we want to thank our guest-host. barry, you're right, we didn't have a million things we didn't get to. >> a million. >> will you come back soon so we can talk more about it? >> we should talk about the retail landscape and what's happening. my dad ran a manufacturing company. his biggest client was walmart. he had to drive his manufacturing offshore. never had a chance to talk about it. next time. >> we'll have you back soon. thank you very much. >> join us tomorrow. "squawk on the street" with -- tomorrow's david tepper. now is time for "squawk on the street." good tuesday morning. welcome to "squawk on the street." i'm karl quintanilla with jim cramer and david faber at the new york stock exchange. the premarket. the tension is squarely on the new draft bill called the american health care act. we're going to watch pharma and

insurers all morning long. europe got stung with the worst german factory orders in eight years. trade deficit at a five-year high. the health care proposal. the fight begins over what to repeal and how to replace. plus, another jobs announcement from exxonmobil. the president thanking exxon, calling the actions the core of his agenda. and a rally snapped. snap falls 12%. now below its opening price from ipo day and moving lower in the pre-market. first up, health related stocks are in focus now that the house gop is repealing and replacing the affordable care act. changes include requiring people without insurance to pay a tax penalty. the use of credits instead of subsidies to help people pay for insurance based on age and income levels. freezing medicaid enrollment at current levels and the tax credits will remain one of the sticky points. rand paul already out this morning calling it obamacare

light. >> a tweet from the president, getting rid of state lines, promoting competition. it would promote competition. having different organizations go against each other. there wasn't enough competition, one of the reasons the raise went up so much. it's been different not to have a political discussion about it. it is an impeer cal battrimperi. the rates either went up or they didn't. i think united health has the best technology, algorithm. when they pulled out, it showed me the real competitor, the one you want, stepped away, making it difficult to get prices lower. >> true. we made a lot of aetna choosing to pull out in many exchanges. however, during the court case, for aetna and humana, the judge said it was based on aetna's

attempts to get leverage on the anti-trust case opposed to the economics, which was interesting at the time. >> right. >> no doubt, there has less competition in the exchanges and a number of the smaller players certainly faced extinction from trying to compete. the larger guys, anthem stayed in there perhaps as the most aggressive. >> right. i find this president's tweet about the working on a new drug system to be competition, is that like in europe where if you don't come to terms, they drop you from the formulary? >> he talks about a phase two and three of the plan. on the morning shows today, mulvaney said it could pass the house by easter. senate will be the tough hill to climb. >> these are complicated things. i tell people, if you're looking toward washington to be a reason why you buy or sell, just stick

with deregulation. stick with what the executive orders can be. those are line items, pens. the transparency affairs, anything with the epa, where you decide, listen, we're not to delay coal, being fazed out. anything involving congress is just going to be really difficult to get done because of the interest. look, eli lilly is powerful in washington. the vice president of the united states is from indiana. sometimes i forget. these are powerful interests. >> there are powerful interests when it comes to aca, when it comes to tax reform, in particular, to the border adjustment we've talked about so often, which is taking us to arkansas and the two republican senators from there. >> right. >> speaking of which -- >> whether they'd be in favor, given wall mamart is an importa part of their economy? >> president's schedule today, talking with cotton and purdue.

that's the topic at hand. >> it is so difficult watching the border tax commercial and then reading pier one having the quarter. what's the essence of pier one? pier one is an importing. would pier one be put out of business by the border tax adjustment? >> they call it pier one imports. that's the name of the company. >> i think it would be, i don't know, just a long walk down a short pier. >> moving on to exxon, the president lauding the plan to invest $20 billion through 2022 on u.s. gulf coast refining projects, creating 35,000 temporary jobs, 12,000 permanent jobs. a plan since 2013. late last night, the president tweeted, buy american and hire american are principles at the core of my agenda, which is jobs, jobs, jobs. thank you, exxonmobil. the company said it will double production of u.s. shale by -- in the next ten years. >> they have good assets.

not great but good. $47 billion in projects going on right now in that particular area. a lot of it related to lng. a lot related to the fact our natural gas prices are the lowest in the world now. you can build a lot of plastic. it is a boom. i wish more people could get down there. sometimes i think wherever there is unemployed people, we should give them a federal bus ticket to get there. if you can add medicalewelders, have a shortage of in this country, people working with their hands to get this all done. the jobs that are coming in texas, east texas, are rather extraordinary. if i were president, i'd get down there right now and say, look, this is where you have to come. this is where the jobs are. >> a lot of jobs left north dakota, which boomed for a very long time, didn't it in. >> yeah but these are more -- absolutely, the pri--

>> you break even and we move below it, we know what happens. stop talking about man camps. >> right, the man camps. stop talking about crude by rail. >> right. >> these are mostly natural gas related jobs, to be able to -- remember, even mexico has a shortage of natural gas. texas has a shortage of natural gas. >> some of these, carl, i think were originally planned as far back as 2013. >> yup. pay an average of 100 k. good jobs, as jim points out. >> great jobs. i've got to tell you, unfortunately, one of the things we don't do well in this country are trade schools. if you're illinois tool works, a remarkable company that makes fantastic quality equipment, it's welded and designed. if you don't know how to weld, you can do it. >> automation. i think it is interesting. we have jobs created as part of previously announced programs and companies are taking an opportunity to showcase because they know they will get good

publicity and perhaps a nice tweet from the president. recall amazon's plan to open warehouses, and the jobs created there. even softbank, which had previously announced plans. it is not a bad strategy. >> toyota maybe softly. you want someone to say, i was going to build a plant where i've got a lot of plants but i'm moving it to south carolina. >> yup. >> i'm not going to build that plant. that's the real winner. >> that's the pure play. >> that's the guy who gets more than a tweet. trump buys a car for that guy. >> we're going to talk to the chair of saudi aramco in the next hour. al-falih. it brings to kind, as it relates to exxon, that the u.s. will be the biggest contributor to new global supply through 2022. >> well, there is just a remarkable amount that can be pulled out of the ground, between 35 and 45, that is lucrative. provided it is in one area of the country. let's not confuse things. just -- if you had piping, scoop

and stack in oklahoma, they're smaller, but we don't have enough pipe to get all the oil out of the permion. we thought we did. we had the infrastructure left over from the movie "giant." i don't know if you saw that. >> james dean. >> i saw it once. i was a james dean aficionado at one point in my career. i think if we can get the piping out, we would be able to produce it. needs to be built now. would be fabulous for u.s. deal, because they maybe the oil tube. it is all good for jobs. i'm in a positive mood, aren't i? >> yeah. >> just positive. a lot of positivity coming from me today. i feel it. >> this will bring that down. >> see if i can beat it out of you. >> showing the january trade deficit, a number watched by the president. widened to $48.5 billion. the highest monthly level since 2012. the oecd maintains the 3.3% growth for the year.

