dollars in ill gotten gains. it's friday, may 20, 2016 and "squawk box" begins right now. >> live from new york, where business never sleeps, this is "squawk box." >> good morning. im. take a look at u.s. equity future this is morning. the dow was down almost triple digits yesterday. this morning dow futures indicated up about 58 points. s&p up 7 and nasdaq 18. overnight in asia you will see the nikkei is up about half a percent. similar for the hang seng and shanghai composite. and this friday morning of trading the dax is up almost 1%. the cac in france 1.1% and the ftsi up the most at 1.4%.

crude oil prices also, which yesterday ended relatively flat. prices have picked up slightly to 48.25 for p ti. brent crude up as well. existing home sales come out at 10:00 eastern time. expected to have a risen but at a much slower pace than march. as for earnings look for campbells soup, deere, foot locker and the buckle. >> it's stubhub. they got pay you 500 -- oh okay,

how much? oh pay me a thousand o go. kind of a negative interest rate thing where they actually pay you do come. it's ban busy week on the retail front. the latest name to report. gap. the retailer posted earnings in line with previous guidance but it is giving a cautious outlook for the rest of the year. warning it needs trends in the apparel retail environment if it going to hit wall street's earnings target. amid that slump gap plans to close all old navy stores in japan. also some banana republics, mostly outside of north america and lit do that by the end of the business year. following the latest reports s&p downgrade the stock to junk. fitch did last week. >> and located debris and passenger belongings from that

missing egypt air flight. hadley gamble joins us now from paris. >> the egyptian navy says they are absolutely sure that part of the fuselage and some belongs to passengers does belong to egypt air flight 804. the egyptian military had taken full control over the search and rescue and they are continuing to comb the area searching for more. we also understand at least three french investigators are on the ground in cairo, including a technical expert are all there to take part in this investigation getting under way into what caused this plane to plummet from sky just 20 minutes before landing. a lot of question this is morning as well as to whether or not the plane's previous destinations had any impact on the security of the aircraft. what we know is that the a320

was in several cities before it took off from charles de gaulle. so some big questions about that. and also of course whether or not this was a terror related incident. we've heard more suggestions from egyptian authorities that this was in fact a terror related incident and the question of course why haven't we heard more chatter among groups like islamic state, and al qaeda as to that. so we're going to continue to monitor this from paris. >> hadley thank you. >> for more army colonel jack jaco jacobs. i don't know how question get the most out of talking about it because until we find out the block box and everything it is all just speculation. i guess to me wow it's a lot of

places where the aircraft had been. if you do have a way of getting on board, could you have put something there that doesn't do anything for five, six, eight hours and suddenly just detonates oop timer? >> yeah you can do that. and i think it is right to focus on not necessarily the passengers. there are varying degrees of security taking care of passengers to make sure that they are not bad guys. but there is less focus actually on the people on the ground to do things like bring equipment on, caterers and maintenance people and on so. as a matter of fact charles de gaulle just recently i think got rid of several scores of people who were on the ground who they suspected of being terrorists.

and yes you can put something on board that eventually blows up. it can be on a timer. or it can be on a relatively sophisticated by easy think to do whereby it responds to -- the trigger responds to altitude changes and blows up on the third time it -- all that stuff is doable. >> so it could have been planted anywhere. >> i think that plane was -- >> yeah. it was in all these places. think of how hard that was to pull off 911. years of pilot lessons and then you think of this shoe bomb -- this is like why didn't they figure this out long ago or why didn't we think about this long ago. this is the easiest way to do it. you have people with carts going in and out of airports all the time. right out on the runway.

literally thousands of people that have access to the hold of that plane. this seems like a nightmare for us to try to -- >> i'm standing in line for tsa behind some old lady who shows their idaho card which they then scan and while that is happening somebody flashes a card and walks right through who's an employee, not just an employee of the airport. frequently they are employees of concessionair es. who knows who these people are. and if you think it is tough in the it's or relatively easy in the united states for people to get through and paris and tunis and cairo yeah it is something of a nightmare. >> what is the cost to to that solution? >> there are a couple things you have to do if you really want the kind of security that will

make us much more comfortable. and by the way it has to happen everywhere. not just in the united states. you shouldn't be able -- if you really want to be serious about this. you can't just pull up to the irpt. you have to pull up to another facility that costs billions of dollars to do. like they have in cairo. very far from the facility itself. that is where your pags are checked. x-rayed and taken apart. and after you're cleared you then go on buses that have also been x-rayed and go all the way to the terminal. you shouldn't be able to go right up to the terminal. everybody who works in the place has to go through, you know, a special background investigation. and that includes concessions. >> you are talking about about stuff that would make it

inefficient to take a flight that is less than a 15 hour drive. >> and nobody is going to pay the bill for that. the airlines is not going permit a surcharge on the ticket because that will put tickets way out of the economic reach of most of the people who fly. i remember years ago i was at bankers trust in london and i flew everybody where. none of the people on the planes i flew were civilians. everybody was a businessman. today everybody flies. not just in europe but certainly in the united states because airline tickets are relatively cheap. you would have to restrict the people who fly. the airlines are not going put up with it. governments won't pay for it. so we're going to find more clever ways of trying to determine who's a bad guy. and in the united states we're not going to do it because we don't want to profile people.

they do in other countries but they won't here. >> the clever perhaps more efficient way or cheaper way you think ultimately the only ral way to do it is through profiling. >> number of things. profiling is one of them. i remember in israel once on business a few years ago and you get grilled. >> but the cost of that is big and there is only one real airport they are doing that at. >> that is correct. but they got do that. you have to be able to submit yourself to an x-ray. you have to have these intrusive ways of determining whether or not you are carrying anything. and every person who works on the flight line has to be subject to this stuff too. all this costs money, slows everything down and makes airline travel grossly inefficient. so there's got to be some tradeoff. until we find some genuinely efficient likely electronic

meanmea means of determining who's carrying something bad and who isn't, who is a bad guy and who isn't. >> we're not as good as dogs even. i was just thinking god we need a lot more dogs. >> that's the other thing. when was the last time you saw -- when was the lams last time you got sniffed down by dogs in the tsa line. >> two of them are german shepherds, and the most incredible animals in the world. a lot more dogs are necessary too but you can't have a dog inspect the hold of every airline. why don't have a stupid electronic machine that's as good as the dog? or do we. >> >> they're working on it. but all the cargo has to be x-rayed.

all the cargo can be sniffed down but they are not. >> we got to go somewhere. anyway, thank you. >> okay. yep. u.s. equity futures indicating a higher open on wall street this morning. joining us now with where the marks are headed. does anybody really know? -- and lou breem. can grow a little lou breem for me. >> lou -- where's mary? mary slaughter. go ahead. >> sitting here next to me. >> excellent. >> do you actually think you know where the market is headed? >> i have a crystal ball. >> let's look into it. >> here is what we know. with interest rates this low you only need a little bit of earnings growth to support a high multiple in the market. the problem is we are in the earnings recession.

so we've had negative earnings growth on the s&p 500 and it is not just energy it is across the board. you see a little growth in consumer and healthcare but across the board very low earnings. so the secret here is you don't need a lot of earnings but you have to show up with some. so the companies that are going to show up with it are going to differentiate. walmart and target. walmart up 10%. target down almost 10. and now we're back to the whole actively managed thing which also hasn't been working very well for anybody either. >> the problem with the stock market in the last year and a half is that it hasn't been able to sustain any kind of gains since the fed stopped expanding their balance sheet. the last qe was in second quarter of 2015. we've been a little over that but really have never sustained

any of those gains. the last time the weekly close but over 2100 i think was last july and the market's proved vulnerable in between. not like we've fallen but the market's been vulnerable couple of times. sharp selloffs. maybe we're more vulnerable to china when the fed is not there or maybe more vulnerable to the fed itself and i think that is the next question. can a stock market rally and a fed rate hike cycle co-exist at this time. so far we haven't been able to do that and i think it is a real question. -- >> what do you think the answer is? when june comes around -- >> let's say -- well first of all do you think there will be a raise? and what does it do to the market? >> the fed certainly intends to raise. i don't know it will be june. my opinion i would wait out brexit and then if they really felt that boy june was the time

and we really should act then we have a chance to reset the table in july a couple of weeks later. i would assume we'll be able to sustain. the economic growth has been so sluggish for so long i like to look at the nominal dwpd gdp year on year in the last naive years and that last five years period is worst we've had. so that sluggish growth and maybe the fed action kept us from falling further but there is research that says that the fed low rates and whether the fed has done has discouraged the real economic growth, the capital expenditure. and if we don't get the economy growing in a more sustainable way than the s&p or the stock market in general is more vulnerable. >> rates will be low enough to support the stock prices of

companies that do show up with earnings. what we've seen this year is companies that have delivered earnings growth showed up with over 2% earnings growth in this earnings season bucked the trend. >> those stocks have been far and few between. >> not many of them and then you put everybody else out of business twret pretty quick. >> it is a fairly elite growth. you have about 50, 60 names in the s&p 500 but on average they have shown one growth and they are a little expensive but not much compared to the market and their history. and again rates will be low enough. remember the earnings impact of the energy sector is diminishing and it is simply a factor of math. >> the earnings impact dragging down the s&p 500 overall because e -- >> diseaseit is a melting ice c.

if they drop 50% again they will only have half the impact and oil prices up to $50 so you might have a lift on the broad market but certainly the companies that show up with the earnings will be differentiated. >> jim stewart had a column -- >> i saw this. there is a fundamental flaw in it. >> -- buffett make the investment. take that piece out. i completely agree with you. >> explain -- >> jim stewart talk about the idea that apple giving berkshire. he said warren buffett's involved. buffett didn't make the investment it was todd or ted. ite way does it make it a value stock? that is the question. >> it is kind of not tech. it is kind of a sad commentary. >> sad commentary. >> buffett did miss every big

tech stock. he didn't get on any of them early. >> does it raise the question of apple being a value stock as opposed to a growth stock. >> buffett hasn't been limited to classic value stocks in decades. it is a question of garp as much of anything has been his strategy so i don't think this tells us that much new about a stock like apple. but is it at a discount to its potential earnings growth rate, sure? >> guys got to wrap it up. >> all right. we are going to talk about mickelson. and i don't know what to think of that. they are using the word "putts." they are not spelling it putz.

but it is the same meaning. so i've stopped using any yiddish term because i don't want to -- >> out of respect. >> out of respect. but apparently the post has no such respect. you know phil is a piece of work though. the reason he had to take the tip is because he owed this guy money on his other gambling. stock market is perfect for him. let me show you how to work some options phil in commodity futures. "squawk box" coming right back.

