countries on their black list.

it's north korea and iran. the fact that they're meeting, does that give you hope that they're going to change, or is this just a show? >> i don't see any signs that kind of the long-standing principles of the iranian government, they're contemplating changing those, which is opposition to the existence of israel in support for groups like hezbollah and islamic jihad groups. the official slogan of the iranian government remains "death to america" so it's difficult to establish a thriving economy when your slogan is in opposition to the most prosperous economy in the world, the united states. i have no doubt that there is enormous desire on a popular level to be part of the global economy. i always say iranians want to be south korea, not north korea.

even though you have a quasi-elected establishment, president rouhani who i believe sincerely wants to put the country's national and economic interests before ideology, but we should never underestimate the power of that deep state, these men who operate in the shadows. you don't really see them when you go to tehran but they're very much there. >> i was just thinking that the -- i mean, it's gotten to where the revolutionary elements in iran, if i were them, i would think that the world has come in many ways to my viewpoint. i wouldn't think that they're going back to the pre-revolutionary iran like the shah anytime soon. i theocracy. the middle east many would like the whole place to be a theocracy, right? an islamic state. >> i do feel they feel pretty confident at the moment. if you look at much of the middle east it's in a state of upheaval and iran looks pretty

stable in comparison. and frankly, when you see the amazingly cruel things that bashar al assad is doing in syria with the support of the iranian government or isis is doing, iran's behavior doesn't look so bad in comparison. but at the same time, i think that, you know, iran is not going to be -- it's going to be a place where western companies can sell their products and western companies can buy iranian oil, but i don't see the iranian government creating an ecosystem in which iranian entrepreneurs can thrive the way they have thrived in a place like silicon valley. they want kind of the results of silicon valley, but they're not willing to foster an environment which is conducive to those types of results. >> it is weird. dealing with bankers in oth countries and global business people and, you know, you end the phone call. and death to america!

all right. see you later. how do you do that? how is it possible to -- i hadn't even thought about that, but it's -- >> thank you, karim. great to have you on. >> indrandrew, you have to emba the cargo. that's what the kids told the father. dad, embargo the cargo. >> no cargo shorts, cargo pants? >> yep. coming up -- i'm going to abercrombie & fitch right after this. "huffington post" joining forces with the media company combining virtual reality with news events. the company's co-founder joins us. today's guest host aol ceo and chairman tim armstrong. he is owner of aol and "the huffington post." we'll be right back. actions. they speak louder.

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stocks to watch this morning. aig reported quarterly profits of 65 cents per share, 35 cents below consensus. they saw a short fall in income from underwriting and investments. viagen is spinning off the hemophilia business into a

separately company to be named at a later date. john foxx will be ceo of the new company. texas road house beat estimates by quarterly profits of 50 cents per share. restaurant chain also on pace for better than expected comparable sales for the current quarter. when we return, tim armstrong joins us along with the ceo of ryot. is uber wimping out when it comes to taking uber public. travis was on the show last week and had this to say. >> this is about building a company. it's always been that way for me. i have said even on cnbc that we're going to take as long as we possibly can to go public. >> will fred wilson join us. to respond. talk uber and other tech ventures. that interview straight ahead. we needed 30 new hires for our call center.

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welcome back to "squawk box." aol acquiring ryot. linking content to action. the company joining "the huffington post" to bring films, linear video and content. joining us now with more, a man who has been up perhaps a little too late last night. guest host for the rest of the show, tim armstrong joins us. aol chairman and ceo. how are you? >> andrew, nice to see you. >> you brought a lot of guests with you. >> a lot of guests coming. but the most exciting thing here is vr this week with really the

new fronts this week. it's nice to be here. thanks for having us. i saw joe at the white house correspondents' dinner. in the bathroom. >> it was weird. >> right. right. >> there was a line outside. >> there was a line. >> to the bathroom. >> could have made a good vr movie about it. here is what i want to know about vr right now and your interest in why you bought this company. everybody is talking vr. >> virtual reality. >> virtual reality. dare i say, it doesn't feel like it's ready for prime time yet. how far are we off, and how much of this is a bet for the future, not for now? even though it's very sexy, dare i say, to do this at the up-fronts and all of that. >> first, it's about consumer -- we'll talk about where he's been and you'll see why it's been very important. >> virtual reality, its time is right now. part of what's extraordinary is this is a mobile first technology. we're out of the headset.

you see facebook 360. youtube 360. this is in everybody's pocket right now. i think that's the breakthrough. we're seeing a fundamental platform shift in the way that people can consume video. that's what we have been excited for the last year and a half to be pushing the boundaries with news and journalism for that. >> when everybody talks about this in the context of putting on the headsets or the google cardboard headset when we talk about oculus. in terms of describing it to our audience, that's not what we're talking about. you think the immediate opportunity is different. >> i think the headset experience is terrific. when people put it on for the first time they're transported to the center of one of these stories. they can see scale, scope of disaster, see news as never before. it's immersive and pretty extraordinary. what we're excited about is how we not only create content for the headset but also for the consumer on their mobile phone. >> if somebody is watching right now and they go to ryot.com, they're not going to you, right?