it lifted the outlook for the u.s., china and japan because of fiscal policy support. seeing the u.s. economy growing at 2.4% compared to a prior 2.3%. >> whoa. >> moving in the right direction. >> i think the rest of the world is leading us. the rest of the world is looking. we don't look at our markets. unless president trump was president of every country, the stock market is up. markets are up around the world. the german number, i think, is like a durable goods number. it is tricky. there are some things that can offset there. i like the global tone. i like the tone that i am seeing. i had domino's on last night. a technology company that delivers pizza. i had well build on last night, huge food services company, international. fantastic. there are countries doing well, doing so much business. so, yes, again, i'm much more -- >> i don't hear you talking about inflation, gas prices,

wage inflation, where are we going to find the workers? >> i'm worried about the drug stocks. the drug stocks on the tweet. >> on pricing? >> when the president tweets he is going to drive the prices down, doesn't want me to buy it. >> a new system where there will be competition in the drug industry. >> you have the formula -- you like the idea i have? >> yeah. >> if you don't play ball, you get off the list. >> he previously called drug pricing a disaster. >> disaster, yeah. >> curious to see what exactly he's talking about when he says that. of course, he's been talking about the ability to buy in bulk, fix prices, make the government a single purchaser. >> how about the meetings they've had? >> many argue it would not be -- yeah. >> the meetings were era of good feeling with the drug companies, you know. a lot of hugs, positive mojo from the meetings, you know. guess the mojo didn't carry over. >> yeah.

see how walmart and lowe's feel about some of the meetings. >> yeah. i mean, it turns out the meetings were a little for show? i don't know. >> what's the drug stocks go down today? >> 2%. people realize, wow, we thought they were immune. i mean, they've been -- pfizer has been good. merck has been good. lily has been so strong. the charts didn't indicate the president was going to do that, just in case you wondered. >> there's been talk about consolidation amongst the bigger players. it is hard to imagine you could make that strategic decision without understanding exactly where washington was going to play. >> but astrazenica was coming back. they have a great cancer franchise. i thought there might be a combination with bristol-myers. >> nothing going on right now.

>> you rule it out? >> don't try to start something. nothing is going on. >> how about valeant? where is the floor? >> i don't know. >> took out the 13th floor yesterday. a lot of people feel there is no 13th floor. >> we're going to start asking, what's the floor for snap after a pullback yesterday, down 12%. we'll talk about that and what it means. also ahead, the chairman of oil giant aud aramsaudi aramco. s&p down, flirting with biggest losses since january. back after a break. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person,

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♪ heading into the fourth session as a public company, snap falling in the premarket after a 12% drop in monday's trading. the parent of snapchat below the opening price of 24, above the ipo price of 17. at least five analysts slapped a sell rating on the stock. we talked about that yesterday. >> yeah. look, there's new numbers out talking about the daily average users having another step down, at least as a survey. there's been a lot of articles including about this robin hood. i had the brokerage house, that millenniials bought it. to understand this process, i'm not trying to be a snob, but to

understand the way that stock is placed in an ipo is to recognize that you're not buying a correct valuation. the valuation is discoutorted b how much stock is kept back and how many people bought it at $17. the company may be profitable in 2020, maybe not. facebook is immensely popular. >> by that measure, when would you ever buy on the open of a new issue? >> only on a discount. >> when it breaks syndicate bid? >> no. if it is a good company. >> yeah. >> remember s, i like deals wit no pizazz. most of the people who watch "mad money" can't get in on a deal. i say, this has no pizazz but it is something you ought to be looking at. this thing had too much pizazz. i mean, you know, he hangs out -- >> seems way more excited than

they were. tom farley. >> what's his name -- >> sorry. >> one of the most -- what's his name? thinking about what's his name -- >> i said -- >> tom farley. he's the guy. >> i'm getting older. what can i tell you? sometimes the names aren't right there. >> played baseball for georgetown. fabulo fabulous. >> i bet he was. >> how about the story today that some groups representing institutional investors, trying to get the indexes, like msp, from excluding companies that don't offer benchmarks. fair? not that it is an issue for snap any time soon. >> i felt these should be a democracy. you don't have to own anything. nobody is putting a gun to your head, own that. >> a number of analysts are taking a look at the app tracking data points. i guess there are various ways to track apps.

looking at daily average user growth for snap, of course, which was a concern going into the ipo and continues to be one a few days later in terms of what the growth looked like for the early part of this year so far. we know growth had been slowing year-over-year and apparently continues to. you'll continue to see that. >> it is decelerating 3% year-over-year growth. it is not a growth company. >> it is not great. >> no. twitter -- remember, i said going short snap and long twitter yesterday on wathe show. critics. nobody wanted to do that. already, you'd be outbid. >> that was a good conversation. >> yeah, it was good. >> the president's tweets are irrelevant, they're noise. all kinds of things. >> jason, the executive producer, was happy about that. he said, i felt great after that. it is the thing i'm feeling now. >> want to spend our show

talking about another show? come on, man. right here. in the present. 40 minutes left. >> because it is your birthday week? >> 40 minutes left. >> it is how come i can't remember anybody's name anymore. the age gets me. >> amenda, they jacked the price up. >> art, happy birthday, as well. we'll talk to him later on this morning. wish him well. >> famous march birthdays. when we come back, cramer's mad dash. count down to the opening bell. one more look at the futures. more "squawk on the street" in a minute.

♪ i used to make a wish before the city turned gray ♪ all right. we've got opening bell about seven minutes away. time for our mad dash. >> a store that ended up being the king of sporting goods stores, dicks reports today. people seize on the negative. the fact that the company gave a forecast that was a little below what people were looking for. 50/55 versus 61. the company has been conservative all their career and it is good. i look at their comps and say, plus five. i looked at the numbers, $1.32 versus looking for $1.30. 17%. i say, wait a second, this is not as bad as people think. right now, david, when it involves retail, no one wants to touch retail. >> i ventured into dick's for the first time not long ago. >> what'd you think? >> i was astounded how large the

store was. >> huge, right? >> i had no idea it was that large. >> if you have kids that play sports, i mean -- >> everything was there. it was baseball season. we had to stock up on stuff. wow. >> they did a good number. >> must have a lot of skus, man. >> bigger than anybody, one of the reasons they have been triumphant. i have to point out that this negativity, people look at its forecast and they say, wait a second, it is just as bad as everything else. i question that. i also don't think nike is doing that badly. under armor is struggling right now. we had a report last night, dress barn, miserable number. pier one had a good number. people look at dick's and say, the border tax, and you've got a big box retailer that nobody likes. witness target. i'm still very concerned about target. >> are you? >> yeah. target, this is one of those that the dividend is not saving

them. i don't know. i mean, a lot of people are saying, jim, you have to focus on the boycott. i am focusing on the earnings. >> morose. got an opening bell a few minutes away.

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you're watching cnbc "squawk on the street" live from the financial capital of the world. the opening bell in two minutes time. all eyes on health care today as we take stock of what they're calling the american health care act. we're going to hear from kevin brady later this morning. jeff bezos, by the way, announcing the first satellite customer from origin. we'll hear from bezos, as well. getting some news from the commerce department. according to a source, china's zte agreed to pay $1 billion to settle a case involving the alleged sale of u.s. technology to iran. zte buys components from u.s. companies and had been accused of reselling the goods to iran. commerce secretary wilbur ross last week told cnbc the white house would be focusing on enforcing existing trade laws. we expect an official announcement later on this morning. then we'll talk to the commerce secretary around 11:45 eastern time. >> i thought it was great when

he said that. there are a lot of news in the books and we don't pursue the laws. also, another thing we don't talk a lot about. the globalization polity. it is not like every company feels it has been beaten to death because of our relationship with globalization. the vast majority love it. >> they do. did you read the editorial from navarro yesterday? he doesn't see the world that way. >> he doesn't. the key trade adviser to the president. >> i do think you'll get a -- you'll see companies -- i mean, look at the drug companies. they've done incredibly well overseas. obviously, they do a lot of single payer but it's been great overseas. i met with the ceo of mylan. number one in france.

