happy st. patrick's day. "squawk box" begins right now. ♪ >> 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. let's look at u.s. equity futures and see if they're in the green for st. patrick's day. some are cooperating. s&p 500 up by a half percent or a half a point. the dow down by half a point. the nasdaq up 3 1/2. this after a mixed market yesterday. look at what happened overnight in asia. you'll see the nikkei was down by a third of a percentage point. some slight gains for the hang seng. shanghai composite down by 1%. in europe this morning, on this

day when president trump will be meeting with an la merkel, the dax is down by, the cac is up. the ftse is flat. crude oil, after an interesting week, up 24 cents. 48.99. gold prices rallied yesterday for the biggest day since june. a rally of 2.2%. >> let get you caught up on some other big stories. president trump will meet with german chancellor angela merkel today. the issues of trade and immigration expected to be front and center between those two leaders. the ceos of bmw and semens are expected to attend the meeting. this is merkel's first u.s. visit in two years. she was supposed to be here earlier in the week but the snowstorm prevented that from taking place. caterpillar hiring a former u.s. attorney general to help address

the import and export practices investigation. this coming out after lawmakers raided three caterpillar facilities as part of that revenue probe. separately president trump nominating boeing executive to serve as deputy defense secretary. the white house confirming patrick shanahan will succeed robert work, who agreed to stay on as deputy until a replacement was nominated. >> where was the massage that was with dubya and merkel? >> was that at a g20 meeting? let me give you a massage. then biden did something to -- >> to merkel? >> not to merkel. actually, there's a few pikes on who biden has creeped out over the years. only one in three americans plan

to wear green today. >> 2 out of 3. >> 9 out of 10 americans plan to celebrate st. patrick's day, but only 8% of americans plan to get drunk on st. patrick's day. >> thank goodness. you know what granny always says, you can't drink if you don't start in the morning. >> only 30% will wear green. 13% will eat irish food. i will have some corned beef and cabbage. i will make that in the crock pot. i have one with my picture on it. >> i know about that. >> only 9% will pinch people. >> i was going to say we have to pinch and drew. >> maybe i was so drunk i forgot to put the tie on. >> let me just tell you something -- >> remember in elementary school, if you forgot to wear green, you get pinched. >> you will be bruised all over your tuchus by the time i'm done with you today. pinching your perk little

cheeks. okay. >> okay. getting weird. >> that's all i got. >> you talk about other people creeping people out. >> we've been together a while. >> this squawkward moment has been brought to you by joe kernen. >> come on. lighten up. it's friday. st. patrick's day on a friday. >> dangerous. >> you know what else? you think we won't talk about march madness? we will in a second. you know how much time is wasted? we have not done our part, productivity on march madness. we need to get on it. >> i'm so upset. you told me the wrong place to hook up -- >> that was not me. >> you said click this button. >> they were tied. >> first, we're only tied for a day. >> then you will -- >> count your lucky stars. >> you clicked the button, didn't see a single game. you were somewhere talking about the pbs cuts, right? you and your people are just incensed about what's happening

in the budget. >> i don't want to see pbs cuts. >> only relative to the price tag of going to mar-a-lago every weekend. on another subject -- >> yeah. >> i actually studied this. this was not -- >> you pressed the button. >> no. what i did was went to all the different websites to figure out who -- >> i thought you just pressed the button? >> then there's something called a historical random algorithm, so i used that one. i did work on this. it wasn't just a -- it was a click ultimately, but i researched which -- what i was clicking. >> you did just pick with a click? >> there's lots of clicks involved. >> you had me until you admitted it was a click. >> it was a click, but i did research -- >> before you clicked. >> it wasn't a blind click. >> it wasn't a blind click. >> i got one with xavier. then i picked unc wilmington to

win one. they did not. mid tennessee state. if i remembered last year, they beat michigan state last year. i didn't have strong feelings about minnesota but there were two 12s that beat 5s. you know that, right? >> you know when we talk about buying the powerball lottery, you look at us like we've lost our brain? this is no -- >> this is totally different. >> actuarily speaking it's not. >> do you have notre dame? >> i have notre dame going a long way. >> there was a shot going in the last 10 seconds, which if it didn't go in, it would have knocked out everybody's bracket. on today's agenda, there are -- we have a reader coming up on this. we'll have to come back to this. maybe we'll kill that. two economic reports today. this is why we want to talk about march madness. the first one is february industrial production. that's out at 9:15, which we'll

already be gone. that's followed by a preliminary read, which is even later, we'll be having green beer by 10:00 a.m. that's when consumer sentiment comes out. as for earnings, look for results from luxury retailer tiffany before the opening bell. i think someone is making a run to get some -- this place -- >> i hear we're getting shamrock shakes. >> shamrock shakes. >> maybe. >> you know i had one a couple weeks ago? >> did you see the mcdonald's tweet tweet yesterday? >> no. >> they say someone hacked into it. >> oh, they hacked into it. something about trump. >> they said keep your short fingers off our burgers. >> worse, you're a clown president. >> then they said it was hacked. nothing you disagree with. >> like a ronald mcdonald kind of joke? >> no, no we're getting shamrock

shakes, anything else you want from mcdonald's? >> fries. you didn't actually put in an order, did you? >> no, there's eight things i wanted, but i won't indulge. toronto's canada goose making its public debut on the new york stock exchange. you wear that in today? >> canada goose? absolutely. >> you did. >> you can do that, but can't wear green. the stock closing its first day of trade with an increase of 25% from the ipo price of $12.78 a share. but the first trade registered was 18. it was down from that. the performance made it the second best ipo of the year. goose priced its initial public offering of 20 million shares to raise more than 2$255 million. i saw something written where is snap now? >> snap is below $20. >> down, down, down. >> but not below 17. what did you think of peta? did you see this?

buying in the canada goose -- >> so they have a say because there's some fur -- >> there's fur on yours? >> no, i actually zipped it off. >> you still bought it. >> the animal is still dead. i'm sorry. so you think that's okay, you zipped it off. do you think the animal is coming back to life? you can glue the fur back on it? you bought it. you were part of the problem. >> i am part of the problem. >> okay. as long as you know it. >> since you brought it up. shares of snap falling below $20 for the first time since that stock began trading. the decline comes after another analyst put a sell on the parent of snapchat. that makes six firms that recommend selling firms have a rating. none have a buy. after two days of gains, the stock has pulled back on concerns of valuation and lack of profitability. 19.73 is where the stock is now.

that's still above where people who got in right at the ipo at $17. >> the federal reserve making it easier for smaller banks to merge. its lifting the threshold for transactions that require a more rigorous debut. it had required banks with 25 billion or more with assets, it's changed now 100 billion. watch this space, because we should see a lot more smaller mergers. not necessarily allowed is for us to see mega mrernlg mergerga. all day today on cnbc, we're looking at what's being done on the deregulation front. the white house has issued executive orders and congress is using a little known law to roll back obama era regulations adding up to billions in regulatory relief. kayla tausche joins us now with more. >> it might seem like it's just chipping away little by little,

but the republican congress and the trump administration have been rolling back regulations at breakneck speed. first the president's executive orders, he's often enkournlcou y and flanked by business owners when he signs them. he directed to freeze or roll back regulations put in place by the obama administration. congress has been targeting obama era regulations with the congressional review act a little known and until now rarely used authority that gives congress the right to overrule executive agencies on recently passed legislation. using the cra's, the house has passed more than a dozen rollbacks including requirements that federal contractors report federal and state law violations, and rules meant to stop mining companies from dumping waste near waterways.

dozens more are in the pipeline or waiting for the president's signature. they apply to a handful of different industries. john thune citing data from the american action forum estimates the changes from both branches so far have saved $50 billion in long-term compliance costs, and 46 million hours of paperwork. the largest portion coming from a delay in a labor department fiduciary rule which directs how brokers or financial advisers rather can invest a kleinclient assets. this week a coalition of states opposed trump's vehicle emissions rollback which he rolled out in michigan on wednesday. companies are quantifying the cost of a given regulation, it's more an art than a science, but we'll be looking to see how they're trying to figure this out. the expectation is that the metric they'll use to judge whether this is working or not is growth, especially revenue growth. joe? >> okay, thank you. we'll turn to the markets now.

what kind of fur was it? do you know? what's the animal that -- that provided the -- >> i'm not sure. >> the decoration for your -- >> i happily bought my coat about six years ago, before it was fashionable. >> what do you think it is? you have no idea? >> i have no idea. >> can you check to see what they would put on there? >> isn't it coyote something? >> oh, my god. >> i don't think it's coyote. >> there was an issue about that. >> the only reason -- what about -- are the animals nicer than cows? do you know? >> that's the problem. i have to say i'm thinking more and more about a vegetarian lifestyle. >> that's not the point i'm making. >> that's the point i'm making. >> you have a long way to go. aren't pigs -- remember arnold? >> i know. >> he was a smart pig. >> charlottes web. >> nice pig there. >> i'm not sure, are these animals nicer than chickens that

provide a -- >> i don't know. are you suggesting that -- >> i'm suggesting that -- >> are you wearing leather shoes? >> yeah. you have a long way to go to get to where you want to be if you're going to stamp out all the -- >> got it. >> there is a social consciousness and awareness that wasn't there before. i'm seriously thinking about it. >> i don't understand the cage-free eggs. i guess because they roll. you don't want them falling off -- >> no, because the chickens are crammed in cages, it's so small their feet grow into the wires. >> it's not the eggs. >> no. >> don't you think -- >> you're being flip, i know. >> all of these fashion companies are now trying to -- >> your heart is bleeding again. >> it is coyote fur. >> it is. >> ugh. >> all these companies are trying to figure out how to make truly synthetic versions of everything. it will be amazing. >> i'm sorry i asked. >> yeah. >> i'm sorry i asked. >> you know, coyotes raid hen

houses and kill little chickens. >> yes. >> was a recent -- "barn yard" terrible i could yoetdi coyotes. how do you know? you kill a coyote, save a chicken. circle of life. >> can we go see the lion king forgot? >> remember scar? nice guy. >> joining us now is david lebowicz, not irish because of the tie. thanks for playing along. but julian emanuel, nice. happy st. patrick's day. >> my wife let me go out with this one on. >> don't worry about it, david, only 1 out of 3 people say they'll wear green. it's okay. at this point, just looking at the notes, you figure only two more hikes? >> i think two more hikes. >> why not three? >> i think the reason they don't want to go with three, the fed

has the market where they want it. >> which market? >> the futures market. the fed funds futures market and the equity market. expectations of the market are in line with the path the fed laid out. so what they'll do is hike two more times, probably june and september. leverage the december meeting to start talking p the balance shee about the balance sheet. that's the question we've been getting, what happens to the 4 billion in assets that the fed accumulated. >> what does this mean for equities? >> the question here is the fed actually worried at aurl thll te first quart ser is looking soft? this locks like a 0.9 gdp quarter. when they hiked in the past, the market sold off in the near-term. on each and every occasion, between 5% and 10%. in this low volatility

environment, we think it's possible. the key is is confidence going to man tintain its high level? if it does, the market doesn't correct. >> will that translate into a higher gdp? >> it has, and it has on several occasions in the past. in a lot of ways it's a self-fulfilling prophecy. that's why you see confidence being tweeted about consistently. it's important this momentum gets maintained and that ultimately looking later in the year it translates. >> i would hope so. the fed tried to increase confidence with qe and animal spirits, which is overused right now. that didn't work. the economy really never caught up with all the priming of the pump. they primed it, but it didn't catch. you need fiscal stuff or pro growth policies -- >> you need pro growth. it worked for the equity market.

no denying that. now we're at the point, so late in the cycle, that you really do need to see economic acceleration to keep equity prices moving forward. >> i think that's the biggest risk. if that positive sentiment, if that fear of missing out on additional upside translates into a fear of losing capital on the down side, that's where you see equity markets encounter turbulence. the earnings sto s story is b it's a confidence issue. >> what happens in 2018? >> our view is -- >> how many hikes? >> probably three to four. >> we're never getting back to normalized rates really. >> i think this is a slow cycle. when you look at the yield curve and what the bond market is telling us, what the long end of the curve is telling us is the tra jekjectory for global growt

hasn't changed. so that slow and steady expansion is very much with it us. that results in a fed that is more cautious. they talked about their goals on inflation, they'll let inflation run hot and let the economy boil a bit. they are worried about spooking the market like they did in '15 and '16. >> a lot of people say there are signs that the global economy is picking up steam. you're saying it's not? >> the yield curve is telling us the structural story has not changed. you're seeing some improvement in europe. definitely seeing em come back online on the back of a more stable dollar. if you talk about the drivers of gdp being demographics and productivity, nobodygraphics an productivity are on our side. >> you have some green. >> i have some green in the socks. i tried. >> you can't see it. >> you can't pinch him, you realize that?

