live from new york where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. the federal reserve boosting rates bay quarter point and signaling more hikes this year. the fed indicating two more rate hikes this year. we'll have more on what fed chair gel season tejanet yellen the markets about the economy. all of this idea of three rate hikes for the year are on the table, not four as markets had been anticipating, we'll see, that rally was sparked yesterday in the equity markets with the dow up by 112 points. the nasdaq now just 100 points away from the 6,000 level, closing at 5,900. the gains we saw yesterday put the s&p 500 and the dow at the second highest closes of the

year. let's look at u.s. equity futures. you'll see right now things are indicated higher once again. the dow futures up by 63 points. s&p futures up by 5, the nasdaq up by 18. all of this was good for rallies around the globe. you can see in asia, the nikkei closed higher, by 12 points. hang seng up by 2%. shanghai come poz sit wcomposit up as well. you can see the markets in europe are also indicated higher. the ftse up by 1%. the dax also up by 1%. the cac right now up by 0.8. let's look at what has been happening with ten-year. ten-year right now, the ten-year note looks like it's yielding 2.5%. this was something to watch yesterday in the action across the board. >> trying to figure it out. i was talking to liesman. he was trying to figure it out. he didn't think we knew what was going on in the netherlands

during the trading day. we did i was watching it i knew full well that the guy was going to fall well short of the populist revolt. >> he did pick up an additional seven seats. >> but a disappointment. it's not surprising either. the uk -- >> which was a big disappointment? >> the netherlands is not the uk. it's a disappointment for people who wanted a populist revolution. the netherlands were never going to use the -- how do the netherlands leave? who what do they have if they leave the eu? they're part and parcel of the eu. i don't think they're going to say we're going out on our own. immediately you saw what happened to the euro. the euro immediately spiked. dollar declines. so why would our rates go up if the dollar is declining? rates would come down tonon a weaker dollar. lessm liesman was making the point is

wasn't as dovish. >> he said this morning -- >> we have a big bond rally, we have to be dovish. i will talk to him about it. he was trying to figure out whether we knew before 4:00 p.m. about the netherlands. we absolutely did. >> it was shaping that way. >> i was disappointed, obviously. i think it means le pen probably -- the french -- >> you think it does mean le pen -- >> i think it means le pen doesn't make it either. >> how come you have trouble following me? it's obvious what i'm saying. it's very obvious what i'm saying. . it's not obvious because -- >> the french are somewhere between the netherlands and the uk. they love entitlement states, they love socialism. >> you talk about these positions as if they're the popular position. >> i do. >> they may be popular to you. i'm suggesting to you -- >> why do you think it's called populist? >> because they're popular? >> popular among people who know what's going on and have the

right opinions. >> oh. let look at crude oil prices. crude snapped a seven-day losing streak. it settled up by 2.4%. it's up another 1.1% this morning. that's a gain of 56 cents to 49.42. >> and the market at 2316, the santoli buy-in, 2385 on the s&p. it's not backing off. katie stockton, when she was on, we didn't get back to that. europe looks really strong. >> you can check in with her again and see what she thinks at this point. >> if you're waiting to buy in -- >> are you talking about the train? >> you didn't get back down there again. you're stuck still in newark looking around. >> the train may be going back. >> you decided into the to take an uber to philly, now they're down in baltimore, so you're screwed. >> uber to philly? >> he's saying to get on the train. you missed it. so you're still sitting in

newark looking around. that's not a good place to be stuck. >> i can take the regional down, hope to catch up with the asell lachlt. acela. >> nobody likes the regionals. is there a first class in the regional? >> no. >> that's not an option for you. >> i think there's a quiet card. >> good, no babies. >> by the way, i ran into someone yesterday who says we say data and data constantly. >> back and forth? >> yeah. >> you say tomato, i say -- >> if you look up in the dictionary, i don't think there's a one and a two. >> data and data are the same? you know what i don't say? if it's singular, i don't say datum. that's too pretentious, you should do it. >> a loyal viewer who stopped me on the street, they said you say data and data interchangeably. the jobless claims, housing

starts, and philly fed survey is out at 10:00 a.m. we will also get the jolts. the bank of england will announce its rate decision. as for earnings, we have dollar general reporting results before the opening bell, after the close, we get to hear from adobe systems. also president trump's budget blueprint will be handed out at 7:00 a.m. eastern time. that will be the biggest news of the morning. we have john harwood right now. we haven't soon you in a while. how are you? >> good, how are you guys doing? >> good. what's going on? >> everything in the donald trump budget is driven by a core shift in priorities that he's trying to execute. that is to say a $54 billion increase in spending on defense. a core corresponding $54 billio

in discretionary programs. he's not touching medicare and social security. what does that translate to you? you look at the individual increases, 10% increase in pentagon spending. you have also substantial increases in homeland security and also veterans affairs. everything else in the budget, 31% cut in the environmental protection agency, 28% in the state department. big cuts in education, in labor, in agriculture, also in the commerce department. you have not only arts and humanities programs being cut, corporation for public broadcasting, but nih, the overseas private investment corporation. now, has to be said, these cuts are not likely to go through. why? because if you affect a shift of that magnitude in budget priorities, you need 60 votes to change the budget caps that exist under law.

those will not be there because republicans don't support those cuts, neither do democrats. mick mcconnell said that state department budget cut will never happen. before i complete all the budget stuff, we ought to take note of one thing that president trump said last night at his speech in michigan. it had to do with the troubles he's experiencing on healthcare and the signal he was sending towards the next priority. take a listen. i want to get to taxes, i want to cut the hell out of taxes, but -- but before i can do that i would have loved to put it first, i'll be honest. there's one more important thing that we have to do. we are going to repeal and replace horrible disastrous obamacare. >> i think that's a significant statement from president trump, right now they're struggling to get support among republicans

for the healthcare plan. and by signals he prefing he pro do taxes first, that increases the odds that the healthcare debate is cut short and they get to taxes. the likeliest single thing to happen all year, you look across the budget, healthcare, is a cut in corporate tax rates, president trump is signaling he would like to be talking about something that is more unifying than healthcare and perhaps this budget as well. >> john, one thing that struck me looking through this, epa down 31%. that's probably something not a surprise to scott pruitt. he came in with a lot of the same ideas going along with this but the 28% cut for the state department. is that something that rex tillerson would be behind? it seems like a slightly different scenario in terms of what each was expecting coming i

in. >> cabinet secretaries were modifying the proposals, each were arguing for somewhat higher spending levels than initially suggested to them. but, look, rex tillerson is not driving the train on this budget. as mick mulvaney told us in a briefing yesterday, what we did was we decided to create an america-first budget. we took all the rhetoric that donald trump used in the campaign and tried to translate that into numbers the reason they had to do it that way was that they have not filled out their government. so a lot of the high-ranking people in cabinet departments, in the budget agency itself have not been appointed. and so they're operating with a fairly bare bones operation. that's why the budget we get later today is going to be by the standards of recent first-year presidential budgets, going to be a bare bones document. >> john, 31% at the state department.

is that enough cuts to get rid of the deep-state obama holdovers who are undermining the trump presidency? i would cut at least 31%. >> you have a lot of career civil service who believe in these programs, and have been there for quite a long time. a lot of the senior members of the republican party who serve on these appropriation committees also believe in these programs. i talked to john thune a couple months ago, he said obviously we have cut as much as we can on the discretionary side. we need to go after the entitlement programs of medicare and social security. donald trump says don't go there. so this budget doesn't go there, but a lot of republicans on capitol hill think his priorities in terms of where the budget ought to be reduced are

misplaced. john, i can't let you go without asking -- >> hit me. >> are you taking them right to the final four and to win the whole thing? >> of course i am. you see how hot we got at the end of that acc tournament? . i saw it all. gra grayson allen. they're as good as anybody. i don't know what to do. remember when connecticut won, they were like 18-14. >> i agree 100%. nobody -- there's no dominant team in the field. >> no. >> this is not the best duke team we've had. and it's been a very rocky and uneven year. but the way it's coming together right at the end gives you a good feeling. >> i agree. they showed me a lot. i was sure north carolina would win. i'm still -- it would kill you -- i am taking north carolina to -- >> you know what? obama filled out his bracket, he

picked carolina to beat duke in the finals, which is a very obama thing to do, he's very anti-duke. that's hurtful to you, john. for all the mutual love between you two. that's cold. >> you know, i interviewed him a couple years ago, joe. >> i remember. >> it was the day after duke had won the 2010 championship. >> yeah. >> and i said i want a high five for duke winning. he pulled one of those junior high school moves -- >> yeah, i do that to andrew. you pull away and fix your hair. >> and he sent me a picture with an inscription which said i don't high five dukees. >> a lot of people hate duke. >> i noticed that. >> they really do. did you have -- did you have connections? how did you get in? the school has gotten much harder to get into. >> every school has gotten much harder. >> that must be it. i'm looking at duke now, it's

almost impossible -- not for me, i'm not going back, but looking at it, it's almost impossible to get into that place. what was your s.a.t.? >> it wasn't what it would be -- what it would need to be to get in now. >> so 1050 or something. that's what i estimate for you. >> now the whole scale is changed. >> it was barely sufficient. >> what was yours? >> i don't know. 1 1350. >> whauz ias it. >> i had friends who got 8 780, 800. >> i get you got 800 on the math? >> no, i didn't. >> he got 800 on english. >> no, he did not. >> he has a great grasp of the language. seriously. >> i don't know where you're going with this. >> he says data wrong. >> no, we looked it up. you can say data or data.

you can say either one. not a preference. >> i talk real good. anybody who says i don't, you know where you can put that where the sun doesn't shine. >> where the sun don't shine. >> i have my whole day planned out. when you have -- even just something as minor as wanting to get those points for the stupid bracket, because we have the tv news thing -- >> i didn't fill mine out. >> alt every gaevery game is so watch. >> joe, your bracket better beat andrew's or don't show up for work the next day. >> what? >> your bracket better beat andrew's. >> it usually does. are you just pressing -- >> i'm just hitting the button. >> that's about as much interest as he has. did you see sc last night? down 17? >> no. that's my wife's alma mater. down 17, came back and won, beat

providence. nice. >> i got smu beating them in the first round. see you later. thanks. >> all right. we don't have time for you guys. thanks for showing up. no. >> stop. >> the fed deciding to hike rates by a quarter point giving the market what it has been eagerly awaiting. janet yellen offering a simple and feel-good answer when discussing that decision. here's what she had to say. >> the simple message is the quhi economy is doing well. we have confidence in the robustness of the economy and it's resilience to shocks. it's performed well over the last several years. we've created, since the trough in employment after the financial crisis, around 16 million jobs. the unemployment rate has moved way down and many more people feel optimistic about their prospects in the labor market.

