♪ >> live from new york where business never sleeps, this is "squawk box." good morning. 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 steve liesman. good morning. >> good morning. >> good to have you here. >> great to be here. i was in philly yesterday, got on that reliable amtrak, came back. it worked well. >> you spent a week in philly? one afternoon? >> exactly. which is where comcast is headquartered. beautiful city. >> whenever i say that, you remind me, in a good way. >> we love philly. >> we do. >> beautiful town. >> schuylkill, the row houses are beautiful. the zoo. >> great place to get -- to culture great management. really good managers. really good corporate -- >> something in the water there. >> something in the water.

>> i might have met one yesterday, patrick harker. the new philly fed president. has a business background, academic background. went to the university of delaware. interesting guy. has a civil engineering degree and a master in economics. >> he was trying to be a homer. >> i know. i got it. i was ignoring it. >> that's your first meeting with this guy? >> yeah, it was. he's not as hawkish as charlie plosser. much more down the middle. >> love charlie. >> he's on board with a few rate hikes, but not in a hurry to do more. >> three more or three total? >> three total. two more. >> we had kashkari on yesterday. >> i know. i saw that. >> you did? i read the transcripts later. >> you did? >> yeah. >> some people with that viewpoint like the interview, my viewpoint. you heard, if you read -- you know what i was saying to him, i think he's crazy. >> right. >> because you're close enough

to the statistical inflation numbers to where if you're at all forward thinking at all, now is the time. he just kept trying to defend that position. i thought what maybe was interesting is how people look at the participation rate, it's everything to all people, to people that think the labor market is tight. it's the reason it's down is because of -- i mentioned you. did you see your name in there? >> i did not. >> i thought you said you read the transcript. >> i read his answers, joe. >> i said you thought the demo was older people retiring. >> i said half of the retirees. >> okay. >> some of them are -- there are people and research shows they are coming back. >> i'll tell you off camera who i heard from and they said they loved it. >> the way you questioned him. >> yes. >> and that he was left in shambles. >> you don't always get that in

a transcript. right. exactly. you needed to actually watch it. you should be dvr'ing the show. >> probably on the acela. >> no excuse. let's check the u.s. equity futures. you will see right now it looks like things are indicated higher. dow futures indicated up by 37 points. s&p 500 up by 5. nasdaq up by 14. >> can i interrupt? this tells me that the markets just don't care about what happened yesterday. >> i have a different take. >> okay. >> yesterday markets did get weak. you could see -- >> during comey? >> i don't know if it was during him. i think if the markets believed there was some -- right now we're back to where there's smoke, there must be a fire. >> right. >> there's smoke. we know clapper and morrell both said -- it goes back to july, as recently as a month ago, they were saying they didn't have anything. i think the market is saying that comey is eventually going to come out -- he has to eventually. if there's nothing, he has to come out with a hillary-type

exoneration, and hopefully not come back two weeks later saying we found anthony weiner talking about russia. i think the market is assuming -- i really do think if the market thought that this presidency was in jeopardy in a serious way, i think the market would go off. just because it's tumultuous but also the tax hikes. >> the market doesn't trade with a moral bend. >> are you implying something is wrong? >> no, no, no. >> i don't know that it would be a leading indicator. >> i don't know the market knows more than we do. i have no idea. you have flynn -- >> the market is only trading outcomes. the only outcome i think that matters to the market is whether -- there's two. one is the potential for an end to this president circumstances the worst possible outcome for the trump administration. the second one is whether this weakens his presidency and his

ability to get through the policies the market -- >> so far the market doesn't seem to think that either is happening. i don't know that the market knows anything more than we do. >> i think what we see when we look at the market is the way it bets on different outcomes here. it doesn't seem to be incorporating much weakness in the trump administration into the outlook from this, even though some editorials i read say this will go on for years. >> either that or the ignored story yesterday, how well gorsuch performed. that's giving strength to the markets to get that ninth -- fifth on the right side. >> on the conservative block. >> correct side you mean. >> right. >> no, right side. >> i have to read something. here are the big stories we're watching today. house republicans releasing a package of amendments last night to their healthcare bill. the two key alterations exc accelerating the engxpiration o