>> that's a bummer. i told you. i have andrew. what color are your underwear? >> don't show us. >> there's your green socks. we just showed them. >> blue. >> what is it. >> you should have just told him green. >> blue. >> raise your arm. is that a glean shirt? that's not green either. how about your teeth? >> any broccoli? >> you got nothing. >> you wanted me to get you a piece. >> you within a me to ask more questions or go to break? we're wrapping it up. >> we are wrapping it up. >> we're trying to wrap something up. we're wrapping it up. david, thank you. i take it back, those are nice. absolutely some green there. >> thanks, joe. >> only one person here not -- not participating. julian, thank you. pleasure. >> oh, it's you. >> it is basketball!

>> yes. >> now to the brackets. northwestern looked good made the ncaa tournament for the first time. they played their first game against vanderbilt. do you know who was there watching? >> who? >> elaine. >> oh. >> elaine was there. i didn't see george or jerry or anybody else. >> you mean veep. >> the veep elaine. >> her son's on the team. >> huh? >> her son's on the team. >> a vanderbilt player thought his treatment was down by one point when they were up by one. he fouled a northwestern player on purpose who made two free-throws to give the wildcats the lead and they win 77-76. northwestern plays the top seed in their region, gonzaga who has, like, a giant on their team with a beard. interesting looking dude. that's tomorrow night and xavier looked really good beating maryland, 76-65. and of course the coaches -- one

of the coach's fathers was in the audience, our pal, bill murray. his son, luke, is an assistant for the team. i followed this team all year. you have to hand it to him. they lost maybe one of their best players, they lost sumner and other guys have stepped up. >> he wanted to know if you were going to the game. >> bill did? >> yeah. >> if it were closer, maybe i would have. i didn't go there. i went to st. xavier, but my dad went to xavier. i pull for cincinnati. they play today. i think they play -- who do they play? smu. no, they just lost to smu. i do like looking at this leaderboard and seeing myself up here. and you down here. >> press the button. >> i have 14 out of 16 right, but i put the bracket in the wrong place. >> i'm tied with you. >> but -- but alphabetically i'm

higherments. higher. >> way to go andrew! >> when we come back, a multimillion dollar settlement for lyft drivers and their battle over employment status. and small business optimism has been driving on the thoughts of cutting red tape. before we go to break, let's check out this day in history.

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and add phone and tv for only $34.90 more a month. call today. comcast business. built for business. ♪ >> welcome back to "squawk box" on cnbc. a u.s. federal judge approved a $27 million settlement between lyft and more than 200,000 current and former drivers over employment status. the drivers sued for being classified as independent contractors instead of employees, which would let them get reimbursed for their expenses. under the settlement, most driver's will get $130, though those who log more than $30 a week could get thousands of

dollars. small business optimism, talk about it every day. it's been climbing. it's at historically high levels on prom miises from president tp to put and end to regulations that hurt. now they're looking for follow-through. kate rogers has more. we need the commentary. i have some commentary about this. >> you do. okay. great. we'll get to that as opposed to what you say the rest of the show? >> as opposed to normally. >> healthcare and tax reform are two big issues. small businesses have been optimistic since president trump got elected hanging their hopes on a new era of more business friendly policies. on the radar for future deregulation outside of those issues, crowd funding rules under the s.e.c. analysts mentioned loosening reporting requirements for companies that y s thaies that remain private while increasing capital and raising the $1

million cap. there's also the expectation that the national labor relations board will become more pro business and scale back some worker protections that were put in place. one decision being appealed in the joint employer rule which says parent companies can be held liable for labor violations made by contractors, something the franchisen industry has been opposing. there are two vacant seats now that trump has yet to appointed or fill. and healthcare and tax reform, historically the develop top tw for businesses. >> i figured out just watching as the government and washington are trying to do something, the way it's impossible at this point. maybe you need term limits. these guys have been there too long. unlike voters that go into where no one knows what you say, these

guys know their votes will be looked at by their constituents. they never do -- they very rarely do what they consider is right. all they do is what will look right. i think they're always -- >> there's a lot of times fake votes. you can vote this one down and vote yes for the next one. the swamp is impossible to drain because the swamp has alligators, it's got snakes. all these nasty things in the swamp that fight back. i'm for term limits, let's go. >> we probably should. in this day and age, these idiots have to look at the twitter feed. oh, my god. people are saying this about me. maybe i -- >> i think that's why -- >> maybe they're active bloggers. >> all they care about how they look. >> that's always been the finger in the wind. >> the flip side is you want that a bit, too because you don't want people off doing crazy things. the idea was if you're elected to do something, you can be voted out by your constituents if you don't do it.

i don't know. >> i think like we mentioned earlier in the week, small companies and the nifb which is so conservative historically is saying we need action from washington, which you don't normally hear from them. i think they want action, the small companies want to see this happen soon. healthcare is top of the mind. >> you have a president, a house of representatives and a senate. >> they can get it done if they want to. >> they're stuck in the mud. >> i think that speaks a lot about the political parties these days, too. >> right. >> there's not the homogony that there used to be. >> they get buffeted by media stories. we love obamacare now, before it was the worst thing in the world. now this is the worst thing in the world. >> thank you. >> can't do the budget, can't do tax reform. if you're not into snap, there's plenty of other names to

watch. and on top of being st. patrick's day, it's world sleep day. we say hello to the 25-year-old entrepreneur looking to improve your slumber. right now as we head to a break, a look at the s&p 500 winners and losers. >> that was wonderful. >> bravo. i love that. >> that was great. >> pretty good. >> wasn't that bad. >> parts could have been better. >> it was pretty terrible. >> was bad. >> was awful. at fidelity, trades are now just $4.95.

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what's critical thinking like? 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 welcome back. shares of snapchat's parent company falling below $20 for the first time since the company went public. the technology sector overall is the best performing of the year. our next guest sees definite bright spots.

joining us is mark mahaney. we had someone yesterday telling us technology is a bright spot where even though stocks have come so high, they see those stocks moving higher. you think the same? yeah. we thought again this would be the year of f.a.n.g., and it seems to be the case so far. all those have outperformed, particularly facebook, amazon and netflix. i think also more interesting stock picks, but facebook we like. very reasonable. "d" rated last year. great play off videoification. that's big these days. and netflix probably still has more controversy, though the sentiment is switching on it. you have a breakout year with new shows and international markets. >> you left google off the f.a.n.g. stocks. it has not quite performed up to

the others? >> it's the stumper in the group? why hasn't it outperformed? last year people thought we would see massive deceleration, we didn't. there's a list of concerns investors have. i think what they could do is take other bets generating about 4 billion a year in losses and prove there is some revenue, some metric, some froth out the growth out there. >> just proof it's not all lottery tickets. >> do you think the transparency on that 4 billion of losses has hurt or helped them? they restructured the company, called it alphabet, put everybody in these units, and was supposed to make it transparent so you could give it a higher valuation. in the short-term it did, now there's potentially an overhang as a result. >> it probably did. >> probably helped or hurt? >> probably helped. what it caused people to do is focus on the core business. then what happened you had the

hope trade. so people looked at that. you had a new cfo in there. we saw margins improve. the last couple quarters they turned the other way. now it's become a double negative. i want my core business to be showing higher margins, it's not. i have this huge lump of losses. >> how much pressure do you think they'll be under to deal with those losses in a way they might have not been had they kept it all hidden in one group. i say hidden in the best sense of the word. there's great opportunities in there, but you have to think really long-term about it. a lot of investors can't. >> google under pressure there inve from investors? no. i think there's alternative vehicles, life sigh yciences be there, google fiber, some of those should be a hit. >> tell us about the lesser-known names that you think are buys. >> i think this for the first time in three years, the more

interesting cars are tru car, yelp and lending tree. i think there's -- particularly with yelp, this company recently disappointed investors with results, but overall we think the company is provisioned, particularly on the local advertising and home services segment. >> the question with yelp is always fake reviews and who can manipulate that stuff. have they found a way to move past that? >> not really. it's a problem. it's an open marketplace and hard to police it. that's one thing that twitter found out, what happens when you get people speaking their minds, you get a lot of mine mine s that you don't want to hear. but sooner rather than later, you will be able to interact directly with plumber, as,

architects, people to help you at time. >> mark mahaney, what is that? look at that tie. >> even you, remembered. are you going to read this tease? look at you. >> thank you, joseph. that's very nice. want to thank you guys in the control room. >> that's another day, you bought another blue tie. what is that? >> this is a purple tie. >> that's purple? >> well, no. go back to the green. thank you. coming up, it is st. patrick's day, can they do that for every show? >> we should have done it for mahaney. i'm embarrassed for him. >> americans are spending some green, and the number is in the billions. you're watching "squawk box" on cnbc. yes?

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in today's executive edge, spending green on st. patrick's day. according to the national retail federation's annual survey,

americans will spend 5$5.3 billion up from 4.4 a year ago. an all-time high in the 13-year survey. also 139 million people will celebrate spending an average of $37.92 per person. >> coming up, a high-tech wakeup call on sleep for those of who just woke up. the company is called hello. the founder and ceo is a 25-year-old but has the backing of big investors like peter thiel. we'll say hello to him next. 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.

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♪ >> all right. welcome back to "squawk box." we spent some money on this, on some shamrock shakes. >> we didn't spend money. >> no, cnbc did i'm not going to drink all of this. this is a large. it does have dairy stuff in it. it has milk, sugar, cream, corn syrup. and it also has -- this right here, 820 calories.