welcome back. welcome back to "squawk box." if you are making plans to travel on memorial day on that weekend. your best bet is to find a way to get an early start. aaa is predicting a giant jump in the number of people traveling over the holiday weekend. estimated 40 million americans are planning a road trip due to low gas prices. the highest number in a decade. and traveling by air probably won't be much better if you were

watching this week at o'hare. domestic flights are 26% cheaper than a year ago. that is contributing to expectations that this summer will be the busiest ever for air travel. that means long lines at tsa. so pick your poison. >> we complain when the economy is down and can't travel and -- we just like to complain. i'm driving. >> driving down. it's like 12 hours. do you know how many trucks that is? >> i know. >> i don't think he's coming over. and then he's like -- >> time you get to spend with kids in the car. i have two 12 hour trips in the car this summer too. >> oh he knows what he's doing. he's a professional truck driver. i know he's got 16 or 18 or however many. and i know if it fish knives you

will get smashed like he an but he's an professional. >> i try and stay in the car lanes, when you have. >> you and your nervous lines. there are no trucks up there. there is nothing up there. >> i know. >> there are just a couple of birds on takeoff you have to avoid. drones. >> i get nervous when there is a little bit of construction and they have those, the barriers that are very narrow. >> the shoulder. and you are passing and truck. and he's like, you know, looking over at something oh i got a text and he's coming over a little. >> the drift is brutal. >> 11 hours of -- >> i thought i had a messed up mind but the more i listen to you two. >> -- >> it is exhausting but we can share. >> like a therapy session. i'm ready for it snow. >> when jeeves is driving it is

a lot easier. >> it is. oh he know what is he's doing. >> i like driving myself. i like being in control. sort of. oh shut up. >> all right. >> talk about a office perk, a north carolina company is planning award each of its employees with a tesla model 3 once it's release. >> it's called petra -- i will check it out. they do scientific parts. i this company may grow very fast and are going to get thousands of applicants from this. we talked about this on "worldwide exchange" earlier.

the cynical part of this is you may never have to pay off. or they may grow very slowly because the cars will be available a little later. and kentucky derby winner nyquist will attempt to claim the second race tomorrow in the preakness stakes. nyquist starts post position 3. two of his toughest competitors will be nearby. exaggerator is at post 5 and awesome speed starts in 4th position. morning line favorite at three to five odds. >> awesome speed. someone came up with that. that's good. i thought they had all been used for horses. horses have very weird names now

but awesome speed, i get that. that's one you want to watch don't you think if it's called awesome speed. wouldn't that be a -- >> not feeling it. >> awesome speed. >> if you could name your horse what would you -- >> i don't know. i don't know. i've never owned a horse. i named my dog gunther. >> we have an executive, a gambler and a golfer caught up in insider trading. all the details next. and later retailer gap off to a rough start to the year. the stock down 42% in the last three months. as we head to break take a look at yesterday's s&p 500 winners and losers.

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welcome back to "squawk box" on cnbc first in business worldwide. news just breaking this morning. you know yesterday they thought they found the debris. they did. the egyptian navy now has located debris from the missing airliner. also passenger belongs. and they located it about 180

miles north of alexandria egypt. the country's defense ministry says the wreckage will be brought to egypt for analysis. we'll keep you updated. >> the executive edge now. federal authorities announcing thursday the insider trading charges against the former chairman of dean foods and billy walters and golfer phil mickelson was named as the relief defendant in that case. eamon jafrs was the latest. >> the documents laid out by the government depict a triangle of golf, gambling and business between the three men. yesterday held a news conference to explain the scheme. he laid out the cost of all this. >> as alleged for over five

years davis repeatedly and systematically fed material information about dean foods to walters who in turn benefitted handsomely to the tune of about $43 million in profits made and losses avoided from his trading in dean foods stock. >> the charges with are filed against former chairman thomas davis and gambler billy walters. davis has pled guilty and agreed to cooperate with the government. walters has said the accusations are simply false. davis is charged with tipping walters of a white wave foods and other developments. walters said to have profited by $32 million and avoiding losses of about $11 million.

and phil mickelson is named in the suit and say said to have profited by about $930,000 based on a tip which came from thomas davis. both mickelson and walters owed for gambling debts and this insider trading scheme the government alleges is how they were going to get out of those debts. you often scratch your heads when you see these. because they involve people who are already fairly well to do. in one case a famous person and you wonder why they do it. and in this case the trading was not very subtle. at one point walters was trading about 30% of all the stock in a given day by dean foods so not a

very subtle scam here. >> you just love insider trading when it involving someone everybody knows. martha stewart and, you know, everybody knows phil. >> but it also seems like the rules are changing. >> the guy said hey you really augment to buy some of this stuff. so you give the money back so no one is saying -- but phil in the past there are all kind of under currents about phils, whether he has this big gambling problem. had a big equipment maker, you know, there are all these weird -- he does like the gamble. and people will gamble walking down the street on a piece of gum or something. pete rose. >> do you think you should have to receive a benefit on the other end? there is a real interesting question about fair markets and

how it and the whole thing and there is that law. >> -- isn't that inside information. >> that is the question. >> it is hard being a decider. go ahead, sorry. >> when we come back, squawk booze news, we are getting ready for world whiskey day. we'll do that in a moment but first as we head to a break a quick check in the european markets right now. & in a world held back by compromise, businesses need the agility to do one thing & another. only at&t has the network, people, and partners to help companies be... local & global. open & secure.

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it turns out tomorrow is world whisky day. today is national streaming day. day for everything. and the spirits, wlisky is rising in global popularity.

has been collecting of fine and rare vintages. u.s. sales of american whisky residen rose to nearly $3 million last years. one of the world's top collectors. brought . some say your collection is worth upwards of $10 million. >> i've been doing this for over 30 years. it's really a passion. developed into a hobby in checking and started off way back when i was growing up in the uk. eni was in my early 20s i was buying bottles. i self educated myself and brought in different styles of whisky. i've brought a number of whiskies from my collection here to show. >> a lot of people like hard

assets instead of financial assets. i guess this is like a hard liquid asset. how many of your bottles in your collection are not open? most of them i guess. >> i live by a different principle. i believe in buying at least two of everything i can afford. i always open one. i've got a range of whiskies here. comes out every year as the limited production. couple hundred dollars a bottle. a syndicate very limited, only 500 cases are produced every year for the united states. and it comes exclusively to the united states. and then this is where you can start a collection. but then you can also move up to promethe prometheus. this particular whisky two days ago got aurded t eawarded the b

malt whisky. >> are you every talking about bourbon. >> whisky i'm looking at the scotch, bourbon and ry whiskies. >> all of them. >> when do you stick the "e" in whis whisky? >> probably the americans and the irish. >> 20%? >> i would guess around there. >> i drink this quite regularly. i host whisky shows around the country. and -- >> not all of them. >> i'm coming to this. this is the royal salute tribute to honor. >> don't open that. >> $200,000. >> it was opened. i bought two of these. and i opened one in london this

past november for prince charles 'birthday. we had a private event for 13 couples and we did open. >> you're on "squawk box" today. open that thing. >> it is open. >> that one was already open. >> we had 13 people it was all finished off that night. was it. >> is that an empty bottle then. >> is that -- >> well open that one. >> -- this -- >> "squawk box." prince charles -- >> -- do with the bottle when you are finished? >> a beautiful dekanter to keep. this is a handmade. there were only 21 bottles made. and they are all numbered. >> how much value is the bottle itself? squli would say a good amount of value but the whisky inside is quite valuable as well. >> were you like wow that is $20,000 scotch.

>> it wasn't about the whisky. it was a moment. and the blender and a whole ceremony behind it. it is not just about buying a bottle. you have to enjoy it as el well. you have to bring the whisky makers in. especially when they are great bottles! same thing as wood casks without leaving it in the wood casks for years. >> that's questionable. >> not buying that. >> not really. when you look at the whisky. the magic, 90% of the magic really happens in wood maturation and it is not really a science. what is happening in there. some casks go really bad. some really well. so the master blend verse a challenge to really balance. >> when you taste bunch of whisky, seems like you have to spit it out like wine, right? >> yes exactly. when i'm doing -- when there are a lot of tastings i don't

encourage people to take it down. just like that. find the one you like and in the end go back and enjoy it. >> i can imagine. wine you may get by with not spitting but this stuff. >> some other connoisseurs will beg to differ because if they are paying for a lot of it they may want to drink it all. but to go back. one point i want to make is you can start collecting whisky at any stage, any level. you can start with ones limited at a lower price bracket can work your way up. this is about a thousand dollars. that is limited production. glen meringue and about $45 thousand. and you have a different range of collecting. all of these whiskies as they get rarer and rarer get inherent value because they are more precious. >> we're going talk retailer

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...even at the ripe old age of 187. life well planned. see what a raymond james advisor can do for you. welcome back everybody. gap's quarterly results falling

in line with estimates and relatively unchanged from where the company pre announced to the downside earlier in month. gap shares down 43% just over the last four months. you can see right 43%. the shares are flat on the news. they were up 4% in the after-hours market yesterday. matt boss joins us. he is with jpmorgan chase. you mentioned it when we were talking before, the reason the stock was up last night was the cost-cutting moves, that's something wall street likes and the new thing in the picture here? >> it's a small step that the gap is making. i think it is the right move in terms of closing some of the stores. they've long way to go both with an over-stored u.s. environment. the cut last night was mostly international. they've also lost their way in terms of customer traction. that will take aening long tim

>> that's the type of thing when you see wall street rallying over store closings. that's not a great outlook for the future. >> no. there were probably 200 to 300 a/b malls. that's where the productivity is. the 250 stores macy's is talking about. that's what the department stores saying they're trying to bolster. the nordstroms, the upper tier in the world has 200-foot print. the gap with 800-plus in north america, that's -- >> how do you cut your way out of that? you're talking about 600 stores they would need to cut in the united states. >> the equation -- this is what we're grappling with -- is right now most retailers would tell you brick and mortar versus online. online, the thought process used to be a third of retail would be online, two thirds in stores. now that equation seems to be changing where, you know, we have consultants, we have different on the field experts saying we could be moving to a