france! >> the opening bell here. t montreal celebrating the 200th anniversary. the ceo will join us in half an hour. maker of photo labs. >> it was almost like people said, i got my chance. whenever you get this, i got my chance moment, the buyers are substantive. they come in and take up a lot of stocks. i can't tell how much is so-called program buying p and s and guys saying, this is my chance. there is a lot of money that wants in this market. even money, i think, who is den grading to the stocks want to come in. watch the bank stocks. just when you thought they were rolling over, boom, guys come in. boom!

like bam. >> got it. what is this, batman from the '60s? pow, wham? >> sales force is going to be an early gainer, jim. along with ibm, as they announce a new joint venture in which they'll co-mingle artificial intelligence offerings to customers. >> right. this is watson meets einstein. two real, smart guys. the key to this is there was an acquisition ibm made not long ago. march of 2016. they bought blue wall. a company spawned by sales people. that is the intersection. sales force is not, like, a cross sale, so to speak, in terms of them actually having an entity. blue wall is putting it together. i didn't think it was initiative substantive. i've come around to the idea it will move the needle somewhat. these are two companies.

watson has lacked a platform. einstein gets the use of this blue wolf, which will be great for einstein. i remain convinced that salesforce is too cheap, given the fact that they have $14.5 billion in billed and unbilled deferred revenue. cash on the balance sheet. i come back to the idea that it was amazing that there were people within -- shareholders within salesforce that really blocked that twitter deal. i think that was kind of a wakeup call. maybe the ceo is not -- doesn't wasn't able to call the shots. machine learning and artificial intelligence. to use twitter to be a fabulous force for customers trying to figure out what to do. not so the president could tweet. don't let fake news tell you there is in fighting. that was not trump's -- i mean the design.

that's kind of icing on the cake there, that trump is saying, don't worry. we're getting rid of this. don't worry, we're doing that. russia ran over president obama. well, you know. >> right. >> that was not -- >> your point is perhaps he realized, wait a second, i don't have a control stake here. >> it was not bentioff.com. >> perhaps if the shareholders want me to do something in the future, i better take it seriously. >> though he's built an amazing company. i do think this deal -- look, i've always wanted to know why watson didn't do more than, say, beat david faber on jeopardy. there should be more to watson. good on health care and the weather. this platform could be meaningful. blue wolf is a meaningful ak wf acquisition made. i prefer salesforce, because they had a great quarter. play ibm with the idea they'll be doing a lot more artificial intelligence, a lot more cognitive, and this certainly will help them. i liked ibm stock since, i

guess, 30 points ago. mostly because martin schroeder, the excellent cfo, convinced me he made the goals. salesforce is the mover. >> the key point is they also get ibm as a customer. >> yes. >> right. >> huge customer. systems integrator for ibm. this is really big for salesforce. >> speaking of acquisitions. >> accusations? >> acquisitions. it is a small deal but one we should mention. hewlett-packard acquires nimble storage. in the flash storage arena. it is a premium. $12.50 a share. all cash. amounts to $1 billion. they also will take on $200 million worth of unvested equity awards. that's your total purchase price there that we're talking about. hp isn't doing enough. nimble, as you expect, up sharply. the shock had been trading well below.

>> premium deal. where whitman needs to move because she needs better storage. i did a sum of the partsa ag analys analysis, which is why we picked it for the trust. it has been, well, anything but worthy of investing so far. >> yesterday, we reported that it was very close in terms of a settlement with the activist investor paul and the installation of hunter harrison as ceo. it's happened, effective immediately. yesterday, they announced that that, in fact, has taken place. five board members, including halal and harrison and three independent directors will be added. others will step down. most importantly here is this, again, we reported on this yesterday, the opportunity for

shareholders to vote on the pay package. the specifics of it -- i say pay package. they have a pay package for him as ceo. this has to do with his -- what he fore fitted or was promised for leaving canadian pacific. namely, $84 million of compensation and benefits that were fore fitted from them as a result of his leaving and tax indemnity that may amount to $23 million. shareholders going to get the chance to vote on that. if they say, we're not going to pay it, harrison made it clear that he is going to leave. he'll resign immediately. >> david, okay, let's go over this thing. first of all, gets a huge amount of money. second, deutsche bank takes price target raise. citi goes 58. these are prices on acquisition, not earnings. >> right. >> there is no way president trump lets canadian pacific buy this company.

>> it is not about acquisition. >> you can't get there on earnings. you just can't. >> you're not a believe in hunter harrison, the man who somehow rethought rail? >> unless he can make it so every utility uses coal and there is a harvest to end all harvests. a seven year jubilee, we get cars going up to $20 million. no, i can't get there. i can't get there unless our chemical companies take over the world. in the end, rails transport things. those cargoes are not in the kind of demand that would merit this increase. >> he can make the trains run on time, jim. come on. >> you can make the ratio of, you know -- you can make the ratio -- >> you can have it go up. >> not as good as it could be. >> you're saying it is not going to be enough? >> no. >> given the move up in the stock price already. >> everyone loves this guy, and it is terrific. in the end -- cxs had a decent number. china cut coal to some degree. coal bonds were down.

but natural gas fell through the floor. i don't get the -- look, great, union pacific has done well. i love them and norfolk southern. so well run. in the end, they carry kor goca and they're not doing that well. >> health care stocks are the biggest laggard right now. worst performers on the dow, merck, pfizer, j&j. jim? >> they've been so strong. people thinking they were going to be unscathed by the president. when the tenure went to 2.5 to 2.3, a lot of money rushed into them. j&j goes from 111 to 123. people say, fine, nothing wrong there. obviously, everyone thought that the president was not going to be part of the equation. i do think that these two will get buyers because i think that in the end, not to be too critical here, but the idea of competition will be very hard to figure out. these companies don't have a lot of competition because they are

patent drugs. you have to somehow -- >> now, you have some competition. >> true. >> treating the same disease. hep c. >> and you understand the life of patents and say, listen, we're done with that. if you do an add on, we're done with that. >> as is often the case with the tweets, there is a lack of specificity. the market is left wondering, what really does it mean and what will be coming. you get people wondering, well, is the president referring more to part b? >> yeah, what's he saying? >> medicare part b, where no fo formilaries exist. >> will it be cheaper? do we insist that generics are used in every single case? >> we don't know. by the way, it would take legislation. >> right. >> we're waiting on names at the fda. bunch of things. >> right. >> can't do an executive order to lower drug prices.

>> no. >> could he do an executive order to raise the price of twitter? >> he could try. >> try. >> no, these are complicated iss issues. i'm not minimizing it. it is difficult. everyone likes to -- the way to get prices down is to do what the va did, and that's not been the united states' style. va said, this is what we'll pay. >> sure. >> you can pit guys against each other. if they don't play ball, say, listen, you're not part of the package and good luck to you. there are ways to do it. it's not been the american way. these companies have been regarded as being some of the best industry, saves lives. i'm very pro industry. i've got to be careful. i think the industry -- there are actors that have done bad in the industry. we know they are. but this is an industry that's created a lot of jobs and done innovation. i'd hate to see it suddenly be, let's say i wish the other countries paid more. the other countries should pay more for our drugs. valea valeant, not holding, though people thought the refinance might be good. >> $11.89. that's right at the 52-week low

for valeant. value act owns a lot of the stock. >> they have stuff people think are me -- some people think valeant -- >> the last quarter wasn't particularly good for valeant. $29 billion plus in debt. guidance bringing cash flow down, as it has been coming down. spending a bit more on r&d and they're not getting price increase. >> they can't. now, take a regerneron. do you say, listen, the guy who cuts the price most we'll endorse one day when you're more in mass? amgen and regeneron down. two of a kind. a tweet is not necessarily the most effective way. these are complex issues. >> yes. snap, down almost 8%. back below 22 now.

i assume we're nowhere near peaking near interest on the shares. >> my travel trust owns facebook. a great company and making so much money. about to become far more than just an advertising company. the data center is real. remember, snap has to pay them $400 million a year. now, if they really have a slow down in daily average users, how will they afford that $400 million? that's a lot of money. don't forget, i still think that al alphabet wouldn't be wrong to guy a big management company that business the enterprise. >> you'll get a fee on this when it happens. >> salesforce. >> you don't need to be einstein or watson to figure that out. you can be bullwinkle and rocky to figure those out. >> one of my favorites.