>> joining us now, an equity guy, steve reese, from jpmorgan. on the economy, sam kauffman from ubs. and on currencies, borri borris slogsburg, founding partner and director of bk asset manager. glad we have all three of you guys. i'll start with our economist. was it more dovish than the market was set up for? then i'll go to schlossberg and find out whether it was currency moves that did it. >> there's always the risk they hint towards four hikes this year. >> so you would say slightly -- >> slightly more dovish. >> is that why the bond market rallied so much? >> it surprised me a bit. i read the symmetric language as being a reminder if inflation gets -- sure they won't move as inflation hits 2%, but the fed is willing to move as it goes

slightly beyond that. that's a reminder of their willingness to move. >> the euro spiked on the netherlands. >> it has for the last couple of days. >> huge move yesterday. the dollar is weaker. would that cause rates coming down here because of geert wilders? >> not really. >> what was it? >> i've been telling you the market has not been buying the whole fed bullish case for a long time. dollar/yen has not broken the 1.15 level. until it does, you can't argue the dollar is in a rally mode. yesterday a tweet showed the correlation between the height of the fed chairman and interest rates, starting with volcker and going down to janet yellen. it was tongue and cheek, but i think there's truth to that. the net final rate will be much lower than what we're used to. that's what the market is seeing. the fed basically communicated everything is okay. but we're not going to rush. we'll stay gradual. that's why the dollar is in no

man's land. it's not seeing the run-away strength. >> bernanke was short. greenspan -- >> volcker, greenspan, bernanke -- >> used to be the briefcase indicator. >> i thought you would appreciate it. >> it was the thickness of the breach case. now it's an anatomical thing. >> steve do we go back now and test the lows, 200 on the s&300? >> i don't think so. the market acted well yesterday. it was what it wanted. three is good growth, getting better, but not four, meaning we need to slow things down. the most interesting reaction is how financials performed. worst performing sector in the s&p 500. it shows you how much enthusiasm is priced into that sector in terms of the rate hikes, deregulation and upside to growth expectation. >> you don't think people will get a chance to buy the s&p at 2300 soon? >> never say never, but we need to redefine the pullback.

this is a year where you have to see growth is getting better around the world, u.s., europe, japan. commodities are stabilizing. >> because you're in newark, having one of those crappy pretzels in the train station. >> i know everybody says there's no complacency in attitude, but i think there's complacency in price. i think we come down. >> to 2300? >> yeah. >> but that's like -- that's like us going out and asking -- the first person we meet on the street what do you think of equity. >> i'll tell you why. it's just like the dollar is not supporting equities, and oil dropped also. everybody was telling me that oil would stay at 50 forever. i think you'll see -- >> by the way -- >> you haven't been bullish since november 8th. why -- >> no, i was bullish november 8th. i turned bullish. i said buy everything. no, when trump came out and said -- i think why buy everything has stalled is what

john was talking about. there is no deregulation, no tax cut. there is deregulation. >> there's no act to move higher. >> we're happy with what we own. we think europe is a better buy, we upgraded it three wooeeks ag. >> people have been saying that, evaluation. >> valuation doesn't look that good. it's the earnings recovery versus the u.s. >> we already had our earnings recovery here. >> we already had ours and europe is coming in nicely. >> so you would be shocked if the fed was forced to say no, it isn't three, it's four? is that still a possibility? >> fiscal policy could push them that way, if they see stronger signs that capex is coming back. slightly confident, tentative about that. stro stronger signs of capex, fiscal policy question. and fiscal quarter gdp is looking like a 1% number. >> with jobs data? >> even with the jobs data. it may be the old gdp bias that

seems to pull down q1s every year. then there's some inconsistencies within the data. getting strong imports but no consumption at all. that's a real question. yellen was asked about that yesterday and said we don't pay too much attention to quarter to quarter gdp. has to be a bit of a worry. got their attention last year at this time. >> all right. i don't know. i done know what happens with the fed. yesterday i loved the -- it was the second hike in how many months? three months? two months? yeah. >> since december. >> yeah. all the news, it's the second hike in three months. the third hike in 11 years. you know, it helps that second phrase is an important part -- >> that's part of the market. >> all central banks are hoping that they're finally done with qe. >> the reflation trade is coming back. >> that helped in the

netherlands and in france, too. >> even mario draghi said he wants to started getting off the qe -- >> that wouldn't have happened if there was a populist revolt in the netherlands. >> people use the interest rate hike as a reason to stay out of the markets, we never said that. >> your year-end target is right where we are. >> we're basically there. >> that's not very -- >> that didn't assume trump's policies, if we do get lower tacks, deregulation, healthcare reform, we think there could be 2500 on the s&p 500. if your year-end target is right where we are, that's not giving clients a lot of value added. yeah, we think where we are -- i can do that. i can be -- >> we should work together. 35% probability of the upside -- >> up 1% or down 1% or exactly where we are is where we will be? >> we're repositioning towards sector calls like telecom, energy, technology in the u.s.,

and talking about europe. >> positioning sector calls. >> i like that. >> yeah. i'll still pay you, i guess. boris, sam -- >> thanks, guys. >> sam coffin, did you get a lot of grief your life? >> i did. >> easy to remember. makes me uncomfortable, coffin. when we come back, the stage is set. the bracket of 64 teams in the ncaa tournament is complete. next, how much productivity the u.s. economy is expected to lose when the games begin. that's coming up in "chairs." first a look at this day in history. ♪ say carl, we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade?

uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.

welcome back to "squawk box." the ncaa men's basketball tournament tips off today. yesterday the last two teams made it into the bracket of 64. uc davis beat nc central, 67-63. they will play the number one seed of the midwest bracket in kansas. and it's been a while since -- kansas says they're not a

tournament team. i'm taking them to the final four. usc has had some streaksment they came back from a 17-point deficit to beat providence, 75-71. they'll play smu, which i happen to watch because they played cincinnati a couple times recently. they killed them both times. . d did you change your bracket picks? >> last year i did three, four revisions. >> what kind of studying did you do? what kind of research? just what i've done. i've seen a lot. >> did you look at statistics, the chances for each one? >> no. >> all the bracket toll giologi? >> no. >> when you go to the site, you can do the regular button or an algorithm that mixes the different -- you can choose the different bracketologists? >> are you doing one of those? >> i'm thinking mixing two of them. >> if you watched any throughout the past four, five months, nobody -- everybody beat

everybody. everybody lost. teams that shouldn't have had a chance, beat teams they shouldn't. it's been a difficult year. it could be one of those years where it could be a number five seed or six seed -- >> that goes all the way? >> could. but maybe not. when you do that, you try to pick upsets because they always happen. 12-5, those ap all the timhappe the time, but if you do that -- >> if you're wrong, you're out. >> you feel like an idiot when they make it all the way to the final four and you had them out in the second round. >> it's like a lottery ticket. the games are big business. they're also a big drain on productivity. the american gaming association estimates $10 billion, more than $10 billion will be bet on the tournament this year. of that, only 3% is from legal wagers, the rest is from off-shore betting, local bookies

and office pools which are everywhere. u.s. companies could lose up to 2$2.1 billion in productivity assuming people spend time filling out brackets and watching games at work. the odds of having a perfect bracket? forbes says the chances are 1 in 9.2 quinn untquintillion. which is i wouwhy he's offering million dollars. >> that's just to get 16 right. >> 2.1 billion lost in productivity. if you did that on social media every day -- >> even more. >> i will admit, in the last block i was trying madly to reset my password so i could get into the brack ketet. >> i only watch these games when

they' i'm not playing. >> that's when they don't play. >> i don't want anybody to -- your productivity is good. you leave here -- >> i'm working. i have stuff to do. i go to the office. i have meetings. i go to lunch today. i have all sorts of things -- >> i don't. >> i know. >> we could put you to work. i don't want to work. >> you work. >> a lot to of days, with your baby. >> that's a joy. that's not work. >> should we move on? >> you are pretending that you work -- >> he's talking about you. >> he is. >> we have to give you facebook news, but it does relate to the tournament. mark zuckerberg getting into the game. the billionaire meeting up with duke players and coach k. he vers evisited the campus of carolina. he earned the nickname zucker buckets. >> why did he get zucker buckets? >> i don't know. zucker buckets. >> because he was making shots? i know bucket is a shot.

i get that. was he making those shots? >> how tall is he? >> the other guys are -- >> the other guys are giants. >> maybe that's what's going on here. >> yeah. >> he looks -- he looks taller than coach k. >> short little guards you see running around are 6'5". they are. unless you're really good. there's a couple six feet tall. >> spuds. >> exactly. when we come back -- >> the dog? >> yeah, spuds mckenzie. >> remember that dunk contest? how fatall was he? >> i literally can jump about four inches. as hard as i try. >> i believe it. >> when we come back, the next step for the gop healthcare plan, house republicans looking to make tweaks to win over more lawmakers. the ceo of national health enterprise company will tell us what he wants to see changed in the plan next. the command performance sales event is here.

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welcome back. you're watching "squawk box" live from the nasdaq market site in times square. welcome back. right now let's turn to the gop healthcare plan. house speaker paul ryan says changes will have to be made for the measure to get wider support from house republicans. joining us now with more on healthcare an what's been happening under the trump administration is michael dydorf. thank you for being here today. >> thank you. always fun to be here. >> this has been watching a lot of moving parts trying to come

together, those changes still look like they're going to be in play at this point. based on what we heard from paul ryan yesterday. what do you think of the preliminary plan laid out? what do you think would like to see changed? >> i think the preliminary plan was a good base to start from. we have to really continue to focus and ensure that we don't forget that we're dealing with the most vulnerable part of our population. so i want to continue to help focus and support anything that will ensure that they get the highest quality care. we have to be considerate of the cost as well. we've demonstrated there are ways to do it. the highest quality is the lowest cost. >> what is it that the plan gets right? what needs to be tweaked? there's a lot of confusions about states that have bought into this, states that have not. how you will make that compromise. >> you have to find the middle ground between those who have

and those who haven't. there are other alternatives with the marketplace and others to seek ways to provide coverage. they have to look at the totality of it. they can't look at the expansion or marketplace. look to see how it all comes together. >> what does that mean in practicality? >> you have to figure out who needs support, what level of support, how do you do it? you don't want them losing healthcare. no matter who is involved, you don't want to see 20 million people -- that's probably the most bipartisan statement you can make, 20 million vulnerable people lose health care. >> part of what was laid out is people don't have the mandate, if they're not forced to buy insurance, they will choose not to do that. that's what the cbo scoring said as well. which is why 14 million people would fall off the rolls next year. >> i think that's a very real concern. healthy people don't do it. we advocated for what we call a copper plan, a low-cost one with

well care, and then a bigger deductible for catastrophe care. >> a catastrophe care plan essentially? >> yeah. but you have to frame it in such a way that it's of interest to a younger group so you get that coverage and get them into the system. the worst thing is when people start going to hospitals, quick clinics and don't get the continuity of a primary care physician. that's why we advocate for well care even in the low-end plans. >> the problem with that is that people who buy into those exchanges may think, okay, i'm getting healthcare. but if it's a high deductible, has craatastrophic care, i hope never have to use that, if it's a high deductsibible i'm payingr something i'm never using. >> i understand that. we have to pay a job educating them. make sure they can afford the deductible. some people need $100, some people can afford 1,000.

you have to look at what you can afford, not just the end price. >> michael, would anything satisfy you be called obamacare lite by sercertain parts of the republican -- >> you can put any hand on it -- i think some of it will. >> what you think is necessary probably is not palatable to a large contingent of the house of representatives. >> i think good politics is good negotiations and compromise. i think there are some things that we're quietly talking to people about and trying to support. i won't front run discussions our people in washington are having with members of congress, but i think there are some alternatives. nothing will be perfect. if you try to satisfy one group entirely, you won't get there. my attitude is this is business

as usual. this has a long way to play out. we're covering a million plus lives on the exchange and doing so successfully. we'll continue to do that. i read they're trying to bring in a reduction in the expansion. i'm not worried how fast they do things, i wanted to see how well they do things. >> did you read the omb report this week which seemed to suggest that perhaps the obamacare unto irtu.s. was more stable than often described? do you think that's right or wrong? >> i think it is relatively more stable. we've had great success with it. it's known. we've been profitable. we're writing a check for 4$425 million in june back surplusver ve ver versus risk adjusters.