50-50 world. if that's the case the problem is conversion at online is roughly 2%, but if somebody goes to a store you can convert them almost 20% of the time. so the cost of doing business just keeps rising for these retailers. >> yes and no. keeping a store up and running is very expensive too versus an online fulfillment system once you have it up and running. i would think it would be a ep chooer way of doing business. >> that's right. you have rising wages number one. that's definitely an impact across all of the retailers. you have to really put forward this experience because experience will be the key to really converting the customer. and you also, along with the rising wages, have to have the right payroll. take a lulu lemon who has grass roots and people who know the product. that's what you have going forward. >> has anyone costed out the in-store return cost. now in the multi-channel world where you go to a gap online, buy the product, decide you

don't want it. you're not shipping it back but you're going to walk into the store and you're going to use up the time of somebody there to then return it. maybe they can translate that return also into sales since you're physically there. i don't know. >> right. what a lot of retailers will say is the most profitable shop is actually that return trip where the initial purchase was made online, the return is made in stores and you end up with one and a half times the original purchase price because of the additional conversion. that's where you need the right payroll in the stores to convert that trip. >> what other retailers are in trouble? your universe is one facing a lot of upheaval these days. >> the department stores last week left people really unsettled for sure. negative same-store sales across everyone of the department stores, substantially negative at some of the mid-tier with macy's, kohl's and nordstrom. our view is the department stores are not over, but they need to evolve. it's not going to happen

overnight. again, we don't think they're the next newest papers, like a lot is being made about this. i think they need to figure out their differentiation. amazon overlapped with most of the department store brands is almost 70%. so the key differentiation is private label exclusives. some of the private label brands don't mean anything to the consumers, so how do you strike the balance? >> which stocks would you say are the best buys? >> i think the customer wants convenience, a price proposition and innovation. i think who really fits that mix would be the off-price retailers. i think that some of the athletic retailers still have relevance. that's the innovation side. as you think about that convenience side, i think the dollar stores can continue to win. i think dollar general said it at their investor day. nearly 60% of the u.s. population today has less than $1,000 in their savings account. kind of a scary metric, but sort

of points to a dollar store economy. >> the ones who are getting it right, the ones who are kind of moving along this line, i mean, look, you're talking about people who are pretty busy these days. most households have both people working, when you have a dual-structured household. there is not a lot of time and i think a lot of the retailers were very slow to realize that. this is the day of reckoning? >> it all seems to be coming to a head. that's what we were talking about before with the real estate profile. stores need to close. and i think retailers, if they were built from ground up today, would look very different. i mean, i think you would have somewhere in that range of 200 to 400 stores, online 25% today but growing at a much faster pace than brick and mortar. with innovation really being the key to separating yourself from the pack. >> so it's -- it's really grim, but i mean, it's not newspaper

grim, as you said. >> right. >> it's really grim, but like not "new york times" grim. >> "new york times" is not grim. >> all right, all right. he just made that point that it's really grim but not as bad as what newspapers. >> there will be winners. >> there will be retail winners. >> i still read papers. just not that one. i still read. >> all right. thank you, matt. >> thanks for having me. >> newspapers. not that bad! coming up, our guest host -- i heard that and my ears perked up. andy puzder. we'll talk politics, the economy and the restaurant business. later, i have to do this interview. roku. i am an expert. a market leader in streaming devices. it's the leading one, much better than apple's and google's. get ready for the rio olympic games

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breaking news this morning on that missing egyptair flight. it was headed from paris to cairo. egypt locating debris in the mediterranean. details straight ahead. as the race for the white house heats up. tackling the issues that mean most to your money. tax reform. wage debate and getting the economy going. outspoken ceo of ck restaurants is here. it's national streaming day. the ceo of roku joins us to talk about his company's plan to take on rivals like amazon. the second hour of "squawk box" begins right now. ♪ it's friday, i'm in love >> live from the beating heart of business, new york city. this is "squawk box."

♪ thursday doesn't even start welcome back to "squawk box" here on cnbc. first in business worldwide. i'm andrew ross sorkin along with joe kernen and rebecca quick. take a look at the futures at this hour. you're looking at things looking up. dow would open up higher 48.5 points. nasdaq up 15 or almost 16 points now. the s&p 500 up over 6 points. this morning's headlines. shares of yahoo. bids for the core assets are coming in a range of 2 to $3 billion. according to the "wall street journal," below the range of the original estimate of 4 to $8 billion. verizon still centered the frontrunner in the bidding. national association of realtors out with april existing home sales this morning at 10:00 a.m. eastern time. congress looking for a 1.3% increase. g 7 nations meeting in japan but little is expected to be accomplished as leaders discuss global economic growth. there has been growing

disagreement on a coordinated strategy as countries slash interest rates and implement aggressive monetary stimulus. search teams continue to scour the mediterranean sea hunting for wreckage from the jet carrying 66 people that disappeared yesterday. the flight was headed to cairo from paris. egypt says it may have been a terrorist attack. this morning personal belongings and parts of debris from the wreckage have been located. hadley gamble joins us. good morning, hadley. >> reporter: good morning, joe. essentially what we know right now is at least three french investigators as well as an expert from airbus are on the ground in cairo and expected to meet with the egyptian counter parts. part of the ongoing investigation into what happened to egyptair 804. the egyptian military is sure that the fuselage and passenger

belongings found 180 miles north of alexandria do in fact belong to the missing airline. the question, of course, surrounding where this aircraft was in the couple of days prior to landing here at charles de gaulle and taking off for the cairo-bound flight is pretty much being discussed as we speak amongst security experts not just here in france but also in the u.s. as well. one of the big questions is did any of this impact the security of the aircraft. we understand this plane was in brussels at one point and flew to egypt. eritrea and tunisia. questions surrounding whether or not this aircraft had anything happening with it prior to taking off, of course, from charles de gaulle en route to cairo. another big question. egyptian authorities raising the possibility that this was an act of terror but little chatter amongst group like the islamic state. big questions surrounding what exactly happened to the

aircraft. we'll continue to watch developments from here. back to corporate news. it's been a very busy week on the retail front. the latest name to report is gap. retailer posting earnings in line with previous guidance but giving a cautious outlook for the rest of the year warning it needs, quote, trends in the retail environment to improve from the first quarter if it's to hit wall street's earnings targets. gap planning to close all the old navy stores in japan and some banana republics mostly outside of north america by the end of the business year. we'll be joined by retail watcher jan kniffen to discuss. applied materials beat the streets on top and bottom line and offered up beat guidance. driven by strong demand for chips used in, yep, smavertphon and solid-state drives. i am in the market for a couple of those, you know? they don't come in the right colors anymore. just this you gory -- do you

have -- how many do you have? >> none. >> i bet you have some. we just don't know what the hell they are. >> they are in everything. >> none that i've bought specifically. >> i don't buy mine independently. >> you don't care about color. >> no. tesla has raised more than $1.4 billion in fresh capital from the sale of nearly 7 million new shares. ifr says the shares were priced at $215, lower than a previous price that they had for sale of $242 back in august of last year. tesla plans to use most of the proceeds to expand production of its electric cars to 500,000, at least 500,000 a year that they're hoping to get to by 2018. turning to the race for the white house. let's bring in our guest host for the next hour to talk about the presidential race. you sit down, i talk to you about western bacon chee cheeseburgers for the first set.

i'm hungry. >> ck restaurants ceo andy puzder, a master of editorial writing and in business thinking and the laws of unintended consequences. i love to read your stuff, usually in the "wall street journal." >> thanks, joe. >> it's important that you connect the dots to well-intentioned moves that we try to make. so we will get to politics, but let's start -- i worry about fast-food workers when they get priced out of the job itself. and i was thinking about it in paris or europe at mcdonald's -- sorry -- that's a dirty word, i know. >> it's okay. >> i don't think i ordered from a human, and we went quite a few times. it's all automated over there, where you go and it's all on the machine, and not until you get to the person that's actually giving you the food do you actually have human interaction. and the more expensive labor gets, the more you're going to see by definition restaurants

will just upgrade to automation. >> as we catch up to europe on the social policy efforts like minimum wage, obamacare, the overtime rule that just came out, as you make labor more expensive, you obviously make automation for -- a more viable alternative. it becomes right. there were times when we looked at putting in kiosks and they just cost too much. it wasn't reasonable. i think wendy's announced last week they were going to make kiosks available in 6,000 restaurants in the united states. >> when is the last time you priced them and looked at them? >> they're not -- they're not too expensive now, particularly -- this was maybe five, ten years ago, when they first came out. >> so technology was more expensive at that point. >> labor was a lot less expensive. >> now you put an ipad on the table and that's the end. >> it's not a problem. it's easy to do. it's not something you like to do because you want the personal interaction. you want people to be able to explain the menu. as people become more facile with the ipads and particularly

millennials. the research has shown that they don't like the personal contact. they're not going to malls or restaurants anymore. the young guys to meet girls. >> in life in general they don't. on facebook and snapchat. >> isn't this the steady flow? >> at a time when labor participation is, you know, at lows we haven't seen since jimmy carter was president, at a time when youth unemployment is really high, is that a time to implement policies accelerating moves to automation? the working class needs a period of transition. we need to train them and set people up for better jobs. we need to revamp the education system so people are qualified to do the jobs that exist. what's happening now is the cost of labor is accelerating at such a pace that it really moves up how fast you want to automate. this is why a company like

wendy's would announce they're going to put these in 6,000 restaurants. it's a problem for working class youth and minority youth that has a very high unemployment rate. this is how they get on the ladder of opportunity. the restaurant industry trains america's work force. >> mcdonald's has done more to train america's work force than colleges. >> cash a paycheck, pay taxes, fica. >> i started at baskin robbins. i learned how you stock the store, customer service, you know. >> there are certain people -- >> i did too. >> certain minimum wage workers, andy, that aren't high school. that's what you're going to hear all the time, that these are 40 and 50-year-old people trying to support a family. what do you do for them? >> a real alternative here that wouldn't preserve business and help jobs is the earned income credit. everybody's eyes glaze over.