>> patricia was the first babe. you can say that because it was a cartoon character. >> she was. >> morgan brennan is on the floor for us today. >> hey, carl. stocks modestly lower today. second down day here amid a modestly mixed session in europe. higher trade in asia excluding the japanese nikkei. consolidation is the theme with traders i've spoken to as investors take profits after the record highs last week. ahead of the fed meeting next wednesday. the obamacare replacement proposal is in focus. we have the employer mandates scrapped, tax credits replacing subsid subsidies. different groups reacting. we have humana, united health, tenant health care all lower. drug stocks under pressure because of the recent tweet this morning from president trump about a new system with increased competition. the biotech etf is lower today, as well. energy, out performer after the

i iea forecasted double oing production by 2020. crude is higher this morning. with it, stocks like conocophillips and chesapeake. we've seen a turn in the last moment. exxon also detailing its $20 billion spending plans in gulf coast refining. chevron, growth productions at its analyst meeting in new york this morning. we are -- cnbc has a number of these ceos coming on the air. turning to social media. disappearing profits at disappearing messaging app maker snapchat. you touched on that. down 7% right now. well below the opening trading price at $24 a share. hovering in bare market territory versus the high hit last friday. looking at the dow, modestly lower in u.s. stocks today. down about 40 points in the dow.

down about seven points in the s&p. guys? >> morgan, thank you very much. let's get to the bond pits and rick santelli at the cme group in chicago. good morning, rick. >> good morning, carl. everybody continues to ask how long will the equity markets continue their virtually retracementless move? you know, all i do is try to read what the markets are saying. something has changed. i know that's an obvious statement if you looked at equities lately. it doesn't only end there. if you look at one week of tens, well, you should notice last wednesday, we settle at 235. yesterday, 2.5. right now, 2.5 on change. really consolidating tight. if you look at a year-to-date tens, looks like an ekg, between 2.30 and 2.60. the 2.50s is where much of the trades have been occurring. what traders are saying is, maybe it is time to take a little bit of a break. maybe that pattern has broken a

bit. we'll try to monitor the various charts and my sources. two day of the shots. two year in europe. took another beeline for big negative rates. let's open it to january 20th. remember, it wasn't many trading sessions ago, looked like we'd get minus 100. pay attention to this. a year today, the dollar index, right side and left side, we're still down about 3/8s of a cent or so on the year. even with rates built in for march, needing to move higher, dollar index is flat, all things considered. finally, another thrclue as to maybe things are changing with the patterns established, the fixed income markets. only a little turn. we'll continue to monitor. carl, david, jim, back to you. >> thank you very much. still to come, hear what jeff bezos said about the space race. also, wilbur ross, we'll

talk to him later this morning. dow is down 41 to start the day. don't go away.

amazon founder and ceo jeff bezos speaking at the satellite 2017 conference in washington. as you probably know, bezos is also the founder of blue origin, a space exploration company. take a listen to his vision for our extraterrestrial future. >> we have now more than 1,000 person team at blue origin, and the team is incredibly talented. they're doing a great job. my vision for blue origin, the long-term vision, is millions of people living and working in space. we need a space for civilization for a bunch of reasons. that's the vision. >> they did launch their first customer for satellite launch services. a company called utle sat. they have a reusable rocket, debut before the end of the

decade. millions of people working in space. >> at no point would you ever think that this was not going to be a government project. it'd be an independent project. >> i know. >> how the world has changed, that individuals lead it and not governments. >> bezos is going to try to colonize mars. i'm sure he'll also try to live forever, right? >> how long is -- >> 300-year plan. >> if guy the guys are taking view. honestly, i was there when the russians put in sputnik, you know, the speeches we got. jfk would give a speech and the government felt it was their goal. now the government is saying, listen, it is not our goal anymore. we have to do other things. individuals have filled in. >> you raised a point, aspirational things. hyperloops and going to mars and all those things. >> they think -- >> to be the realm of the government. >> they're richer than the government, i guess is what you

have to say, in terms of their balance sheets. >> yeah. >> they have a better balance sheet. right? i mean, nasa spends, well, not a lot. >> musk's balance sheet is shaky but he has big ideas. >> musk talks more about colonization. by the way, here's the president. public tours resume at the white house. >> work hard, everybody. work hard.

>> first come, first serve. go to whitehouse.gov for more information. the tours are self-guided, last 45 minutes. the president, of course, kicking off that new feature. he is going to meet with the boy scouts later on tonight after meeting with lindsey graham for lunch. daily intel briefing. look at the enthusiasm. >> great tour if you've never done it. i spent some time in the map room, where it was the day that roosevelt died. that's another incredibly -- right where the allies were. the white house is very stirring. >> we'll get stop trading with jim after a break. that schwab billboard. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? ...no minimums. schwab has lowered the cost of investing again. introducing the lowest cost index funds in the industry with no minimums.

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eisen and david faber at the new york stock exchange. markets lower again for the second day. looking potentially for the first back-to-back losses on the dow and s&p since the end of january. looking at oil, as well though, up almost a full percent. >> road map for the hour starts with the american health care act. republicans rolling out their version of the obamacare replacement. >> sources say china's zte has agreed to pay $1 billion to settle a case involving the alleged sale of u.s. technology to iran. we've got details. plus, an explusive with the chairman of the world's most valuable oil company. saudi aramcaramco. his take on the trump era and the road to what is rumored as the world's largest ipo. first, let's go to capitol hill for details of the gop's new health care plan. morning, kayla. >> good morning, sarah. the plan put forth by house leadership dubbed the american health care plan dismantles the taxes and subsidies from

obamacare. in their place, puts tax credits and expanded savings accounts for customers to buy their own insurance. it keeps coverage in tact for dependents under 26 and those with pre-existing conditions. it is the structure of the tax credits which get more expensive the older a custer gkus custome goes up if you let the premium lapse. the question for conservatives and would-be supporters now is how much will it cost? because in the draft language, it essentially says this new legislation will be paid for by the repeal of obamacare. we'll hear from the congressional budget office momentarily on its score for the legislation. here's budget director mulvaney this morning. >> we will know what it costs before they vote on it. i think everybody who looked at it knows that this is going to save a dramatic amount of money. once you repeal the mandated obamacare, you repeal the taxes of obamacare, you repeal the penalties of obamacare, you get