>> right here. >> they are good. >> happy st. patrick's day. >> there's the perception there's no dairy products in mcdonald's. >> i didn't know what was in it. i thought it was that dead coyote that you ponied up for your coat. no, there is dairy. it's really good. who can do 800 calories? those are empty calories. >> and the fat content, 30% of the daily -- >> if you work out and sleep a lot, as i segue to the next topic. if you're up at this hour, you're probably thinking about sleep or the lack of it today is world sleep day. we hope you got a lot of sleep last night. our next guest is looking to help make sleep a billion dollar business. his company is called hello. it makes sleep trackers. it caught the attention of tech investors like peter thiel. we want to bring in james proud.

a peter thiel fellow. he skipped college -- you remember that -- >> yes. >> he's one of them. james proud, founder and ceo of hello. this is the hello product. a lot of people wear devices -- i used to wear those jawbones on my wrist. >> i did. >> you had the fitbit. this is a whole different situation. tell us what's going on. >> this is a sense, this is on the bedside table, not wearing anything. we sort of -- >> you put this next to your bed. >> put it on your bed, clip something to your pillow. retalk about we talk about it as the complete sleep system, it's your alarm clock, white noise, but also tracking your sleep. no wearing anything. set it up and go. >> how does that work? >> inside are sensors looking at everything in the environment, lights, sound, temperature. all the things that affect the sleep. >> humidity. >> humidity as well. the number of humidifiers and

dehumidifiers that people bought after this is ridiculous. >> so you don't wear something, it's on the pillow. >> it's like having something on the wrist, it's on the pillow. we see the types of devices needs to be minimal. >> how does it even work with the pillow? it knows if i'm a restless sleeper and flopping around? >> when you put your head on the pillow, it starts tracking. >> what if you're sleeping with your spouse next to you? does it know that? or maybe your 5-month-old baby next to you. how does it track all that? >> probably not sleeping too much with a baby. you simply clip it on to the pillow of your spouse as well. it works with two people easily. >> it can pick up different -- >> exactly. >> and like alexa, to some degree, you talk to it. >> we see voice as a beautiful way of input and output. you shouldn't have to be looking at your phone at night. wake me up at 7:00 a.m., and away you go. >> before i go to sleep, i'd say

wake me up. >> i would never trust that. you know how many time i check my alarm clock? >> we're in the back-up alarm business. if you have to be on the air, it's an issue. with this, it's also -- you said a white noise machine? >> white noise machine, alarm clock, everything related to helping you fall asleep, sleep bet better, and wake up. >> i have all of those things next to my bedside table. >> but this won't change the temperature in my house. >> no, but it will connect to your thermostat and do it automatically for you. >> so if i have a nest thermostat in my home, if the temperature was the wrong temperature in the middle of the night -- >> it would automatically correct that. when you wake up, it'll bring the temperature up to the right temperature. >> and you need to get cold when you're sleeping. >> when you fall asleep, the body drops in temperature. something people don't know. they're like, i like my room warm at night. that's actually bad for you. >> why? >> because the cold body temperature needs to drop by a

couple degrees. >> i said, if you want to get sleep quickly, the shower, right? you should take a hot shower before you go to sleep because then your body temperature is going to drop immediately afterwards. >> that's interesting. that's what we do with all the kids. you get in the bath. >> jump right asleep. >> or you can read one of my columns and fall asleep. >> can you clip is to a my pillow. >> what do you mean, sir? >> it's the fancy pillow. >> we have the guy on. there's a company called my pillow. >> we push a lot of products here. >> i like that my pillow. >> i do too. >> it's a good pillow. >> do you have a pillow you like? does the pillow matter? >> pillow matters. mattress matters. >> can i ask one other question about this? part of me wonders whether this unto itself is going to create even more anxiety. the whole thing about sleep is you don't want to be anxious.

i used to find with the jawbone and fitbit and the others that i would wake up in the morning to look to see how well i did or not. my wife used to say that she thought if she had just faked -- if the numbers told me i slept eight hours, i would have thought it was spectacular. if it said it was four hours, i would have been anxious all day. >> that's the problem with a lot of this stuff. it creates anxiety. everything we've tried to do, whether it's through beautiful design of the object itself, not having to wear it, software that makes you feel reassured -- >> but sometimes ignorance is bliss. i don't want to know how little i'm sleeping right now, honestly. >> i think you do. >> i don't, at this point in my life because of the 5-month-old. i don't want to know. >> that's true. >> it's a different amount for people too. i would say most people probably need 7 1/2 hours. people that lie and say they only need four -- >> you're very rare if you're one of those people. >> how many hours do you think peter thiel gets? >> i'm sure you'd have to ask peter about that. >> you have privacy on these

things. you know averages. i thought that was fascinating. it'll tell you how you're doing relative to other people, which might create anxiety. >> we try not to push it to you if it's going to be too bad. >> how much does it cost? >> $150. >> where do you get it? >> target, best buy, amazon. >> but ultimately, is it -- and we've talked about this before. hardware is a good business. subscriptions are a better business. is this a big margin business, or are there services you have to layer on top of this long term? >> it's a good margin business right now. of course, with the data and what you can do with that, it becomes an even better margin business potentially in the future. what we've seen, we went and looked at the data of does this actually work. we went and took everyone that sleepin sleeps six hours or less when they start using the product and see over the course of a year, how much better do you sleep? after a month, people have added 30 minutes of sleep. after a year, they've added nearly double to 62 minutes. when you compare that with

sleeping pills, on average, people are averaging around 12 to 13 minutes extra sleep. >> do you care about not having -- i always thought the fitbit thing was interesting because it could tell you if you did enough exercise and whether that would help you sleep more. is that -- do you want to know that other piece of information, in terms of being a data guy? >> we're very interested in how do you have a full complete picture of someone. i think right now there's a huge discussion going on around health care, for example. too much spending, how do you make it cheaper. i think there's a huge conversation being missed around preventive. we're treating people for getting sick right now. it's a lot cheaper to prevent people being sick. so for us as a company, the reason we started with sleep is because we're not a sleep company. it's just the foundation of absolutely every single day. >> okay. thank you for coming. how much sleep did you get last night? >> not enough. i had to wake up early for this. >> fair answer. james, thank you. it's called hello sense. coming up, pruesident trump getting ready to meet with

german chancellor angela merkel. trade and immigration policy will be front and center. we'll set the stage next. "squawk box" returns in just a moment. usaa gives me the peace of mind and the security just like the marines did. the process through usaa is so effortless, that you feel like you're a part of the family. i love that i can pass the membership to my children. we're the williams family, and we're usaa members for life. we cut the price of trades to give investors even more value.

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markets are green on this st. patrick's day. futures are up as the dow comes off its third negative session in a row. we're setting you up for the trading day just ahead. deregulation nation. defense stocks flying on the promise of less red tape and more military spending. how you can make money on this new trump trade. and merkel heads to washington. a preview of today's big meeting between president trump and europe's economic powerhouse. the second hour of "squawk box" begins right now.

♪ live from the beating heart of business, new york city, this is "squawk box." ♪ welcome to "squawk box" right here on cnbc. happy st. patrick's day, everybody. i'm unfortunately wearing a purple tie. everybody else is in green. we're live from the nasdaq market site in times square. the futures at this hour sort of now cooperating with st. patrick's day. we're in the green across the board. the dow looks like it would open a little over ten points higher. s&p up a little over a point. the nasdaq up close to six points. here's what's making headlines a the this hour. tiffany just out with quarterly numbers. earnings of $1.45 a share, 7 cents above estimates. revenue beat forecast and flat same-store sales. nonetheless, those beating forecasts of nearly 1% decline. the luxury goods retailer also gave an upbeat full-year forecast. remember that stock had suffered a little bit in part because

people were worried about trump tower and that main flagship store on the corner of fifth avenue. >> huge percentage of their sales. >> now that mr. president trump is in washington, it's a little easier to get over there. also, the fed easing merger rules for smaller banks. we could see some big or small merger deals in this case. now bank combinations that have less than 100 billion in assets won't have to undergo rigorous scrutiny. the fed says banks under 100 billion in assets are unlikely to pose a threat to the financial system. and nintendo's latest video game console apparently a big hit according to "the wall street journal." the company plans to at least double the production of the nintendo switch over the next year. the switch is a hybrid console that can be used at both home and on the road. as for the broader markets, let's take a look at oil prices. they've been higher once again this morning. you can see right now crude oil is up by about 36 cents. it's back above $49 at 49.11. some notable comments overnight from the saudi oil minister.

he once again called for other opec members to get on board with production cuts. >> also seek equal sharing by others of what they signed up to. we had frank and friendly discussions in houston during the conference with some of the countries that were represented. everybody is happy about this agreement. it's a learning process for some countries. we want them to accelerate that learning and get on board. >> let's look at the dollar this morning. down slightly at 100.25. on today's economic agenda, just a couple things. two notable economic reports, february industrial production art 9:15 a.m. eastern and that's

followed by the preliminary read on march consumer sentiment. that's out at 10:00 a.m. okay. despite snap's record-breaking debut t hit a little bit of a cold streak. shares of snap falling below $20 yesterday for the first time since the stock began trading. the decline coming after another analyst put a sell rating on the parent of snapchat. that makes six firms that recommend selling shares, while three have a neutral rating. none have a buy at the moment. snap pulled off the hottest tech ipo in three years earlier this month. after two days of gains, the stock has pulled back on concerns about valuation and lack of profitability. however, we should say the original ipo price for those who could get it was $17. >> hard to get it though. >> hard to get it. apple has announced plans to set up two new research and development centers in china amid challenges to the iphone maker in the world's second largest economy. the tech titan has committed to

invest more than $3250 million in research in china. u.s. regulators rejected a drug that treats high potassium levels. it's the second time the fda has failed to approve this drug, which is known as zs-9. astra acquired it when it bought zs pharma. the high potassium it treats is typically associated with chronic kidney disease or chronic heart failure. squlnc and boeing signed a $3.4 billion contract with the government through which the u.s. army and an international customer will buy the latest apache helicopter. the international customer will receive 24 new ones. boeing did not name this mystery

customer. shares of boeing up 43% over just the past year alone. president trump meeting with german chancellor angela merkel to talk trade, defense, and other issues. eamon javers joins us with more. what can we expect at this joint press conference that they'll be doing later this afternoon? >> well, we could expect some moments of tension here, becky. the question is whether these two leaders, who are sort of on opposite ends of the geopolitical spectrum can work together and get along and forge a good relationship between the united states and germany during the trump administration. you remember that president trump on the campaign trail was one of angela merkel's biggest critics with comments like these. take a listen. >> hillary clinton wants to be america's angela merkel. and you know what a disaster this massive immigration has been to germany and the people of germany.