obama supports it, ryan supports it. i support it. even today, say you are a single mom with one, two or three kids, the earned income tax credit takes you above -- none of those people should be earning minimum wage. they should be making claims for the earned income tax benefit credit that has lifted billions of people out of poverty. it's not set up well right now. there's lots of fraud. if we expanded and improved it as opposed to increasing minimum wage we could protect the least skilled workers and protect jobs. >> and encourage people to be in the work force. >> yes. it's funny. we went to $9 an hour year before last in california. i met with some general managers. and they said, we have a problem. they said, people are coming in asking for fewer hours. i said, why would you ask for fewer hours, you just got a raise to $9 an hour. they said we're going to lose

our snap benefits and medicaid. they were making an economically fiscal decision. it's a benefit that declines as you earn more but never declines more than the increase in income. you're always making more as you earn more. i think that's incredibly important for american workers. >> have you ever thought about -- i have heard economists talk about it. a different wage for an apprenticeship level or internship job with a promise by the employer that there is a significant amount of training. maybe it's for a different age cohort. you have people talk about this idea. >> i am supportive of that. i think we should have perhaps a tiered minimum wage if we're going to have a minimum wage. i think we also have to take into account geography. the minimum wage in san francisco and the minimum wage in birmingham, alabama, if there is going to be a national wage

it should be whatever the lowest area could absorb because you don't want to hurt those areas. there is some reaction in the public against that. they don't like the idea of paying kids less or -- but i think it's a great idea. even hillary clinton came out and was talking about adding a geographic element to the minimum wage. i think that's -- we need to look at this rationally and stop looking at it politically and emotional. >> not going to happen. if it wasn't politically and emotionally -- it is a -- one of the things we've all learned with nixon and -- i don't know if you were around -- wage price controls cause dislocations and usually don't have the intended consequences. i was -- i saw that you said $9 was probably a good -- you would favor a $9 minimum wage. >> yes. >> in a perfect world, i'll bet you wouldn't want any minimum wage, would you? >> well, the minimum wage is zero. that's what you get -- that's like the 10,000 people at walmart that don't have jobs. >> but that's never -- i'm

telling you, even republicans say, just -- they throw in the towel and say you're going to look like a republican if you're against the minimum wage. so they throw away their principles because in this political and emotional environment that we're in right now you can't even make that case. you don't even make it. you say you're fine with he $9. >> i am fine with raising the minimum wage to the point at which is doesn't destroy jobs. a report came out of the san francisco fed in december -- obviously the san francisco fed is not a bastion of conservative economic thought. the report came out and said, look, the important policy consideration here is do minimum wage increases hurt the most vulnerable, low-skilled workers. the conclusion was, looking at all the research including some of the more silly research, but looking at all the research it said the best research shows it does hurt and probably to a greater extent than we previously thought. so if you raise it to the point where it doesn't hurt those workers and the -- the congressional budget office,

which isn't bipartisan. it's non-partisan. said at $9 an hour you eliminate 100,000 jobs. at $10 an hour it's 500,000 jobs. you could go to $9 with minimal impact and help these people out. in our restaurants we're already there. our average wage for the crew level is about $11. walmart went to nine and ten. if walmart is at ten, target is at ten. labor participation is so low, we're fighting for the same employees, which is raising the wage. >> market forces. >> which is how it should work. >> i don't know if people think of this as crony capitalism. people talk about how our economy has moved to a winner-take-all model. senior management makes a lot more money than the guy -- that's always been the case. but the spread between the top guy and you. how much did you make last year?

>> i can't tell you. >> i thought there was a number out there. >> there was a number from five years ago that people keep referring to that's wrong. it includes everything i made on my investments, selling a piece of property. >> $7 million. the point between -- the spread between you and the guy at the bottom has gotten larger over time. and i am saying that generically. i don't know if that's true of your particular company. what is that a function of, and does that -- whatever that is -- have to be fixed? >> i think people are compensated based upon the value they create. what we did at hardee's is we took a company that was basically bankrupt. it was going out of business. all the franchisees would lose their investment. we brought that company back to where now everybody is very -- we opened more net new restaurants last year than any of our direct competitors. >> what did your father make?

>> my dad? when i was a kid -- he said $7,000, $8,000. he said lawyers made a lot of money. i said how much do they make? >> my dad never made $30,000. >> mine neither. >> i saw something i was going to send to you yesterday. it said, in florence, the 20 richest families in florence are the same families from 600 yearsing o. they are the ones that still have the money. nobody came up from -- whose father owned $10,000 and made several million. >> these are great success stories. i love this. i love this. this i love. i am trying to figure out a different -- >> the people who become the haves. they can be mark zuckerberg. they can be anybody. >> if you're trying to run the country almost like a company, in a perfect world, how can you get that bottom cohort -- >> right. let's get everybody up there. in sweden everybody comes down. >> that's why you do that.

what does that mean? >> the president the other day said we've got to go the way of the scandinavian companies. >> i think the scandinavian countries are too homogeneous to be an example. >> there is no defense spending. >> california has 30 million people. how many are in sweden? >> not many. but it -- you know, the point is you want to make sure everybody has the opportunity to move up. and if we want to make sure that people have a minimum standard of living, which i think is just fine, then something like the earned income tax credit works. when the government tries to stick its hand or finger in and move something -- you can't push on the business community. it's like a balloon. you push in at one point and it pops out at another point. when they do this there are unintended consequences even for the people they're trying to protect. >> you need a new president that actually understands the businesses are where the jobs are. hillary, straight faced. don't let anyone tell you the

private sector is where the jobs are created. with a straight face. >> she was in boston and worried about pocahontas, the elizabeth warren up there. >> you're pulling a trump. you're doing a trump. >> okay. >> goofy elizabeth. >> we'll continue this conversation. happy to have you here. >> 9.5. >> california has 38 million. >> we'll get on the pocahontas line. >> what do you mean we? back to the market. this morning, though, futures looking higher after asian and european markets shrug off the idea of a rate hike in june. >> elizabeth warren, always happy to have you come on the show. we talk markets after the break. later, we'll tell you how low can you go. retailers racing to lower prices after walmart saying it's ramping up its program to slash prices on key items.

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welcome back, everybody. a quick look at the futures this morning. right now both the dow and the s&p 500 are on track for the fourth negative week in a row. if that happens, it will be the first time they've seen a streak like that since october of 2014. check out what's happening with the ten-year note and the treasury market. two and five-year note hitting highest levels of yield since

going back to march, middle of march. you can see the ten-year right now yielding 1.859%. that yield climbs as well. the dollar yesterday was up. that makes it 5 out of 6 days in a row that the dollar has been stronger. right now on track for the third weekly consecutive gain for the first time since all the way back to march of 2015. dollar is down against the euro and up against the yen. gold prices down 1.5% yesterday. right now up about 1$1.60. some averages are down now for 2016, right? some are negative again. >> we were very close to the dow, yeah. when we come back, retailers hit hard this week. find out if there are better days ahead for the sector and what names should be in your portfolio. "squawk box" after a quick break. we'll be right back.

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kentucky derby winner nyquist will attempt to claim the second race in the triple crown tomorrow, the preakness. nyquist starts at post position 3. i think he was in lucky 13 last time. two of his toughest competitors will be nearby. exaggerator at post 5 and a horse called awesome speed. let's name it awesome speed! hey, that's great! starting in the fourth position. nyquist is in the morning line as a favorite at 3 to 5 odds. weather could be a factor. forecasters calling for a 90% chance of rain. coverage starts tomorrow on nbc sports network at 2:30 p.m. eastern and then moves to big nbc at 5:00 p.m. coming up when we return. it has been a rough ride for retail over the past month. we'll find out if there are any bright spots after the break. the ceo of roku here to discuss the streaming wars.

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. welcome back to squawk. stories front and center. heavy equipment maker deere reporting profit of $1.56 per share. also beating street forecasts. company noted a decline in global farm economy as well as weakness in the construction equipment sector. foot locker. we'll talk about them in a second matched estimates with profit of $1.39. but still falling short of forecasts. foot locker points out that profits were at a record level during the quarter. and earnings also out this morning from campbell soup. the earnings company -- company earnings, 65 cents per share for the latest quarter beating estimates by a penny.

revenue slightly short of estimates but the soup and food maker did raise its full-year earnings forecast. >> a little chart. >> it's a beautiful chart. futures right now as traders look to the release of existing home sales and comments from the fed governor today. joining us to get you close out the trader week is institutional services managing director. what are you looking at, jim, today? >> this is interesting to me. we look at today and say we're up four handles and the s&p, it's a big deal. no. off 20 handles off the low yesterday. this is in a big monetary sabre rattling fed week. not just the minutes but the two days prior to that. believe me, the fed knows what the minutes will say. they were pretty hawkish as well. to me this could be the door open a little bit for the market actually accepting a fed rate hike, provided that it comes along with some very dovish commentary, which our experience

has been, if they're going to hike at all, and they want to hike, they'll cushion it with the bubble wrap of dovish rhetoric around it. i think it's a very real possibility now. the market is saying 25%. i think it's probably 50-50 right now. if we see strength today in the stock market, i think it's very positive. if we go below yesterday's low, which was like where we were pricing in doom and gloom of a rate hike, then i am not a big fan of the stock market but right now i'm okay with it. >> you think come the summer? >> i think -- i am still a bull. i think come the summer, i think they'll -- if they do the one rate hike, as the summer comes and we get closer to the election. they don't want to be perceived as too political, the fed will back up and leave the market to rally. the fed is still there. one rate hike doesn't make a huge difference. i'm still a bull unless it starts to deteriorate from here

rapidly. >> thank you. appreciate it. great to see you this friday morning. it's been a rough ride for the retailers with major brands like nordstrom, macy's and gap down in the stocks. we spoke to matt boss about the sector. >> the department stores last week left people unsettled for sure. negative same-store sales across every one of the department stores. substantially negative at some of the mid-tier with macy's, kohl's and nordstrom. our view is the department stores aren't over, but they need to evolve. it won't happen overnight. where are the bright spots in the retail sector? jan kniffen joins us. he is a msncnbc contributor. this has been an unusual time in the retail sector. for decades we've heard about the over-storing, over-mall population, the consumer heading towards online shopping.

is this where all these actually happen? >> i've been making the predictions for two years, not for decades. and i said in the fourth quarter i thought it was the tipping point, which is a way overused term, of course, but i think we're going to see this is the point where brick and mortar gives way to online. we just saw amazon up 27%, we saw all the department stores down, right? the biggest impact of amazon being the biggest seller of clothing is going to be on the department store space, not the off-price space and not the fast-fashion space. i do think we are seeing that. but in general, what's happening in the department store has been happening for a while. fast-fashion gained share again this quarter, just like it has every year. off-price gained share again this quarter like it has every year, and amazon gained share this quarter, just like it has every year. >> operators like terry lundgren were able to keep ahead of the trend for years by doing things like combining department stores, rebranding, spiffing

things up. is this a much different pivot required now? >> terry macy and nordstrom will still be the winners in that space. they're the best omni channel retailers in the country right now, the two of them. walmart is third. they're going to keep putting money into that. unfortunately, unlike building a store and kind of refurbishing every eight years, you're continually rebuilding the online system. they're putting a lot of money into it, more than either one ever expected to, but they'll win the game. they'll win in the respect of they'll be the ones left. they'll be the ones still selling the product. they'll be the showroom for all of the brands, but they may not get the returns they have had in the past. on the other hand, macy's is paying a 5% dividend. unless you think they're going to quit paying their dividend they're pretty interesting looking right now. all in all we'll see the department stores continue to give way. that's been going on since walmart opened their doors in