the affordability care act taxes. president trump saying the goal of the changes is to bring down costs. we'll have a great competitive bidding protest. medicine prices will be coming way down, way, way, way down. and that's going to happen fast. we're just adding that to the bill. i said we have to add that to the bill. we were going to do a bill later. we'll try to add it to this bill. if we can't, we'll have it right after. we have some crazy laws in case you haven't heard. >> president trump will meet with lawmakers on capitol hill this morning to push for support of the american healthcare act. the bill will be voted on on thursday. in washington, supreme court nominee neil gorsuch will head back to capitol hill for the second day of his hearing. and secretary of state rex tillerson plans to skip a

meeting of flat to fnato foreig ministers scheduled for april 5th and 6th -- >> going russia later. >> i heard two different things. ian bremer said he is doing this to meet the chinese president and doing russia later. i have to get to the bottom of this. this was a reuters story. >> if you go with nato versus china, go with china now. >> that's right. >> because of what's happening -- rush thsia is late. with everything happening with north korea now, you would be crazy not to focus on the chinese meeting and make sure we're looking at the most important problem right now. russia's big, but north korea is a much bigger issue now. the only way we can deal with that is go through the chinese. >> president xi jinping is expected to visit president trump at his mar-a-lago resort that week. and rex tillerson is expected to attend that meeting. no confirmation from the state department. reuters reports that tillerson

will visit now e. momoscow on a. >> that is what was conflating, that he will visit moscow before china. but i personally would like to see china number one. for more on the political stories, let's get to eamon javers, he's been watching all of this from washington. what do you think? >> good morning. first, something to bring you up to speed on that's breaking at the top of this hour. new flight restrictions for aircraft coming into the united states from certain countries. u.s. intelligence is saying they're concerned that terrorist groups continue to target aviation, possibly with explosives hidden in electronics. so that means passengers on flights from ten overseas airports will be affected by these new restrictions. they can't carry on electronic devices larger than smartphones, that affects things like tablet cameras, laptops, dvd players and the like. a they have to go into the checked

baggage. nine overseas airlines have 96 hours to comply. jordan, jiptd, tuupt, saudi ara could wait, morocco, qatar and the uae. and we learned a couple of things from fbi director comey, y there is an investigation into the 2016 leelection meddling in it, and any relationship between the trump administration and the medd meddlers. and james comb my saey says theo evidence to back up the president's accusation that he was wiretapped by former president barack obama barack obam and then we saw this fascinating moment. you had a hearing going on about

an investigation into the president's campaign. and then you had the white house live tweeting that hearing as it was going on. then the fbi director asked to respond to those tweets in realtime. here's what they put out from the white house from the official white house account. they said the nsa and february fib tell congress that russia did not influence elelectoral process. congressman jim hines saw that tweet and had the opportunity during the hearing to ask fbi director comey what he thought of that tweet. >> it's not too far of a logical leap to conclude that the assertion that you have told the congress that there was no influence on the electoral process is not quite right? >> right. it wasn't our intention to say that today. we don't have information on that subject. that's not something that was looked at. >> so, comey there saying that the white house simply got it wrong in that tweet, and that that's not their intention at all.

so, we had this wild meta media moment here. bottom line is this a story, as you were talking about, that is going to be causing problems for this trump white house, possibly for months to come. because once this investigation gets started, it's going to have to run its course. as you say, we're headed to one of two possible outcomes. one is a full exoneration, in which comey, you would expect, would be forced to come out and say we did a deep dive and found nothing. or some other legal outcome here that would be significantly adverse for the trump white house. so, something that will really take a lot of their time and energy in the coming months. >> it's like a rotest where everybody sees something different. even in your language you said we found out there is a investigation. that implies to me that we assumed there was an investigation and it was confirmed. >> had beethere had been a lot reporting that there was an investigation, but they never

said yes. >> but if comey came on and said we are not investigating russia ties to the trump campaign, the fbi is not that would have been a huge story. that would have been a huge story. when i heard it, it confirms it. the other thing you said, the investigation has started, we have to see where it leads. it started in july. as far as i can tell. i don't have any sources in the state department leaking things to me. >> right. >> so i have no idea what's there. according to clapper and others, i don't know. it's been going on since july. as of a month ago, if i believe clapper from july to a month ago there was no smoking gun. >> right. >> i don't know. >> right. we have to wait and see what they come up with. >> even msn, you tell them there is an investigation of ties, it's just like, well, you're telling me there's ties.