and the german people are going to riot. the german people are going to end up overthrowing this woman. i don't know what the hell she's thinking. >> so that's pretty tough stuff there from donald trump. also, peter navarro, the trump traded trade adviser, recently suggested the germans are controlling the euro as an implicit deutsch mark. that obviously not going to get a lot of smiles over in berlin. clearly there's some tension here to work through today, guys. when i asked senior administration officials who were briefing reporters about the tensions between the two leaders and the president's comments out on the campaign trail, they simply refused to discuss it. administration officials said that was the campaign, we're not going to talk about it. they literally then folded up their briefing books and walked out of the room. clearly this white house doesn't want to talk about the president's comments toward angela merkel on the eve of such a historic and important summit, guys. >> yeah, an implied deutsch mark that's valued at half of what it

would be valued at if based on germany's own fundamentals. they've done just fine with that. the criticism went both ways. she's like the last standard bearer for the whole globalist g-20, open borders approach. in her own country, she's got her own problems. she's saying you should be letting more people in. we'll see how that works out for her. >> there's some dissatisfaction there as well. she has to mind her own store. >> she certainly does. >> the other issue is the border adjustment tax. that becomes the big issue. one of her big terms is ris processty. if we plan to race any sort of tariffs, they plan to reciprocate. >> the president is going to meet angela merkel at 11:20 in the west wing. we'll go on from there. they've got a working lunch. they've got a joint press conference. we expect to be able to ask questions of both leaders. we'll see how this day unfolds. there's a lot here at stake. >> eamon, i'm going to take care

of that border thing on bmws and porsches. i think there's exceptions to every border adjustment. >> get a little loophole in there. >> they all do it. >> it's a washington tradition. >> i may attach that to like the health care bill. that's what they do, these people. >> no, no. what they generally attach that to is the are you for american jobs bills. >> you never know. could be for anything. >> i like baseball, american pie, and american jobs. >> are you implying there's politics in washington? >> i just call for term limits. that's what i've come to. >> if you want term limits, you're going to get lobbyists and staffers running the show. you can't really learn this town in two years. there's a downside to everything. >> there is. there is. i don't know what to do. i'm just watching what's happening down there. >> monarchy. maybe that's the solution. >> works okay. works okay in certain places. let's bring in the senior transatlantic fellow for central

and eastern europe with the german martial fund in the united states. you probably heard some of those comments. regardless of what you think of the concerns on both side, would you characterize this meeting as at least delicate or at least fraught with sort of walking on egg shells and sizing one another up to some extent? >> most certainly. i think this is the most delicate meeting that the german chancellor will have had in a very long time. we all know, you mentioned it earlier on, that their long-distance relationship so far hasn't been easy. there's been forth and back trading of criticisms, both from the side of president trump and from the side of the german chancellor. so i think in the first place, some of these differences that have emerged will need to be smoothed over. but there's obviously also a potential for this to be a backlash at home.

angela merkel is heading into a re-election campaign. there is potential for this meeting also to cause a backlash for her politically here at home because president trump is probably the least popular u.s. president in a very long time. if this meeting somehow doesn't succeed, turn out to be cordial, cooperative, this would certainly be a liability politically for angela merkel here in germany. >> i could see where if it doesn't go well, that she could be helped by that. the people in germany right now, if trump criticizes the immigration policies, which some of them do feel dissatisfaction with, they could sarks hey, this is our country, we'll do what we want to do. that could boost her popularity and her view. i'm wondering just how much she wants to get along with donald

trump. >> well, i think she will have to get along with him. i think there's a whole set of issues of cooperation and a normal working relationship across the atlantic. it's simply indispensable. she knows he will be a difficult partner to work with. i think she's taken this visit and the preparation especially to this visit extremely seriously. we know, for instance, she's read articles on donald trump from a 1990 edition of "playboy." that's how deeply she's delved into the topic for this meeting, in order to avoid exactly the sort of things going wrong that we have seen going wrong with a couple of other leaders that have already come to washington to see donald trump. >> i mean, just to be absolutely honest, you look at when

president trump's comments about brexit, steve bannon has a certain sway, i would think, and i don't think that chancellor merkel can even assume that, you know, trump is pro-eu. you may have to talk trump into even hoping that there's not a frexit or being disappointed with what happened in the netherlands. i'm not even sure that you can assume that the trump administration is convinced the eu is a good idea. >> well, yes, we have heard a number of statements that basically put a question mark over the institution, european union. we've heard similar comments earlier on, including from then-candidate donald trump on an institution like nato. angela merkel will certainly try to impress upon the u.s. president that both of these institutions are critical

building blocks in our relationship, also in the security order in the cooperative order that the united states and europe have been building for decades. these are institutions that shouldn't be taken lightly and put into question easily. i think we've seen already that with regard to nato in particular, more recent statements of senior officials from the new administration have been a lot more forthcoming, conciliatory, and have basically reinforced the importance of nato. i could well imagine that there will be an effort by angela merkel to basically develop a similar appreciation of the european union with donald trump and his senior staff. >> so you're in berlin. we got to go. i don't want to take too much of your time. been to munich. we're going to go to berlin.

it's starkly different, would you say, in terms of the experience between berlin and munich? uh-oh. >> we may have lost him. >> all right. we got to go anyway. you been to both? love munich. >> i have not. >> we're planning berlin. >> we're planning a vacation together? family? >> you're welcome to come. >> thank you. >> a lot of people do maybe both families. they love to do that. that might be fun. >> quick family. we're all doing it together. love it. ways wins.

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then why settle for slow internet? comcast business. built for speed. built for business. welcome back, everybody. let's talk markets. the futures this morning have been in the green, celebrating a little bit of st. patrick's day. the dow futures are up by about 20 points at this point. s&p futures up by two. the nasdaq up by six. joining us now to talk more about the markets is jim keenan, chief investment officer and co-head of global credit at blackrock. courtney gibson is partner and president at loop capital, also a cnbc contributor. welcome to both of you. we did hear from the fed this

week. it sounds more like the fed is on track for another two rate hikes potentially this year, not three. jim, what do you think that means, and is that a good sign or bad sign? >> i think it's a good sign. really, the market was starting to get a little bit more fearful that the fed was going to tighten at a faster rate, right. so we all know that the fed is going to tighten. you're starting to see inflation pick up a bit. but a gradual tightening, i think, is going to be good for markets and healthy. >> so you're telling investors it right now to invest in equities? >> i think over the long term, equities are relative to this backdrop, where we are in the economy, equities are going to outperform bonds. there's going to be a lot of volatility associated with it. if you look at pricing right now, equities have pretty substantial pricing built into them when you look at p.e. multiples. the backdrop for the economy is still good. there's a lot of uncertainty with regards to how much fiscal policy, the timing of the fiscal policy will ultimately come into play. earnings are coming out of this

kind of 2015 commodity cycle. you still have a tail wind to growth. so the backdrop for equities looks better than bonds. aggregate total returns are not going to be that great. >> courtney, what are you tells investors? >> at loop capital, we're an investment bank and brokerage firm. our clients absolutely are telling their clients to be diversified. at the end of the day, equities, i agree with you, are absolutely going to outperform. we're seeing it now. there's a lot more opportunities, i think. however, that doesn't mean you don't hold bonds at all. there's a reason why you have diversified portfolios. i think it's important for clients to make sure their clients remain diversified in order to help to mitigate risk. >> government bonds though? >> again, being very diversified. righting now high yield is doing very well as you look at the things going on in commodities. he's the bond guy over there, the bond guru. but we are absolutely seeing clients invested. tips, given what st. patrick's

goi -- is going on in the marketplace, i think you're going to see tremendous opportunity in t.i.p.s. in the future. >> where do you think inflation is going? >> up. i think that's the easiest way to look at it. i agree with the fed hiking potentially two more times this year. they're very cautious. no one wants to have it on their watch where at the end of the day, you know, you send us back into a recession. so if we get two more hikes, i think it could be justified depending on what the numbers say. as we look at economic data globally, it's not just, you know, what the u.s. is doing. we have to look at the global markets. but i think ultimately, if we get another hike, a quarter of a point in june, possibly again in september, i'm not sure september happens, but two more hikes i think we can sustain. it's going to be totally dependent on what's going on. are you trying to throw things at me, becky? >> sorry. jim, just in terms of how far we've come, how you feel about things, especially now when you

start looking towards washington and seeing that it is going to be a little messier than some people had anticipated, we're getting bogged down. the republicans can't even agree on the plans they're putting forward. how much of this rally is dependent on things actually getting done in washington? >> to break it down, i think the first part of the rally was really the recovery of the commodity trade. you started to see obviously policy, stimulative policy came in from china, early part of 2016. then obviously sentiment has really taken off since the election. obviously the promise of fiscal spending. i think the question is really in the back half of the year and as you go into 2018. year-on-year comps start to change. i really think at that point, if you don't see the fiscal stimulus start to come back into the market, i think you're going to start to question growth into 2018. i think that's the point i totally agree. when you look at pricing today, you have to be a little more balanced. you have to be a little more conservative than where you were a year ago. i think the economy right now

for the next three months has still got a lot of legs to it just because of the sentiment associated. it's just as you get into the 2018 or think you need that fiscal spent. >> courtney, you still like areas like banks, technology, and energy. >> most definitely. we saw a slight pullback earlier this week in energy. i personally ended up buying some exxonmobil. i like the connection to our wonderful now new secretary of state. it is what it is at the end of the day. i think energy does have some opportunities right now where there are pullbacks in banks and energy, as well as in tech. i think there are some great names there that clients should own or be buying over the past couple months here. >> courtney, jim, thank you both for coming in. >> thank you so much. >> thank you. coming up, tiffany quarterly results are out. we're going to talk luxury retail and how deregulation may achkt t affect the sector. then, defense spending and the nation's veterans. new secretary of veteran affairs david shulkin will be our guest.

"squawk box" will be right back. time now for today's aflac trivia question. where did the first st. patrick's day celebration occur? the answer when cnbc "squawk box" continues. uys leg. yeah looks like a real nasty moving back in with his parents. what? no. i just broke my leg. no, this is a full blown move in to the basement, you're gonna be out of work without that money from... aflac! you might miss your rent. aww i just moved out. bummer man. hey i used to have my own place. yeah? no, no i live with my mom, but it's cool. health can change but the life you love doesn't have to, keep your lifestyle healthy with... aflac!

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♪ now the answer to today's aflac trivia question. where did the first st. patrick's day celebration occur? the answer, in boston, massachusetts, in 1737. "squawk box" on this st. paddy's day. united states secretary of veterans affairs, david shulkin. we'll check the markets. they're in the green on st. paddy's day. in the spirit. >> in the green. >> and wti crude also in the green at 49.02. "squawk box" retail detail. first up, breakfast with tiffany's. the luxury retailer out with

quarterly results. reaction from the street next. plus, how president trump's plans for deregulation will impact the sector. we'll ask retail guru right after the break. "squawk box" will be right back. kevin, meet your father.