out of the government centric system, the score is going to be positive and helpful long term to the deficit. >> while the white house has largely left the policymaking to the leaders in congress, one thing that it has vocally endorsed at c pak and the joint address is buying insurance across state lines. that's something the insurance companies fought because they didn't like it and it was missing from this draft. it is because it wouldn't survive the senate rules on reconciliation. the new policy, doesn't have to do with the budget or the revenue to the government. trump tweet ted this morning, saying that will be phase two and three of rollout. in a separate tweet this morning, he took ownership of the plan. he called it, our plan. sort of implicitly endorsing the plan that the house leadership put forward. we'll see on capitol hill, guys, whether senate krcriticism of ts plan still remains, now that they've gotten their hands on the draft, or whether they still

have issues with it going forward. >> something, kayla, that the big insurance companies who have met before with president trump inside the white house are going to be on board with? >> well, it is unclear. even if they are on board with it, sarah, this won't be implemented for several years. the medicaid freeze happens in 2020. the phasing in of some of the new parts of the plan won't happen until 2018 or 2019. they'll have the grapple with the existing infrastructure of the affordable care act for the foreseeable future. we'll see what parts they like and what they don't like. insurance companies have been vocal against selling insurance across state lines because from a regulatory perspective, it is complicated. they don't know what state's regime complies with it. >> we'll wait from world from the industry. thank you. for more on this new bill set to repeal and replace the affordable care act, let's bring in former administrator during the obama administration, andy. and michael barnes, a former

drug and health care adviser to president pusbush. andy, with your work with obamacare, how far apart is what the republicans announced from the aca that president obama implemented? >> well, good morning. i think the bill is pretty far from the aca but, more importantly, it is also far from president trump's own goals. the president has said that he's going to put forward a replacement bill that would cover more people, or at least the same number of people more affordably. this unfortunately doesn't do that. it cuts millions of people from the medicaid rolls and it increases people's costs by eliminating the co-payments and deductibles. by eliminating the individual mandate, which may not be popular. analysts estimate it'll bring the cost of premiums up by 25%. this dun meoesn't meet the core goals, let alone where the aca, i think, which helped millions

of dollars. >> to be clear, we don't know exactly what the cost of it will be and how many people will be affected, what the premiums would look like, michael. do you agree with the assessment? >> some part of the assessment, which is also what some of the u.s. senators said. we don't think this plan is going to cover enough people. without an individual mandate, repeal that is somehow balanced out by a stronger incentive to get people to buy insurance, you don't have enough base for there to be affordability that is necessary for people to be able to get quality health care and to be able to sustain a system. largely, this bill, what i see in it is it is a lot of politics but it is short on sound economics and creating a system that would be viable in terms of health care for as many americans as needed. ultimately, i think that we do know that there will be phases two and three, but the risk here is we've got the fundamental reforms that include the tax repeals that undermine the system. we don't have guarantees that

phases two and three are going to create economic sustainability and quality health care for the array of people that are covered by the affordable care act. >> what about this idea of the tax credits? do you think it'll be enough to cover the low income population who needs health care? >> i don't think it is. >> sorry. that was for andy. then michael, you can weigh in after. >> sorry. >> i think michael and i are going to end up agreeing on this. i think particularly for people who are 55 to 65, they're going to see their premiums go up very significantly and their tax credits will be reduced. i think there's an estimate that for a 60-year-old, the average premium increase is going to be about $3,500. the same is true for people who are at the lower end of the income spectrum. what happens when people can't afford insurance is the only people that tend to buy it are the sicker people. this is not only going to cover fewer people, but it is actually not going to be good for the

risk pool either. >> michael? >> yeah, i i hahave to agree. we have to have a system where people have strong incentives, if not a mandate, to buy health insurance. this notion of a 30% increase in premium is not enough. people already suffer and they take the risk not to buy insurance, knowing it will be expensive if they have a catastrophic health event that requires them to spend. 30% additional is not enough of an incentive. there has to be something stronger to get people to buy insurance when they're healthy. it is not in this plan. hopefully it would come out of the senate as a moderating insurance on the house bill. >> right. michael, again, one of the key problems with the aca has been the lack of participation from healthy, young people, to take the risk in the pool down, i guess, which is why you have some insurers pulling out of exchanges. i'm hearing both of you say you don't see anything this this plan that changes that, correct? >> correct. there could be some vital insurance reforms that were necessary before the aca and now

are necessary during, you know, the continuity of the affordable care act, that would reduce the administrative costs and put greater controls on the insurance industry, putting as republicans would like, patients and providers back in charge of care and reducing costs by adequate cost sharing and rationing conducted by the health care consumer and not by the insurance that are effectively serving, in many cases, sarah palin like panels. it should be market based and in a version influenced by the senate republicans. >> we have the portmans of the world saying it is not going to adequately protect, michael. we'll hear from the freedom caucus later today. rand paul already called it obamacare like. can you envision a compromise that brings those together? >> i do. you're hearing from the senators who are strong on economics and understand what is necessary to create a sustainable health care

system. and by the way, they're conservatives like paul and lee. but also representative of states like ohio and alaska, with rob portman, the states that potentially stand to be the hardest hit, the red states, by the current proposal from the u.s. house. so i think that the u.s. senate can be a very moderate influence that creates a system that is sustainable if they get their hands on the bill. >> that's why they're phasing out the medicaid expansion. final word to you, andy. the republicans want to get this bill before both chambers before the april 7th easter recess. is that realistic at all? >> well, you know, they're asking republicans in states like ohio and pennsylvania and louisiana to take an awfully difficult vote, to really take billions of dollars away from their state, for medicaid expansion. take treatment away from opioid addiction. i think it is going to be very, very tough to see republicans,

moderate republicans, particularly from those states, get on board with something that looks even remotely like this. >> which would mean it could take a lot longer. we'll leave it there. thank you very much for joining us today. andy and michael. >> thank you. getting news in this morning from the commerce department. according to a source, china's zte agreed to pay $1 billion to settle a case involving the alleged sale of u.s. technology to iran. zte buys components from u.s. companies and have been accused of reselling the goods to iran. the commerce secretary told cnbc last week the administration would be focusing heavily on enforcing trade laws. >> the next week or so, you're going to start to see a lot more out of us on enforcement. i think it is ridiculous to go to all the trouble to bring a trade case, win it and then not enforce it against the other party. we will be a very strong enforcer of it. >> although there was some

speculation, perhaps, his presser today would involve nafta or some sort of rewriting or renegotiation of trade deals, this is more about enforcing what is already in the books. we'll be school hasking him abo >> they can say, we're being tough and enforcing our rules. the business questions and market questions we hear about for the commerce secretary is how tough are they going to be when it comes to enforcing tariffs and any kind of reciprocal tariffs and potentially going around the world trade organization and doing so. >> coming up later this morning. when we come back after a break, the ceo of the bank of montreal will join us live. we'll get his take on regulat n regulatio regulations, the fed and more. plus, cause for cautious optimism in the oil market. that's the message from the k r chairman of saudi aramco. we have an exclusive with him later on this hour. stay with us. hey gary, what'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go.