they're going to a company that sells products. >> we're ryot."huffington post."com. we were ryot.org before. >> you're not worried about brand confusion? >> not so far. >> how much of the opportunity in terms of the way you both think about it is in simply the way we consume the news versus right now there seems -- hottest thing going, every advertiser and marketer wants to build some type of vr experience. >> on the business side of this, the reason bryne and his team are interesting is you look to 2025, there will be 500 million people a year buying vr sets, being involved in vr. and from a business standpoint it will be a $25 billion to $50 billion industry. if you look at the advertising segment right now, it's the number one thing getting discussed at the advertising new fronts. $240 billion digital business right now for advertising.

vr is the number one topic this week. and so bryn, talk about ryot studios. >> people remember the first time they have a vr experience. for a brand, that's a powerful thing, to give somebody the first experience in vr. they remember that. part of the extraordinary thing about vr is it sort of registers as -- you are not just watching a digital video. you are having an experience. so that sticks with people. we have had incredible success up until now with brand partners whom we're creating custom content for. now we're able to distribute it more widely and bring in more brands. >> what's the barrier to entry in this market? it feels like, if you can just get the technology, you have the camera and know how to use it, everybody seems to be jumping into this space. >> i think the barrier of entry right now is high because the cameras are complicated cameras. every single day they get easier and easier as people are able to make that technology easier to use. but right now it's -- most of the cameras are a bunch of

gopros cameras on a 3d printed case. you have to take the footage, shoot around and stitch it together. our whole post-production transformed to handle this. >> creating content can be very expensive. are you getting enough advertising dollars to offset what is the cost at this point? >> it's been pretty wonderful for us. brands are so excited to be able to give people an entirely new experience, one that they can be inside of. and so we're really, really busy. now even more so. >> you will always need disparate lenses to merge it together for vr? there is no way to take one shot and use some kind of algorithms to figure out what it would look like from different angles? >> the easiest ones now are two cameras which each have a range of 190 degrees. >> so you only need two? >> yes, but they're not to the quality point -- that will be the ultimate when you have two

cameras that shoot in 4k and self-stitch. that's some months away. >> you are an advertising guy. right now you can charge enormous premiums for this type of advertising, at a time pre programmatic advertising and others are commoditizing the business. i see the attraction. do you worry that this becomes commoditized too? >> i don't think so. the business that ryot has created it about differentiation. they've shot vr in 40 countries across the globe. if you look at where advertising is going, andrew, advertising is really about scaled experiences and data. scaled experiences are something that ryot has brought to the table for the last four or five years. they were nominated for an academy award this year. when you talk about true scale and differentiations nothing is bigger than mobile and video and where vr is going. >> if there are going to be multiple virtual reality sites,

which i assume there will be, what is your curation about your story-telling is any better? >> we have journalists all over the world. right now one of the things we're launching together is virtual reality production in all 15 of the international b bureaus of "the huffington post." what we've brought to the table is a lot of great docu style journalists and film makers. people who shoot on the ground and come in -- >> thank you for coming in. we need to do "squawk" in the round. venture capitalist fred wilson will talk to us about start-ups. uber ipo and the state of technology. right after the break. real is making new friends. amazing is getting this close. real is an animal rescue. amazing is over twenty-seven thousand of them.

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market alert. under pressure. futures pointing to a lower open on wall street as global growth concerns spook investors. is a tech bubble brewing? not if giants like google, facebook and aol have anything to say about it. how they're teaming up to keep things going in the big apple. our special guest this hour, aol boss tim armstrong and venture capitalist fred wilson. jared leto in the house.

music, movies, investing, is there nothing this man can't do? we'll find out as the final hour of "squawk box" begins right now. ♪ ♪ you can't break me down >> live from the most powerful city in the world, new york, this is "squawk box." welcome back to "squawk box" this morning right here on cnbc, first in business worldwide. i'm andrew ross sorkin along with joe kernen. michelle caruso-cabrera is hanging with us today. rebecca quick will be back tomorrow. in the meantime tim armstrong is here. we have a lot to talk to him about. we're less than 90 minutes away from the opening bell on wall street. looking at the futures right now. things looking down. dow off 120 points. s&p 500 looking to open down as well about 14 points. nasdaq looking to open off about 30 points. european markets as well, you're looking at a down round across the board this morning german

dax off 2%. cac off 1.5%. ftse 100 off a percent. oil prices under pressure. rising output from the middle east and north seas renewing concerns of oversupply. australian bank cut points to 1%. the first easing of the year. worried about deflation. low inflation, subdued wage growth and an uncertain global outlook. eu trimming its 2016 forecast to 1.8% from 1.9%. the eu inflation forecast also getting cut. stocks to watch. pfizer posting better than expected earnings and revenue. the company also boosted its full-year earnings forecast as it integrates its hospira acquisition and boosts sales of new cancer treatments.