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♪ 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 and center, hedge fund value act capital has raised its stake in valeant pharmaceuticals. this comes days after pershing square liquidated its stake. an s.e.c. filing shows value act owns 5.2% of the drug maker. that's up from 4.4% three months ago. value act as owned varying amounts of valeant shares since 2006. adobe is a big winner in the premarket trading. software maker reporting better than expected quarterly earnings and revenue, both on increasing subscription sales for its

creative cloud software suite. and a reminder, today is quadruple witching day on wall street. that occurs on the third friday of the third month in each quarter. it's a situation that can cause extra volatility. meanwhile, retail's number one policy issue is tax reform and the border adjustment tax proposals that are high on the agenda. courtney reagan joins us with more. >> the common theme with these regulations that make employing 42 million retail or supported subsector retail employees more onerous, these are the regulations that retailers want changed. so basically, retailers want obamacare reconfigured. that's not unlike my other businesses. specifically, eliminating the 30-hour workweek rule for determining health care benefits and the employer mandate to provide health care to employees and dependents. the -- but appointing more

business friendly individuals to the national labor relations board is key for retail as well. the obama administration's nlrb changed a number of laws that make it easier to organize in the workplace, creating more legal risk, including microunions, giving one department's employees the ability to organize as opposed to the whole store together. that's the makeup department department as opposed to the entire store, for example. joint employer is another regulation. it's an example where a contractor or contracted employee is hired to paint parking lot lines at walmart. they could sue their employer and walmart if legal action is taken. they don't like that. one of the most outlandish regulations is a 2010 requirement for retailers to track and report where all the gold, tungsten, tin, and

tantalum comes from in their products. that is nearly impossible and a huge drain in resources. but that's what the regulation requires. >> wow. >> there's only one zipper company. have you ever looked? >> ykk. i did know that. >> why does no one else make zippers? >> they must be pretty good at it and be able to keep the costs down. that's how capitalism works. >> where are they based? who are they? >> i don't know where ykk is based. >> are they a publicly traded company? >> i don't think so. now you're putting me on the spot. >> if you look at your zipper, is there any other zipper company? do you know? >> i haven't heard of any other zipper companies. >> have you seen the under armour ones where there's a magnet and you put them together? >> yes, they're trying to revolutionize the zipper. >> are those ykk? >> no, that's an under armour special. >> it's a japanese group of manufacturers. >> doesn't seem like people are -- doesn't seem like a high

margin business. >> no, but if you can get a monopoly. >> what do you do when you zip it up and it comes apart at the bottom? >> you have to get a new zipper. it's broken. >> and ykk gets more business. >> so it matters. >> but the s.e.c. wants to know where the tin came from in the zipper. >> they're magic. >> zippers? yes. let's talk more retail this morning. a different type of retail. tiffany's upbeat quarterly results. we're going to talk about how deregulation will impact the sector. tiffany beat on the top and bottom lines and gave an upbeat forecast. joining us is ceo and chief research officer, our guru on all things retail and fashion. zippers. >> i would say you are the guru on zippers. sounds like you're studying them carefully. >> tell us, how should we think about tiffany's? we were talking about the little sort of hiccup that took place at that flagship store next to

president trump's home here in new york. that seems -- >> well, when you look at it, $1.45 in earnings beat consensus. the sales results on the top line were better than the holiday season. so you were down 1% for the holiday. you just came in with flat results. the americas was a little better than expected. the guidance was right in line with consensus for at least mid-single digit growth. >> is this a better operations story at tiffany, or is this, say, something larger about where we are in the economy? >> i think overall, you had a little improvement since the holiday season. the gross margin is what really did it. some of the lower price points definitely are higher margin. fashion jewelry worked. that helped. but really, the tiffany story is about change. the change that's going to come from a new ceo coming in place, new board members. that's what makes tiffany's interesting. >> do you extrapolate anything from these numbers? >> it's doing a little better. we're seeing the global consumer

overall is traveling more. we've seen that from some of the european luxury goods companies. you're seeing the chinese travel a little more. you're getting more japanese business. certainly they even saw europe and asia pacific got better. >> what do you make about what's going on in the sea suite and the board? you have the former ceo stepping back. who is tiffany looking for to take over that spot permanently? >> i think overall, they want someone who can effect greater product change. product innovation will make a difference at tiffany's. all of these companies who are heritage companies, it's always about reinventing themselves and catering to younger consumers. you have to get that millennial. the speed to market is very important. product development and design to being on the shelf, the tiffany tea collection, which has done great. now what's next? i think that's the key. you have a brand that everybody knows and has to have more relevant appeal. >> what about the lady gaga collection? >> that was interesting. definitely and interesting

collection from tiffany. but being able to gain relevance, i think they're going to try different things. look, those holiday sales, it's better going forward than it was in the past. that's encouraging. >> good point. >> what happens with the border adjustment tax on companies like tiffany? >> for companies like tiffany, they don't make as many things overseas in asia. when you have 90% to 95% of your apparel made overseas, it's an impact to all of our companies. and you can have companies that were earning a profit, go to a loss, and we don't have the manufacturing facilities in the united states to manufacture those goods. so it's an impact of very big proportions. >> so what happened? >> you're not going to bring these manufacturing facilities back to the u.s. so quickly. not that it will employ people. are you going to have manufacturing in technology and robots taking the place of people. >> what happens to the stock prices if that happens? if you have all these retailers that swing from profit to loss? >> stock prices go down. >> by how much do you think? >> it depends what their earnings look like.

it's not like this is all going to be enacted at once. and are we going to get some of the international retailers being able to fend off some of these border adjustment taxes. >> is any of it reflected in the stocks right now, or is that a reflection of consumers changing habits? >> i think it's a little bit of both. the fear that was out there in december, when there was so much discussion about the border adjustment tax, people were talking about is this an industry that's uninvestable. you can't say that because there's always things that go up and down. what you can say is they're all having to figure out new ways to do business, and it's the changing omni channel and it is the border taxes at the same time. >> this is a disruption like i don't recall ever seeing in retail. >> never seen the disruption of this magnitude to how companies do business. >> before you even get to the border adjustment tax. >> exactly. and this adjustment, you're having companies look at store sizes, how do you cater to new customers like millennials, what are you doing on mobile. if you're not on mobile, you're not there. the acquisition last night of true and company by pvh, that's

about data. it's integrating the data so they can learn more about the customer. that's exciting. >> are we going to see big, empty shopping malls all over the country? what happens with all the stuff that's been built up? >> it's really hard to kill a retailer and to kill some of these centers. you're going to get new types of tenants in there. are we going to have movie theaters or supermarkets? are we going to be like what europe is with some of these shopping centers and department stores? food halls make a difference because food drives traffic. i think we're going to get new categories in some of them. but we need more exciting tenants and product innovation from some of the existing tenants. >> okay. thank you. >> thank you. >> appreciate it. >> thank you. coming up, deregulation nation. we talk defense stocks after the break. is it time to buy? "squawk box" will be right back.

dearthere's no other way to say this. it's over. i've found a permanent escape from monotony. together, we are perfectly balanced. our senses awake. our hearts racing as one. i know this is sudden, but they say...if you love something set it free. see you around, giulia welcome back, everybody. the president's budget blueprint calling for more defense spending and a big part of getting that through is trimming the regulatory fat.

morgan brennan joins us with more on our special deregulation nation series. >> good morning. when you said is exactly right. so when you talk about regulations, defense highly regulated. that has been the case for decades. that's not necessarily going to change. so defense stocks have rallied post-election for two big reasons. promise of a massive military rebuild and the cutting of waste, which is key to more money flowing to actual acquisitions of hardware since there are budget caps in place and likely not going anywhere. now, pentagon waste is a huge topic right now. analysts point out that 20% of the dod's budget is overhead. there's been a lot of focus on lockheed martin's f-35 fighter jet. the ceo has said in the past that 35% of every modernization dollar is tied up in compliance. some analysts have argued the government could streamline elements of its buying process for some of these weapons systems to trim the costs. lastly, keep an eye on space.

there's been a lot of debate about how much to governor the extra terrestrial economy. the obama administration released a sweeping regulatory proposal. lawmakers just recently have been discussing this on the hill. perhaps a telling sign, elon musk telling me recently that spacex's moon tourism mission would still involve rocket fueling with people on board. nasa's safety panel has strongly opposed that. it's kind of telling that he's proceeding at least for now with this business model. >> yes. we're going to talk more about that, actually. we have an interview with the new secretary of veterans affairs. the department of veterans affairs about to see its budget grow by 6% to $79 million according to the new budget blueprint we saw this week from the white house. the va offers medical treatment to more than 9 million american veterans. the new secretary david shulkin joins us. mr. secretary, it's a pleasure to see you today. does that sound like a number

that you can work with to try to improve what we've all witnessed over the past three or four years, even become almost a political football to some extent? you were there. do you think this is a good start? is it enough? >> well, good morning. yes, i do believe the president has honored his commitment when he said he was committed to taking care of this country's veterans. this is a budget that will allow us to do that. >> i see that some of the -- what it's earmarked for, more nurses, more doctors, i don't know how i would split it up. maybe you can tell us. is that's what's needed, or is it i.t.? there's still too much things done on paper, not done effectively to get the maximum amount out of the system? what needs to be done in your view? >> well, i think there were three broad categories that this budget allows us to take care of. first is it allows us to bring in the type of health care

professionals that we need to make sure we are caring for veterans in the way they need it. a large part of that are mental health professionals and health care professionals in parts of the country we've had trouble recruiting in. the second is to make sure veterans have more choice and to be able to go into the community and get care from the private sector when the va is not able to provide the services they need. third is the general category of modernization of our system. we do need the most effective tools so that our staff can take the very best care of our veterans that they deserve. >> mr. secretary, it's not just limited to the va. the rural areas where it's -- how do you attract talent? i don't think you can attract people just from money. it has to be a calling, i think. how do you go about trying to do that? >> this is a challenge. it's a challenge not only faced by the va but all of american

health care. we're looking at it several ways. the va does more training of health care professionals and medical students than any other organization in the country. in fact, up to 70% of all doctors will spend time in the va system. after spending time in the va system, they often want to come and work and be dedicated to veterans. secondly, we're using technology telehealth. no other organization in the country is using as much telehealth as the va to be able to reach every part of the country where veterans live. >> there was a time when part of the aisle was promoting single payer. this is years ago where the va was held up as a model of what could be accomplished by the government an effective system. suddenly it almost went 180 degrees to where it was almost pointed out that this was the problem with trying to have no competition and government-run health care.

you were there for just the last couple years, i guess. where did -- what happened? when did it start deteriorating and why, the care? >> well, the big crisis in veterans health care actually happened in april of 2014 when we found that there were wait lists and people weren't talking about it. they were hiding the information. so what's happened since then is we've really had to re-establish the culture to make sure people understand why there is a va, and that is to serve those who have served us. so we've had to recommit to our values and mission. we've had to rebuild slowly but surely the trust of our veterans and the american public. i'm committed to making sure that veterans know that we're here for one reason, and that's for them. >> but mr. secretary, what led to those problems with those slowdowns? i'm sure it wasn't that people didn't want to serve. was there not enough money, enough funding, were there not enough doctors? what led to that backup? >> i think there was a culture

problem where information wasn't being shared and people were hiding information. i do think that the demand had outpaced the requirements for the budget. so there wasn't enough funding that was there. we're now taking a hard look at all those issues and correcting the problems to make sure that we are on the right track. >> and that's for 9 million people. what advice would you give to poli policymakers right now about repeal and replace so that we can learn lessons from when you try to have a government-run system versus a private or market sector? do you support the bill currently up for consideration right now, the ryan care? >> well, look, i'm here to care for veterans. i'm not going to politicize veterans. i do know that the lesson here is that you have to focus on what services are needed. we have to make sure we are providing the services needed. for veterans, the country has a commitment to caring for those who have served us.

so i think the lesson here is that if you don't provide what's needed, you fall short of your goal and your mission. >> yeah, becky alluded to it. i can't think of anyone that would not want to give the very best care possible to people that we owe so much to. so you wonder where you lose the -- you wonder where that gets lost, whether it's bureaucracy or not enough money. you just wonder how it happened. >> well, the president has made his commitment to veterans. i think you're right. the country is united on this issue. we know what we have to do. we now have the resources to do it. so we're under way on a task that we feel very good about and that we feel confident that we're going to be able cto achieve. >> you were the designated survivor. >> that's what we got to talk about. >> did they come to you? i've seen what kiefer souterland

is going through. did they just tell you? >> well, i received a call. i was asked whether i'd be willing to do that. of course, i said i would. i was honored to do it. fortunately, this was a lot of preparation just in case. of course, everything went well. >> where do you go? where do you hang out during that period? >> he can't tell us that. >> well, we do leave d.c. to a nonspecified location, of course, for national security reasons. we don't tell that. i will tell you that it is a location where there are a lot of young men and women who prepare very hard in the eventuality that something catastrophic would happen. i was very proud of those people. most americans will never see what i saw and should know the country takes this very seriously. they should feel good about that. >> excellent. and you're a doctor and everything. i feel better having talked to you. very serious and everything

else. i think it was a good choice. anyway, mr. secretary, we appreciate your time this morning. >> i'm pleased to be here. thank you. when we return this morning, stocks to watch and a check on this morning's top headlines. don't forget, all day long on cnbc, deregulation nation. banks, energy, telecom, media, and much more. keep it locked here all day. we're tackling the issues that matter most to your money. the futures this morning feeling a little green. right in the mood for st. patrick's day. holding on there barely. "squawk box" will be right back. ♪

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built for speed. built for business. welcome back to "squawk box." let's look at stocks to watch this morning on this st. patrick's day. netflix was rated outperform from bernstein, the firm saying the subscription video on demand company is vastly superior for entertainment. also, tribune media may be the target of a takeover battle, according to bloomberg. 21st century fox is weighing options to thwart a takeover by sinclair. and texas road house was upgraded from buy to neutral based on valuation and belief in the restaurant chain's growth prospects. when we return, we're going to talk manufacturing, jobs, and deregulation with the ceo of the national association of

manufacturer manufacturers, jay timmons.