>> what are you doing right that other big insurers are stepping away from the pools? >> in the beginning, we're in a risk business. we set the rates right. >> so your rates were higher to begin? >> a little bit higher to begin, but we're also dealing with our population that uses our network. we're dealing with a population that once their traditional network -- high quality, we monitor the scores to ensure it's the highest quality. we ensure they get to the doctor. >> what is your population, so people understand that? >> 400% of the federal pov cert level or below. >> across 29 states? 29 states. >> so you're dealing with people that are willing to pay to get to the doctor to get to the preferred -- >> it's subsidized. that subsidy is important to these people. we asked for rate increase of 1% a year for the last three years in the medicaid business. you get them to the doctor and you treat a cold before it

becomes bronchitis, pneumonia and other things. there are things you can do. but you have to be focused and willing to ensure these people get to a doctor. >> michael, thank you for your time. >> thank you. always great to be here. coming up in the executive edge, the details of wells fargo's ceo pay package. stay tuned. you are watching "squawk box" on cnbc.

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in today's executive edge, new details about wells fargo's ceo tim sloan's pay tapackage. wilfred frost has more. >> tim sloan received 2 opinion 2.3 million in base pay, and there was no cash bonus of his pay after he and executive commit memb members of his committee did not receive any. the proxy statement says the pay

rise reflects the promotion to ceo, but it does deliver a different message to the board's retraction of a bonus. hidden elsewhere is a footnote on carrie tolstedt, and they remain the authority to forfeit her remaining options even if they are vested and exercisable. she already forfeited $19 million of unvested options. tolstedt has not suffered further rebuke from the board review. due to finish in april despite some who reported directly to her being fired for cause. either way, back to tim sloan's pay, his pay is significantly lower than his predecessor john stumpf's last full year of pay at 19$19.3 million and was the lowest of the big six banks ceo's pay for 2016. >> i want to be a ceo. >> you want to be?

>> yeah. what do you think? can i be the ceo of "squawk box" or something? >> listen, if we can simply change our title and get those kinds of pay, i will be the co-ceo of "worldwide exchange." >> i know. >> i'll take 19 million. i want to be a ceo. don't know why i didn't think of that earlier. probably too late. thank you. i would do good with it. >> pleasure. >> do good or well? >> no, i wouldn't do well, i would do good works. >> do good works? >> >> i would do good. >> give it all away? >> not saying give it all away. >> what would you do? would started with a water.org thing, give it the equity portion. you know you can give -- >> matt damon. >> gary white. >> you give equity in -- >> they have an equity program and a debt program.

you can do debt, you can actually invest and get a return, but a small return. >> right. coming up, when we return, maybe joe will give some money away and president trump's agenda the president holding a rally last night in tennessee while a judge in hawaii blocks the travel ban. we'll head to washington and talk about that. first a quick check of what's happening in european moments right now. "squawk box" returns in a moment. our first name has always been 'american'. at at&t, we employ more than 200,000 people with good-paying jobs. connecting consumers and budiness through mobile, internet, and entertainment. at&t invests more into america's economy than any other public company. bringing american's more choices, more freedom, and entertainment everywhere. no company is more invested in america's future than at&t.

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welcome back to "squawk box." let's check out what's on pru president trump's agenda today. a judge in hawaii blocked the travel ban. eam eamon javers joins us with more. >> you're right, more bad news for the trump administration. this was their second attempt to get it past court scrutiny. the first attempt was struck down by a court on the west coast. this attempt also last night blocked by a federal district court in hawaii. here's what the court said in striking down the ban. they said that the new order was issued to disfavor a particular religion, and the court cited trump campaign statements on travel ban for all muslims. that, they said, indicated what the intent was behind this particular travel ban. the government said that no element of the order was a

religious test in their defense of this. still, the court has now blocked this order. that was very frustrating to president trump, who was out in a campaign-style rally last night. here's what he said about all this. >> the order he blocked was a watered down version of the first order. that was also blocked by another judge and should have never been blocked to start with. >> so some real frustration from the president of the united states. we'll see where they go from here, guys. not necessarily clear what the trump administration's strategy is going to be. will they try a third bite at this apple, or will they do something else, or will they continue the court fight on this, possibly run this all the way up to the supreme court. unclear as of now. president trump will spend most of the day celebrating an early st. patrick's day.

>> what's the timeline? what do you expect on that, eamon? >> well, you could be talking months and months, even on an accelerated time frame. we'll get some indication from the trump administration today as to what they'd like to do here. i'd be alert for signals from the white house. do they go the court battle, try to revise this again. you heard that frustration in the tone of the president last night. he's upset with this and doesn't like this process at all. he's a little bit in a box though because what the court said was that the verbiage from the campaign is the problem here. when the president called for a total muslim ban, that indicated what his intent was. so almost anything he does here could be applied to that rhetoric in the past. that's a tricky spot for this administration. >> and if you take any state, any district judge, anywhere can do a nationwide ban. >> yeah.

federal courts, right. >> that's what i mean. but just to get it finally settled, it may have to go to the supreme court. on any given day, you're going to find some activist judge anywhere that's going to do whatever the hell he wants, which is part of the problem. >> so the administration has to decide if this is the version of the ban they want to take all the way to the court or if they want to do something else. >> the previous one they can't take. they already pulled that one. >> right. >> who you got winning everything, javers? >> i have no idea. creighton because that's where my wife went. >> they beat my poor musketeers. >> or villanova because that's where my dad went. >> you're not going to fill it out? you have no interest? >> no, man. i'm the dumb money in those things. i know the difference between smart money and dumb money. >> we'll be back with smart money on the futures.

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stocks surge as the federal reserve raises rates and signals more to come. we are all over this fed-fueled rally straight ahead. the budget battle begins. president trump rolling out his blueprint for a new spending plan. how impacts your money is coming up. and technology takes center stage. today's guest host talks apple, google, facebook, and snap. social capital ceo and part owner of the golden state warriors will join us with his investment ideas. the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york city, this is "squawk box." good morning. welcome back to "squawk box" right here on cnbc. we're live at the nasdaq market site in times square.

i'm andrew ross sorkin along with becky quick and joe kernen. we have breaking news. you're looking at a live shot of the government printing office in washington, d.c. president trump's budget blueprint is officially out. we should say this is not a budget but rather a budget blueprint. there's nothing on taxes, revenue, entitlements, and other usual budget information. it only covers domestic discretionary spending, like cuts to the state department, epa, and other areas. we will try to run you through some of those numbers that could affect business. we're going to hear from congressman diane black, chairwoman of the house budget committee. that's going to happen at 7:30 eastern time this morning. in the meantime, let's run you through a couple other headlines. first, before we do that, let's take a quick look at the futures this morning. dow looks like it would open up about 62 points higher. s&p 500 opening up about 5.5

points higher. the nasdaq up about 16.5 points higher. >> in fact, the nasdaq would open at a new intraday high if it continues as these levels right now. >> we also have a triple-header of economic numbers at 8:30 eastern time. steve liesman is hanging out with us this morning. we're going to get the weekly report on initial jobless claims, february housing starts, and the march philadelphia fed index. we're going to give you all those numbers as soon as they hit the table. also, oracle shares are jumping in premarket trading this morning. business software maker reporting quarterly profit of 69 cents a share and continues to see growth nits cloud business. co-chief executive mark hurd is going to join the gang on "squawk alley" at 11:00 a.m. eastern time to talk about the quarter. and talked about these guys yesterday. i have my coat. it's on the hanger over there. canada goose will debut today on both the new york and toronto stock exchanges. the outerwear maker pricing its ipo at 17 canadian dollars per share. that's above the expected range.

the blueprint budget is out, as we mentioned. hot off the presses. john harwood now joins us in d.c. with the details. john? >> andrew, this is what they call the skinny budget that any new administration does. it's not as full as we'll see next year from the trump administration. but there's a very clear message here. donald trump has it in the opening of this document. he says a budget that puts america first must make safety of our people the number one priority because without safety, there's no prosperity. so how does he translate that? the core transaction in this budget is a $54 billion increase in spending on defense and a corresponding decrease in domestic spending. how does that translate? well, look, the pentagon budget goes up 10%. you've got increases in homeland security and veterans affairs. the losers in this budget are all the other domestic agencies,

the traditional functions of government we've become used to. the environmental protection agency goes down 31%. state department, almost that much. agriculture, commerce, education, all of those have substantial cuts. now, this is not likely to be approved by the congress. why? because to change the budget caps to execute those cuts, you've got to have 60 votes, meaning you hold not just the 52 republican senators but get eight democrats. that's not going to happen because many republicans, as well as democrats, believe they've cut as much as they can from the discretionary side of the budget and that further savings are going to have to come from the big entitlement programs of medicare and social security. but donald trump promised in the campaign not to touch those. this budget does not, guys. >> all right, john. thank you very much. john harwood. for the second time in three months, the federal reserve increased its benchmark interest rate by a quarter point. of course, that's the third time it's happened in 11 years. but this widely anticipated move takes the target range from

0.74% to 1%. now the question becomes how many more hikes are here to come in 2017. steve liesman joins us now with more on that. hey, steve. >> just very excited. the amount of brain power at this desk right now. of course, becky quick is here. then there's also nathan sheets and david wu as well. it's really quite remarkable. >> you're excludeing joseph and myself. >> i was just saying that becky quick is here. what i want to talk about is markets look like they want it both ways when they come to the fiscal and monetary policy. for the moment, they're getting it. the smm has rallied based on hopes for stimulus from the trump administration. yesterday, it went even further when fed chair janet yellen said three rate hikes were coming, but the fed hadn't yet factored in fiscal stimulus. enactment of fiscal splus could be a trigger for raising growth and funds rate projections

later, while absence of it could change that. jpmorgan says the march dovish hike has leftble if conditions easier. goldman sachs said that was likely not the fed's intention. you usually don't want conditions to ease when you're hiking. here are the percentages. 54% now. looking at the july fed funds, that gives you a june probability of 54%. then looking at january, you've got a 55% chance of that third hike happening. so whether you think the fed does three hikes or more this year is linked to your belief, does the trump administration get policies. >> you're staying. >> i'm staying. >> says it right there. steve, stick around. like a piece of old gum. anyway, joining us now, nathan sheets, a visiting fellow at the peterson institute for international economics.