you're telling me there's ties. if there's an investigation, there's ties. that's the knee jerk reaction. i watched gloria borjer say this is the most perilous day in the trump administration. it's like you don't know anything more than you knew the day before about whether there's any fire to this smoke. watch any other cable network, you will see hyperventilating among democrats and their enablers and -- >> it would be law enforcement malpractice for the fbi and u.s. intelligence not to look at this. one of the outcomes here is we could get a full exoneration, very much the same way we did with hillary clinton and the e-mails. you remember how everybody leapt to a conclusion when the fbi came out and said publicly in a letter to congress we found more e-mails. we'll look at that. then this incredible moment before the election where everyone thought, wow, there must be something here. then the fbi had to walk back

off the edge of that cliff and say we looked, we didn't find anything remarkable there. this will take longer than that because it's a much more complicated story. it involves overseas intelligence, multiple officials within the trump camp. so all of that will take more effort to unravel. it's not something that can be done in a few days. it will be distracting for the trump white house for a period of time to come. >> they are so mad at comey because anthony weiner. it's nice to see -- god, they love him again. >> comey is -- he's in the hot seat. >> he's unbelievable. now they're back -- they love him again. >> he's trapped in a logic box. he's trapped in a box he created himself. >> he did. >> typically fbi directors say we will never comment on an fbi investigation. he femt lt he had to about hill clinton last year, so he did so he broke that cardinal result

that is in the fbi director handbooks. >> now we understand that rule -- why that rule is in the handbook to begin with. >> now he has to break it again like he did yesterday. now the question is will he break it a third time and talk about leaks? is there an fbi investigation into leaks? he didn't go there yesterday. republicans pressed him hard. they're frustrated by what they see as unprecedented leaking from the federal apapparatus. comey did not say whether he will be investigating that. he will be forced to break the cardinal rule a third time? once you start doing it, becky, as you say, you have to keep doing it. >> hopefully he doesn't exonerate him and then some russian stuff turns up on anthony weiner's laptop. >> with that laptop where it's been, anything is possibility. >> just don't touch that thing. >> yeah. >> sticky keys.

thanks, eamon. >> you bet. >> let's get back to the broader markets. joining us now is jack caffrey, equity portfolio manager. chris retzler from neidum fund. we were kicking it back and forth earlier about when the market starts thinking about the general news. i read the notes from both of you gentlemen. i didn't see the word russia to be found in your notes. at this point that's not on your radar screen? >> it's on the radar screen, but it is -- >> you don't know either. >> i don't know either. if i had my own counterintelligence operation, maybe i would have a stronger view. i think stocks are trying to anchor themselves back to where we will see earnings develop. are we continuing to see better economic data? that gives us more confidence in the earnings story which gives us more confidence in the valuation story.

>> chris, the only thing you delved into as far as things is rates and the fed. so the fed and rates are more important than putin and trump. >> we're certainly watching the rates. it's a positive indicate their things are doing better so they can raise rates. what i did hear yesterday listening to comey was the need for cybersecurity. as an investor i'm looking for opportunities. i think on a bipartisan basis they will be investing money to protect data. that aside, that's a great area for equities. >> you see -- you felt the need, jack, to comment on the transportation sector. has it been weak? >> there's been a breakdown in terms of what you've seen. dow transports is the older technical indicator out there. >> right. >> if the transports are not doing well, i do have a bigger problem? response to some thinking about that, i just added that we see

more seasonality being injecteded into the transports, when you think about the parcel business being a fourth quarter story. i would suggest we should spend less time on the transports, more time on the banks and lending activity. >> so, what -- other than that, the transports what do you think investors ought to be paying the most attention to? we had a good jobs number, right? >> the jobs story has been consistently good. not so great that the fed is forced to panic. if i think about what i spend my nights worrying about at 2:00 in the morning, we should be paying more attention to, what does the fed look like a year from now? when we think about the potential openings on the fed, what do we wind up seeing in terms of monetary policy that comes nine months from now, 12 months from now, 15 months from now?