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deregulation nation. president trump's push to cut the red tape and what it means for the business of manufacturing. wells fargo's new ceo speaks out. the chief of the nation's second largest bank on the economy, president trump, and the impact of the cross-selling scandal. that cnbc exclusive interview moments away. plus, chasing a pot of gold. >> follow that rainbow! >> big businesses are hoping to see green this st. patrick's day. we'll tell you how much consumers are expected to spend. it is friday, march 17th. the final hour of "squawk box" begins right now. ♪ good morning. you're watching "squawk box" here on cnbc. i'm joe kernen along with becky

quick and andrew ross sorkin. futures are in the green for st. patrick's day but just barely. treasury yields moderated interestingly after the fed hike. they're now at 2.51. we were at 2.6 a week or so ago. among the top stories this morning, in washington president trump will meet with german chancellor angela merkel. the two will hold a bilateral news conference in the afternoon. there is a lot on the agenda, including trade, the economy, russia, and the future of nato. a few things to get accomplished before that press conference this afternoon. the fed is easing merger rules for smaller banks. bank combinations that have less than $100 billion in assets will not have to undergo rigorous scrutiny. previously that threshold was $25 billion. and there are two economic reports on the agenda today. february industrial production is out at 9:15 a.m. eastern time. then at 10:00 a.m., you can look for a preliminary read on march consumer sentiment. okay.

stocks to watch this morning, a couple things to look at. retailer tiffany out with quarterly results. earnings of $1.45, 7 cents above estimates. the luxury goods retailer also gave an upbeat full-year forecast. check out shares of canada goose. we've been talking about this company all morning. the toronto coat company made its public debut yesterday. closing its first day of trade with an increase of 25% from the ipo performance. however, it finished the day below its first trade price of $18 per share. snap shares falling below $20 since going public. the decline comes after another firm put a sell rating on the parent of snapchat. snapchat parent pulled off the hottest tech ipo in three years earlier this month, but after two days of gains, the stock has pulled back on concerns about valuation and lack of profitability.

all morning long, we've been talking about the impact of deregulation on the economy. let's talk about what it means for manufacturers. joining us now is the president and ceo of the national association of manufacturers, jay timmons. thank you for joining us. >> glad to be here. >> we have been trying to get our arms around just how big of an issue regulations have been for manufacturers. how would you size it up in terms of numbers? >> well, here are the numbers. manufacturers are directly subject to 29,696 regulations. that's a huge number. th it's a massive impact and a massive economic impact that chills investment and job creation here in the united states. >> how did this kind of build up over time? i just wonder when did it get to a point you thought was a tipping point that really made it too tough to compete? >> that's a great question. this is not, as i think a lot of

folks would like to say, the partisan back and forth. i think a lot of folks would like to say this has been a problem of the last eight years. yes, it has definitely grown over the last eight years, but this has been piled on for 20, 30 years. it's a 2.3 total cumulative impact of $2.3 trillion. over the last eight years, we've had about one major regulation. that equates to about $100 billion impact to the economy with that regulation. we've had about one of those every 4 1/2 days. 650 of those throughout the obama administration. that's a tremendous impact, $100 million impact. >> my guess is it's not a situation where every regulation is bad. >> no. >> how do you sort out the good from the bad, and how do you try and ease the shackles in terms of trying to get things through? >> thank you for that question. that's exactly right. not every regulation is bad. we're in a free market economy. we need good, sound, transparent

regulation. that's what we fight for every day at the national association of manufacturers. we all want clean water. we all want clean air. we all want a safe workplace. but it really boils down to common sense. are you going to implement things that are going to be onerous to the economy that's going to make it less likely that you're going to be able to make the investments to achieve those goals, which is what a lot of these regulations have done. >> let's break it down. if there's that many regulations -- >> do you want me to name them all? >> no, no. give an example of a good one. >> sure. we've worked with various agencies on regulations over the years to try to make sure that they enable us to compete and succeed. let me go to the bad ones.

obviously that's the easier thing to talk about. there's a tremendous number of ones that manufacturers are perfectly content and happy with dealing with. let's look at some of the ones that are most restrictive. the waters of the united states rule. basically, everybody puddle on a manufacturing facility is now regulated. the administration has taken action on that. there was the overtime rule, which made it very difficult for manufacturers to operate their facilities, manage their facilities in a way that made sense. there was the clean power plan that basically regulated every source of carbon in the atmosphere, which made it very, very difficult for us to have -- well, it would have made it, had we not taken some action, would have made it difficult for us to get affordable energy and a reliable source of energy. so we have a lot of those issues that have been piling up over the course of the last few

years. those are ones that we want to tackle immediately. >> in terms of what's happened, we've heard a lot in the markets about how the trump administration is already going to work on deregulation. what have you seen show up? have there been actual things that you can point to, to say, yes, this has made it easier to manufacture in america? >> well, i think that's coming. i think that there is certainly a lot of -- there's a lot of optimism that regulatory reform is foremost on the agenda, along with tax reform and infrastructure investment. but you know, this is not a quick fix issue, becky. i think that's the most important thing that we have to understand. there is a process in place for reforming regulations at the agency level. but there's also a need to have some legislative fixes. we see some action in the house on certain types of regulatory reform legislation. you see senator portman and

senator heitkamp working in the senate on a regulatory reform effort. that would put, quite frankly, some common sense into this system. that would allow us to be at the table when regulations are being considered so that we can report out what's technologically feasible. what can we do to help achieve the goals that are in mind for these regulations. >> jay, president trump has talked about obviously creating jobs in large part through manufacturing. there's a lot of conversation in this country around whether we should have a border adjustment tax. we just had a retail analyst on who suggested that manufacturing, to some degree, the idea if we do bring manufacturing back to this country, in large past, it's going to be done by robots and artificial intelligence, not by people, the people them who voted for donald trump. do you believe that? >> no, i don't, andrew. you know i've had this conversation before. look, when we bring back

manufacturing to the united states, and let me start with the baseline premise. manufacturing is strong in the united states right now. we want to make it even stronger. when you think about robotics or think about automation, what we have to understand is that the jobs of the future, we definitely have a lot of need for the skilled craftsmen in the traditional manufacturing jobs today, but we're going to need folks with different skills also in the future, people that can design and build and operate and maintain automation and robotics. those are jobs that are going to be incredibly lucrative. they're going to be great careers. so our goal is as jobs are upscaled, we want to make sure workers are upskilled so that those jobs are future proofed so that we don't have to worry about a loss of jobs in the future. we're going to have the technical skills and educational

background for the workers of the future that can maintain those jobs for a lifetime and make them lifetime careers. >> all right. jay, thank you very much for joining us today. >> thanks for having me. today is not only st. patrick's day, but it is also the beginning of march madness. been running through the numbers. berkshire hathaway, warren buffett talked about how they were offering berkshire hathaway employees the chance to come up with the perfect bracket. only down to 32. >> 16, i think. >> if you get down to the final 16, you get a million dollars. they've been sending the numbers. it started at 96,108. after notre dame, it went to 69,649. this morning, there are only 834 brackets remaining because of the two upsets that went through. >> inside the berkshire -- >> however, there are so many -- there weren't nearly as many upsets yesterday. we'll see what happens today. the chances are very good. >> warren buffett says himself if we have a day similar to

yesterday, the same pattern happens in terms of the number of upsets and things like that, odds are quite good they'll have someone win or more likely multiple winners of the $1 million. >> that's where you're going to be calling warren and saying, hi, he's not in? do you know when he'll be back? that's when you're never going to be able -- if they have to pay off, they're never going to find this guy. >> he's going to pay. >> no way. that's how people like him get to where they are. he's so cheap. >> he says he would like to see somebody win. >> he wants his personal assistant to win. or him. he's probably got ten brackets. >> one bracket per person. >> no longer works here? really? >> his assistant was doing very well yesterday. >> you'll never get ahold of him. or the check will bounce. coming up when we return, a cnbc exclusive interview. wilfred frost sat down with wells fargo's new ceo tim sloan. highlights from that conversation next. plus, more on our series on

deregulation. later, ipo optimism. we're going to talk about the -- talk to the head of nasdaq's listings about why the pipeline will heat up later this year. stay tuned. ( ♪ ) it just feels like anything is possible here in upstate new york. ( ♪ ) at corning, i test smart glass that goes all over the world. but there's no place like home.

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welcome back to "squawk box," everyone. shares of adoe bbe on the move s morning, reporting better than expected quarterly earnings. that stock up by more than 5%. and netflix ceo reid hastings weighing in on the potential end of net neutrality. he says he's not too worried about what will happen if the regulation is eliminated. in years past, he's been very outspoken about practices he believe went against net neutrality principles. coming up, wells fargo ceo tim sloan speaks out. highlights from that interview next. as we head to break, check out this. more than 139 million americans are planning to celebrate st.

pad i d paddy's day. spending is expected to hit more than $5.3 billion. "squawk box" will be right back.