'62. when i got in the business there were 100 department store names. now there's five. >> walmart was up almost 10% yesterday. that's a standout in a lack luster season. >> walmart has to start winning online as well. but they are doing retailing 101 as well as they've ever done it. it is working for them. they have to have a store that's acceptable to shop in. they don't have to have the greatest display. they have to have in-stock, great pricing, and a nice enough store. and doug has brought them back to the nice enough store. it's much more pleasant shopping environment than two years ago. the in-stocks are better, the offering is better. and you're seeing it show up. >> they're lowering prices as well. >> they're bringing down price. that's the way sam ran the business for the whole time that he was driving -- walmart, when

they were 20 years old, was 3% of sales and they were getting half of all new sales in retailing. that went on for a very long time because sam continuously pushed down the price and levered the expense structure. >> still out. >> the jury is not out on walmart. wayme walmart. they're a $500 billion company. >> it was a $92 stock. low is 57. it's back to 68 or 69. >> right. >> we'll see whether the initiatives work out. jury is still out. 500 billion in what? sales? >> yes. they're an a-rated credit. >> right. but how do you get the stock back to 91 and will it get back there? >> i don't know but it's a buy right now. >> is it fair for us to compare amazon and walmart? >> yeah. amazon is the number one competitor to walmart and walmart is the number one competitor to amazon. based on joe's thesis walmart is

a better company. amazon makes no main in retailing. it's all aws. >> that's the point. if you think about it over the next three or four years as aws grows it will continue to subsidize the rest of the other business. >> yeah. >> it doesn't matter -- you could say then they're unrelated but they're still competing against each other. >> i think they are direct competitors. i think, as walmart gets better online it puts pressure on amazon. amazon has no requirement to make money. they have a zero cost of capital. it's hard to compete with them. walmart has been pretty successful competing with them and making money in the process. that's tough. >> walmart does 115 million in sales in a quarter and amazon does 30. they do more in a quarter than amazon does in a year. one has a value of 380 whatever billion, the other a value of under 200. i made that point. you're not watching, so you can't tell me what i think if you haven't seen what i said yesterday. >> i was watching what you said

yesterday, actually. >> you heard all that stuff. >> i did. i sent becky a note about it. >> i thought you sent it to him too. >> walmart does a lot of things. they had pr problems for years. and they're seen as anti-worker. they couldn't open a shop in new york city. so they spent, what, 3 or $4 billion in the last couple of years on these initiatives. we'll see whether the pr that they bought and the new store upgrades and the minimum wages -- we'll see if that pays out. jury is still out. it's 68, not 91. wouldn't you say we'll see, if it gets back to 91? >> yeah. but i think the initiatives are working. i don't know if the r.o.i. will be enough to get them back to 91. >> when president trump puts tariffs on the china goods it might be a problem too. right? >> it might be. i'll have to vote for him anyway. >> you will? >> i have to. he is a republican. he wasn't my first choice. >> there were 17. you could have had five -- you could have had 16 first choices.

>> i told andy, out of the three that are still running, of the 340 million people in america, they wouldn't have made my top half but you still have to vote for one of them. >> you do. coming up, raising the ante. you like it better like that? >> ante. >> raising the ante in the streaming wars. roku's ceo -- i'm going to grill this guy. he tells us about the latest version year-round taking on amazon. the peak of climbing season. two guys are snap chatting on the top of everest.

ange ang

the streaming wars are heating up. roku releasing the latest version of its streaming stick and dropping the price to $39.99. joining us, the founder and ceo of roku. anthony wood. it's some kind of like geeky genius inventor guy. you invented the deservr. >> i did.

>> you have a bachelor's in ee or me. >> ee. i have been playing with computers since i was a kid. >> i am very impressed because i don't really understand how any of that stuff -- you know how to write code, then? >> yes, i know how to write code. >> sorkin, how come you don't know how to write code? >> html. >> that's it. >> lousy version. >> i am stuck at fortran and cobalt. i am confused by the zeroes and ones. old-line media's nightmare. it's slowly happening. do you feel that way, that ten years from now it will be mostly smart tvs with devices like roku? you'll still need broad band but -- it will be a broad band world but maybe not a tv network world. >> absolutely. we are in the middle of a transition where all tv will be

streamed. that's how people will watch tv. that is bringing a lot of changes to the industry. all advertising will be streamed. it's going to change the tv ad business quite a bit. bringing new internet technologies to tv advertising and giving consumers a huge amount of choice. as well as more choice, lower prices. >> where you are now. $39.99. what's your next generation roku device? >> we have a whole range of roku players, the new streaming stick is on sale to celebrate national streaming day today. >> the whiskey day is tomorrow. >> yeah. it's national streaming day today, which is the day that you can watch as much tv as you want. so our -- the streaming players are on sale, $10 off for the new streaming stick. just got five out of five stars. our biggest push in terms of distributing the operating system which is how we think of

ourselves is our roku tvs. we work with manufacturers to create a roku tv, which they sell. that's the fastest growing we we distribute our platform. we have five different tv companies to sell roku tvs today. >> it's a samsung but you call it -- >> we don't partner with samsung yet. >> if you get a smart tv how do you know what streaming device is in it. >> most smart tvs today -- half of the countries sold today are smart tvs and that's growing. most have home-grown solutions where the tv company made the software and it's not really what they're great at. >> confusing stuff, i have to admit. it's not easy to use. >> yeah. >> long-term, when you think about the integration of devices like yours in the rest of the home. google just came out with the google home device. the echo which amazon has, all of which are tapping into your calendar and other data about

you. apple has a tv coordinated with its devices. how important is it to be ultimately interoperable with those and is there a challenge long-term to your particular business given that you won't necessarily have the data sets of all the other pieces that some of these other guys have? >> so our focus and the reason we are successful is tall we foc -- all we focus on is making great tvs. i have amazon products but it has nothing to do with tv. it's music. >> do you think five years from now you'll walk in the room and put on "homeland." whatever it is. it will know my favorite show and it looks in my calendar and figures i have time to watch it. they'll match up all this information in a way we don't even think about today. >> i don't think that's what's going to happen. i think people will sit down on

their couch, get a beer and flip through the tv and watch a few different shows. data is super important. a big part of our business is advertising. that's where data comes into play is targeted advertising and changing the way advertising is delivered for tv. >> what show do you put on when your wife and kids are out? >> no, no. the point is -- the idea is in the future the computer will be able to say -- >> you were speaking from experience, sounds like. >> it will no in your calendar that you have a half-hour. >> kids are gone, wife's out. the playboy channel immediately comes out. is that right? >> product placement. there are different ways to approach this. >> there's ads on tv, we're about to have one now, and on streaming they're targeted ads. >> so you can place them better? >> you're a car company. you want to run a campaign

targeting people who are planning on buying a car that make over $100,000 a year. >> you'll see a different ad than i would see. same way as the internet. >> roku means six in japanese. it was his sixth company. >> cool! >> pretty good. >> what's the word for seven? >> what's the japanese word for seven? >> i don't know. i stopped counting at six. >> thanks for coming in today. great to see you. when we come back we'll serve up final thoughts from our guest host andy puzder, the ceo of cke restaurants. the markets, s&p and dow on track for fourth down week in a row. futures up 53 points. s&p futures up 6.5. "squawk box" will be right back.

s. welcome back to "squawk box." turning our attention to our guest host this morning, andy puzder. we have had a lot of fun thus far. do you want to talk politics or the economy? >> i'll leave it to you. >> you use the pocahontas line. >> i hope everybody knows that was a joke. >> but andy, trump has made -- trump is the one who used pocahontas first. >> yes. >> i have seen people make the point that there are a lot of things that would have been politically incorrect and maybe we did get a little bit -- i don't know about this case, but

maybe we did go a little too far with safe zones and microaggression. he's at least taken the fever pitch off the thought police and the pc police. you can immediately say -- i didn't say it, he said it. then i said goofy elizabeth. that's -- he calls her goofy elizabeth. >> i don't think he has slowed the thought police from being out there. it's just muted their concern. >> that's a big part of his popularity. people who have been frustrated with the political correctness. >> when did you decide you liked him? >> he was not my first choice or favorite candidate, but there are parts of me that want to see somebody who is more focused on policy. i like jeb bush and marco rubio. but there's also a part of me that really enjoys seeing donald trump. i enjoy seeing him up there. i enjoy the energy. i enjoy that he's fighting against -- >> the "journal" has been dead-set against donald trump.

they've been establishment republican all the way. nothing is certain with mr. trump but that's far more preferable than the certainty that hillary clinton would nominate a certain liberal. mr. trump's list makes him superior to mrs. clinton. this is the first time the "wall street journal" editorial board has written anything like that. the mainstream establishment, elitist republicans are finally realizing, it's -- you have either/or. don't you? it's almost a binary choice. >> we're talking about three branches of government in the election. we're electing who controlled the senate and the house. we're talking about who will be president and who will control the judiciary. the next president will shift the courts too. >> right. >> coming out with these 11 justices was obviously important to the "wall street journal." you have kudlow and steve moore and larry kudlow coming out with working with mr. trump on his

economic and his tax plan, saying it's a good plan. you really are seeing a shift. i think it's justified. i agree with it. i am there on donald trump. >> what about the consistency issue, or inconsistency issue? >> on hillary? oh, on trump. okay. i'm sorry. i thought you meant -- because she has been so consistent. >> it's much easier to say -- she has been more consistent on issues than trump has. >> what about tpp, what about keystone? >> i'm not pushing hillary here. >> she has not been more -- she has probably been less consistent than trump. >> that's not true. that just empirically not true. >> the interesting thing about this is mitt romney changed his position literally on like one issue. abortion. he changed from -- all you heard about was how he was a flip-flopper. donald trump changes his position every couple weeks on

various issues and you don't hear he is a flip-flopper. he says, i look, i thought about it some more and now i have a better solution. people go, that sounds like me. >> the crime bill. is she for free trade or against is it. >> we're almost out of time. what do you see? you have a lot of stores in a lot of places. how are we doing right now? >> you don't want to use the word "melees" because it was tied to the carter administration but things don't seem to move up or down. we seem to be up, and everybody gets excited. and then they go down. and it's -- you're not seeing any dynamic moves. after seven years of recovery we should have seen a dynamic move and we just haven't seen it. so it's -- hopefully we will see it, but it may take another administration. >> andy, thank you very much for coming in. >> it was a pleasure to be here. >> even jon stewart said not sure she has any moral center whatsoever. >> how are you not making -- >> just saying at this point

it's a tossup. i didn't know what you meant when you were talking about lack of conviction. i wanted to be specific. stick around, everybody. "squawk box" will be right back. you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be.

the great rate debate takes a new turn.