that's an interesting debate that we are not having because we have other headlines that are sort of capturing our attention. >> did you wear green on friday? >> i did not wear enough green on friday. >> did you throw back a couple? >> i can neither confirm or defly that statement. deny that statement. >> corned beef. >> i had a lot of corned beef. >> did you? >> yeah. >> oh, boy. final thoughts -- not final. you look healthy, but last thoughts for your appearance today? >> look, we're about to enter earnings season. i think, you know, we need to see earnings come in to support the p levels we're at. vix is low. volatility is not out there but there is rotation under the surface. stock pickers market, you have to find areas that have growth. >> here's something, the drug stocks did not move yesterday very much. the comments from the president were pretty strong.

i'm surprised to not see more reaction in the market from them. >> i think they've been in the headlines for almost two years so they're pretty beaten down. once you get a deal, you can value these drugs and you can then move forward. coes can begin to plan. it will be great once they clear the air. take the price cut, that's fine. if you get lower regulation in the fda, and i can get you a drug a year earlier, that's a great opportunity that they should be willing to give up pricing. >> all right. talking about st. patrick's day, that's like the last bastion of political -- that will probably be outlawed fairly soon. you couldn't do that with -- i'm trying to think of any other ethnicity. i'm irish, part irish, i'm allowed, but talking about st. pratt ti patrick's day, did you have a couple of cocktails? you're stereotyping, right? >> sure. >> steve? >> you're afraid to comment. >> it's your show.

>> you're okay, jack. >> you've expanded the boundaries of television. >> there's probably a defense fund -- >> i wonder if there are irish people who don't like that. >> corned beef. >> i think correspondent beefne. >> i think the drinking thing may be stereotypical. >> nobody drinks on st. patrick's day in ireland. >> they don't? >> it's a religious holiday. inspecting towers way up high avoiding turbulence in the sky. personalizing treatments with dna and recommending who should play. a dress that thinks, which crops to grow, tax prep to help keep payments low. you can find me on an oil rig, i answer questions small and big. hello, my name is watson.

welcome back. a border adjustment tax is a key component of the gop's tax reform plan but retailers have come out strongly against it. ra kate rogers has more on the impact on retailers. >> retailers are basing for the impact of border adjustment tax. manufactu the other 98% of products are manufactured in europe. >> for our business, that $145 shirt they make from italian fabrics that we sew in poland, that will have an additional 20% tax on it. some people might say 20%, that's not a huge deal. but whatnot everybody realizes is we're paying a huge amount of duties to bring these shirts

into the country. >> he says shipping shirts in from other countries would be too costly. >> the blueprint that has come out from house republicans that contains a border adjustment, you know what lots of other really good things for small companies in it. it has unlimited immediate depreciati depreciation, expensing of capital equipment, has lower tax rates, elimination of the estate tax. that's the other element of this you can't look at border adjustment tax all by itself. it's within the context of larger tax reform. >> the national retail federation which has been a critic of the vap proposal, says it will crush small retailers causing them to lay off workers or close their doors. this is complicated stuff,

nobody knows what the impact will be, and that is particularly concerning to small business because they don't have the manpower or ability to navigate new oceans. >> i find there's a big group of them that are heads down and not paying attention to it either they don't import, it's not on their radar, then other companies like ledbury are saying this will churt our business, we'll have to cut hours. so it's concerning. >> kate, he imports fabric from abroad, makes sure thes here and expo shirts and then expo exports? >> no. >> would he make shirts here? if -- if there was an import tax. >> he would love to make more

here but it's concerned about quality and people having the right skillsets to it make the type of shirts he makes here. >> kate, thank you very much. when we come back, politics in focus. the gop pushing a revamped healthcare bill in hopes of securing a vote thursday in the house. evan bayh is here and he'll be here next. first a look at yesterday's winners and losers. know you have a dedicated advisor and team who understand where you come from know you can craft an investment plan as strong as your values ♪

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♪ welcome back. you're watching "squawk box" live from the nasdaq market site in times square. good morning. welcome back to "squawk box." u.s. futures at this hour have been trading positively for most of the session after a late swoon yesterday. nothing huge. the market had been up for most of the session. you can see up 41 points now on the dow. just under 6 on the s&p. nasdaq up 16. we almost forgot about after yesterday they may vote on thursda thursday. >> they probably are. they told everybody to stick around for late votes.