david wu, dr. wu, who heads up global rates and kurn currency merrill lynch. did you fill out a bracket? >> i did a bracket with my son for our school. >> who's going all the way? who do you have winning? can you tell me? you have to tell me. you don't have to if you don't want to. >> i think most people have kansas. >> they do? kansas seems to disappoint at times. all right. i'm going to start with dr. wu. i'll tell you why. you've been fairly bullish on the policy from the trump administration and what it can do to gdp. liesman's written about this

first-quarter curse many, many times. should we think that 1% is, you know, just sort of a head fake and things really are percolating better than this? or are we back to thinking things aren't that flush? >> i think the selloff in the dollar and the rally in treasury yesterday after the fomc meeting yesterday tells you everything you need to know, which is the fed is a trigger of pricing the fixed income market that's largely run its course. i think the only thing that matters right now is tax reform. and i think it was good to hear the president yesterday at his rally talking about tax reform after obamacare. but i think that at this point, given that the battle over obamacare has yet to basically play out, it's unlikely to play out at least until i think easter, which is when mitch mcconnell said he wants to put a bill on obamacare on the president's desk. that means, unfortunately for the markets, we're not going to get any clarity on tax reform until at least the second half

of april. >> david, we got to work on your mike. liesman, you're thinking maybe it was netherlands, not dovish. >> i think netherlands might have played a part. >> did he just say it was more dovish? >> he thinks the market can compartmentalize these things, that can it say, you know what, i'll deal with tax cut when is they happen, but right now i'm taking yellen at her word. by the way, a lot of this has to underpin this idea you may not like, joe, that the market rally is based on actual underlying economic fundamentals and corporate earnings outlooks as it is on fiscal policy outlooks. >> but it can also -- what you just said can be influenced by optimism. >> it can be, yeah. true. >> nathan, where are you on all this? >> i continue to believe baseline economic growth is likely to be around 2%, as it has been over the last five or six years. the key question is whether these policies that trump is

espousing are going to be able to rekindle animal spirits. and i think that of these policies, the efforts to deregulate the business climate are the ones that we're seeing are having some kind of signature. business sentiment, particularly with small firms. will that be a key to getting going at a more rapid pace and ultimately raising productivity. but there is an upside scenario that's emerged over the last six months. >> this is getting interesting. it's like three-dimensional. you like the regulation. that's good. david thinks the most important thing is tax reform. can't do tax reform until you get these guys through this obamacare replace and repeal, which at this point i have in idea how to handicap that. >> you know what, i think the only thing i'm looking at every

single day is the president's approval rating. i don't know if you've noticed. in the last three days, every since ryan wrote out his bill to repeal, it has really taken a dive. that i think is very concerning. the question is, the president until now has talked to ryan in terms of backing the bill as it currently stands. whether he's going to continue to do that, if this continues to be a drag on his approval, i think that has yet to be seen. but i think what it tells you is it's definitely not going to be simple. >> is he losing the support of people that want a more clean repeal, or is he losing support of people who want even more obamacare-lite? >> both. >> i think the problem is a lot of people voted for him -- basically, lower middle class people who will lose out on the reduction of medicaid expansion. the premiums for the less wealthy are going to be going up, while the rich will be

getting tax back. >> can i throw a simple question out? how many people think there's going to be tax reform this year? you? >> having lived in washington for over 20 years, my experience is never bet against gridlock. that's the most likely outcome on tax reform. >> you think it happens next year? >> i'd be skeptical. >> same on obamacare? >> i think that's a harder one. >> i personally think there's a 95% chance tax reform will happen this year. >> wow. >> do you also think you're going to get three rate hikes? can you put both hands in the air? what's the answer? >> i think yes, but it's a question of when. i think we're going to get tax reform this year only because the republicans know they cannot go into elections next year without tax reform, but they have to be forced by the market to do tax reform.

>> you're putting 95% on taxes. you have to put the other one even higher. >> i'll tell you why. if by the middle of may they haven't done obamacare, at that point they're going to have to cut their losses because they cannot afford to do an 0 for 2 on obamacare and tax reform. >> you can't get to taxes without -- >> you can, you can. you definitely can. you have to pivot. but they've gone too deeply down this path to pivot now. it will have to be the beginning of may before they can pivot. this is why we're going now into a six to eight-week uncertainty where there's going to be nothing on tax reform. every day they're fighting over obamacare. it's going to scare the living hell out of the market. i think that's the problem. >> maybe the train is going to back up to new haven. >> yeah, all the way back to new haven. through newark and back. >> i'm just giving you the option. >> you've been, you know -- as we've gone higher and higher, i know that's in the back of your mind. but we've got no reason to think that's going to happen at this

point. it's not coming back to newark. >> i got on the wrong train to d.c. i went the wrong direction. we've been using this as our sort of analogy for where the market may or may not be. >> the market has priced in everything. we've had two months where we've assumed infrastructure is going to happen. we've assumed taxes are going to happen. we've assumed the obama repeal is going to happen. the market is set up perfectly to react to the fact that gridlock is likely the outcome. >> but if nathan is right, there's no tax reform s the market overvalued? >> it may not be overvalid, but it definitely is overbid. >> others have said that what we've gotten so far is purely deregulation. it has nothing -- the rest would be icing on the cake. if you go through eight years of all that, new regulations every day, and you just stop that and get rid of some of the pending ones and we're at 1380 on the s&p.

>> you've had like a trillion dollars based on air. >> the challenge we face is figuring out if this happens, what does that mean for growth. what does that mean for investment. it's a microeconomic phenomenon. it'sheart hard to put into moded say that's 0.4% or 0.5%. it's not clear to me that the market at its current level -- >> it's certainly the consensus opinion. the consensus is we've gotten way out of our skis, assuming there's not going to be any potholes. >> arguably, that's the consensus for the macro guys, who are having a difficult time. >> everyone we have come on says, oh, boy, i'm nervous. and they're sell side guys, 90%

of the time. >> people are still buying the equities. somebody is out there believing in these. >> i think the market is trading like it can have its kacake, it cup cakes, donuts, and scones too. i don't think all of these things can be true, that you get tax cuts and you have a fed only doing three rate hikes. >> i think the budget today, though, is indicative of the type of massive changes that we haven't seen. "the washington post" lays it out that we've not seen proposals like this, change this drastic since the reagan years. while you might not see these exact cuts going through because it's going to be much more difficult to have congress go through and agree to cut things that are in their own backyard, i think this lays out the blueprint this is a very different world, one a lot of people haven't lived through. >> and you brought up the idea there's been headwinds for a while. oh, the mark tripled, blah, blah. it only doubled in 18 years. there were headwinds for eight years because it was not a --

listen, all i'm saying is you take the headwind away, you don't need tailwinds. all you need is no wind. >> 2007 and yada yada yada, nothing else happened. >> from 1999 to 2007 it doubled. use your gdp. we had headwinds for eight years. take away the headwinds and you're doing better. >> i adprgree with you. the loss of hillary clinton was a big boost to the market. >> that's your way of not giving trump credit. which david nods, i know i'm right. >> i'm with joe on this simply because i think, again, i think this tax reform is going to be transformational. i was in germany talking to german clients.

germany within three years emerged as the industrial powerhouse of europe. so from that point of view -- listen, the last time we did tax reform in this country was 30 years ago. nobody said it was going to be easy. we're going to get this one right. i don't care if it takes another three or four months. if we get it right, that's the most important thing. >> i'm sending yo uh to washington. i am. go down there and talk to these people. anyway, thank you. nathan, david. >> we're going to talk tech in a minute. >> that's good. >> and climate change. >> oh, wow. >> please don't. please don't. >> it will be a big hour. >> was that the snow from global warming. >> i brought that for you just to show you what's happening. >> a lot of global warming out there. >> are you going to tease him? >> your tease. >> coming up, guest host tech

investor and church of climatology member and part of the golden state warriors. that's next. later, budget committee chair diane black joins us. stay tuned. the greatest population shift in human history is happening before our eyes. sixty to seventy million people are moving to cities every year. at pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. partner with pgim the global investment management businesses of prudential.

welcome back to "squawk box." the tech sector rallying more than 10% since president trump was elected. our guest host today has made some big calls about companies like apple, amazon, and google parent company alphabet. he's the founder and coo of vc firm social capital. he's also part owner of the golden state warriors. we just had a conversation about where the economy may or may not be going. let's talk stocks and companies in particular. you made a bold call on amazon last may. you said this company would be a $3 trillion company. >> in ten years. >> are you still in the same place? >> yeah, in fact, there's things those guys are developing now that i think probably even further cement that lead. they are probably the closest to a natural monopoly in two really important markets. the first is retail. again, we had this conversation

last time. there's not a thing that probably the three of us aren't buying from amazon every day. now what they're doing is they're starting to disrupt themselves. there's this thing they released, a push to serverless computing, which has huge impacts. >> what does that mean? >> think about the following. if you're building something, today it still takes, call it, 30 days once you've built something to launch it, manager it, and that's much better because it used to take three months. so amazon aws took three months to 30 days. they've invented something that takes it from 30 days to three minutes. >> i don't even understand that. how do you go from 30 days to three minutes? >> essentially what they do is they'll abstract away a lot of the complexity in having you deal with servers.

>> it's a template sort of? >> yeah, it's literally a button. >> one-click shopping? >> that's a great analogy. it's like one-click checkout. you push a button and everything gets taken care of. they know your address. they have your credit card on file. >> that's amazing. i know what one-click shopping did to me. it's dangerous. >> this is a great point. you can think about what it does to companies like intel, to all the memory companies, to the router companies, to all the software companies that are building today. by doing it, they take control of pricing, they compete better against google and microsoft. >> that's what i was going to ask. where's microsoft in this game in a meaningful way, and where do you think google will be? >> this is the power of monopolies. microsoft has spent 30 years, to be honest, getting pretty crappy software deployed by millions of people. the situation that creates is they now have an inbuilt market where a lot of the stuff built in migrates, and the only place it can go is microsoft.

>> quick take. we got a lot more to talk about with you. snapchat. >> look, at the end of the day, businesses like that -- i helped build one -- are valued in three ways. number one is users. number two is engagement. number three is number of adds you can show. you guys run a really successful show. you know the add load is limited. facebook told you in q-4 add loads typically tend to be 10% to 15% of all the things people see. you have to be growing users and engagement violently in order to make maximum profit, maximum value. >> and you think they are doing that or not? >> i mean, i don't have to guess. i think they've told us what's happening, which is they're going to focus on that second pillar, which is we don't think this is a user growth play. we think that it's a user engagement play. my perspective, coming from a place that decided both were important, was that every user in the world should use our product because it's that good. i would want to own a company that wants every single person in the world to be using it.

>> does that mean you'd be short this company? >> look, i think that if i was benchmark, i would love to be long the stock at 3 cents. but at $21, i'm not a buyer. >> not a buyer, okay. we're going to continue this conversation. we should mention parent company of this very network, nbc universal and comcast, bought a piece of snapchat. we'll continue this conversation in just a bit. when we return, the president's budget blueprint is officially out. we're going to get reaction from the chairman of the budget committee, diane black will join us. time now for today's aflac trivia question. what is the symbol of ireland? the answer when cnbc "squawk box" continues. mr. diaz. simple procedure, we're just going to make one small incision here, then we're gonna go in and remove your '67 corvette. my vette!? it's just a gall bladder! you don't have.. aflac!