biagen spinning off the hemophilia business as a separate publicly traded company. aig falling short of estimates seeing a short-fall in income from underwriting and investments. the ceo joins "squawk on the street." a legendary tech investor is teaming up with our guest host for a new policy lobbying at technology friendly policies. names like uber, ebay, snapchat and airbnb joining the fray. fred wilson joins us with our guest host tim armstrong, chairman and ceo of aol. tell us about this. then i want to talk to you a little about uber. they're teaming up with you. you had some tough words for travis, who we had on last week. who had some tough words for you. before we go there, tell us what

this is all about. >> tim called me maybe three months ago and said, we've got to get the tech sector more organized and more connected to the local government, state government, and i said you're right. and we found an amazing person named julie samuels to do it. we put together an organization called tech nyc. tim is co-chairing it with me. we'll get as many tech companies in new york as possible to join it. >> what are you fighting for? >> it's really making new york city -- it's the number two venture capital place in the united states right now. it was number four five years ago. so the work that's been done in new york city in the bloomberg administration and now into debladde blasio a great place for tech culture and code. we're focused on making it friendlier for internet companies. there are a thousand internet companies in new york city right now. >> what would make it fle

friendlier? in the business community at large in new york city, mayor de blasio doesn't usually score high. >> we're with him. we have spent time with him. we have an opening tomorrow night for this venture. he'll be there. fred and i, i think, are probably less concerned on who the mayor is right now and more concerned about where tech is going overall. the city has made an amazing movement. i think de blasio is behind it and supportive of it. we've spent time with him. we spent time with bloomberg when he was mayor. >> in terms of particular policy choices that you are advocating for, they would be what? >> we need more talent in new york. we need to build up the local talent pool, and we need to have policies that allow our companies to recruit more talent to new york. so talent is number one. if you talk to any ceo, anybody in any of our companies, they want to -- >> so new york city should do what in order to do that?

>> the first thing it needs to do is focus on the local people in the city, getting them the training they need to work in the tech sector. whether that's k through 12 education or higher education. you have a lot of great colleges in this town. >> so charter schools? is that part of it? >> getting charters more focused on tech skills would be great. that would be great. anything that can create a more knowledgeable and skilled work force in new york city is the number one thing. >> i remember you, though, critical when de blasio potentially went after uber and then pulled back. did that -- >> i think -- >> did that create a chill at all in the tech community? >> i would think you would have been critical about that? shouldn't you have been critical about it? >> really? really? >> there is an event with de blasio tomorrow so -- >> let me just say that we had regulation on the hired car

business in new york city for a hundred years. there are rules about what taxis can do and what limos can do. there need to be rules about what uber can do. that makes sense. >> talking about uber. as i mentioned -- >> this was about limiting uber. it wasn't about rules. it was about maintaining a vested interest -- >> you limit how many cabs are on the street. >> which they shouldn't. >> the reason they do that is that, back in the depression, everybody was driving, and you couldn't get around the streets of new york. >> the depression is over. time for updating the reg layin regulations. >> you need a limit on how many people are driving around. >> it's set by the market. >> it's not set by the market. >> because we have a medallion system. that's why it's not set by the market. >> it's a longer segment of debate. given that there were the battle of words between you and travis, if you will, you suggesting that travis needed or needs an ipo. >> i didn't say he needs.

i think it would be great if some of these top tech companies like facebook before them and google before them would come public and create the possibility that people, american people, everybody, could own their stock. that's what -- that's what tech companies should do. the best tech companies should go public. aol went public. okay. great tech companies should be public companies. that's my point. >> where do you stand on that? >> i think i agree with fred that the ecosystem -- if you look at the ecosystems built around these companies after they go public, they're big. if you're travis, you make business decisions based on how much you are spending and investing. it's tough to be a public company if you're investing a lot and you haven't gotten the profit machine going yet. fred's point is basically having these companies go public explodes ecosystems around them. even with the venture we are launching in new york city right now, if you look at the companies that are connected in new york city, many came from companies that were prior public companies where executives spun off, entrepreneurs spun off, and

it's a really -- >> we hear the public market has effectively broken in that it creates perverse incentives where somebody like travis. >> i have watched companies go public. it's a good process because it creates wealth. those people can start their own companies and hire people. capital formation, wealth creation is the backbone of the american economy. going public is a big part of that and always has been. if we start saying we're never going public, our best companies will stay private, i think that's bad. >> do you worry that some of the companies missed it? straight up economic, where we are in the cycle perspective, that it would have been better off doing it a year or two ago -- >> i think if uber went public today they would have a massive ipo. >> people talk about unicorpses.