does the fed have lower standards than the markets? we'll ask what could push the central bank to move at next month's meeting. former jcpenney ceo joins us with his take on the future. an adventure in snap. two climbers sharing their trek up mt. everest with the world and in realtime. >> it's collapsing on itself. >> they join us live as the final hour of "squawk box" begins right now ♪ live from the most powerful city in the world. new york, this is "squawk box." welcome back to "squawk box," here on cnbc, first in business worldwide. i'm joe kernen along with rebecca quick and andrew ross sorkin. we're less than 90 minutes away from the opening bell, and only 60 minutes away from the weekend. the futures right now are up -- did i say that?

yeah. dow jones up about 60 -- not for you -- on the money. >> my show. >> us two bros -- you have more work to do? >> always. >> you're on a fast track. you are. >> up 60 points. nasdaq up 19. looking at oil. we still do this. now down an earth-shattering two cents at $48.14. tell you about some of the stop stories. debris from the missing egyptair passenger plane found in the mediterranean sea according to egypt's military. search planes have been combing the sea as part of an ongoing investigation into the cause of the flight's demise. a live report from overseas a little later this hour. we'll switch gears back to wall street for a moment. there is one economic data point of note today. coming up at 10:00 a.m. eastern april existing home sells. economists looking for a 1.3%

increase after a 5.1% jump in march. g 7 meeting today. countries slash interest rates and implement aggressive monetary stimulus. stocks to watch this morning. first up. deere. after earnings and revenue came in better than expected the company noting the continuing downturn in the global farm economy and weakness has been an issue. stock is down 1.25%. campbell soup posting better than expected earnings and raising its full year earnings forecast. the company is acknowledging that the consumer environment continues to be challenging. it also says it is not satisfied with recent organic sales growth levels. stock down 2.3%. look at the run it's had over the course of the last year. up by close to 34%. foot locker matching profit estimates but revenue of comparable store sales falling short. stock down 2.6%. check out shares of shoe carnival. down sharply this morning.

a decline of 6.5% after earnings, revenue and comp store sales all missed the mark. full-year guidance falling short of the current consensus. ross stores getting hit this morning after the off-price retailer's latest results roughly in line with estimates. the current quarter and full-year earnings guidance is weak and the stock is down more than 6%. check out shares of valeant. the company received a notice of default from bond holders after the embattled drug maker delayed filing its quarterly report. valeant says it is avert default by releasing results by july 18th. stock down 1%. check out shares of yahoo today. bidders reportedly expected to offer only $2 billion to $3 billion for the company's core business. we should say that is far below estimates. some estimates were in the $4 billion to $8 billion range. at one point they were talking about as much as $10 billion, everybody and their brother that's around yahoo has tried to talk this company up like crazy.

>> who said 8 to 10? can you give a name? >> i can't say. >> there is a name associated with that. >> there is a netherworld of people around this process, all of whom are on the marissa mayer payroll desperate to prop up the value of this thing. >> i love it when you get like this. >> frustrates me to no end. we have been through to much speculation and it's all a disaster. >> we knew the numbers would be low when we heard the story circulating last week. >> you've come a long way. two or three years ago you would not have said it like this. >> my skepticism about this is beyond frustrating. >> this is great! it's osmosis. >> by the way, i hope -- >> the face looks familiar. i can't place the name. >> i would love for them to get a great value for this thing.

i hope they get the money, as much as they want. >> the term "netherworld" does it imply hell and evil spirits? >> it's a cohort of people that are. >> an evil cabal. >> i am not suggesting they're evil. >> now you're walking it back. you had me. june rate hike on the table according to the fed minutes released on wednesday. the markets seem to be holding the data to a higher standard. i like this sort of idea, liesman. steve liesman joins us with a look at the debate between the markets and the fed going into the critical june meeting, which i just yesterday kept saying that -- just acting like it's on the table when it's really not is like preparing people for july, which is like -- i'm so tired -- >> you're tired of being disappointed. that's just, you know -- >> that would be my wife, yeah. >> you know, the fed this week as you say, joe, pointed the

markets towards the chance of a june rate hike, even after the disappointing april jobs report at 160,000. how could the fed hike after the jobs report that most of the market panned as being weak? here is the answer. the fed has a lower standard than the market does when it comes to jobs. markets seeing the 200,000 as the mark. two weeks from today when the may jobs report is released, the question will be not if it's strong. the question will be is it strong enough for the fed to hike. okay. now, here are where various fed officials are, what they have said publicly on the job growth needed to keep the unemployment rate steady. that's where job growth equals entrants to the work force. john williams is in a range. middle of the range, 80,000. janet yellen said 100,000 job growth monthly is enough to keep the unemployment rate steady. eric rosengren spoke directly to this issue in a recent speech

about what he sees as the measure of job growth. given broad demographic trends, normal or trend payroll employment growth is now between 80,000 and 100,000 jobs a month. to be sure, this is not the same thing as saying the economy, with different policies, couldn't do better, that the country should be satisfied that 94 million americans are out of the work force, but the key is, if you want to know what the fed is going to do, sorry, best to lower your standards and think of job growth the way they do and leave your hopes and dreams for your whiskey induced -- >> i still think they're just -- >> on the issue of -- >> june maybe. >> the key, though, is july is probably more likely now. what dudley said yesterday at the press conference which is after -- i went down to the new york fed and then he gave a press conference. three criteria for brexit, which is, one, we want to see what the polls are doing. if it's a wide margin. that's one. two is we want to look at the potential fallout on the financial system from brexit.

>> three. go. >> and three -- uh oh, three is the underlying strength of the u.s. economy. >> uh oh. >> could have been -- i did not. i didn't know. i always worry before 9:00 in the morning when i give those lists if i'm going to hit it. >> that's an admission it's not the dual mandate that matters. it's world events and we'll be paying very close attention. >> if i could tell you the way the fed thinks, they'd say it's all part of the dual mandate. >> they'll say it all matters. >> we're the biggest economy out there still, right. and what happens overseas. we affect them and they affect us. they want to be mindful. they don't want to make a mistake. they told us they'll err on the side of being more dovish than less. they'll probably do the quarter point somewhere in the june or july. dudley suggested it was a tossup between the two months. >> thanks, steve. >> pleasure. wow. joining us now -- not one of his

minions. not somebody who works at richard bernstein advisers because there are many advisers there but richard bernstein himself is here with us this morning. hi. >> good morning. >> here is what i am thinking. i care about the fed. i do. but, when they do finally go up, it really will be for the right reasons because we can handle it. so we really -- this infatuation and fixation on whether we buy or sell stocks based on this is probably misplaced. and you may, if it pulls back, maybe you just get better prices. you're still bullish. >> we are still bullish. >> isn't this kind of like a -- is this important or is it just an event that's happening at the same time and you're not that really interested? >> the fed is always important. you don't want to downplay the fed too much. we're going through modern day jaw boning. used to be the fed would hint and then begin to talk. now you get the minutes. this is modern-day jaw-boning. they're hoping -- i am guessing,

i don't know, i am guessing that they want these minutes to send a message to calm people down so they can delay raising rates farther into the future. >> and they're still going to do it, but they're ready -- we feel like, wow, they're ready, but they might not till july, correct? >> correct. i think when they really raise rates it won't be a surprise. everybody will know either because they tell us or because the data is so good it would be ridiculous for them not to. >> yesterday or the day before goldman sachs said because of the impending rate hikes there is no reason to own stocks for the next year. you disagree? >> supposedly the smart money is quite bearish. there was data released yesterday by i.s.i., the great macro firm, that showed that the outflows from equities, equity mutual funds and equity etfs, total equity outflows are now larger than what you saw in '08, '09.

2015 and 2016 outflows from mutual fund etfs are bigger than '08 and '09. people are scared. in an environment where there is that much selling and fear in the backdrop -- >> they're either scared or bored. >> it's been a year of complete boredom. in the stock market. >> that's fine. it's not like this has never happened before. >> i don't feel that scared. but yeah. some people think there are scary things happening. i guarantee a lot of people are like -- i've said, don't short a dull market. we say it every couple of weeks because it's so dull. >> i don't think too many investors are good at timing short-term moves in the market. the point being for most of the people watching, are you smart enough to get in and out to time the market. i'm not sure they are. >> do the math for me. if the fed adds 100 basis points

from where we are now by the end of 2017 how much less are storks worth in an environment of 1.37 overnight than a .37. >> here is the interesting point. if we are 100 basis points higher on fed funds, what does say about the economy? it says the economy -- >> 5% real -- top line nominal growth. 3% underlying growth. >> what about corporate profits? it says corporate profits would be higher. the question is, if you want to be bullish as i am, you have to say the resurgence in corporate profits over the next 12 to 18 months will be more powerful than the fed raising rates. if that's true, we have a very traditional earnings-driven stock market. >> do you lower multiples in an environment -- >> yes. multiples do down. is e. going up or p going down. odds are your pe will compress by the numerator going down.

in a cyclical stock, usually the leaders in an earnings-driven market the e will be powerful and that will propel the stocks forwards. that's the way -- and i think -- i don't think the fed is going to try to get ahead -- >> i don't think they're trying to stop that from happening. they want to go along consonant with the economy. >> i would argue they want to lag a little bit. >> that's true as well. >> that's why i am reasonably bullish. >> it's my business and bread and butter, but i think people make too much of it. if they're going to raise a quarter in june or july, what am i going to do? stock up on tuna fish and go into the bunker because they're going to raise a quarter and maybe another quarter in december? what is that? i need lots of bottled water? i don't see the fear because when i project it out it's hard for me to get to a 2% fed funds rate by december 2017. >> they should normalize rates but normalize rates relative to

what? it has to be relative to the strength in the nominal economy. you can't say the fed will raise rates unless they lost direction. maybe they would. >> red state and blue state clients. at richard bernstein do you have red state/blue state types in your shop? >> sure. >> you're not going to come out and say you're feeling the bern if i ask you. you will not confirm you're feeling the bern. >> no. i was never feeling the bern to begin with. so i'm certainly -- >> don't you like the way i set that up? >> yeah. i'm not -- >> still hitting your wife? >> yeah. >> i do like the bernie mugs. when i was younger my friends called me bernie. for bernstein. i always wanted a bernie mug -- >> you do feel the bern! >> they call you bern. i call you effin. >> you have a lot of nicknames. >> it's fun. >> it would help because there are so many richard bernsteins.

there is probably another richard bernstein advisers somewhere. >> i don't think so. >> there is not another richard effen bernstein. >> no. i feel confident of that. >> you can have it. when we come back, a live report from 21,000 feet. we'll talk to two guys climbing mt. everest without oxygen tanks, and they are snapchating the whole way up. "squawk box's" highest interview ever straight ahead. veteran retail executive allen questrom will tell us what's wrong with the sector and how he thinks retailers can turn things around. stick around. "squawk box" will be right back.