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now the answer to today's aflac trivia question. what is the symbol of ireland? the answer, the harp. good morning, everybody. welcome back to "squawk box" here on cnbc. we are live from the nasdaq market site in times square.

among the stories front an center this morning, tesla is raising a billion dollars in additional capital to shore up its balance sheet. the electric carmaker will sell $250 million in common stock and $750 million in convertible notes. ceo elon musk will buy 10% of that new stock. both offerings are set to price after today's close. the government is set to release february housing starts about an hour from now. consensus forecasts call for a 0.8% increase, partially reversing that decline we saw in january. at the same time, we'll also be getting weekly initial jobless claims and the march philadelphia fed index. the bank of england just out with its latest policy statement and interest rate decision at the top of the hour. it's going to be coming up. the bank is widely expected to keep rates unchanged. for more on president trump's budget blueprint, let's bring in congresswoman diane black, chairman of the house budget committee. congresswoman black, thank you for joining us this morning. in your view, what's the key

takeaway from this blueprint? >> well, we're just having an opportunity to look at it, as you all know it just came out last night. but i think what we see is a president who is serious about cutting federal funding and putting money in areas where he believes that this nation is really in need, such as our military, to be sure we have military readiness and that our young men and women are fully equipped when we send them into dangerous situations. >> from here, what do you expect to see, just in terms of the sausage making? what actually becomes -- ends up in the final deal, do you think? >> well, it really is a little early to stay that. our budget committee has been hard at work looking at every one of our functions and agencies of the federal government. we've been doing this for several weeks. we'll now take into account what we've already looked at in each one of those areas and match it up with what the president is saying. i'm sure there's going to be much more dialogue on whether we agree with what he is putting forward. i already know that he's got a

real heart for making sure the military sequester is reversed so we can ensure -- look, i've been to ft. campbell. i've seen what's happened since that sequester. we need to be sure when we send our american men and women off to war that they're fully equipped. other areas, i'm sure we'll have great discussion on that, and i look forward to it. >> for ratings, i'd like to just talk budget forever. i might just shift gears briefly about repeal and replace. i just read an interesting piece about the quandary that so many republicans are facing here. some people are saying we need bipartisan legislation within the republican party. it's got to be bipartisan. forget the democrats. they're not even in the mix. but we need bipartisan -- there's a feeling that, you know, in the last administration a lot of times democrats voted on things that run popular just

for it to die in the senate. then they were left with that. there seems to be, i don't know, some feeling that if republicans vote for something that the hard core right doesn't want and it dies in the senate, then they're going to be painted with that brush. what are the current dynamics if for this law at this point, chairman black? >> i appreciate so much that you called it making sausage because i've never made sausage, but i understand there are a lot of pieces put into it to get that final good tasting product. that's exactly what we're doing here. we have a lot of dialogue that takes place. it's been taking place over the last almost year with our blueprint. we're going to continue to move along with this. at every phase, it is a better product. so i'm looking forward to more conversation, and i think at the end of the day, we'll get a good product. >> the other thing is that

there's a lot -- like i said, bipartisan within the republican party. i think a lot of these people in the house are more worried about an attack from the right in the primary than they are about losing to a democrat in a couple years. so you may be able to wrangle them just by saying if you don't go for this, you're basically going for the status quo. so maybe you get them. do you think then the senate, if they did get a bill, do you think the senate could come together and do a couple of things maybe and finally okay this thing? because the senate seems to be where people are most worried. >> well, listen, i like my senate colleagues. we sent a lot of them from the house of representatives to the senate. we had really hoped maybe they'd take a little more of our culture over there with them. the nsenate is the senate, the way they say. many times what's done is the house will come up with proposals, the senate will pick at it until they get it. they have every right to do that. and they have every right to put whatever they want on there then send it back to us. we'll then determine what the

best product is for the american people. >> is there a bill that the senate passed that the house would be okay with? you think this is really going to come down to hashing it out bare knuckles when both sides come back together? >> i think it will be a process, as i've already said. we have to remember that this bill is only one part of this process. there are also things that can be done by our secretary, tom price, and hhs. he's already begun with some suggestions and some things that can be done there to help reduce the regulations and bring the cost of health care down. in addition to that, we have already begun the third tier of this process where our committees will take it through regular order. already the education and labor and work force committee has come out with a suggestion on -- or they've actually passed a bill out of their committee on associations. that is that like communities, such as farmers or small businesses could come together and create a co-op together and

get lower costs for their employees. medical malpractice has come out of judiciary. these are all different phases that will -- at the end of the day, what we need to do is make health care something that people want a tt a cost that th can afford and give them choice. that's really what this is. >> it's a very difficult process. we had an analyst who joined us earlier today that said if there's not movement by may, he thinks the administration may pivot and say let's put health care on hold for now and get to tax reform just to make sure we get something passed on some sort of time frame this year. is that something you could see happening? >> i am much more encouraged than he is. being in the middle of this process, i'm feeling very good about our opportunities here in the house. we're moving it forward, as our plan indicated we would. i think we're going to have a product that can go over to the senate very soon. they've had time to think about what it is they'd like to add. i think that it will be ready

much sooner than what some think. >> you're taking up the bill today, right, in the budget committee. >> that's right. >> do you give me 100% chance that it makes it out of your committee? can you tell me? >> yes, i'm going to tell you i'm very confident that bill is coming out of the committee today. >> you said yes to 100%. that's unbelievable. >> i'm very confident. >> that's good. >> how are you thinking about the potential risk of 17 million to 20 million americans that may lose coverage? >> you know, that's what came out on the cbo score. i have honor for the cbo score. obviously they're trying to predict, and they're predicting behavior. any time you take a mandate off, there will be people that say, look, i never wanted this to begin with. as a matter of fact, there were 20 million americans -- we don't talk about that frequently -- that did not choose to get this health care. they either got an exemption or decided to pay a penalty. so those very people are people that are just not going to be in that health care market.

and that's what cbo indicated. as they pull out, they're going to lose coverage. but this gives the american people choice. so i believe that moving forward, we're going to see that the changes that we make are going to give people more of an opportunity to have that choice at a lower cost. >> congresswoman, do you disagree with the cbo scoring that suggests that a 64-year-old, for example, making about $26,000 would end up paying close to $14,000 in health care relative to $1700 today? >> what i do -- i do honor their score. we do take that in consideration, but we also have to remember that -- >> that's a $12,000 delta. >> yeah, what we -- >> spending more than 50% of their income on health care. >> yes, that's correct. and that's why -- >> is that politically pat lalabla -- palatable to you and your constituents? >> we need to put all these equations together, which cbo does no do. they can only score what's currently in law. let's remember that. they can't score the other

things that are going to be put in there. they're also predicting behavior. remember when they predicted behavior on the affordable care act, how far they were off on that. these costs will come down as we put other measures in place. >> congresswoman, how do you think about the fact this is just a tax cut for rich people? >> god almighty. >> i know that's the mantra that many people put out there, but it is a tax cut for everyone. it is an opportunity for everyone to have a little piece of that tax cut. >> congresswoman black, thank you. chairman black, thanks for being with us this morning. top of the 8:00 a.m. hour, house minority whip steny hoyer. he'll receive a great reception today, i can say. stay with us. when we come back, our guest host on the president, silicon valley, and the stock market. let's take a look at the futures this morning. they're up once again after big gains yesterday.

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welcome back, everybody. we are getting reports of an explosion in paris that may have occurred at the offices of the

international monetary fund. police tell krcn cnbc that an envelope exploded. they could not confirm if it was at the imf office, but police say it was in the area. the incident is not being characterized as a truerrorist attack. an investigation is ongoing. we'll keep you up to date with anything we hear. in the meantime, let's get back to our guest host today. he's the founder and ceo of vc firm social capital. he's also part owner of the golden state warriors. you said that uber is one of the companies you wished you were an early investor. obviously that stock -- or the off market valuation of that company has soared. but what do you think about the controversy that's been swirling recently around uber? >> i think it's terrible, and i think it really speaks to the fact that sometimes in silicon valley, we run forward really quickly without thinking about the collateral damage. i can give you a couple examples. when we were building facebook,

we ran into a lot of privacy concerns. at the time, people were really trying to figure out what should be permissible or not. there was a moment in time where there were these television cranes and tv cameras peering into our offices saying, hey, you were stealing information. we had to really confront that as an organization. this was, i think, in 2007. we did it though. we were able to bring in great people like sheryl sandberg. we were able to write down a set of values and create a culture that optimized around the respect of that information. >> and thinking about what you're doing rather than just doing it. there's a point where as a startup you've got to get things done. >> you have to just do it. you have to balance doing the things to grow your business with doing the things that keep you durable. i think if you look at any ceo of a great company, what he or she will tell you is if you don't have a great culture, things decay and the company will not last. >> but you look at what's happened at uber and say that was a culture that just happened or something that they decided? >> i honestly it's more by omission than commission. the reality is when something is growing that fast and all the sudden you're a $68 billion

company and you're forced to think about a business in a global context, by a group of people who frankly are forced to do that now in a four or five-year window, you're in a p petri dish. i think you have to realize there are going to be a lot of things that are suboptimal. when you figure it out, now you need to be judged by your ability to pull in the people necessary to fix it and then as long as that culture gets fixed, i think this company will be fantastic. >> is this a company beyond just being a taxi/limousine company? a couple years ago we talked about it in a different context, as sort of an end to end -- >> here's what i think is not well understood in transportation in general, which is that ex-china, because in china what you have is -- again, i love these monopoly businesses. in china, it's a complete monopoly. in the rest of the world, we have these two interesting dynamics. there's a consumer surplus that's available to all of us, which is to get anywhere we want

frp t for the cheapest we've ever been able to get to. now we're seeing people like ford, tesla, general motors, cities all the sudden now coming into the market. so there's more competition over time, not less, more pricing pressure, not less. we will be the ultimate beneficiaries, along with three or four well-positioned companies. >> but that's because the vcs like you are effectively subsidizing our rides every day. >> i am not. >> well, not you. other vcs maybe. >> meaning this is not something you think is a good deal to get in on? >> outside of china, i think unless you're in the earliest of rounds, like the investors in uber, it's a very nuanced economic transaction that has to believe that there is less competition in the offing. my belief is the opposite. as people rely on this service, there will be more folks, both private, for profit, and frankly cities and nonprofits, that have to come into the market.

>> we've been talking about the budget today. the point is made that the president would like to push more spending towards defense, cut a lot of other budgets. you think that there's something interesting that's been happening in defense, that people aren't paying attention to. >> i actually think the more important thing is to take a step back and understand what's longitudely happening. we've had two or three massive offsets in defense spending. one was around just armaments. the second was around actual physical, you know, guns and tanks, et cetera. we've started a third offset around artificial intelligence, machine learning, ai, cyber espionage, cyber attacks. and we know that these offsets are, a, multidecade and, b, decatrillion dollar in spending. for us, we've taken a step back and said, how can we enable america to actually be at the fore front of this. one of the things we've been doing a lot of is investing in certain aspects of machine learning and artificial intelligence that we think are

very revolutionary. i'll give you one example. so, you know, we invest private and public markets. one of our public market positions we love is google. two and a half years ago i'm listening to a call. they randomly mention they built their own chip for ai. i thought, what is going on here? why is google competing with intel? took us a year and a half to find the group of people that did that at google. but we were able to take them out. we have eight of the ten original people that built that chip, building a next generation chip now. that chip is revolutionary on every dimension. it can empower companies like facebook and amazon, tesla, the government to do things with machine learning and computers that nobody could do before. so those are the kinds of things i think are really exciting. >> google must love you. you found this and stole all their people? >> you get the nasty gram. but you deal with it and move on. >> wow, all right. we're going to continue this conversation in just a moment. coming up, stocks to watch ahead of the open on wall street.

in the next hour, john rainey of paypal joins us to talk mobile payments, cybersecurity. stick around. "squawk box" will be right back. the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.