down rounds. >> when you are talking about companies that are falling apart. you're talking about companies that didn't have good businesses in the first place. some companies have great business. uber and airbnb have great businesses. >> over the last four or five years, some of the companies were more concerned about the valuation rather than their business. you see the unwinding of that right now. there has been a lot of success. especially in new york and in california, obviously, there has been 27 exits over $500 million in new york. so the unicorns are getting a lot of press. probably a lot of people raise too much money without great business models but that underlying ecosystem is still strong. i think fred is topping with the top of the ecosystem pulling it up. >> you're on the record being negative about apple. several years ago you said it wouldn't be a top three tech company by 2020. are you feeling vindicated based on what you've seen in the

last -- >> i am not rooting for apple to have problems. i just think the future of technology is more and more in the cloud, it's more and more in machine learning and a.i., not in the devices. it's more what's going on in the cloud, and i think apple has not really invested there. they're very much a hardware company and a systems software company. and i think the future of tech is looking more and more, to me, where companies like amazon and google are going. >> they would tell you they are a platform company. what you hear in the valley constantly is, in terms of the deep engineering work, big-challenge stuff, machine learning, a.i., it's all being done by the facebooks and googles and microsofts of the world. >> i think microsoft has done a great job in the past couple of years turning that business around. i think what's going on there is amazing. >> do you think, two, three or four years out that that will be the undoing to the extent that

you think apple is not doing it? >> i have heard people make the argument that apple is ultimately one of the greatest fast-followers in the world. >> can they do a self-driving car? can they catch up in that world? that's where the world is going, right? it's not going to just be, you know, a device. it's going to be everything in your life. it's going to be refrigerator, your car, everything is going to be having software in it -- >> i am an apple the devotee. it's hard for me. you were an investor earlier in tumbler, which was sold to yahoo. how troubled is it and where do the negotiations stand? >> i said this on this program before. i think yahoo is a strong company with hundreds of millions of global users and has really good platforms. right now yahoo is a separate company making their own decisions but the process they're in right now for our sized company is makes sense to

look at it. i would be interested in fred's take on tumbler and some of the aet cetessets there. >> you always wanted to buy this. there was speculation for a long time that you wanted to buy this company and she never wanted to merge with you. marissa mayer. >> all the rumors predate me by many years. since before i got to aol. i would say this. everybody loves drama camp in the press when she is assethesee up. >> let's do it right now. >> it predated him. there was a period where i thought you were trying to buy her or she was trying to buy you, but she didn't want -- she thought aol -- she thought aol had a bad rep. >> false. by the way, look, aol was the worst merger in history. had a bad situation. we turned it around in 2.75 years. company had the best quarter ever, q 1. if people didn't look at aol a few years ago and said, hey, this company might be troubled.

it's different today. >> just last week. negative $8 billion. they described how you would have gotten to that. are you disappointed as somebody who invested in tumbler that rolled into yahoo. >> i think yahoo has done good things for dutumbler. if somebody picks up yahoo they'll get a gem there. i think tumbler is one of the few properties on the internet that resonates with the teen demographic. you have snapchat, tumbler, kick. >> fair or unfair to be as critical as the press has been and analysts have been thus far about yahoo and marissa mayer's leadership in particular? tough for you to say? >> the companies, the situation i was in, the company marissa got into. it's a rodeo. those are big companies that have lots of issues and lots of problems. the -- the aol situation was a

situation, worst merger in history. had the brand. it was better for us to be underestimated. yahoo is in the middle of silicon valley. it was probably overestimated in terms of how quick things would happen and what was possible? >> did i miss something? i thought the gorilla in the room was if and when you get yahoo what do you do with it? >> i won't make comments about yahoo. but we have been very clear on three things. our strategy, our structure and our cost structure. that's what allowed us to turn the company around in a little over than two and a half years. our strategy has been content, advertising, programmatic advertising, vr you saw this morning. we're big in media and want to be the world's largest media company. >> what a troubled company like yahoo help with that? >> we have big 2020 goals. we want to get to two billion users, tens of billions of dollars in revenue. i'm looking at any asset we can to get us in that direction. the verizon ceo said on cnbc

it's the type of asset we would be interested in. at a high level that's the statement. at a low level you have to go in and do your math and homework. still an open question. >> the elephant in the room? >> or the gorilla. >> or the 800-pound gorilla. >> or the 800-pound gorilla in the room. >> great minds. >> this show is a walk in the cake for you, isn't it? wait a minute. cake walk. >> thank this gentleman, the one and only fred wilson joining us this morning. thank you. >> thank you. >> stick around. >> you're sticking around, right? fantastic. the nation's automakers reporting april sales. phil lebeau joins us with expectations. >> april sales were relatively strong. we could see all-time record highs in terms of total sales in the month of april. the real question is what was the sales pace? we'll talk about that in a bit. here the individual automakers

and the expectation of those who will be up slightly or those in the case of general motors who will be down slightly. three things to look for. what happened with fleet sales. certain makers, ford in particular, ramping up fleet sales in the past few months. you don't want it to get too high. incentive spending. it's been moving higher. is it to the point where we start to see some of the crazy deals coming into the showroom? strong april sales as i mentioned at the top. they are expected. many believe we'll see a new all-time record in total, total number of units topping 1.51 million vehicles. you look at shares of the automakers. they've all been getting a bounce in the last week and a half or so after strong earnings reports from general motors and ford. we'll see what happens later today. the sales pace, 17.1 to 17.3 million. that's the expectation most people have for last month. >> thank you, phil!

we'll be watching all day. coming up, much more from our guest host aol ceo tim armstrong. we talked about someone was nominated for an academy award. couldn't you get anyone who actually won an academy award. you do have one. jared leto, an academy award winning actor. someone who sold 15 million records for 30 seconds and mars. he is also a technology invest oi or. 50 start-ups. he has some of his own. you're an acoliyte of his.