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welcome back to "squawk box." it is the height of climbing seen on mt. everest. two mountaineers are summiting to the top and sharing their journey in realtime via snapchat. the #everestno filters. adrian and cory join us right now on the squawk newsline from advanced base camp an everest at

more than 21,000 feet. good morning to you, gentlemen. thank you for join us. >> hi. thanks for having us. >> thanks for having us. >> is this your morning? or are you in the evening now? >> we're in the evening just waiting for some soup right now, actually. >> how cold is it? >> you know, right now outside it's probably just a little bit below freezing as the sun sets. by 9:00 or 10:00 p.m. tonight until be down well below zero degrees fahrenheit. on the mounting we expect it to be as cold as negative 25 on our summit day. >> how much more do you have to go at this point? >> well, we've got quite a ways still. we have about four days of climbing before we're actually poised for the summit. so tomorrow we'll move up to about 23,000 feet. the following day we'll move up to about 25,500 feet and the

following day 27,500 feet. and then hopefully summit on the 24th. so we've got a little bit of work ahead of us still. >> hardest part so far? >> hardest part so far? probably last week while we were acclimatizing. we were hit by a windstorm that almost destroyed the tent we were staying in and we had to stay up all night with the full mountain gear on getting up and digging the tent out of hundreds of pounds of snow every few hours. a brutal night. >> on the screen that we have we're showing images from your snapchats. one of the things we wanted to talk to you about was social media and your decision to broadcast so much of what you are doing. how -- how easy or frankly difficult is it to do that while you're outside, you know, trekking? >> it's funny. social media has taken such a

drastic turn in the past few years. it's become so easy to share stories. one of the reasons we chose snapchat is because it is a fairly easy platform to use. but more than that, it's -- it's really -- it's just a very uncurated look at the way the whole everest season and an expedition unfolds. in the moment it can actually be quite difficult to take your mittens and gloves off and actually use your phone. but overall it's a very easy platform to tell a story, especially, you know, by these means. >> it's been totally rewarding for us. at this point we're just getting hundreds of comments and videos sent back to us every day sort of wishing us good luck and asking us questions and things like that. it's a two-way street is part of the beauty of it. >> i assume you're using a satellite phone of some sort attached to urine iphone? how do you do it? i assume there is no lte service

up there. >> that's right. first and foremost we have to keep our iphones warm. then we set up a wi-fi hot spot using a satellite internet connection powered by solar. and hopefully get the snaps out. it can be a frustrating process sometimes, taking the snaps is easy. sending them -- every ten second snap might take ten minutes or more. it's hair-pulling at times. we usually do it in camp while we're eating dinner, hydrating and things like that each evening. >> i want to talk about -- you have a couple of sponsors, some very interesting. one is soylant, the drink. is this what you guys are eating or drinking every day in terms of how you're sustaining yourselves? >> well, so that's actually a great question. we have three primary sponsors. soylant is one.

eddie bauer and strava which tracks our fitness. it's hard to supplement nutrition high on the mountain. one of the easiest ways to get calories is actually to drink them. it's not to say that we're using it exclusively, but we actually use it quite a bit when we arrive at camp at the end of a day. we mix up a batch and try to get as many calories in as possible. >> our doctor would estimate we burn something like 8,000 to 12,000 calories a day while climbing. traditionally on expeditions i have put in 5,000 calories of food. if we can drink one or two bottles it makes a big difference. i have still lost some weight on this trip but less than in the past. >> gentlemen, we want to wish you well and thank you. if you can get your cellphone out or your satellite phone out

when you summit and call us between 6:00 and 9:00 eastern time when you do that, let us know. we wish you well when you summit. thanks so much. i'll snap you back. >> great. talk to you soon. >> thank you. it's amazing. >> stop on the way and build up the red blood cells. coming up veteran retail executive allen questrom still ahead. looking for balance in your digestive system? try align probiotic. for a non-stop, sweet treat goodness, hold on to your tiara kind of day. live 24/7. with 24/7 digestive support. try align, the #1 ge recommended probiotic. we are the world's connectivity company. we are business

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welcome back, everyone. futures are indicated higher this morning. the dow futures indicated up 62 points. s&p futures up by 8. both indices are still on track for their fourth week in a row of losses. nasdaq up 20 points right now. when we come back, this morning's top stories, including the egyptair mystery. egypt's military says the plane debris and passengers' belongings have been found. couner terrorism expert frances townsend joins us to talk about all of this when "squawk box" returns. business a. and with double the lte coverage in the last year you can get more done in more places. right now get 2 lines with 10 gigs each for just a $100 bucks. and for a limited time get a hot spot free, yeah free. switch your business to t-mobile@work today.

welcome back to "squawk box." global interfund bank says it's working on new security measures following a series of breaches. one resulted in an $81 million theft from the bank of bangladesh. reminded banks it's up to them to immediately report hacks. gm will expand its new car-sharing service to new

markets. gm's maven program. it will be expanding to washington, d.c., and boston later this year. td bank is discontinuing its popular coin-counting service. i used to love doing that. following a lawsuit by a new york man who claimed the bank's machine short-changed him. td says use of the machines had declined steadily over the past few years. we had taken the kids to a -- have you done this? >> it's free, right. >> it's free. you bring the whole thing with the pennies -- >> you have to have an account there for it to be free. >> matt has an account there. >> you sure about that? >> yeah. if you open an account they give you like $20 and you can do it free. and i did. >> see? >> to get the $20 and to do it free. then i left all the change in that account there. >> good for you. >> that's the way to do it. start saving from the bottom up. >> now i have a td -- >> i think you can do also -- dare i say commerce bank in new york.

>> i thought commerce is td. >> is commerce now td? >> yeah. >> i didn't realize you had to open an account to do it. do we have an account? maybe we do with the kids. we do have a developing story this morning of. the egyptian navy locating debris and passenger belongings from the missing egyptair flight 180 miles north of alexander dra egypt. hadley gamble has been covering the story from paris and joins us now with more. >> a lot of conflicting reports over the last 24 hours coming out of the story. the latest is that the greek defense minister has said that at least part of a body, part of a seat and some luggage has been found in the mediterranean but egyptian authorities who have been leading the search and rescue operation have yet to confirm the statement. what we know from egyptian authorities at least is that they are absolutely sure that pieces of luggage and a piece of

a fuselage do in fact belong to egyptair flight 804. investigators are working with an expert from airbus as well. the investigation is ongoing. standing here at charles de gaulle. i want to mention that a little earlier in the afternoon we had sections of this airport cordoned off. there was a heightened security presence, bomb-sniffing dogs and police. we're still here watching and monitoring the situation. one the big questions going forward, if this was a terror attack as was suggested by egyptian authorities, there is a big question in the minds of many security experts. they're wondering why there has been so little chatter amongst groups like the islamic state and al qaeda. no one is claiming responsibility for the attack. in the 24 hours leading up to the departure of the flight several locations of the aircraft, it was flying from

egypt. brussels, belgium. tunisia and eritrea. questions on whether that had any impact on the security of the aircraft. we'll continue to update you as we know more. >> okay. hadley gamble, thank you. joining us now, fran ez townsend. serv frances. welcome and good to see you. i think there are like four, 24-hour cable channels and business channels. we have had a couple of days where we don't have the flight recorders. we just found the debris. so far, 24 hours, all you have had is conjecture about what it is. it doesn't mean we're going to stop trying to conjecture, but i mean, i have heard every theory put forth. i'm not -- here is a couple of things you might know and might be able to advance the story. they should know by now why the three marshals were on that flight. do you know if they know why

there were three? were two going home? you don't need to find a flight recorder to find out from the airline why those guys were on it. >> right. the airline is saying very little. probably a good thing because egyptair doesn't have a good history of getting you accurate facts. you're right. this is something they could tell us that they surely know. but egyptair is -- look, there was the misstep yesterday. they said they had found debris and then said they hadn't. egyptair in the russian plane bombing over the sinai, everybody had concluded it was terrorism, including the claim of responsibility, and egypt was still denying it. and so -- >> this is different this time, though. egypt seems to be more open. yesterday i saw an official saying, look, it's more likely that it was terrorism. they're not closing the door on any option but that's different than they've dealt with it in the past. >> infrared. no flash. no responsibility being claimed by anyone. the drudge -- i don't know, in

the last couple of hours had something about the swerves. could a hard right turn of 360 degrees, left turn, whatever it was, that there is speculation maybe there was a cockpit struggle. but then people said, if there were three air marshals, how could there be a cockpit struggles with three air marshals on the plane? >> we've seen instances -- now we have reinforced cockpit doors. if there is something going on inside the cockpit, the air marshals cannot get in there. you don't know. in 1999 there was the egyptair case where one of the pilots intentionally downed the plane. we knew that from the flight recorder. that's an instance, becky, where egyptair to this day denies that that's what happened there. there are more open in this case. i think most -- the operating assumption of investigators right now is that it's a terrorist incident, but no one has foreclosed the fact that it could have been a mechanical failure. >> that was an a-320 where that inexperienced crew got below

stal spe stall speed on rudder. one more thing, andrew, and then you can -- i'm already -- oh, yeah. um, i was worried now that maybe paris had a breach of the catering guys or the baggage handlers who are whomever has access to the plane that might want to leave something on the plane. now we know it was in all these other locations where it could have been planted beforehand. are we lucky here in this country that something like this hasn't happened? i can't imagine our security is so great with -- or do we just not have isis minded people, as many in the united states, to do this as a caterer? >> the numbers of isis here in the united states is certainly smaller than it is right now in western europe. our security protocols are much stricter and much more sort of rigidly enforced. >> if you were going to do it, instead of strapping it on yourself, if you could plant it and not be there when it

happened, isn't that better? >> absolutely. >> as a terrorist for me, to be on the ground when it's happening. i don't know why this hasn't been the single-minded method -- >> it's the focus of investigators. when you think of the plane being on the ground in the places that don't have the security discipline that we have here in the united states, that's for sure going to be a focus of investigators. we've seen ourselves, lest we criticize others, where we have screeners that tsa then fired because they had criminal records. you know, this is a perennial problem. >> i wanted to ask two questions. one, when something like this happens, when you are -- put yourself back in your old role. what happens? what are they talking about? not just what are they talking about. what are they doing? is there anything done that's different from the day before? >> there is a certain amount of muscle memory that goes on, right. first you want to know was there an american on the plane. you would wondering do you have

any jurisdiction in order to get control of the investigation. there was not in this case. then you want to understand as quickly as you can what was the method of operation for, as joe was talking about, getting the explosive device on the plane because do you have gaps in your own security that you need to correct. those are the sorts of investigative things. the other thing that goes on right away is a search through the intelligence databases. nsa, fbi, anything that didn't look important that might help investigators. >> in an efficient world, what would we do with our tsa and security broadly that is not cheap but, if we wanted to -- if we wanted to actually catch the bad guys, what would you do that we're not doing today? >> wow. i always say, if you're looking to catch them at the point of screening, you've really failed. that's your last hope. so the idea is to continue to make your investments in intelligence services because you want to catch that threat before you get onto the shores

or get to screening. >> okay. all right. thank you. i just happened to see this. japan is vowing not to devalue the yen. they're not going to do that. they reiterated the commitment -- talking about negative interest rates? >> what was that all about? it's a little late. now they're not -- they tried. it didn't work. it got stronger. you know, i don't believe you, mr., mr. finance minister. >> frances, thank you. >> thank you. a rough run for many of the nation's retailers. is the consumer really in trouble? or is there something else that's happening here. we'll ask veteran retail executive allen questrom, a man who is known for a lot of things in retail experience. stick around. "squawk box" will be right back. . . no one speed... no one way of driving on each and every road. but there is one car that can conquer them all. the mercedes-benz c-class. five driving modes let you customize the steering,