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there are some stocks on the move today. let's take a look. dollar general reported quarterly profit of $1.49 a share, 8 cents above estimates. also reported a same-store sales increase of 1%. that was more than double what the consensus estimate was.

probably means it was a half a percent. see, i did get an 800 in math. williams-sonoma -- >> you tipped 35% the other day. you screwed up the math. >> how do you know i didn't like the waitress? >> you told me the bill, you told me the numbers. >> i messed up. >> what? >> it was $117. >> he doubled the 17 instead of the 11. >> i came up with $35. i was like -- >> which i totally get it. >> the waitress came back and said, thank you so much, sir. i'm like, i guess i'm really nice. then it's not 35. you think it's $35 too. >> it's $22. >> it's less. >> anyway, it's all right. $10 difference. still stings. it would sting you. you know that. i'm talking your language right now. >> 25% tip, 20?

>> i was trying to do over 20. i ended up doing like 35. i'm good. >> it is a fun thing. >> so great. >> i'm a huge tipper. i love it. it's so great. >> okay, all right. you don't do 100%. >> yeah, minimum. >> really? >> look, i got lucky. i feel like i should -- i got really lucky. i feel like i should pay it forward. >> you do 100% when you tip? >> yeah. >> every time? >> if it's bad service, no. but most of the time -- you know, they just have such a joy on their face. it's wonderful. >> how do you feel about greasing the mater d? >> love that. love that. >> what do you think is reasonable? >> give him a hundred dollar bill maybe. >> you think? okay. >> depends. >> this is like a different world. >> i love this. >> it's so great. >> this is andrew. i'm not trying to get a table. where's the place that's hard to get in the city now?

>> i love the guys at bob. >> all right. we're learning a lot. coming up, house minority whip steny hoyer, a big tipper, he's going to join us with reaction to the president's budget blueprint. then paypal ceo john rainey is going to join us. yes? please repeat the objective. ♪ thrivent mutual funds. managed by humans, not robots. before investing, carefully read and consider fund objectives, risks, charges and expenses in the prospectus at thriventfunds.com. hi, i'm frank. i take movantik for oi opioid-induced constipation.

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budget watch. president trump rolls out a pbut of his spending proposal. plus, we'll talk to house minority whip steny hoyer about president trump's skinny budget and the battle for health care reform. the slack attack. the ceo of workplace mess jiagi app responds to the growing competition. ♪ live from the most powerful city in the world, new york, this is "squawk box." good morning. welcome back to "squawk box" here on cnbc. there's no agreement on that fed move here yesterday.

>> but the bank of england is out, unchanged. >> we were having a very spirited discussion on janet yellen and what it all means. at the nasdaq market site in times square, i'm joe kernen along with becky quick and andrew ross sorkin. our guest host this morning, who enjoys a good joke. >> i do. >> that was a couple belly laughs i generated. i like that. founder and ceo of vc firm social capital. more from him in a bit. i bet you have a good twitter feed. >> i do, actually, yeah. i like people up on twitter. >> retweet good things. the futures right now are indicated to open higher again. significantly higher. 58 points after a strong session yesterday. we're not far from new highs in a couple of the averages. treasury yields, that was one of the big stories yesterday along with the move in the euro. treasury yields have moderated again. we thought we were off to the races in terms of going up to

2.65, 2.70, 2.75. but no, here we are. took another turn down after the move yesterday. 2.52 this morning. >> we want to thank you for laughing at joe's joke. >> yes, thank you. >> somebody's got to do it. >> can you come every day? yeah, exactly. among the top stories that we're looking at this morning, federal reserve boosting interest rates a quarter of a point. chair janet yellen signaling two more increases this year. also, tesla planning to raise a billion dollars ahead of the launch of its model three vehicle, according to filings with the s.e.c. they will issue $250 million in common stock and $750 million in debt. on the economic agenda today, we have a couple things we're looking for. weekly jobless claims, february housing starts, and the march philly fed survey. all of that in about half an hour at 8:30 a.m. eastern time. at 10:00, we get the monthly job openings and labor turnover survey. president donald trump releasing a bunt flueprint for fiscal 2017 budget.

it only looks at discretionary spending, things like cuts to the state department, epa, and other areas. the full budget plan is expected to be released in may. this gives us plenty to talk about today. for more on the budget blueprint, let's bring in congressman steny hoyer. he's the house minority whip who represents maryland's fifth district. leader hoyer, thank you for joining us today. >> good to be with you. >> "the washington post" and others lay out this is the most ambitious blueprint we've seen for paring back domestic spending and beefing up defense spending since ronald reagan first came in, in 1981. what do you think? >> i think it's the most irresponsible budget i've seen and most unrealistic budget i've seen. it cuts very substantially, as you pointed out, the state department, which is going to undermine our security around the world.

who says that? the people at the pentagon. it cuts nih substantially. ed that's health care research to make america more healthy. so i think when you look at all the component parts, it was simply a hatchet job to increase very substantially the defense side of the budget without paying for it, except with these irrational cuts. i don't really think this is a realistic document. it's not fleshed out, so we don't know all the specifics, but the fact is i think that it will be essentially dead on arrival. >> we did hear earlier that even scott pruitt at the epa asked for additional spending, that he does not want to see the 31% budget cut that's been proposed. similar stories from some of the other agencies. but this is also an administration that does not yet have all its players in place. so a lot of these things, admittedly, are going to be numbers not fleshed out at this point. >> well, i don't think this is a question of having players in

place as having a rational policy in place. this is just simply not a real document. it's not a responsible document. it's not rational to slash domestic spending, particularly when you want to grow the economy. this is going to cost jobs now and in the future. >> congressman, how much of this might be described as an anchoring technique in terms of a larger negotiation? >> well t m, it may be that. what you're saying is they don't expect to get this, but this is their starting point for negotiations. i get that. but whether it's a starting point or not, you really ought to have a rational starting point, not an irrational starting point. i think this is the latter. i think it's the latter because i think republicans on the appropriations committee who have a responsibility to adequately fund programs that they think are important for america and for the american people, you've already heard them saying this is just simply not realistic. we can't do this.

so in terms of negotiations, they're not starting at a realistic point. so i think it will be viewed by many as simply a nonstarter. >> when reagan came in and proposed some pretty steep cuts to government spending as well on the domestic side, while those things started out, while we saw some cuts in programs, by the time he left, most of those programs had grown to above when he started out with things. they say that's in large part because of what happens in congress, that nobody wants to see anything cut in their district or any of the projects or plans that they really have an interest in themselves. >> well, you know, i think that's -- that probably is correct in some instances. frankly, spending has been pretty well contained on the discretionary side. frankly, it's not the discretionary part of the budget that's growing, as you probably know. the discretionary budget, as part of the substantially decr over the last couple decades.

to think you can take money out of nih research, take money out of protecting the environment, take money out of protecting the public health at cdc, and you could go through all these law enforcement, transportation -- the president says he wants to increase infrastructure, but slashes the department of transportation. so it's a somewhat hypocritical and contradictory budget in many respects. frankly, you're correct. in fact, president reagan and any president, the only ones who can really stop spending -- i can talk about cutting spending, others can talk about spending, but you need 218 in my house and 60 in the senate, but the president can stop spending in its tracks. no president in the 36 years that i've served in the congress of the united states has vetoed a bill that spent too much money and had that bill overridden. the debt went up under ronald reagan 187%, more than any other

president with whom i've served. the fact is that they're looking in the wrong place. >> is that an argument for going after entitlements like social security and medicare? >> i think it's an argument for looking at the whole budget, not a third of the budget. or actually about 30% of the budget. i think without doing that, it's not going to be realistic because as i say, forget about the democrats. the republican leaders on the appropriations committee, so many of them said either publicly or privately that this is simply not realistic to meet their responsibilities. >> congressman, secretary of defense james mattis said if you cut the state department's budget, then you need to buy me more bullets. >> exactly. >> what percentage of the state department could you cut, or could you not at all? >> i think all of us want to get rid of waste, fraurksd ad, and . obviously we want to look in every one of the agencies on the defense side, on the nondefense side, to make them as efficient

and effective as possible and not waste the taxpayers' money. i think all of us are strongly for that. the question is, do you want to cut out substance of programs that are, in fact, helping america grow, helping america be healthy, helping america defend itself. i don't know what the state department -- you use -- you asked me that. i don't know what percentage it is. we ought to look at all the agencies to make them efficient and not waste money. cutting the defense department by 15, 16, 17, 18% is simply, as general mattis points out, going to undermine our national security while you're increasing the pentagon. his point was, look, if you cut the state department, you're going to have to spend a lot more money on defense because we're going to be less secure. >> that's a fair point, but back to this idea of the entitlements, if you really want to get your arms around deficit spending, you have to go after

things like social security, medicare, and medicaid potentially too. do you think it's the right attack to say that medicaid should be frozen at 2018 levels? >> yeah, becky, what i said was, and what i believe, is you have to look at the entire budget. if you look only at discretionary spending -- and i mean defense and nondefense, you're looking at 30% of the budget. meaning 70% of the budget goes untouched. >> this is the argument simpson-bowles made on every one of these. it seems that we never get around to doing just that, looking at the broader budget. >> becky, as you know, the president said absolutely he was not going to touch social security or medicare. >> i know, i know. >> we don't think -- i don't think that we ought to touch the ben fit benefits of anybody who has social security and medicare at this point in time. we have to look at 100% of our expenditures. there's some expenditures you can't modify. obviously the interest on the national debt is something you can't modify. >> no, and that's going to get harder as the fed continues to

raise interest rates. >> becky, you're absolutely right. i think that's why this budget is so irresponsible and reckless and will be rejected pretty much out of hand because it won't be perceived as a realistic effort. but we'll see what happens. the president has not outlined exactly where he thinks these cuts ought to go or mr. mulvaney of omb. it's a broad stroke. but the broad stroke, i think, gives reason for great concern. you know, i was coming on this morning because we were having a hearing today. a hearing that the republicans would not hold on what the impacts are on the repeal of the affordable care act. i think it's very important that we have some hearing. the republicans marked up. no american had the opportunity to be a witness. we didn't have a cbo score.

we didn't know what it would cost. we now know what it would cost. at this hearing that we're going to have today, the democratically appointed former chairman of the cbo is going to agree with the republican appointed ceo director that this will gut medicaid, cut medicare substantially, increase costs for almost everybody in america, and knock 24 million people out of insurance and end up with 58 million people uninsured pretty soon. that's also an irresponsible policy. i hope americans would look in -- i'm not sure we're going to have all the television cameras there, but we are going to be streaming it on my facebook page. we're also going to be streaming it on resistrepeal.org. we hope the public will watch and find out what this proposal does. it's not a better way. it's a terrible way. >> i want the old steny hoyer back. it's been tough since november

8th. you're the loyal opposition. your party's in disarray. steny, it's only going to get worse. >> oh, no, no, no. my party's not in disarray. >> it's only going to get worse tonight with maryland/xavier. thank god you're not coming on tomorrow. >> look, i wasn't too happy at the big ten conference, as you know. >> are you going to watch tonight? i'm excited. i'm worried. maryland has great players. >> we have great players, but we're not playing really well the last month. >> xavier lost that great player to a torn acl. >> i hope we don't take them for granted. it's going to be tough. >> take them for granted? you may be a lower seed, but on even espn 58% xavier wins. you're even distorting that number. god almighty. still no steny hoyer statue at maryland. >> come on. give him time. >> all right. thanks.