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welcome back to swo"squawk box." a judge in brazil ordered wireless phone carriers to block access to what's ap. the reason for the order isn't known due to legal secrecy in an ongoing case. the buzz story of the morning, the people, the outfits, the red carpet. highlights from last night's met gala. we do it next when we return. we got another one. i have an orc-o-gram for an "owen." that's me. ♪ you should hire stacy drew. ♪ ♪ she wants to change the world with you. ♪

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soccer championship -- >> you have to pronounce it again. >> i know how to say it. leicester. decided by two tie games. you're kidding. 0-0. >> out of "the simpsons." >> after a draw in the match against manchester united on sunday -- doesn't nbc do a bunch of soccer? >> we shouldn't make fun. >> awesome. leicester city played the role of spectator monday. the foxes.

hoping chelsea could tie or take down tottenham to help to secure the team's first ever premier league title. the spurs were up 2-1 before chelsea fought back with this game-tying strike in the second half. the game ended 2-2, so leicester city wins the english premier league title, capping off what might be the most remarkable run in a major sport winning the title as a 5,000 to 1 underdog. >> that is exciting! >> they spelled leicester -- >> i don't care what homer simpson says about -- >> does he talk about soccer? >> they went to brazil and he said, oh my god, this game is so exciting. it's tied 0-0! >> all right. nbc. >> it's great. it was a futuristic, star-studded evening at the metropolitan museum of arts annual black-tie gala.

the ball centered around the idea of fashion in an age of technology exploring the relationship between clothing created by hand versus machine. a wild designer gowns covered in beads, glitter and metallics flooded the red carpet. apple served as sponsor and ceo tim cook walked the red carpet with steve jobs' widow. you were there. you were not there? >> i've been there before. not last night. >> you couldn't get a beautiful beaded gown? or you were unable -- >> no. i wanted to wake up early so i could be here on time. >> you have never been? >> i have never been. >> it's on your bucket list. >> i don't -- i was just saying, i don't know if it's on my list. i suspect it might be on my wife's list. i maybe i have to work on that. >> you still have a bucket list. >> i have the things that rhymes with it. >> that's what i have.

>> that's the "seinfeld" joke. you get to a certain age. you want to do that? no. >> we didn't say anything about the keyboard. big show. coming up, putting america to work. the ceo of fast-food chain sonic joining us to talk jobs, economy and state of the consumer. special guest, academy award winning musician, tech investor and all things. jared leto in the house. stay tuned for an entertaining half hour of "squawk box" still ahead. alternatives can tap opportunities that traditional assets can't. and even though they're called alternatives, they're actually designed to help meet very traditional goals. that's why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. translation? goodbye 60/40, hello 50/30/20. ♪

♪ he's a stranger to some and a vision to none ♪ ♪ he can never get enough, get enough of the world ♪ ♪ it's hard to admit how it ends ♪ ♪ on his face is a map of the world ♪ ♪ map of the world >> we're having mike problems. we fixed it. >> i have two mikes on now. which is even better. >> completely. >> that's good. >> the clip is actually keeps hurting my tie. >> that's bad! >> is your tie squeaking about it? >> it's in pain. >> it's ruined. >> it's so tight that it snags every time it goes on.

welcome backs to "squawk box." looking at earnings reports that have come out. cvs health beating estimates by two cents with quarterly profit of $1.18. increased demand for the company's pharmacy management benefits services the key driver. coors earning adjusted 50 cents a share for the most recent quarter. 11 cents above estimates. bottom line was improved lower demand and lower costs. clorox earned $1.21, 11 cents above estimates. raised the full-year forecasted sales and market shares. what? fly babies? babies on flights? we're going to talk about that in a minute. don't worry. we'll call your personal shopper at bergdorf's and get you a new tie. >> this was a vineyard vine. check this out, people. jetblue changing the way passengers see crying babies, as part of a special one-time promotion in honor of mother's

day, the airline offered a 25% discount to passengers on a flight from jfk to long beach, each time a baby started crying. the end result, passengers cheered when babies made noise. four crying little ones meant every passenger earned a free round-trip ticket. i think that's a -- it's a fun thing to do. i can appreciate that given my views on crying babies. >> i fly way too much to enjoy crying babies. sonic launching a new initiative in the name of education. the nation's largest chain of drive-in restaurants committing $15 million to public school classrooms over the next five years. joining us to talk about the initiative, cliff hudson, chairman and ceo of sonic. good to have you here. >> good to be with you this morning, michelle. thank you. >> the cynics watching will say you're doing this for politically correct reasons. tell us why you are investing in education. >> we have had a relationship with donors choose.org for seven