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welcome back to squawk. over to ayman javers, global interbank fund transfer service swift telling the banks they must share information on hacks. there was a recent hack attack and ayman has more on the story. ayman. >> that's right, andrew. think of swift as the central nervous system of the global financial system. it's an electronic messaging system that banks use to authorize transfers around the world. billions of dollars each day are authorized using that system. over the past several weeks we have seen new reporting now that the swift process as a whole can be vulnerable to hackers and this morning dow jones reporting

that swift is sending a new note to its customers telling them that they must report fraudulent activity. a lot of the banks apparently that have been victimized by hacks of the swift system have not been reporting those hacks to swift or to each other or possibly to law enforcement. so swift is also saying it's going to centralize information on attacks inside swift so they actually know what's going on around the world. and they say they'll put out more details in coming days. they'll tighten up security overall at swift. this gives cyber security experts real pause, guys, because swift authorizes so much money, it's used by just about every financial institution in the world. thousands of institutions in more than 200 countries around the world use swift. and now it looks like hackers have figured out some vulnerabilities. last night we saw a report from reuters that a bank in ecuador was apparently hacked using some kind of swift vulnerability causing wells fargo to transfer about $12 million out of wells

fargo accounts that ultimately investigators are saying went to hackers' accounts around the world. so that bank in ecuador now suing wells fargo saying that that bank should have been able to process these, stop them before they happened and stop the hackers from getting that money. so a fascinating development here as swift is trying to tighten security at banks around the world, guys. >> all right. thank you very much. thate battled retailed sect getting a lift. companies like walmart, american eagle and dick's sporting foods topping earnings estimates. despite a shopping environment that's proven dismalfor traditional big-box retailers. heard a lot about the fall of retailers over the last two weeks. let's bring in allen questrom. former ceo and chairman of jcpenney and of federated department stores, now macy's. great to see you, allen. thank you for joining us. >> how are you? >> what do you think is happening here? you are somebody who is known as a retailing king, somebody who

has the mod touch when it comes to things. so many people are saying it's the internet and that traditional retail's days are numbered. do you agree with that? >> no, i don't agree with that but i think internet does play a big piece of the business today. much more so than ten years ago, and particularly with the portable, the -- that makes it even more difficult. i think you have a situation of what's going on right now is you have had a cold spring. you had a very bad fall. weather was too warm. you had a big carryover of inventories. many of the stores when you walk in are very unexciting. american eagle, you mentioned earlier. i was in the store the other day. looked very exciting and people were buying. if people walk into many of the stores today, there is no reason i want to shop there. all you see is stuff and sale signs all over the place. that's not the way for bricks and mortars to be successful

going forward. they are putting a lot of effort into the digital side of the business, but every time you do a dollar in digital it's probably one less reason a customer comes into your store. walmart, as you reported yesterday, and target. both have a big grocery business. it's difficult to do a big grocery business on the internet. you have to -- if you are at walmart, you want that store to be exciting when you walk in because you have people coming in every week to buy groceries. you want them to buy other things in the store. walmart only does $12 billion. that's less than 2% or 3% of their business. >> walmart.com. >> and target does 2% or 3% of their business. some stores who now have 25% of the business. neiman's has 30% in internet. macy's, 18% or 19%. it hasn't helped their total business. i believe you should have the internet but you cannot give up the bricks and mortar experience. a customer has to come into the

store and be excited. she has to see things that make her or him want to buy. i don't think you're doing that right now. i think you see lots of clearance. no big trends going on in ready to wear. we have had a very cool spring. i think i would look to the fall season. i would think you'll see a better trend, assuming the stores clean it up and make it a place that people want to come in and shop. >> we had an analyst on earlier who suggested the real problem here is that there are too many stores. 200 a or b-level malls and all the other malls have overpopulated that you'll never fix and turn into a destination place to make it a place the customer wants to go. >> no question about it. in the united states we have probably 25-square foot per person -- if you go to england they have 5-square foot per person devoted to retail. then you have to fill up the stores.

you have too much inventory and you have to take markdowns. that's why they're always on sale. many are starting to close down stores particularly in the c and d malls. the a malls are doing quite well. the malls also have to make sure it's entertaining when you go in. it has to be something where people say, gee, i want to go down to the mall. right now that's not happening and as a result it's hurting our business. >> who is doing the best job, and who do you think -- which of the stores has the best potential to really maintain their brand and their business? >> well, i think a lot of the fast-fashion stores are doing extremely well. in zara you see great value and presentation. another one from ireland that is a store in boston called pre-mark coming out of ireland. h&m, forever 21. those are doing well. the dollar stores are doing well. tj max is doing well. they've figured out how to bring people in the store. t.j. maxx is a small percentage

of their business is being done on the internet. so they have depended on what do i need to do to make my customer come into the store. that's the job of a retailer, to create reasons to come into my store. >> although their customer may be less likely to be buying stu online anyway. >> they would be less likely, but that means people still come into the store. the more you give people a reason to buy online, the less they come into the store. i think you need to do both, but what's happened in many stores is they've taken money out of the bricks and mortar to put into the internet. what they're doing is defeating the effort in the store because they don't have the salespeople on the floor, they don't have the display people on the store, the stores don't look good. so i think you try to do both. and quite frankly i would set my goals in terms of profitability over the next several years as walmart did by the way, said we're not going to get the kind of earnings this year and next year because we want to raise our salaries and make our stores look better. i think that was a good move. they need to do more of that. and by the way the stock went

up. fact is they had a 1% increase, target had a 1% increase, target went down and walmart went up. because walmart said they're going to pick up half a percent. i think if you set the right goals out there -- the thing you have to always focus on, the retailer's job is to take care of the customer first. if they take care of the customers and their employees, they'll satisfy the shareholder. >> alan, always good to see you. we appreciate your time. >> nice to be here. okay, coming up, jim cramer's going to join us live from the new york stock exchange. his take on the day's top stories including great fed debate. latest products and services, but they demand the best shopping experiences. they're your customers. and by blending physical with digital, cognizant is helping 8 of the 10 largest u.s. retailers meet their demands with more responsive retail models... ones that transcend channels and locations, anticipate expectations... creating new ways to engage at every imaginable touch-point. it's a new day in retail, and together, we're building the store of the future. digital works for retail. let's talk about how digital

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with nbc sports live extra. i'm getting ready. are you? x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. let's get down to the new york stock exchange. jim cramer joins us now. we're all, you know, god, fed, fed, fed, fed up, but we said we'd talk to you about it. i would have to say, jim, there was trepidation this week obviously based on fed comments and fed minutes, but the market is well off its lows from yesterday already. >> yeah. look, i think the issue is not a hike. it's whether they can really go back to that, listen, we got to do two, three. the three hike is a real downer. when you get the three hike off then you know things can bounce back a little. the two hike i think we can handle, one definitely can

handle. they have to figure outd how to talk about this stuff because everybody is cool with one hike, even though i think the one hike could be tough for a couple months, i think one hike is -- let's see what happens. and because of all this what happens is every time we hear two, three, we get hammered, but we don't get hammered back to where you were so afraid of. so i was listening, it's not the consumer. the consumer is entertained and spending. it's not the industrials except for the fact that the dollar is a problem. can't have the dollar go higher. just can't. >> campbell's down a little, but i think soup is good food. >> well, she is repositioning the company as being much more natural organic away from soup making every right move. the company has been the leader in the transition from the pantry to the fresh, but this was a quarter where the organic growth was a little disappointing frankly. >> i guess so. it's now down about 4%. but as someone pointed out that's got a pretty decent yield too. >> oh, it's good.

have a good weekend. >> okay, thanks, good-bye. when we come back, later this morning imax taking the company to the next level. the ceo coming up. stay tund, you're watching "squawk box" on cnbc, first in business worldwide. ng clients. the face of their business was tellers. then atm's. today it's their mobile app running on the ibm cloud. across every transaction, the hybrid cloud helps their data move quickly and securely. our clients are building out features and pushing updates faster, on five continents. with the ibm cloud, they can move at the speed of any start-up. with the ibm cloud, from bank of america to buy a new gym bag. before earning 1% cash back everywhere, every time and 2% back at the grocery store. even before he got 3% back on gas.

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welcome back to "squawk box." yahoo shares under pressure right now. "the wall street journal" reports the bitters are reportedly expected to offer 2 billion to 3 billion for the company's core business. that is far below earlier estimates in the range of $4 billion to $8 billion. that stock down 4.5% this morning. "the wall street journal" says verizon is considered front-runner at this point. bids are due first week in june. markets this morning are indicated to bounce back a little. the bouncebacks actually started yesterday during the session. couple of rough sessions though on wednesday and thursday after we did have showing some promise earlier this week. could be the fourth week in a row down, but hope springs eternal. we're up 65 now. i don't know what we need to have a positive week. >> the dow was already -- i forget exactly where the numbers fall. for the week, not the full year.

>> possible. but hope springs eternal. we've been cheery. >> very cheery on a friday morning. >> happens on fridays. i got in a good mood immediately with that guy from cke because made me think of a western bacon cheeseburger. >> we got to run. get yourself a burger. >> you may be able to get one around here. >> very soon. make sure you watch monday. "squawk on the street" begins right now. good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. premarket in the green although dow in danger of strongest weekly losing streak in a year. gap, deere, updates on egyptair, europe looking to finish the week stronger. we'll get existing homes at 10 and g-7 finance ministers