>> gorsuch, it's a good time to be in the news business. softbank dropped a 100 dror tls investment in a smartphone startup that competes with the iphone according to the "wall street journal." softbank was planning to take a stake in the firm called essential products which was founded by the creator of google's android software it scrapped the plans because of its close relationship with apple. koc congressional republica recrafting their healthcare plan in hopes of a vote this week. joining us now is governor evan bayh. >> thank you. >> governor senator. >> in a lot of ways this is described as being further to the right, conservative so the house can get the votes there. but it does a lot of things, raising what would be tax

credits for older americans. it would be way too expensive for older people to be on this. what do you think of what has been added to this? how will that play in the senate? >> i think they'll make it a little more conservative to get it out of the house to satisfy the freedom caucus it will come over to the senate, they'll have to make it more moderate to satisfy republican members whose states expanded medicaid and are worrying about millions of people losing healthcare coverage if that adjustment is not made the the ultimate irony is that it may come down to three of the most conservative members in the senate, one of them is ted cruz, who the president had an off and on relationship with. >> why will thit come down to those three? ted cruz and who? >> senator lee and mitch mcconnell, so they can afford to lose two of the three, but not all through. ted cruz is trying to work his

way through this but it's ironic given the relationship between president trump and senator cruz. it will get done but they'll have to come back towards the middle. >> it has to swing right to get through the house, left to get through the senate. what happens in the joint? >> well, as joe said, it's a good time to be in the news business. >> that's the moment of truth. they ultimately get it done because failure is not an option. they've been promising this for six years. they won't -- it will be hard to get the tax reform if this fails. i think they get it done. but it will be like the perils of paul leem, teetering on the edge but it will happen. >> we say it will look more left leaning because of the senate, but then you have somebody like ted cruz. what does he want to see? >> you are starting far on the right. it won't be left-leaning. >> left of what the house said. >> they will do medicare

expansion. if i had to predict, they would grandfather in everyone currently on the system, but then slow the growth of it going forward. >> but it still busts the deficit? >> no, no, the congressional budget office predicted it would reduce the deficit by 3$350 million. >> if you change these things, we call it left of the house -- because of what reasons? >> will reduce the deficit but i will reduce it less. >> the market is most focused on tax cuts, infrastructure spending. can you have a bill get through the house on healthcare, be discussed in the senate go to conference, and all the while can tax cuts and tax reform be working through congress at that time? or is everything stopped until you get healthcare reform done? >> the answer is yes and yes. so these bills are going on parallel track.

>> right. >> the healthcare changes are going on a bill that relates to last year's budget. the tax cuts, which most of your viewers and america is looking for that, that will go on a bill that will go on this year's budget. first they have to pass a budget, then that allows them to use the reconciliation provisions in the senate which means they can pass it just on republican votes without democratic votes. last time we did tax cuts under brush, 12 voted for it. it's conceivable 12 could vote for it again, but that's a heavy left. all the staff work is focused on healthcare, so it does slow down but both things can happen. >> i call you governor to emphasize your indiana roots. get you out of the swamp. out of washington. because you were from indiana. >> first and foremost the governor. >> and you're from indiana. >> thank you. >> great state of indiana, next to another great state -- ohio.

so the second and third round of legislation on the obamacare replacement, this could theoretically need the help of democrats to actually try to fix some things that were wrong. would you concede there were some things that need to be fixed in obamacare? >> no act is perfect, sure. >> far from that. some people think it would have died on its own. you're not in the senate anymore. you don't need to be partisan. you were always a centrist. would you expect anyone to help in the second and third round and vote to get the 60 they need? do you think any democrats may come along? >> you may get a joe manchin. >> you might get an evan bayh? >> well, depends what was there.

>> how about gorsuch, would you vote for him? >> he seems like a sensible man. >> for you to say these things is almost earth-shattering. this is bigger news than an fbi investigation. but you're not in the game anymore. >> that's the problem, joe. the place has become so polarized that even if one or two democrats were to vote for these things, it would take eight of them to break a filibuster, that won't happen. >> so no help with any of this stuff. >> i don't think so, no. but judge gorsuch will be confirmed ultimately. >> one way or another. >> the republicans may have to change the filibuster rule. >> some of them want to do that. the other people say they should wait for the next one. >> the democrats argument is a good one up to a point. it would be good if we had consensus candidates on the supreme court. it would be good if there were a 60-vote flethreshold, but it's become so polarized the definition of sensible fell