or eight years. now we're increasing the amount we're supporting, $3 million a year for five years. my late mother was a schoolteacher. my twin sister a schoolteacher and i am very involved in public education. nothing cynical about it. teachers across the country come out of their pockets to support their classrooms. what we're trying to do in every community in which we do business is to help the teachers in the classrooms. they go online to donors choose.org. make a application for a grant. we'll do 15 million over the next five years. very much about the communities in which we live and where we do business. >> we want to talk to you about the minimum wage. and the recent hikes that we've seen across the country. the supreme court declining to consider a challenge by franchisees to parts of a seattle minimum wage law that will eventually raise hourly pay to $15 an hour. what does that do to your

business? >> that's a bit of a challenge. we'll see what happens over time. in cases where this has been done by and large these are being staggered or staged over time. so our expectation, we're meeting with franchise leadership this week, as a matter of fact, on a variety of issues. one of the things we'll lay out for them is a model that they can consider on how they would have to raise prices on an annual basis in order to offset these costs. so we'll -- we are working to confront it with our operators, make sure it does not, in the long run, impede their business. it presents a challenge. but i believe it's one that we -- we'll have to confront but i believe it's one that we can successfully deal with over time. >> the supporters of raising the minimum wage will say, all right, so what. you have to pay more for a burger. big deal. >> yeah. well, i suppose that's -- that is one angle. it is somewhat inflationary. i guess for the individual whose

pay goes from $7 to $12 over time, whatever the amount is, the increase, or if it is $15, for them they get 100% of that. so it outstrips the cost of the increase of a sandwich, a drink, whatever it is, whatever it is they're buying. it is generally inflationary. these are challenging questions, i think, for our society about what is the appropriate amount of pay -- >> i thought you might say that it would hurt jobs. wouldn't you be more incentivized to do more automation and therefore fewer people have the higher-wage jobs? i think it's morally ambiguous whether or not you have more people employed at a lower wage or fewer people employed at a higher wage. do i have the math right? does it eventually mean fewer people employed at the higher wage? >> well, it will -- the higher the wage is and the larger a component labor is the more it calls upon us to attempt to explore all tern itti

explore alternative ways to prepare food so you experience less of that cost. i can tell you up front it's going to cause us to shift away from labor. if nothing else our model is not set up to do that. we do make to order all of our food and deliver it with car-hops. the service delivery model is very personal and customized by customer. so it does present a bit of a challenge. i can't -- i cannot tell you it will cause us to lose jobs because i don't know that that's the case. the question is how much price elasticity we have in order to off set these costs. we'll work with that over time. >> we cheered to hear the buffett meeting over the weekend supporting the idea of working at a fast-food restaurant and how it teaches you to show up on time and responsibility? >> it teaches you a number of things. >> teaches you how to get dumped on all the time in terms of the types of jobs. >> it does. i think it's kind of silly and unfortunate. the fact is they are introductory jobs for a large portion of our population. my first job at 16 years old was

working in a restaurant. it's great in terms of teaching you about customer service, interaction with the public. they teach you about free enterprise system. if you're waiting on tables, you learn how tips work and how to satisfy customers. our economy is largely a service economy, and a kid who spends 16, 17, 18, 19 years old working in that setting will be a kid who knows about the service economy and it sets a good stage for that kid for all their lives really. >> my first job was a waitress at pizza hut. one of my favorite jobs. boy, did i learn about people and service. it was -- >> you sure do. >> fantastic. >> you sure do. >> cliff, what do you make of the argument that people make more and more that these aren't -- even though we want them to be introductory, first-time jobs, that a lot of people now -- they haven't been able to climb the ladder. >> yeah. well, i think our -- you know, there is no doubt that our economy is in transition. the types of jobs that are available are very different versus 50 and 60 years ago. this is a bit of a challenge.

the fact is, in our industry, the fellow who is the vice chair of our franchise advisory council came in as a single-store employee and ultimately the operator and now has about 70 of our drive-ins. the fellow who chairs the franchise advisory council was a bread truck delivery man and now he has almost 200 sonic drive-ins and believe me he does extremely well. is not in an introductory position in which he is engaged. these are paths people take. introduction to a free-market economy, introduction to a service economy. but they learn how to run businesses and they do it extremely well. >> yeah. that's great to hear. terrific. cliff, thanks so much for joining us. good luck with the education initiative. >> thank you. thank you. i appreciate the opportunity to talk about it this morning. thank you very much. >> we love a sonic burger. delicious, right? >> yeah. >> the worst burger is great.

coming up, friend of mine, really, from the white house correspondents' dinner, man of the morning. jared leto is in the house. that's him. cool! >> this is from yesterday. yeah. he'll join us when "squawk box" comes right back. ♪