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the bank of montreal, the fourth biggest lendest in canada, eighth largest in north america, celebrating its 200th year an verse ainiversary at th billboard. the trump white house, deregular ga -- deregulation. the ceo of the bank of montreal, good to have you, bill. >> good to be here. >> so much discussion about the relation between the u.s. and canada. how is it affecting your u.s. business? >> well, we're tight with the u.s. the bank was established in 1817.

came to new york in 1818. we've been continuously part of the commercial landscape here. as the u.s. goes, our business goes. it has a huge effect on the canadian economy, as well. >> are we talking trading, lending in. >> all businesses. we're a large commercial bank. you know, we have retail deposit base in the united states, about $80 billion. about 3.5 million retail fly-by-night clooint clients, as well. >> do you see yourself riding the same wave u.s. banks are riding, at least since the election? >> without question, we've invested a lot in the business since the recession. those investments are paying off. our capital markets business has been much strengthened. a lot of capabilities. we've done exceptionally well in the mid cap space. retail banking is doing well. wealth management is doing well. >> though you operate here, does it put you at a comp petitive disadvantage if we see more about dodd/frank, a steeper yield curve, higher interest rates, or does it benefit you

equally? >> i think it benefits us equally. i think of us as a north american super regional and peg ourself against those. dodd/frank has stabilized. the pressure on cost, i think, has abated now. if it is streamlined, that's great. but i don't believe there is a regulatory head wind that is that visible right now. >> one thing we keep reading about is real estate prices in canada. overheated or not? >> in pockets they are. but it is a supply and demand problem. the demand for housing in vancouver and toronto is exceeding the supply. that's put pressure on it. i think it's less a question of too liberal credit and more restrictions on building. i put that in contrast to the united states, where our home lending business is not only doing well but the prospects are outstanding. >> is that demand coming from overseas?

cities like vancouver, right? >> to some extent. you have to realize, small population, relative to many big u.s. cities. they're small markets. >> canada is our largest trading partner, i believe. is there any concern on your side of the border in terms of -- >> i can't hear you. >> canada is our largest trading partner. is there concern on your side of the border about protectionist policies that may be pursued by this administration? >> well, the bank of montreal is the number one trading bank in canada. intere interestingly, close to 90% of our trade supported revenue comes from the united states. we're interested in restrictions on u.s. trade. but because canada and the united states runs pretty much a balance of trade, i don't think it is on the list. there's no trade definite to be confronted. >> the commerce secretary, wilbur ross, who we will talk to later on in the show, said it is a priority to go back to nafta.

can they renegotiate the trade deficit with mexico while leaving canada unscathed? >> i think there are things about nafta that all three participants would like to see streamlined. i think opening up the discussion will probably benefit the efficiency of the markets. it is not in the best interest of either canada or the united states to disrupt what is now a balanced trade position. even with mexico, i think there will be some changes that will maybe address the deficit issue but won't be that harmful to mexico either. >> do you see any risks to the asymmetry in immigration policy between canada and here? >> you know, i think the united states relies on a perimeter that canada and mexico were a part of. i think there is a big focus on immigration as part of the fairness, the opportunity for fairness in canadian society. but the vetting around immigration is very high. i think that is really want -- what you want. the border security is something we're comfortable with.

>> 200 years is a big number. >> very large u.s. business and very strong financial perform r performance. it's come together nicely. >> thank you for being here. >> thanks for having me. coming up, the gop is rolling out its plan to repeal and replace the affordable care act. we're going to speak with republican senator john thune. plus, an exclusive of the chairman of saudi aramco, whose ipo is expected to be the largest ever. huge show ahead. stay with us.

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the price of the fighter jet is falling. we've had unparalleled access to take in the scope of this weapons system. stocks taking a bit of a pause today. the dow is down about 10 points. still, it is up about 15% since the election. s&p 500 up 11%. for more on the international market outlook on the trump presidency, we're joined by the officer of global strategies. good to see you. >> like wise. >> you took a trip around the world, talking to sovereign wealth funds and other investors. >> in australia, european. >> are they as optimistic as

u.s. investors around the trump presidency? >> actually, not at all. i think the view from the global arena is quite different than what you find in the u.s. in the u.s., everybody is focused on the economics. you know, trumponomics. abenomics. in broad, people are focused on the isms. protectionism. short term fixes. i think there is a different point of view abroad than in the u.s. >> what does that tell you, that moment of the money and the buyers are coming from this country, not coming from outside? >> that's correct. our assessment is that a lot of the money that is going to the markets since the election is based on the policies announced by the incoming government is retail investors in the u.s. i think a lot of passive money and momentum money tends to follow suit. whereas, the active investors and the people who tend to be much more bottoms up are taking a much more circumstanpect view. sellers opposed to net buyers.

>> there there be an inflection point in the u.s. markets and do the gains come outside of the u.s.? >> i can certainly talk about our international and global equities strategy. we're in the u.s. market by a substantial amount. i sense that's the feeling people will have increasingly overseas. a lot of the opportunity is yet not priced into the international markets but it is definitely priced in the u.s. markets. so the u.s. markets are more set up for a disappointment if some of the things don't materialize. as we know, no politician can keep all their promises. disappointment is not priced here but it is internationally. that's where the risk and reward is. >> as i hear you talk, i think of the global think thank advising governments, warning about a disconnect between financial markets and global economies. projecting 3.5% global growth for 2018. sounds like you're on board with that view. >> absolutely. actually, there is going to be a summit in europe next week where the eu leaders are going to try to distance themselves from the

trump policies and announcements because they feel that this is a wrong trajectory for global policy. both on trade, where they'll p emphasize they won't be unilateral, and they are concerned about the unraveling of the dodd/frank and some of the banking legislation in the u.s. they are going to stay the course internationally. there is a big divide. >> which market dos ys do you l? >> europe in particular. >> political risks? >> absolutely. with risk comes opportunity. you have to be a contrarian if you want to get the better side of the trade. so i think france, for example, i know is under the cloud because of the election cycle there. if you look at some great companies like michelin, loreal, it doesn't matter as much as the global economy. >> thank you very much. the chief investment officer at ariel investments. carl? >> thank you.

when we come back, the american health care act revealed. senator thune will join us for that. and we speak to the chairman of the world's most valuable oil company, saudi aramco. get his take on the state of the industry, the ipo time line. dow erased its losses. back to the flat line. stay with us. during the lexus command performance sales event, experience our most elevated suvs ever. including the lx, gx, rx and nx. experience amazing. and her new mobile wedding business.tte at first, getting paid was tough... until she got quickbooks. now she sends invoices, sees when they've been viewed

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and other equipment needed to set up a missile defense system arriving in south korea today. the plans to deploy the thaad system angering the north koreans, russians and chinese. the u.s. says it'll be used for defense only. cleanup is underway in missouri after storms moved across the region overnight. dozens of homes in a mobile home park 40 miles west of st. louis were damaged. according to zillow, listing a home toward the end of spring significantly increases the chances of a faster sale and for more money. it found homes listed from may 1st through may 15th sell nine days faster and for nearly 1% more than the average listing. that's the news update. back to you, sarah. >> all right, sue. thank you very much. just looking at the major averages. the dow flipped into positive territory now. it is up 8.5 points. s&p, flat line after a mini

selloff yesterday on wall street. carl and i were talking about the gains and the resilience of this market post election continues in the absence of major catalyst. we got the trade deficit, out wider than expected. it could chip away at gdp growth. the big one will be the jobs report on friday. 190,000 jobs expected to be added in the month of february. >> yeah. i keep seeing headlines. no record high since march 1st, as if it is a hardship to deal with. >> right. >> obviously, we did see a bit of an intraday push or squeeze yesterday. maybe the same thing is happening today. health care is the laggard, of course, following the unveiling of the american health care act. speaking of which, republicans moving quickly on their plan to replace obamacare. the house expected to begin voting on some of these proposals tomorrow. among the changes, abolishing the insurance mandate tax penalties, freezing medicare enrollment, turning to tax credits instead of subsidies. joining us is commerce committee