away. >> when you left the senate, that was one of your complaints about the place and washington and what happened. we have come a long, long way down the road since that time. >> it's regrettable we have. and some of my good friends in the senate are republicans. my father, when he was in the senate, used to have republican and democratic members at our home for dinner. >> what? >> and we weren't serving a poison chalice. but those days of those personal relationships are not what they used to be. >> beyond the partisanship, how much sway does president trump have in congress? it strikes me there are at least two different parties and maybe three. there's the democrats and republicans. does donald trump have his own set of supporters in congress that are different from the overlays inside the republican party? >> steve, the president really does have some sway and juice with the base of the republican party. for those members who would stand up and stop the healthcare bill or would stop tax reform or

would stop an infrastructure bill that the president might be pushing, they could face primary opponents. they have to be worried about that. but getting to what joe was eluding to it's so local polari any democrat who would vote for any of those things, the infrastructure bill might be different, but any democrat who would vote for some of these things, they would run the risk of facing a primary challenge with a lot of money backing them. >> does the 37% or 40% popularity rating matter for internal congressional politics? >> only for the primaries. but many of these members in the house in particular because of the gerrymander come from such overwhelming republican -- their real election is in the primary. so they're worried about a challenge from the right if you're republican and if you're democrat from the left. that's why they break ranks and vote in a bipartisan way. >> the president's low popularity rating, does that matter for congress? >> in the long run, but

initially -- steve, because if they're using reconciliation for the tax bill that you ask about, and on the healthcare bill, those can be passed on a purely party line vote. really if you can unify your base and only have a few defections you can get those things passed. >> did the 20% polling numbers he had before the election matter for the election is the other -- the 85% the probability that the "new york times" had. huffington post had 98% hillary. did those numbers matter? you're talking about gallup at 37? >> there were a bunch between 37 and 45. >> you remember the previous president for a long time was mired in the low 40s. this is early, it's happened question. >> my question was not about the president, it was does it matter for congressional politics getting his agenda through. >> i'm not sure what real popularity number is. i guarantee you he has some

serious clout with -- watch any of the rallies that didn't matter before the election, he had another one yesterday. people are still -- >> got you. >> governor, thank you. >> governor senator, the good things. >> with job approval ratings, i appreciate that. >> an executive making decisions. mattering. >> a bipartisan way. >> instead of talking. >> like us. >> coming arne sorenson will join us. and then john engler will join us to talk about deregulation in the trump administration. and later, kevin brady, mr. chairman, will join us to talk about changes to the gop healthcare reform bill. i hope he doesn't pass ef van bh

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box." goldman sachs is building a robo adviser aimed at giving investment advice to the masses. the company is looking for employees to help build that platform. this comes as goldman looks for ways to broaden its customer base beyond the wealthy. >> robo adviser. okay. tim cook making a stop at a bike sharing start up during his trip to china. the startup called ofo is -- >> mofo. >> you thought i would make a joke? >> usually i do with moores foster, their thing is mofo. but ofo is one of two bike sharing startedups in ch s sharing startedups in ctartups . it expanded across several

cities across china. cook wrote thanks for welcoming me today ofo team. great energy behind your mission to make commuting greener, more efficient and fun. that's nice. coming up, last chance -- no jokes? you're good to go? >> i learned my lesson. becky might, she's been a potty mouth lately. a new generation is entering the work force. everything you need to know about hiring generation z. and as we head to break, a look at european markets. up in germany, down in britain, up in france. kevin, meet your father. kevin e kevin kevin kevin kevin kevin

kevin kevin kevin kevin kevin kevin kevin trusted advice for life. kevin, how's your mom? life well planned. see what a raymond james financial advisor can do for you.

time now for the executive edge. move over -- joe thinks i'm envious of his hair. i am not. i am bald and i am proud and i am happy. can't you get over that? >> you go to those meetings. >> when i put on a hat, it's like covering up the sexiest part of my body, okay? move over, millennials. >> i'd agree with that. >> when i was pregnant, steve rubbed my bully. -- belly. bald heads and pregnant women's bellies. >> this awkward moment brought to you by steve liesman. generation z, folks.