♪ you can't break me down welcome back to "squawk box." futures right now are suggesting that we would have a negative open following what's happened in europe so far this morning. s&p would open lower by 14, dow by 128 and nasdaq by 32. our next guest won an academy award for his role in "dallas buyers club" is playing the joker in this summer's highly anticipated suicide squad. you're not in character right now, are you? >> do we have a shot of the great picture, though? >> if i was, you would all be dead. >> we might be -- i don't know, have some disgusting items here. he is also lead singer and songwriter of the band 30 seconds to mars. no small feat. plus one of his latest projects

is a digital series he directs and stars in called "beyond the horizon." he joins us now to talk about this. we don't have a whole lot of time to talk about all these things. our guest host, tim armstrong, you're like a child star, first of all. all these guys start bands but they aren't real bands. you have sold -- >> i have never been called a child star but thank you so much. i was younger, yeah. >> you were younger. >> but i am actually getting older now. i think i always looked young. it's funny, he gets aol's ceo. then you don't need to say anything else. you have to say a lot of stuff about me to pile it on to make it into something. when you are a bad ass like him -- when you are a bad ass like him, tim, ceo. that's it. >> i can confirm at the white house correspondents' dinner, jared was one table over.

no one there needed an introduction to who you were. >> 30 seconds to mars is a great brand. kevin bacon doesn't have an oscar or 15 million records sold. >> he is a really nice guy. >> i know he is. but 30 -- you tour globally. for five years you didn't take a role. then you are particular about your roles. you take one and get an oscar for it. >> the point is you're multi-talented. >> this is before we talk about your tech start-ups. >> thank you very much. >> how many companies have you invested in over the years? >> i have about 50 investments and i've been really, really lucky. i work with some incredible, incredible companies. it's been -- it's something that i started learning about about a decade ago. and it's been a slow build and something that i've done really quietly and something i have been passionate about. i actually spend a great deal of my time in this world, and it's changed my life. >> what was it that got you into it? >> you know, it was -- i think when you're in a band you have

to -- you have to play a lot of roles, unlike when you are an actor you have a studio, and the studios are really great and all-encompassing and cover things like, you know, everything from marketing to social media. when you are in a band you have to do a lot of those things. either in conjunction with a label or on your own. so it put me on a path early on to be independent and entrepreneurial and it led me to the tech world. and -- >> how did you find the tech world -- what was your first investment? >> did you see the names, andrew. >> airbnb. >> how did it happen? >> i can't give you my secrets, bro. come on! there are laws against that, probably. i have been very lucky. i do. i work with some incredible companies, uber. airbnb. slack, stripe. >> his own start-ups too. you have some of your own. >> i have started some companies. we -- the businesses that i have

started are really a lot different than the tech companies. they, first of all, they usually have a business model right off the bat. and they're smaller companies. they're not focused on massive growth and things. >> how do you think about being an entrepreneur relative to acting, music, what you're doing with -- >> when you're in a band, as soon as you -- it's similar to a start-up. you are a few people in a garage. these days normally around a computer, and you're using software to make something. so it's really, really similar. i remember early versions of pro tools you had to kind of basically code in some of the parameters. >> that's a software, joe. >> that's really high performance. >> you're betting on your dreams and yourself. it's entrepreneurial. >> so they bring you uber. you think, oh, maybe? >> that's not how it goes. they don't bring me uber. i go beg for uber. >> so you begged for uber. >> i would say almost every investment i have made i have been incredibly proactive and

aggressive. i have sought investments out. i have never sat around and just waited for them to come my way. >> fascinating. now, do you have some that got away or some that you wished you had gotten -- >> oh, yeah. >> like what? >> oh, i can't -- oh, the oculus guys. that got away from me. >> they wouldn't let you? >> i think it was -- it was -- it was -- probably maybe a little too late. like maybe it was at a time where they couldn't -- i remember i went and met with instagram, i think, four days before they sold their company. >> whoa. >> and i asked if i could invest. and they kind of like looked around and started giggling. i was like, what's so funny? >> do any of the companies ever want to either trade on your celebrity or say, hey, yeah, we want you to be involved, but we'd also like you -- we're hoping you'll do something with us? >> i think you have to figure out what you're good at and you have to offer that. if that's what you're good at, then that's what you need to offer because you're getting the

opportunity for some reason or another. >> right. >> tim has different things to offer than me. but i generally don't do that. i am not signing on to a company to just be a spokesperson. >> quick story. last year you were at the vanity fair new establishment. ron conway is a friend of ours. ron before i met jared said there is jared leto. let's talk to him. he is one of the best tech investors that i know. not having met you before, i said, wow, jared -- he is already good at -- a musician. actor. i know the things he does creatively. it was amazing to talk to him because at that event was all the insider tech people from silicon valley. jared is one of them. so while he is an academy award winner, ask silicon valley he's just as comfortable and drives just as much value because he is on the front edge of all these tech investments. >> the show on aol, second season?