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when you have the right financial advisor, life can be brilliant. ameriprise welcome back to "squawk box." let's get to wilfred frost, who just sat down with wells fargo tim sloan in a cnbc exclusive. >> andrew, yes, thank you very much. a wide-ranging conversation with the ceo of wells fargo, tim

sloan. i asked him, given the share price recovery that we have seen since the sales practice scandal, with the hype around the situation last fall, was that an overreaction. >> we made some significant mistakes. we had an issue as it relates to our incentive compensation plan. we should have dealt with it sooner. we should have dealt with it faster. we had to own up for that. we let our stakeholders down. it's affected the reputation. we've got to rebuild that trust, and that's my primary responsibility right now. >> and you mentioned the politics of things. there was an election pending. there was lots of anti-banker rhetoric at the time. a divided nation, you could say. were you a little bit of a victim of that? >> you know what, i wouldn't call us a victim. again, what happened at wells fargo was our responsibility. we needed to own up to it and fix it. that's what we're going right

now. >> in terms of when the news broke itself last fall, we talked about the actual impact to the business, but was there a sense at wells fargo that the team underestimated the potential pr fallout of this issue at the time? >> hindsight is a great thing because you're incredibly intelligent because you know exactly what happened. knowing what i know right now, i think it's fair to say that we underestimated the impact and we probably would do things differently. i can say that probably about a hundred decisions we make at wells fargo every day. >> i want to move on to the board review. i know you can't specifically comment on what's likely to come out. it's ongoing, and you're not part of the board review yourself. there's been two official releases from the board review so far. one in which eight people, including yourself, were announced as not getting a cash bonus for last year. the board reason said was promoting accountability, putting the company first, and not related to improper behavior. the other release that we've already got from the board review is that four people lost

their jobs for cause relating to the sales practice scandal. were you very pleased when you heard that you fell into that first group rather than the second group? >> well, it wasn't a surprise to me because i know my involvement in the company, and i know the things i did and didn't do as related to the retail sales practice. from my perspective, i think it was entirely appropriate the senior leadership team took responsibility. i think you need to see that more in corporate america, when corporations don't live up to the expectations of their shareholders. as ceo, a lot of what the board decided was recommended by me. we had a very good discussion about it. i think it's entirely appropriate. >> now, of course he said that the corporate stakeholders needed to take responsibility. he's received a lot of attention in the last couple days that he still received a pay rise over the course of 2016 despite that taking responsibility.

later we'll hear his defiant response to that criticism defending his own pay rise. also, the very clear details of how it's impacted the underlying earnings of the company. he did state the worst he felt informati was behind them. also, we'll have comments on the fed rate hike, on loan growth, on deregulation. and finally, i want to leave you with this sound bite in terms of the fact that as he revealed -- as warren buffett revealed on "squawk box" a few weeks ago that tim sloan had spoken with warren buffett three times since the scandal and since taking over, and i asked tim sloan how he had tried to reassure warren buffett that wells fargo was still a good investment. >> well, i don't know if i'm going to be able to do anything to reassure him. i think our performance will reassure him as to whether or not he should continue to be our largest shareholder. we had a very direct conversation. i think he's been very direct in terms of some of the mistakes we've made. we had an incentive plan that drove the wrong behavior, and we didn't get at it fast enough. that's what warren has said.

is that correct? absolutely, because that's what we believe. that's what we're fixing. >> he described it as an honor to have warren buffett as his biggest shareholder. much more to come from this exclusive interview on cnbc throughout the day. >> we look forward to that. thank you. >> wilf, bankster ceo compensation is a much bigger deal in your homeland than i think here. we decided we want to be ceos of banks or anywhere. what was his -- he got a raise to what? >> a net pay rise of 17% from 2015 to 2016 to a total of 12.8 million. the reason it's attracted some criticism is that he didn't get a cash bonus. the cash bonus was 1 million. he got a net pay rise of more than that. he gives a solid defense of the reasons behind that, which we'll have later. >> that's not -- compared to some ceos -- i mean, sir martin

sorrell wouldn't even show up for a quarter in the uk. i just hope you're not being too judgmental of poor tim here. >> joe, i'm asking the questions and listening to the answers. >> i know, but the way you can ask questions and the expressions on your face. you know, whatever. that's okay. happy st. patrick's day. >> well, joseph, watch back the clips of coverage of this story. see what you think. >> poor bob dimon, my god. he was run out of the uk, like tarred and feathered on a rail. he couldn't even go to a restaurant. someone might recognize him. he was incognito. i don't know what goes on over there. >> bob dimon has just made a bid for a small uk financial firm, as of this morning in the uk. getting a lot of attention there. >> i don't know why he'd go back. anyway, thanks, wilf.

st. patrick's day, and businesses are hoping to cash in on the irish holiday. 52% of consumers celebrated are expected to purchase food, while 41% will buy drinks. but only 8% plan on getting drunk today. among the restaurants getting in the spirit, tgi friday's will serve 14-ounce green beers for $3. krispy kreme's traditional glazed donuts will be green today. we already had a shamrock shake. we were all too guilted. took one sip and got rid of it. >> i want the krispy kreme donuts. i didn't know about those. you organize that. >> you are the donut guy. you're like homer. >> we keep saying only 8% of americans are planning on getting drunk today. stay off the roads today. bad idea. be careful, everybody. happy st. patrick's day. >> i'll get drunk on corned beef. when we come back, deregulation nation.

what cutting the red tape means for the economy. plus, the ceo of johnson controls joins us on set. right now as we head to a break, take a look at the futures. stay tuned. "squawk box" will be right back.

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♪ welcome back to "squawk box." good morning. we are here on cnbc, live at the nasdaq market site in times square. among the stories front and center at this hour, chipotle says that four of its 12 directors will not stand for re-election at the may annual meeting. that includes the restaurant chain's longest serving director, who has been on the board for 22 years. chipotle has been trying to recover from that november 2015 e. coli outbreak. also, this morning's economic numbers are about 45 minutes away. february industrial production expected to be higher by 0.2%. also out this morning, commutns sentiment. the university of michigan consumer sentiment index seen

increasing to 97.5 from 96.3. leading indicators for march are expected to match last month's increase of 0.6%. the nation's top economists weighing in on president trump's plans for deregulation. steve liesman is here and has more on that. steve? >> becky, it's been fascinating to report this story the last couple days. economists have a love/hate relationship with deregulation. they love it because they think deregulation and regulation can be a deadweight loss on the economy and by reducing it, you can spur growth. they hate it because it's almost impossible to measure the cost and potential benefits. in a surprising result from our cnbc fed survey, for the second time in a row, respondents say the most important initiative from president trump, not individual or business tax cuts, it is deregulation. they think it has the most beneficial effect on the economy. they hate the trade policies but really like deregulation. since president trump was elected, the percentage of respondents saying tax and regulatory policy are the number one threats to growth, it

plunged to just 7%. during much of president obama's tenure, regulation and tax policy was often seen as the biggest threat. most economists we contacted say nearliment possible to gauge the growth impact of less regulation, but one paper that's receiving a lot of publicity comes from professors at duke and stanford. it suggests regulation may have cost the economy, get this, $4 trillion. measuring regulation from 1980 to 2012, they think the economy could be 25% larger or about $13,000 per capita in america, if regulation hasn't grown as much. take a look at what they did. the unique study used machine learning to read the federal code in a database they created called reg data. they found a massive rise in the number of restricted words like shall, may not, and prohibited. these words now top a million. it was under 600,000 in 1977. the researchers acknowledge they don't measure potential benefits to growth and regulations like from cleaner air or safer food.

the idea the economy can be more efficient from less regulation, that seems widely accepted. measuring how much it hurts from possible benefits, that's more difficult. and how much time we should spend on it. the key thing here is when we put together a budget, how much do we pencil in from deregulation so that offsets whatever spending is out there? very difficult. what you have to do is you have to do it bottom up, industry by industry. this paper i talked about looked at 22 separate industries and tried to gauge the number of restricted words verse the industry and gauge the change. >> how can you believe any of these models? 22 industries, that's 22 places you could massively mess it up and be off. >> mark zandy says -- >> ugh. >> mark zandy. >> ugh. >> he points out the

productivity decline is global, so it's hard to say it's just a rise in u.s. regulation because it's global. he also points out you can use something like dodd-frank. but you've also reduced perhaps the risk to the economy. how do you gauge that. >> you say he, i knew who you were talking about. >> i didn't know i would get an automatic reaction out of you. are there other words that work like that? >> yes. sometimes i don't do it out loud. thank you, steve. let's talk more about deregulation. joining us now is ceo and chairman of johnson controls, one of the biggest manufacturers of car batteries and heating equipment. just big picture, alex, not necessarily with johnson controls, but your view on what deregulation can do for our economy, for the u.s. economy. >> i sure haven't measured the words, but i can tell you that just the environment of understanding that regulation is going to change, that things are going to be easier, people are going to make choices. the choices they make are going

to be different than the choices they made in the past. i do think it'll have an impact. >> you think that just having less new regulations or going back and actually checking what's on the books -- because we never do that. we never check what's on the books when they're outdated or counterproductive. what's more important, slowing down the influx of new regulations or actually going back and taking a hard look at what we're doing now that might not be working right? >> you have to take a look -- i mean, we have to take this opportunity to take a look at everything. not all regulation is bad. not all new regulation is bad. but i think that now is the time to take the opportunity while we're talking about it to take a fresh look. >> we have the notion that everybody's affected, but big companies can either lobby or get around it, right? >> this is the fascinating thing. one of the things the researchers point out is that companies and industries use regulation to keep out competitors. so you get that. the other thing you get, and i

wonder if alex will comment on this. sometimes big companies want federal regulation because that becomes more efficient than dealing with individual state regulations. are there situations like that? >> absolutely. our battery business, we have dozens of battery plants across north america, all with different regulatory environments, whether it be permitting or how you operate the facility. it becomes very difficult. when you have all these regulators. there's state regulations, not necessarily trump federal regulations, but you have to deal with both. >> can you give us an example of the dumbest rule out there? if you got rid of it, it would be better off. >> you know, so in our business, and we make lead acid batteries. when you think about lead acid batteries, the first thing that comes to mind are environmental concerns on lead. you come to one of our lead manufacturing facilities, it's probably -- you're probably

better off eating outside one of our manufacturing facilities here on the side of the highway because of all the years and years of having lead and the gasoline that we use to drive our cars. when you look at the regulations in order to permit and operate our facilities, it's just incredibly cumbersome. >> there's another notion in this paper that i just read, which is that as you pile regulations upon each other, they begin to interact and have worse effects, one on top of the other. if they would consider the layers of regulation, you could possibly become more efficient. is that something you found as well? >> for sure. well, i think -- i don't know how many people in most companies, but in our company, we have people where their only job is to keep up with regulations. specific regulations. it creates an environment where you really don't feel like you really want to be there. >> do you say to yourself now, depending on what happens, you'll be able to, frankly, get

rid of some of these people, and what are you going to do with that money? >> well, in our business, we actually manufacture mostly in the region that we're in. >> right. >> so i think the only choices that we'd have would be between mexico and the u.s. because the type of products that we manufacture are manufactured in the region we serve. i do think that there will be a trade-off that we would -- our cost is better for us to be closer and closer to our customer. i think we would make those choices. i think we would be closer to -- meaning more footprint in the u.s. >> back to that same point, the point steve made earlier. it's a lot tougher for other competitors to get in, small businesses to get into any of these things. we've seen the same thing with small banks and dodd-frank. you can only do it if you're big. >> i can also tell you having regulations, if you're large, is a barrier for other folks. if you have a business model, take advantage of that.