chair, senator thune. >> good to be with you. >> a lot of viewers wonder how we're supposed to have an educated discussion of all of this without a cbo score. how critical is that? >> well, it'll be really important when it comes time to vote. the committees have started their work. it takes time to get these proposals vetted and to get cbo scores on them. they're in that process right now. obviously, a lot of moving parts. as the committees do their work, you'll have energy and commerce and house ways and means committees marking up their versions of the bill this week. we'll be receiving the scores and they'll be incorporated. i'm sure adjustments will be made based on what the feedback is. >> so without them for now, what can we say about the cost and/or the number of people insured? >> well, i think at the moment, those are still -- that's still a little bit part of the work in progress. the goal is to make sure that every american has access to affordable insurance. that's why you've got the

refundable, advanceable tax credit in this provision. you'll have a medicaid program that is workable for people who are eligible for that. and those who are high risk, if you've got a preexisting condition, that's also going to be addressed as part of this. so we think that the coverage is going to be available out there. what it costs, the whole goal is in is to bring costs down. obamacare is unaffordable to most americans. premiums, deductibles, co-pays, out of pocket costs go up. markets are collapsing and people have fewer choices. we had to make changes to fix this and that's what this is all about. as the scores come in, we'll figure out a little bit how to tweak things and dial things up or down. i think the basic components and building blocks of this plan are in place. i think they make a lot of sense in trying to create a more competitive market that gives people more choices and driving down costs. >> about those tax credits, how do you plan to convince some of the more conservative members of

your party, in that wing like senator kted cruz who didn't wat the refundable tax credits, considering it an incentive plan. >> you have government subsidies going out to people in the exchanges, the tax credit is something that republicans for a long time have thought is a much better model because it is a -- it uses the forces of the free market. it creates competition, gives people more choices. the individuals in charge opposed to having the government decide what their coverage, what their plan is going to be. i hope republicans will see this as a better approach. obviously, it'll take some assistance to cover people who have a hard time getting coverage. those are the people that in the obamacare exchanges today are seeing their premiums go up this year 25%. in some states, as much as 50%. and only 1/3 -- or 2/3 of the people in the country have choices. 1/3 of the counties in the country only have one insurer right now. things have to be fixed, have to

be changed. we think there is a much better way. this is a competitive model. a model that utilizes the forces in the free market system that we have in this country. and we think it is going to put downward pressure on prices and make it more affordable to more americans. >> senator, one of the -- behind the data you site as part of the failures of the aca is the fact that even with the individual mandate, younger, healthy people have not signed up. we have two experts from both sides of the aisle join us a little while ago on the show. both of whom said they don't see anything in this plan that will change that set of facts, at least to their estimation, and therefore, they wonder if it will be coming or weather and how you'll get to the affordability you seek. >> well, i think part of it is you want everybody to participa participate. and you do give people, through a refundable tax credit, the resources and means by which they can buy some sort of insurance coverage. you hopefully give some

flexibility to states so they can design insurance plansment you don't have washington, d.c. dictating and have sort of a one size fits off. i think that trying to keep, you know, younger people in the program is important. i think that the way this is structured, it'll be more affordable to younger people. there will be more incentive for them to join. the other thing that you have to change is you've got people who are sort of gaming the system. in other words, when they get sick or have something, they get insurance. as soon as they get the treatment, they get off of it. you have to fine tune it so people can't game the system. there are ways, i think, in whether you can ensure that people, once they get coverage, stay on the plan. if they drop the plan, it is more expensive to get back in. there are ways you can do it short of an individual mandate. what we found out with the mandate is, one, it didn't work. people weren't using it. and obviously, it was creating a lot of angst among those who were. they were having to pay a tax they didn't want to pay.

>> you don't think the surcharge equates to a mandate because it is punishing? >> well, i think, again, people are going to have a choice when they get into a plan to stay in a plan. you know, with the individual mandate, you basically are going to get this penalty if you didn't participate. this is structured differently. you have to have an incentive for people, once they have coverage, to keep the coverage. that's what this is designed to do. there are different ways of getting at this. we just felt that the individual mandate was heavy handed, very much, again, washington knowing best and telling people what to do. this at least allows for more flexibility and freedom in the marketplace and gives individuals more choices. in the end, we think it is a better model. there are going to be people in the margins who need help getting coverage. this is designed to do that. again, it is not the end all at this point. this is the beginning of a process, not the end of it. it is going to go through a

markup and floor consideration in the house and then come to the senate. what we know is the current market is failing. it's got to be fixed. it's got to be changed. what the house republicans are rolling out is an approach that i think is a much better one, that makes more sense for more americans. i think it is going to make it more affordable for people in this country. >> you mention the step by step approach. we're hearing a lot of that. even the president talking about phase two and three this morning. we're watching some of the drug makers under pressure. can you give us any guidance on what you think pricing pressure would be like for them? >> well, i think that the -- obviously, the president, as you said, met with a lot of the heads of the drug manufacturers in this country. i know that they are watching this process carefully, like everybody is. everybody wants to make sure that these prescriptions are designed in a way and prescriptions, no pun intended, for our health care coverage system that helps put downward pressure on costs. i think ultimately what most

drug manufacturers realize, too, is that when there is more competition out there, it does force them to sharpen their pencils. that's what i hope that this does. the more that there is a marketplace that forces companies to compete for individual's business, the more you'll see, i think, that reflected in the lower costs and affordability for people in this country. i think that's ultimately the best thing. obviously, getting drugs on the marketplace more quickly is key. when generics are available, it creates competition. i'm a rare republican in favor of reimportation. i think more competition is a good thing. it'll bring prices down. >> senator, when the president refers in a tweet earlier this morning to a new system where there will be competition in the drug industry, do you know what he is referring to? obviously, many people, including those who follow these industries closely, are left trying to understand or figure out what that might mean. does it actually still deal with, you know, what is different parts, part d?

do you have a guess? >> well, i really don't. i assume we'll hear more about that. i think the president and his team have their own ideas about this. i know that they have had some jawboning opportunities with the pharmaceutical companies. so, you know, what specifically he means remains to be seen. i think the broader point he is making is that more competition is a good thing. and if it means that there are things we can do to get drugs in the marketplace more quickly to create the competition, you know, i'm certainly open to suggestions that he or others may have. in the end, that, to me, is what brings those prices down. frankly, that's what's really worked well in medicare part d. there's been competition out there, and the part d program has been well received by the public. seniors like the program. it's come in under cost, which is one of the rare things i've seen in the time i've been around here. >> finally, speaking of presidential tweets, senator, the president did tweet this

morning, our wonderful new health care bill is out for review and negotiation. does that mean that he has endorsed this, he is a part of it, he is going to campaign for it within members of his own party? >> well, i think that this has been largely shaped with input from his team. i think they've been a part of the conversations and the discussions. i know that our leadership here in the senate and the relevant committees that are working on this have been working with the house and with the white house. as i mentioned before, i mean, i think this is a process in the beginning stages. i suspect along the way, there will be a number of refinements made as feedback is received one way or the other. i suspect the president may have some of his own ideas he'll want to incorporate as the process moves forward. i think the building blocks that most of us have sort of agreed upon are included in this -- at least in the first stages, in the launch of this bill. then we'll see where it goes from here.

but by the end, what we want to have is a bill that can get 218 votes in the vouhouse, 50 in th senate, and something good for the american people. >> senator, we hope to talk to you again over the next weeks and months. thank you for your time. >> senator john thune from south dakota. when we return, exclusive interview with the chairman of saudi aramco. also the minister of energy. we'll get his take on the possible ipo, state of the industry and more. also, another interview you won't want to miss. commerce secretary wilbur ross. "squawk on the street" will be right back. the dow is up 11 points.