that's what we're talking about. they will enter the work force this year. a new book describes traits employers need to understand when managing the group born after 1995. joining us now, david stillman, and his son jonah stillman. i can't keep up with the letters. it was gen x. >> also known as the millennials. >> gen y is the millennials. what's gen z? what's the age bracket? . >> they were born between 1995 and 2012. >> i'm very skeptical of all these letters. they don't mean all that much to me. what distinguishes this group? >> so a common misconception is that anyone under the age of 30 is a millennial. basically, the whole idea of this book is to pry neioneer a dialogue, telling people we are different from the millennials. as we enter the work force, naturally we have to be treated differently because we grew up

in a different time. >> i'm on your side. >> thank you very much. >> you should hate the millennials. >> can't stand them. you should differentiate yourself. you don't have one of those man buns. >> back to the hair topic. >> it's all about the hair. >> they're insufferable. they don't leave the house. >> how are you different? >> so boomers raised millennials. at a young age, millennials were told by their boomer parents, if they work hard with their peers and collaborate, they can be a winner and everything is going to be okay. i was told at the young a age there's 72 million of us. if you don't work hard, one of them is going to steal your job. >> i'm a baby boomer raising generation z. >> i'm 17. core members. >> what does business need to know about this particular group? >> most importantly that they're

not millennials. if we treat gen z like the millennials, it's going to backfire. very collaborative generation. compare that to this generation. not only are they competitive but really independent. think about the workplace today. a lot of workplaces, open office concept that caters to collaborative millennials. this generation, they don't like open-office concept. in fact, 8% said they want their own office. so a lot of workplaces aren't ready for this independent, competitive generation. we anticipate a lot of clashes with collaborative millennials. >> awesome. >> how many -- when you start measuring how many -- how many are there? >> a little bigger at 80 million. this is at 72. million. this is still a very large generation. the leading edge is graduating college this spring and entering the workplace. >> does it bother anybody that now we're at z? what do we do next? >> that's what i wonder. >> your youngest, there's no letter for him.

>> world war z was about zombies. >> what reaction do you get from companies when you tell them things like this? >> part of the challenge is that a lot of people are just tired of talking about millennials. there's a lot of millennial fatigue out there. now we got to get to know a new generation. the good news is because this generation grew up with recession, they also had gen x parents telling them it's a hard world, they're willing to roll up their sleeves. 75% of gen z said they want to start at the bottom and work their way up. >> you almost sound like you described not necessarily globalists versus nationalists, but you're not looking for consensus and it takes a village. individual initiative and earned success. sounds like you may be moving a little right. >> a lot of them believe in the phrase, if you want it done right, do it yourself. >> can i make a point publicly of not associating myself with

joe's criticism of an entire generation of people? >> that's fine. >> what are they, 20 to 35-year-olds. i don't take a broad brush and paint it across a bunch of people. >> yes, you're right. we do risk stereotyping people by doing that. i will say -- and i thought for a long time it's just that we're cranky, getting older. if there's another younger generation that works a little harder. >> i think they are work plenty hard, these millennials. >> working on their, you know, snapchat messaging. >> thank you, david. thank you, jonah. very impressive. you got a future in something here. >> coming up, marriott, meeting with investors today. just saw some of the comments about the three-year plan. it's interesting. ceo arne sorenson will be here to tell us about the three-year growth strategy. he joins us live on set.

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fed speak and earnings dominating today's market moving news. a complete rundown of what you need to watch is straighting ah. plus, we'll check in with marriott international ceo arne sorenson. and fbi director james comey confirms a probe looking at possible trump campaign links with russia. reacti reaction and the international implications. the second hour of "squawk box" begins right now.

♪ live from the beating heart of business, new york city, this is "squawk box." good morning, everybody. welcome back to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and steve liesman. we've been watching the futures this morning. they have been in the green. dow futures look like they would open up by about 34 points. s&p looks like it would open up by about five points. the nasdaq is indicated to open up by 15 points. yesterday the nasdaq did set a new intraday high. didn't manage to set a new closing high. we'll see where things go today. in the meantime, let's get you caught up on the headlines. larger electronic devices will be banned on certain inbound flights. the new rule applies to flights arrives from eight countries in the middle east, egypt, jordan,

kuwait, morocco, turkey, and the united arab emirates. we'll be getting numbers from fedex and dow component nike. and a mixed quarter from home builder lennar. a quarterly profit of 56 cents a share, one cent above expectations. revenue missed forecasts. new home orders were up by 12% in volume and up by 16% in terms of sales. stock is up by about 20 cents. >> that's a big story. to politics now. house republicans releasing a package of amendments last night to their bill they hope will repeal and replace obamacare. the two key alterations accelerate the expiration of the affordable care act's taxes and further restrict the medicaid program. at a rally in louisville, kentucky, president trump saying the goal of those changes is to bring down costs. >> we're going to have a great competitive bidding process. medicine prices will be coming way down. way, way, way down. that's going to happen fast.