incumbency is an advantage always. >> how many people do you have dedicated just to dealing with regulations? >> i don't know that i could count them. it has to be in the hundreds. >> hundreds? >> yes. >> is there lawyers for the most part? >> lawyers, compliance people, financial people, and outside consultants, specialists around safety. >> i don't know if alex wants to comment, but one of my peeves on this whole thing is the more you regulate business, the more you empower the political establishment. the more you do that, the more you raise the costs and benefits of donation and lobbying. so i don't know how much your business has to be involved in monitoring and lobbying washington because the regulations they pass are so crucial to your profitability. >> you're really coming along. >> i've been that way forever, joe. if you would listen to me, i have been that way forever. >> kudos. >> i think that's our system. no matter what you do, that is going to be a part of the

process. >> help us with other regulations. the lead regulation, there may be people sympathetic to that. there's other people who are going to say nobody wants lead in their water or whatever it's going to be. is there any tangible regulation that you think is just -- there would be zero controversy on, that you think in your business where you go, this makes no sense, or any rational human being would just say we shouldn't do it this way. >> i think i heard earlier today that some of the dodd-frank rules were trying to figure out where some of our materials are coming from. conflict minerals. there's -- those type of regulations have somehow got embedded into our process. it's asymmetric costs for whatever benefit. those are the kind of things that are just silly. i can't come up with the benefit. you can't track it really. somebody had a good intention that's gone crazy. >> while you're here, can you tell us how things are going in the auto industry right now. >> good.

i'm not an automotive company anymore. i make sure i say that every time i come. >> that's right. >> but if you look at the spin, their stock has done fantastic. the business is doing really well. the industry seems like it has legs. >> will you ever have all robots making your batteries? andrew is totally worried about that. you still have people manufacturing the batteries, or is it going to be all robots eventually? >> i don't know about ever, but i can't see a day where people aren't involved in the process. >> oneless worry at least for johnson controls, andrew. >> blue you're going to have more robots. >> as the balance between people and robots will shift toward robots eventually, if it hasn't already. >> it would have to, yeah. >> it would have to. >> yes. >> so when people have a conversation about manufacturing in america, are we having a conversation about manufacturing or a conversation about jobs? >> it's jobs. but robots aren't just going to be in america. automation is happening

everywhere. >> everywhere. >> so whether manufacturing comes to the u.s. or in china or mexico, we're no more automated in mexico or china than we are in the united states. >> i read that japan has something like ten times the number of robots per worker than we have in the united states. >> no, we have ten times the lawyers. >> they don't have people. >> it's born of their demographic deficits. >> it's a different situation. >> so did you watch northwestern yesterday? did you go to northwestern? >> no, i went to university of south carolina. we play two games today. >> you never went to northwestern? >> oh, i did. i got my graduate degree. >> but you couldn't care less. south carolina plays tonight. i got marquette. should i change that? i think it's too late. >> too late. >> yeah, it's too late. but south carolina is going to win. >> i don't think south carolina -- >> i know the girls are going to win for sure. >> marquette has had some great wins.

>> i live in milwaukee. >> all right. thank you. >> thanks, alex. >> you tried to get out of that northwestern thing. made me feel like i was going to lose. >> he doesn't associate it with the team. his team is south carolina. >> thank you for that, alex. when we come back, is the ipo ice age over? we're going to ask nasdaq's head of listings about companies in the pipeline. that's next. stay tuned. you're watching "squawk box" here on cnbc.

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welcome back to "squawk box," everybody. a u.s. federal judge has approved a $27 million settlement between lyft and more than 200,000 current and former drivers over their employment status. the drivers had sued the ride-hailing service for classifying them as independent contractors instead of employees, which would let them be reimbursed for their expenses. most drivers will get about $130. although, those who logged more than 30 hours a week could get thousands of dollars. rival uber faces a similar lawsuit. let's take a look at a couple stocks to watch. valeant pharmaceuticals is higher in premarket trading. value act capital has increased its stake in the drug maker. that coming a few days after bill ackman's pershing square sold its valeant stake. a loss of $3 billion. that adds up over time. >> it's amazing. >> $3 billion.

>> value act has been in this much longer. bill ackman gets all the attention. value act was there, you know, very early on. actually knew a lot about this. >> what's their paper loss at this point? >> unclear, actually, because they got in so early. so they might -- we'll do a little math. but they actually at one point had gotten a billion dollars out. there was a controversy about what they would have known about potentially some of the problems at that time. >> because they were in a position to know probably. >> potentially. >> okay. amgen also moving higher, presenting encouraging data on a cholesterol drug. it will unveil more information during a presentation later today at a meeting of american college of cardiology. and tiffany continues to rise steadily since releasing earnings about two hours ago. they beat on the top and bottom lines for its latest quarter and gave an upbeat forecast. i think they should sell those

boxes separately, but i think it's a whole new revenue stream. >> just pretend it's from tiffany? >> go down the street, put it in the box, give it to the person. >> dangerous. don't try that at home. >> yeah, no. okay. in the meantime, we're going to talk ipos. snap, inc. kicking things off. let's bring in nelson griggs, the head of global listings here at nasdaq. i would say welcome, but you're here, we're here. >> been three months now almost. >> in this location, yes. >> so far, so good? >> so far, so good. tuning so far, so good, how are you thinking about the snap ipo? >> well, it obviously got off to a great start. we've had volatility since. i think two weeks is a hard time to judge the success of an ipo. so we have, you know, a pretty muted first start to the year. there's been more deals than

last year and bigger deals, but still not the level we saw in '13, '14, and '15. >> when you look at the volatility, does that subject something to you in terms of where this is going to go in the future? >> i think that's a pretty unique deal. until you get through the investor based selling in, you'll have the lock up sometime in june, july. after that, i think you see the long-term outlook. >> but you do need some big tech ipos to get people excited about the market. >> yeah, i think snap is its own category. there's only a handful of companies like snap. >> the next one was supposed to be uber. >> well, we'll see. i think what we're focused more on is the 30, 40 unicorns. i think those enterprise tech deals are probably where you see that drive a lot of activity. snap is a you topeka deaunique . >> can i ask about uber? given the controversy around uber currently, that a company

like that could go public in this environment? >> you know, uber has obviously a massive market that they have today and are trying to tackle. i think there's a lot of appetite for a company like uber. i wouldn't talk about uber directly. >> everybody is style vying for uber. but you've been trying to vie for uber for years, right? >> we talk to every private company out there and try to get them to come to nasdaq. i would not comment on uber directly. >> what's the sentiment like? for a long time, there were so many companies that didn't want to go public, said the markets aren't ready for it. by the way, i don't want to be a publicly held company. i don't want to do the quarterly calls. >> that's continuing. they're staying private if they can. with the jobs act, the shareholder count change has had a dramatic impact. you have crossover p.e. looking at private companies. the private space is a wash if capital. they can't stay private, and they are. >> what about the business that

you are in. you own a piece of this business, helping people sell to be. >> yeah, what we do is work directly with companies. when they want to do a secondary offering, what they'll do is use our software to help coordinate that sale. it's much like a real estate transaction. it's a complicated process. we run those transactions, working with the company, where they identify the buyers, set a price, and it's coordinated with hundreds of sellers. 2016, there was a big disconnect between the buy and sell side. those deals took a long time to come together because there was much more buy side drin. this year in the first quarter, we ran some of our biggest ever, and it was much less demand to sell this time around. i think you're seeing that shift to the sell side. >> when you talk about governance and look at snap as an example, are we going to see more and more transactions where companies are going publicly effectively giving the public less governance? >> you're already all seeing that. if you go back ten years ago, about 2% of companies go public

with the a.b. shares. last couple years, 10%, 12%. technology companies are recognizing earlier in their foundation as a company that they are looking at how they would control their path. >> is that a good thing or bad thing? >> well, i think >> well, i think from the company perspective i think one of the big challenges being public today is short-termism and why delay going public is there ability to pivot their model. giving them more control in some form or fashion is something we need to consider as a public marketplace. >> who dictates the spread of food on an ipo day? >> we're all about the company, joe. >> when do you have bacon, when do you not have bacon out there? >> if the company wants bacon, they'll get bacon. >> why isn't that part of what you offer? >> you look at what we do here on a daily basis with ipos.

>> or roadshows. make us happier. >> joe's looking for bacon on a daily basis. >> not there today. just some pastries. >> i have a lot of things asked to do and bacon is now on that list. >> do i have to just ask her? >> go straight to the top. >> adina is at the top, but i have control over the bacon. >> sorry. >> okay. >> that was a great interview. thank you. >> thank you, nelson. we appreciate it. when we come back, jim cramer will join us live from the new york stock exchange. we'll get his take on today's biggest movers. in the meantime check out the futures this morning. things have been in the green all morning long. dow futures up by 34 points, s&p futures up by 3, nasdaq futures up by close to 10. stick around, "squawk box" will be right back. board. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? ...no minimums.

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let's get down to the new york stock exchange. jim cramer joins us today. i want to say, jimmy, did you remember? yeah, my man, you did. we don't need no fake photo shopping to get you the green tie going. >> i saw guys with some blue ties down here. i was like what country is that, what day is that, what are they representing? not clear to me. >> one spot i totally by accident i wore an orange tie.

i can't believe the kind of -- i just happened to because i forgot. people thought i was like some, i don't know, like i wanted to do something politically or i had no idea. i've never lived it down, so i try to remember now. >> well, that would be a statement, but i think the wrong statement for the day. >> i think so. so markets cooperating? it's in the green at least for now. >> yeah. remember the days, oh, the bank stocks, they were the leaders yesterday. i mean people have to start understanding that there's something happening. they were talking about deregulation because that's something, that's one of the things that are happening, but more business is happening. and just because we don't see good numbers at target and macy's doesn't mean there isn't business happening in this country. >> jim, supposedly americans waste a lot of time on march madness, so i've been trying to do my part wasting time. >> good. >> did you watch notre dame yesterday, speaking of st. patrick's day? >> princeton, man, i watched

that -- yeah, this princeton team could be a gamer, but didn't matter in the end. >> i'm looking forward to today, too. you got any upsets picked for today? >> i did pick northwestern because sara mentioned northwestern. wilf and sara, sara and wilf's show, i went with them. maybe sara's a genius. >> i know it. i told you about wilf. he sees people using their hands with a ball and he's like what kind of sport is this? why would anyone watch when you're not just using your feet? >> wilf likes to play basketball in a dinner jacket. >> you know, he'd be good. i bet you he can dunk. >> wilf? you kidding, the other day someone asked me if i was british on twitter and he said that's the biggest compliment anyone could be paid. >> all right. anyway, jim, thanks. we'll see you in a few minutes. "squawk box" will be right back. 'g tools, right at your fingertips, you have access to in-depth analysis, level 2 data, and a team of experienced traders

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welcome back everybody. a programming note for you, all day on cnbc don't miss full coverage of deregulation nation and how cutting the red tape will impact business. a final check on the markets this morning before we hand the show off. right now looks like futures are still up. >> whoa. >> dow futures up above by 38

points, nasdaq up by just over 9.5. the markets were already in a position to be slightly positive for the week before seeing the gains this morning. the ten-year note now yielding 2.522%. crude oil prices have been higher once again. >> do you like cabbage? >> i don't like cabbage. i love corned beef. i hate the way cabbage smells. >> and it smells at other times. >> okay. happy st. patrick's day. >> and be careful out there given all the drinking we talked about today. >> yes. only 8% -- >> make sure you join us on monday. "squawk on the street" begins right now. ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. futures not far from fair value on this st. patrick's day. a lot to watch today including chancellor merkel at the white house, quad witching, we're going to tackle the trend of deregulation all