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welcome back to "squawk on the street." let's send it to brian asulliva, sitting down with a special guest. brian? >> david, thank you very much. appreciate that. we are honored to be joined today by al-falih, the minister of energy for saudi arabia and also the chairman of saudi aramco. your excellency, thank you for joining us. >> pleasure. thank you very much. >> does saudi arabia support an extension of the opec production cuts of may 25th? >> brian, it is premature to discuss with only two months and one week into the agreement. i think performance has been good overall, if you look at the numbers in total. compliance has been high. certainly among opec countries. the non-opec countries are getting up there. it's taking them time. there is a learning process on how to participate in a production management agreement.

we want to see inventories in the second quarter. we want to see overall cohesiveness of the group and how we will work together. certainly, opec will not do it alone. we expect non-opec countries that have joined us to contribute and contribute kig zig ca -- significantly. we want to see how the market responds overall. i think it is going to be may before we consider whether such is necessary. we will do what is reasonably doable to guide the market forward. >> is russia cooperating? >> russia has been interested in cooperation from the beginning of 2016. you'll recall, there were discussionins then about a free during 2016. production from opec and non-opec went up, including russian production. by the time we got to the fourth quarter, it was obvious to all

of us that a freeze at those levels was going to be meaningless. so we had to get everybody all the freeze discussion and to a production cut, which took some time. ultimately -- >> you said it took a year. one year. >> it took a year because initially, you know, for a long period of time, it was a freeze and a freeze at what level? which month baseline do we use? then we started talking about the cut. that was very difficult for them to accept. because like i said earlier, they just never done it and they don't have the framework internally to do it. january was a pleasant surprise. the agreement with russia was 300 that will be achieved over the first kwaert quarter. 300 by end of march. they did well in january. february was not so good. >> they cheated a bit in february. >> i wouldn't say cheated but they didn't do well enough. i had a constructive, good

meeting with norvasc, my colleague from russia, and he informed me that the first week of march has been very positive. they've added another 40 mbd of cuts, 160. >> sounds like russia is slowly getting to where you need them and want them to be. >> slower than i would like, but i think we're patient and we'll see where we are in may and take it from there. >> you said it is too early to say whether the production cut will continue after may 25th. i'll ask it another way, sir. under what framework would you extend the cuts? current prodeclaration levuctio? >> i think we're going to look at production overall, supply/demand. we're bullish on demand, picking up this year at a faster pace because gdp growth is picking up. we're seeing the response globally. we're going to see where inventories are. we're going to see compliance

and conformity with the agreement. like i said in my speech, and i've been blunt, saudi arabia has been bearing a significant part of the load for the first three months of this agreement. but we're not going to do of th the fist three months of the agreement, but we will not do it indefinitely. we will assess all of this in may, plus how the market is responding. and ideally, ideally people should be prusing a response to demand and there should be no intervention. >> have you spoken with rick perry? >> i have not. i look forward to it. i have known him when he was a private citizen after he left his position as governor of texas, we shared many things in

common. >> i think i will establish a good working relationship with him. including in the area of energy policy. i had a great rip, i knew ernie, we were participants and we pushed for policies and technologies and developments for abroad portfolio of energy. and i continued that with him. and we achieved a lot together. we feel the administration is tacking more towards promoting petroleum as a solution rather than as a problem, and we fully agree with this. >> you have a pro patrol yum

administration, but you also have one with a travel gag on six nations. you're arguably the leader of the muslim world. so how does that balance out, sir? pro oil, and then a conflict with neighbors. >> i will not intervene or make or take a position on what the united states should do for the security of it's people. many people have travel restrictions about who should enter, what are the visa concerns. we have a concern about the

safety and security of saaudisa. >> do you feel like you have a positive working rip with the trump administration? >> i think in geo politics, security, regional issues energy, global economy, fair trade. so it has always been strong, including in the obama administration. >> we have run out of time, but i need to get the last question in, sir. the you would like $2 trillion in market value. some suggest the value may be less. is there a price or value at which the ipo would not happen? >> well, whatever i tell you about it will be biassed because

i'm a product of aramco. on every metric, aramco will surprise analysts on the upside. lowest cost, highest cash flood, solid reserves. great assets, integration. analysts will say what they say, but at the end of the day it is people that will put on by the data and they will be surprised what they sea. >> an independent firm said we don't see $2 trillion. primarily because of your tax obligations. i assume you disagree with that report? >> i think it is what it will be listing under. so whoever speaks today, who is

speaking, based on speculation, i would like to not comment on speculators. i think the facts, the figures, the perspectives and the data will determine, they will decide what what it is worth. >> is new york city going to get the second listing? >> we'll find out. >> last line of question, you said in a you're okay with u.s. shale as long is it grows in line. what would be opec's response if they started growing production above g.o.p. or demand growth. if we started putting extra oil on the market, sir. >> i think first of all, the global market is 95 million barrels today, going to 100 in a

few short years. so it's huge. so the u.s. over a really amount of time, adding three or five million barrels -- >> that many is okay? >> over a number of years it can be observed. demand is picking up, there is decline elsewhere. so the market can absorb. it is not whether or not they should or should not invest. and contribute to the global market supply base, but it is the pace at which. the u.s., which i don't think will happen, comes too strong in the next few years, and causes a glut to stay with us -- >> opec would have to respond? >> i think it would not be good for the market.

so we need to find a balance and grow in line with the market as i said before. >> you get to be the first victim of the same question that i ask all of my guests. it is very simple. is the worst of the oil downturn over? >> yes. >> why? >> i think the fundamentals will come back into line. i think they are draw downs. i think it is going well, and the investment flows. but certainly they will not cause the glut to stay with us. >> the consumer around the world has not been squeezed. is there a magic number. >> i think the market will determine that.

we will find is together, i think time will tell. >> minister of energy. it was a real pleasure, sir, thank you so much. oil prices higher by about a quarter of 1%. talking everything there. the market saying they're going to have to wait until may to determine whether or not they're going to extend the opec production cut. >> the very exchange that we sit at right now. >> new york is in the running. >> apparently that is what he said for the second listing. >> we will see, overall the market is lower just a bit, consumer staples in technology are in the lead, as far as the dow performance right now. boeing is adding the most to the dow. strength and tech.

snap also having another down day. the fourth day of trading. we track it, wildly traded, high volumes here after a big slide yesterday, watching those levels. let's send it out to get a update on the etz story ahead of our interview with wilbur ross. >> a fine of $892 million in connection with their export to u.s. goods to iran. there is also another $300 million if it violates u.s. law in the next seven years. that's a total of $1.2 billion in potential penalties. in addition, they will facing penalties like being implements with oversight of a corporate

monitor. . four executives to be involved. we talked to senior department officials. it was one of the biggest cases they ever handled, and it is also a criminal case as well. it is involved with the treasury department and the department of congress. they are scheduled to please guilty include conspiracy to unlawfully export goods. also an obstruction of justice. false statements to yoous statements. just a few minutes in the department of commerce behind me. it subpoena 11 a.m. in wall street, and "squawk alley"