>> always good to be with you. up next, shares of paypal dipping after news that google is venturing into the payment space. we're going to talk to cfo john rainey about the future of f.i.n. tech. "squawk box" will be right back. ♪ we're drowning in information. 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, on what matters to you. morgan stanley. various: (shouting) heigh! ho! ( ♪ ) it's off to work we go! woman: on the gulf coast, new exxonmobil projects

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welcome back to "squawk box." competition in the mobile payment arena heating up. google unveiling a new payment feature, challenging paypal's popular app. joining us now is john rainey. i'm on the iphone still. i haven't moved. what do you think of this? >> this technology has been around for a while. i think it's actually a validation of what's happening in payments with the digittization of payments. f.i.n. tech in general is a huge growth business right now. there's two trends that are really contributing. one is the growth in mobile technology. the other is digitization of

payments. they're opening up opportunities to democratize money across the world. >> this guy knows way more about this. i want you to jump in, in a second. one question, which is this. it seems to me that there's zero margin on this kind of business, meaning the venmo business, at least from my standpoint, i pay nothing. the person accepting the money pays nothing. this gmail app, there's no fee. where is the money in this? >> so i can't speak to gmail, but what i'll tell you about venmo is we're moving towards monetizing that today. you're exactly correct. we don't monetize it on a peer-to-peer transaction. >> not only do you not monetize it, i imagine you have to lose money on it. there has to be a transaction fee to you somewhere along the line. >> today it's not making money. but this is actually how paypal started, as a peer-to-peer transaction that then moved to be able to shop at merchants. that's where we're able to monetize that. when a merchant -- we bring that customer to the merchant. they pay us for that transaction. >> john, give us a sense about

how you move in developing markets. we're a sort of very green field. many countries have said they don't want american express, visa, mastercard. what's the strategy for paypal? >> there's a lot of white space on the globe for us today. you can look at emerging economies across the world where we'd like to have a bigger presence. but this fits very closely to our vision of dmemock ratizing money. there's 2 billion people in emerging economies that don't have access to basic things we take for granted. that's the power of mobile. we can put the power of a bank branch in the palm of their hand. >> as those businesses crush the economics, i agree with andrew. we're in a world where it's probably the most expensive it's ever been to process payments, i suspect. i suspect you agree. so when all of those markets, 2 billion people entering the middle class, spending money digitally, what does that mean for the quality of those kinds of businesses in the united states?

>> well, you know, the quality of the business in the united states, this is going to be a competitive landscape. what we bring to the table and why i think we have a competitive advantage versus everyone else is we've got the power of a two-sided network. it's very difficult, particularly in the payments business, to add consumers if you don't have scale with merchants or add merchants if you don't have scale with consumers. that's where i think we have a competitive advantage here, which i don't think is broadly appreciated. >> how are you thinking about the spin off alibaba, trying to buy money gram in the united states? you saw euro net try to jump that deal. >> interesting. we took a similar strategy when we purchased zoom a couple years ago. we took a look at the landscape of providers that were out there, and zoom was the one that best fit with our portfolio. but i think it's, again, a validation of where the digitization of payments is going. remittances in many economies is actually the largest source of gdp. if you look at a country like nepal, it's 30% of the gdp.

so others are recognizing this and trying to get into that space. >> you have a partnership with visa. what does that mean? >> so visa, the partnership that we struck with them, which was one of many we did last year, was sort of an inflection point for us. the big takeaway from that agreement is it provides more choice for our customers. there was a lot of friction in the paypal experience historically. this allows them to pay however they want, wherever they want. it's a vehicle for us to increase customer activation, increase customer engagement, and eventually reduce churn as well. >> john, my peers, i think we've been pouring $20 billion, $30 billion almost a year it seems like into f.i.n. tech start-ups trying to compete with you. how do you think about the landscape of these companies, overfunded, underfunded, the quality? >> it's certainly an attractive space. for i think a lot of the reasons we mentioned, but the addressable market is huge. we have, i think, a pretty good position right now.

venmo is entirely different than what others are doing in the space, in that is actually integrates a social experience. if you look at the transactions, 90% of them are open to that person's network of friends. that's great for merchants as well because if you look at an individual's purchasing pattern or where they're shopping, that strongly influences where their peers will shop. you could imagine that's actually better or more effective than advertising for many merchants. >> have you spent any time thinking about companies like stripe or companies like brain tree and that payment flow and how you should be playing there more aggressively? >> great question. we actually own brain tree. we recognized a couple years ago that was an important part of the business for us to get into. so brain tree is one of the faster parts of our business that's growing today. >> okay. we want to thank you. appreciate it. great to see you. >> glad to be here. thanks. when we return, we have more of today's top stories. later, the ceo of slack will

join us. that's at 8:40 a.m. eastern time. stick around. "squawk box" will be right back. you always pay

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but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence. welcome back, everybody. this is "squawk box." shares of go pro on the move this morning. the camera maker cutting 270 jobs and preannouncing its first quarter earnings would be at the

higher end of guidance. go pro also trimming operations expenses by more than $200 million, saying it's going to return to profitability on an adjusted basis. sharing are up more than 8%. tim sloane awarded nearly $13 million in compensation last year. he received $2.3 million in base pay. he along with seven other executives at the bank didn't receive a cash bonus, however, which of course follows what was that fake account scandal. quick programming note, wilfred fro frost will have an exclusive interview with sloan tomorrow. coming up when we return, breaking economic news. jobless claims, housing starts, and the philly fed tape. back in a moment.

folks, we're just a few seconds away from jobless claims. housing starts and the philly fed survey, a lot of numbers to

digest. check this out this morning. dow futures are up 51 points once again. s&p futures up almost three points after closing at the second highest levels of the year. nasdaq is on track for a new record this morning. right now we're going to get to rick santelli, standing by at the cme in chicago. rick, go ahead. take it away. >> all right. a litany of data points, of course. let's start with housing starts. we saw 3% increase. we were expecting 1.264 million. we ended up with 1.288 million, seasonally adjusted and annualized. last look was revised slightly higher on permits. down over 6%, expecting 1.268. roughly about the same we're expecting on the other side. and what do we end up with, 1.213 million. if you look at last month, it did gain a bit from 1.285 to 1.293 million. but there's your disappointment.

jobless claims, unrevised at 2.43 last week. subtract 2,000. you end up with the new number, 241,000. maybe that's about 10,000 higher thatt than some of the really low levels we've seen. if we look at weekly claims, they move from 2.06 to 2.03 million. finally, philly fed. our last look was off the charts a the 48.3. we were expecting a number much lower, around 30. also better there at 32.8. that's a march read. all the other data points were february. we know that some of these indices, whether it's from the fed or from places like university of michigan or the conference, have been doing quite well. what we also know is traditional growth -- and we know gdp is not equally distributed on every quarter of the year, but boy, first quarter numbers are really starting to look a bit weak, which might go a long way to

explain the response in part yesterday after the rate hike to the drop in treasury rates. joe, back to you. >> all right, rick. thanks. let's get more reaction to the data. steve liesman is here. >> can we keep rick around? >> certainly can. >> nobody understands, in my opinion, the three-dimensional chess that's understanding the bond market better than rick. rick, i want to see if we can explore here the reaction of the bond market, okay. they seem very excited by this idea of only three rate hikes. yet, yellen told us she didn't incorporate fiscal stimulus. does the bond market have it right, in your opinion? should it really have rallied in the face of that, or is it not thinking about getting tax reform? i can't figure out how the bond market wants it both ways. >> i'll tell you, i think the bond market is getting it both ways because stocks are getting it in one channel. in other words, i do think there are still growth issues in terms of how long it's going to take to ramp up growth to be

commensurate with the optimism we see expecting the new landscape to produce growth. i think that's a hard one to divine. the equity markets are taking the long runway, but that's my call. >> i will point out, sort of suggest as you just said, yellen said she has time. i'm not sure that's right because i would point out the oecd and imf both upped their forecast for growth. the fed has not done that yet, right. so they're saying i have time, i have time to do things. i can raise my forecast and then i can react to the stimulus coming down the road, and i won't be behind the curve. but rick, you have to be a person who thinks the fed's already behind the curve. so now you're talking about then getting further behind the curve if they enact some of these stimulus plans. >> no, you know what, i can see how you would think that. >> okay, all right. >> i have no complaints. but here's the way i differentiate that. we have a window for the fed to actually put rates at a level that's probably better served

considering all the questions and how far past the crisis we are. the fact that rates went down was a golden opportunity miss. now, does that mean the fed shouldn't be flexible? yes, but i think that trying to catch up when the growth hits is going to be much more difficult than any central bank thinks because the whole globe is caught offsides, not just the fed, which by the way has done a good job. >> all right. one more thing. >> in my opinion, lately they've done a better job. yes? >> one more thing, if my colleagues here don't mind. i was asked last night what i think the ten-year was going to by the end of the year. i said 3.25. i said that 3.25 because i said i'm going to get 1.40 on the fed. i'm going to add 200 on it, a little less, i'm going to be 3.25. what's your answer, rick? >> i would say i think that the three handle will show up in 2017. you and i are only arguing about a dozen basis points or so. i also, with respect to the last part of the conversation, don't

underestimate the technicals, especially if you're an investor actually looking to get the coupon stream at these levels. 2.60, 3.03, these are big resistant levels, but i do think that 3% is in the cards for '17, but i'm just not sure that when we get there, we stay there. it might be a lot like this 2.60 level. we get to 3 and we keep backing a i way from it. but that would be my high yield target, yes, sir. >> okay, rick. steve, thank you. >> nice conversation, wasn't it? >> yeah. >> it was. >> polite. >> engaging. >> i didn't get involved. >> why didn't you get involved? >> i could have. >> you should ask rick what he thinks about the tesla converts. i love those. >> i wanted to ask you about apple. >> what was the line? >> here's a great apple anecdote. apple in the last five years has spent upwards of about $25

billion to $30 billion on r&d. can you name the most visible things that have been announced? >> watch. >> watch. >> new iphone. >> no, no, new things. >> we've never heard of. so watch. a billion dollar investment in dd. a billion dollar investment in softbank. and a multibillion dollar building in cupertino. >> pretty cool building. >> an amazing building. in fact, they had to figure out a way to bend the glass to make it look like a ufo spaceship. >> i think this is a record for any u.s. company. 140. it has been moving higher. >> i think it's an amazing luxury brand. it's our modern louis vuitton. i'll stand outside in line like everybody else for the next one and pay more for it. probably not a tech growth stock, which is okay. which is probably why buffett and berkshire love it. it gushes cash and they can

repurpose the cash. >> traditionally, they have not liked growth stocks. >> pricing power. i think that's great. it's a wonderful brand. >> but you don't want to own it? >> look, in our public market business, what i ask is, is this a -- i've said this before -- an absolute trending to monopoly type business. i think the answer for the iphone is it's not. the pixel, if you've seen it, looks increasingly like the iphone in every single way. all your services you use are in the cloud. your music is in the cloud. your photos are in the cloud. your documents, your chats. switching devices is becoming easier, not harder. >> but that was part of buffett's theory, that it's a very, very sticky platform base odden wh ed on what he sees when his grandkids. a little different way of measuring it, but he says that stickiness keeps people here. they're really engaged and come back again and again. >> i think we're overestimating what stickiness means.

but just going back to tesla for a second, imagine you could get paid to own an option in what is probably one of the more interesting companies led by what is probably the most interesting ceo in the world. the bonds are like this fantastic instrument, i think n so many ways. you look at it and you're like, well, i'm getting paid to own a five-year option on a stock. if tesla underperforms or if something really bad goes wrong -- >> the converts? >> yeah. >> so you're in that? >> it's funny. i bought a bunch of the old converts, which i think are priced at 360. they were yielding for us at 5%. >> you mentioned aws again. you used the word monopoly. i'm not encouraging it, but i'm curious whether you think that aws, microsoft, google, for the cloud business, to the extent we believe it all becomes a utility, becomes a regulated entity given that every retail platform -- virtually every business in the world is going to run on the same three .