>> it's a really, really amazing thing that i -- an opportunity that i have had. and i am really excited to do it with tim. i get to pick ten people from around the world. thought leaders, people who have lived incredible lives. and basically talk to them about their vision of of the future. last season we spoke to al gore. edward snowden, jeff koons who i saw last night. he is one of my favorite artists. >> jeff, if you are a fan of thif thinking about how human beings interact with art. >> they're short, 7 to 12 minutes long. meeting snowden was fascinating and interesting, as you can imagine. so we have a great group of people lined up for the second season. >> can you threaten tim armstrong as the joker? would that be possible? in that voice? >> he is a strong dude. he could probably do pretty good

against a joker. >> threaten andrew, then. >> i feel like, if i go to that place, you're going to have to call -- >> i was going to ask you about that too. is it like -- is it a meisner thing or -- >> no, no. for me, i -- i really don't use the word method. i don't really prescribe to some kind of technique. i do -- i just stay as focused, as committed and as concentrated as i can so that i can do the best job. >> in "dallas buyers club" you were in that character 24 hours a day. >> he had 12 million viewers on his episodes. we need in him whatever method you're using tonight to be really effective. >> for all the folks who think they are multitaskers or want to multitask. how do you do it when you're acting, for example, and you want to be focused on that and i imagine have to take calls about these

investments or something to do with the band or whatever -- >> i think there's a few things. you have to be really good with your time. you have to be incredibly focused on what's important, what the priorities are. and it took me a long time to figure this out. >> but you cut out certain things when you're acting, for example? >> oh, of course. i mean, you have to say no. you have to get really good at saying no. i would hate to do all of these things, which are so great to be able to do. i feel really lucky, but i would hate to do them poorly. that would be ridiculous. >> do you have another tour planned? >> yeah, we're working on a new album right now. >> are you writing all the songs too? >> yes. >> your brother is a good drummer, too, is he not? >> my brother is, thank you very much. he's the best. >> so he's got another tour. >> yes. >> other people like to be the joker, i'd like to be the joker. but i want to hear that voice. >> you are the joker. >> avoid it. >> come on, just one -- >> it's a little too early for -- >> can you laugh? >> no, no, no.

[ laughter ] hey, that was pretty close. but i worked on the laugh like walking around the streets in new york and toronto. and i kind of walk around the streets and see what laugh would like kind of get under people's skin, you know, if you hear someone laugh loud at restaurants, try them out. and i kind of got to a place where i would laugh and people would always turn around like what is this creepy guy behind me. but anyway. >> then you knew you got it right. >> exactly. >> that's great. >> probably no beads. fine. thanks, man. >> i figured you're set. >> we'll talk about that. >> "the wall street journal," talk about you. anyway, thank you. >> but that was all in good fun. i mean, it was all in good fun. >> it was. >> nobody was taking it too seriously. >> jared leto, thank you very, very much. >> it's great. >> the joker will be back with us every day.

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welcome back. jim cramer joins us now from the new york stock exchange. killer interview last night, jim. >> thank you. >> with mr. cook from apple. curious if there was one takeaway, what was it for you? did he persuade you?

>> yeah, i think -- well, first, there's got to be more negtivity about the stock. these analysts haven't downgraded it. but my takeaway is if you think the company is a device company, that's a misread. the company is going to have 1.5 billion devices in the next year and a half. and it's really just a trojan horse for services and the services you think they may have backed into it, but that's the revenue stream that is going to be preeminent as they grow into other different parts of the world. and i just think people are viewing it as just a cell phone company. if they view it as a cell phone company, you should sell it. because it's not that, but i understand right now why you would say it is. you have to think about what it will look like, not what it is now. >> awesome. >> thank you. >> we look forward to seeing you very shortly. i'm sure you'll talk more about apple and i know i'll be stay tuned for that. >> coming up, tim armstrong's take on technology right now and in the next hour don't miss aig ceo peter hancock going to join "squawk on the street" 9:30 eastern time. stay tuned you are watching cnbc because we are first in business worldwide.

we want to thank you for bringing us all sorts of great guests and conversations. >> thanks for having me. >> i want to know what it's been like now, how long's it been

since you did the deal? >> i think it will be a year next week. >> what's been the biggest difference? >> the biggest difference for me is 40% of my time being back at the company around products and services and those things. when you're not public, we get to focus a lot on strategy and product development and customer relationships. and i think the second thing for aol we're competing in a space where the market has changed dramatically in terms of scale if you look at how big facebook is and google and those type of things. so it gives our strategy a real boost. the world is going mobile. >> right. >> and being inside of verizon has given us a huge chance to spend almost all of our time talking about mobile. the verizon executives have done an unbelievably great job of integrating aol and giving us space to operate but bringing us scale. >> right. >> we've done ten major deals since the verizon deal, m&a and partnerships overall. so we had our best quarter ever

q1. >> tim armstrong, thank you. >> great to have you. >> if you do your 11th deal with yahoo, please come back on that morning. >> only if joe fixes his tie. because we have to have -- >> it's a joker tie. you can't do it either. i'm going to work on a -- >> tim armstrong, thank you very much. >> join us tomorrow. "squawk on the street" is next. good tuesday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer at the new york stock exchange. david faber is in los angeles at the milken institute global conference. a lot more from david in a moment. meanwhile, sullen may continues to live up to its name. europe getting hit by a weak