>> that's the perfect counterfactual for why it won't happen. i think we're living in a world where people will live with oligopolies, especially if those oligopolies are extremely well run and provide great utility at cheaper and cheaper prices. so the minute that there's an end of one, i think you get to a much more heightened risk of regulation. >> i guess the question is the suggestion of whether -- you remember amazon went down for about five or six hours. if that were to happen for 48 hours, whether there'd be a call for something to happen. >> what happens when the power goes out? >> i don't disagree with you, except for some reason we decided those are regulated businesses. >> but they still don't achieve what we ask them to do. regulation isn't the answer. i think good managers -- >> i'm not saying it's a good idea or bad idea. i would be surprised if we don't hear people talk about it.

>> i agree. these are historical artifacts. i think we know now in 2017 what we want are really strong, productive managers, good employees, good culture, good capital allocation, and leave them alone. they will generally tend to do better than governments trying to work on our behalf. >> my music is not in the cloud. my photos are not in the cloud. >> yes, they are. >> i don't have enough storage. what do i need to do? it says you have not been backed up in 96 weeks. what do i need to do? >> you need to get on wi-fi at night probably. >> how do i get more storage? >> you need to pay. you're not calling anybody. >> we don't pay for our iphones. >> you pay for storage. if you want additional storage. >> i got to pay for that? >> you have to pay for that. >> for all the storage. you can get a certain amount for free. that means you're a heavy media user. >> you, joseph, can expense it. we'll figure out a way to help you. >> no, we won't. you can pay. i'm a comcast shareholder.

unicorn messaging app slack has new competition from a few older players. google and microsoft getting into the game. we're going to talk to ceo stewart butterfield about the chat battle brewing in silicon valley. we'll talk to him in a moment. of boxes to check. it's taking the best technologies out there and adapting them to work for you. the ultrasound that can see inside patients, can also detect early signs of corrosion at our refineries. high-tech military cameras that see through walls, can inspect our pipelines to prevent leaks. remote-controlled aircraft, can help us identify potential problems and stop them in their tracks. at bp, safety is never being satisfied. and always working to be better.

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we can identify threats 50% faster. you can do that? we can do that. then do that. can we do that? we can do that. welcome back to "squawk box." one person suffered minor injuries earlier this morning in an explosion at the paris office

of the imf. authorities say that an explosive was contained in a letter, which detonated when opened. they're not, however, characterizing this as an act of terrorism. imf managing director christine lagarde said the agency was working with french authorities to investigate. okay. there is a chat battle brewing in silicon valley. google and microsoft launching new platforms this year to take on slack, a unicorn messaging app that's changed the way employees at big businesses like ibm and nasa communicate. also, "the new york times." i use it all the time. let's bring in ceo and co-founder of slack, stewart butterfield. >> i love this company. >> stewart, nice to see you. >> nice to see you too. thanks for having me. >> thanks for coming on. help us try to understand this, given that we set this up, a little bit about the battle taking place. you are pretty far along in

terms of being ahead of the rest of everybody else. having said that, microsoft and google have a huge platform already. are you seeing them steal business already, or how are you playing against that? >> no, we haven't. google just launched their product last week, i think it was. microsoft officially yesterday. although, it's been out in beta for a couple months. we haven't seen any real competition at this point yet. having said that, it's early days. you know, we launched about three years ago. growth has been fantastic. there's 7 million people using it on a weekly basis, 5 million on a daily basis. in a handful of markets, that's real deep penetration. san francisco bay area, it's about 10% of the civilian labor force. less penetration in other cities, but it is worldwide. 40% plus have paid seats outside of north america. it's being used in academia. it's being used in big

businesses, small businesses. so i think it's going to be a wide front battle. >> thus far, you have remained an independent company. i imagine you may want to ultimately pursue an ipo. do you also think about whether you'd be better off on top of one of these other platforms? is that something you think about? >> well, we work with all of them. i think that's one of the important distinguishing characteristics between slack and everyone else. we're not beholden to a suite of other products we want to privilege or put in a special position. there's over a thousand apps in the slack app direct ory. one of the things you've seen happen over the last decade, although i think we collectively are like that frog in the pond of boiling water, is there's this proliferation of business software product categories. you think about marketing automation and crm and hris and developer tools. there gets to be more and more. we're an 800-person company. we buy from 80 different vendors. that's typical. so for finance, we use net

suite. for hr, we use workday. those are the big-ticket items. there's this whole continuum going down the trail. one called office space used by our facilities team that does seat planning. you'll see more and more super specialized tools like that replacing boring mechanical work that people do. one of the problems is although this tool is great for the facilities team and another tool over here might be great for the legal team and yet another for recruiting or sales or marketing, there's this fragmentation of attention, fragmentation of data. so any kind of platform that can be a connective tissue across the organization is incredibly valuable. >> stewart, that's a good jumping off point. take a step back. people want to find simple comparisons for slack and say it's the whatsapp in the office or facebook in the office or what have you. take a step back and give people a concise sense of your vision for how this plays out and what slack can become. >> thank you very much. so it's a messaging platform. there is an app, and people have

the app on their phone. people have the app on their desk top computer. that'll be their primary experience of it. but it's not just about people sending messages to other people. there's people sending messages to the third-party applications and services that they use to get their work done. those applications sending messages in. so let me give you a couple examples. if i were to send you a link to a drop box file, let's say an imessage on my iphone. what you get is this gobbledygook nonsense url that you can't parse. if you're looking back to the history, you're not going to be able to read. if i send it to you in slack, because there's an integration with drop box, you'll see the name of the file, a preview, and we'll index it for search. does that make drop box ten times better for you? no, but maybe 2% or 5% better. but we do it for box and gook l drive and tons of other services. and not just in file sync and storage. so in our slack instance, we have messages pumping in that are searchable and accessible to

people across the company for things like every time you make a sale, every time you sign an account to an account manager, every time a stats run completes, every time a customer tweets at us, every time one of our apps gets a review in the app store. all of that information, which would otherwise be in one of dozens of different tools in use across the company and not accessible is suddenly accessible. not just that, but the conversations people are having on our marketing team working on international projects, on the customer success team working in financial services industry, on our legal and policy team working on eu data protection rules. all of that information is accessible. you think about as a manager or as an executive, the amount of effort and energy you put into communication in trying to create alignment and trying to make sure people are on the same page -- i mean all hands meetings, the status reports, the stand-up meetings, all of that becomes order of magnitude more easy when people can see across the organization and make those connections. >> how do you think about the

health of the business? we talk about revenue, but revenue in our world, when we're building companies, tends to be lagging. what for you is your leading indicator of value that you know will eventually translate to even more compounding revenue? >> it's going revenue? >> it's going to be active usage. we mean something a little different than what people typically mean. we don't mean someone happened to open the app and have it flash on their screen for a second. the average for all daily active users of slack, including people who are just getting started is over two hours of what we call active usage per day. that means opening the app, it means changing a channel, sending a message, reading a message, uploading a file, commenting on a file, anything people can do using the service, two hours and ten minutes every day is as deep usage as you could possibly imagine for any one piece of software. that's definitely the leading indicator. on the other hand revenue is pretty good. we launched three years ago last

month. very small amount of time and we're talking hundreds of millions of dollars a year. >> stewart, real quick, do you ever see this becoming a consumer business in addition to an enterprise play? >> it's possible in the long term. and i'm not trying to be cagey here at all, it's just hard enough to do one thing well. >> right. >> and we have 100% of our attention focused on the business market. we do like the amazing variety of uses people have. a lot of usage with family and a lot of usage for organizing things like kids sports leagues. there was one moment six months ago i heard stories of adult children using to coordinate care for elderly parents suffering from dementia. i think it goes to show that slack is very useful for teems of people trying to accomplish something and that's usually in the context of business. >> thanks for waking in vancouver for us this morning,

stewart. >> no problem, my pleasure. >> slack 23 on the 2016 cnbc disru disruptor 50 list. when we come back we'll head to the new york stock exchange. jim cramer will join us live and get his take on today's top stories. "squawk box" will be right back. a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

time now for your kensho stat of the day. in the week following a 9% or more drop in the price of crude, the best performing energy names the best performing energy names tend to be kinder

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down to the new york stock exchange. jim cramer joins us now. what do you think the market liked yesterday? and what do you think it likes today? stock market, jim. >> i think people are underestimating the power of oracle. it was a fabulous quarter. this was the breakout quarter, the quarter showed it is much more of a cloud company than the on premises license business. also there's some notes out about how the apple, the next phone is going to be already they're ordering a huge number of chips for it. second half going to be strong. so people are going to be looking at tech and say, you know what, we got a place to go. maybe we don't go to banks because we're not going to get three rate hikes, but whenever you have a leadership group whether it be banks or tech or health care, people get excited and get behind it. >> jimbo, see you in a couple minutes. keep it short. we'll be right back with some

final thoughts. kevin, meet your father.

kevin kevin kevin kevin kevin kevin kevin kevin kevin kevin trusted advice for life. kevin, how's your mom? life well planned. see what a raymond james financial advisor can do for you. welcome back everybody. our guest host this morning -- i've said it right all morning. jamath, i'm sorry. >> that's okay.

>> why don't you talk about where you see the public markets. >> we've been sort of like we made a decision we need to hold a lot of cash but try to melt up with the market. so we've been amazingly tick for tick with the s&p for the most part but 50% in cash. the reason as i said earlier, we are priced to perfection. everything needs to go right now. and if anything doesn't go right, i suspect the asymmetric risk is to the downside -- you don't pay me to hold cash, you pay me to know when to hold cash. >> so you're waiting for a bull pac? any pullback you would see is an opportunity? >> just in case a tax bind isn't as good, just in case the replace and repeal aren't that great, just in case all of these other things don't go exactly as we have priced in the last two months, the risk is probably more than 20% to the downside than another 20% to the upside. you have to be well positioned for that. >> would it take a 20% pullback to convince you to jump in? or would a 10% pullback be something you think now's the opportunity? >> i think you're saying right

the nuance will be in the moment and that's why having a lot of cash is great. meanwhile, to be able to perform at the same levels of the s&p makes us feel really good about where we are. >> all right. chamath, we appreciate you being on today. would love to have you back. >> joe. >> you got to come back to talk about your religion. >> religion? i'm buddhist. >> okay, two -- >> make sure you join us tomorrow. right now it's time for "squawk on the street." ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. stocks looking to build on yesterday's post federally with our best shot in a couple of weeks of testing record highs. we're watching the president's proposed budget today, court challenges to the revised immigration order, the dutch elections in europe where there is some green. and decent data on