we're just adding that to the bill. i said, we got to add that to the bill. we're going to do a bill later. we're trying to add it to this bill. if we can't, we're going to have it right after. you have some crazy archean laws. >> the house bill will be voted on, on thursday. secretary of state rex tillerson reportedly plans to skip a meeting of nato foreign ministers scheduled for april 5th and 6th in brussels. chinese president xi jinping is expected to visit president trump in mar-a-lago that week. no official comment from the state department at this point. in the meantime, reuters reports tillerson plans to visit moscow coming up on april 12th. supreme court nominee neil gorsuch will head back to capitol hill for a second day of his confirmation hearing. if confirmed, he'll replace the

late justice antonin scalia, who died early last year. oh. sorry. we're looking up whether or not the house freedom caucus is a posing the repeal and replace plan. i see they will not vote as a bloc. >> okay, yeah. plenty of fed speak on the agenda. there's just one economic report, that's the fourth quarter current account at 8:30 a.m. eastern. marriott international announcing a three-year growth strategy at its investor conference today. let's bring in arne sorenson, president and ceo of marriott international. great to see you. >> thank you. >> when did the deal close that made you number one in terms of size? >> we closed september 23rd, which still feels like yesterday. >> is everything done? it sounds like you just put these two together. there's not a lot of stuff that happens. but there's all kinds of stuffs.

>> there's tons of stuff that happens. it's technology that takes the longest. we immediately allowed customers to link their loyalty accounts the day of close at midnight. by the end of the year, most of the people decisions had been made so we could have one team looking forward and not worry about do i get a job or what's going to happen to my organization. now we're left with the naughtier problems, which are how do you get to one finance reporting system, how do you get to one reservation system. there are a hundred other systems that these two companies have that we have to reconcile. >> sarwotarwood is not run independently -- >> we're all one company. >> but you did get a bunch of new properties you must be proud of, i would think. >> we got ten new brands. st. regis, luxury collection. >> steve loves the lap of luxury. >> is there a st. regis in park city, utah? >> there's a st. regis in deer

valley. >> i went there one time. i was mobbed by our people. it's all our people. i was pretty amazed. >> you can visit. i don't think people like us can really stay there necessarily. >> no, i didn't stay there. i went in for a drink. >> it's pricey. >> it's a little on the pricey side. even at your salary, joe? >> i can stay maybe two nights. maybe. >> can i crash on the couch? >> no. friends and family. so you got -- i mean, i would be excited if i were you. now this three-year plan you're going to present. it's got both companies under one umbrella. >> the most stunning statistic is for the next three years, we'll open a hotel every 14 hours. we're talking today about opening 285,000 to 300,000 rooms in three years.

i think before the starwood merger, i think our high water mark would have been about 50,000 rooms in a year. we're essentially double that. part of that is because of starwood. a big part of that is because of where we are in the cycle. >> you say where we are in the cycle. the one concern everybody has is people say, great, when you have a limited number of rooms, you can charge more for that. if you're talking about just bringing that many rooms in with the industry at large, what does that mean? is there enough demand? >> it obviously depends on the market. the way the cycle works often is individual traveler demand peaks before openings peak. people start projects during strong demand times, then they take two or three years before they actually open. >> so where are we in the cycle, and how do you know that? >> obviously we've been growing since 2010. we've had a long run already. you'd have to go back into the '90s really to find a run that's this long for the economy, which is what really drives demand in

our business. obviously it's a question every day, how long is this bull market going to continue, how long is demand going to continue to grow. we don't see any signs of weakening. to be fair, we don't see powerful signs of strengthening either. we think the economy continues to bump along in the u.s. at a kind of plus 2% number. obviously the market shows a lot of optimism. if that optimism reveals itself in faster growth, that'll be good for our business. >> you love growth. so i don't know what you think of -- i mean, i do know from past interviews. you probably would be a proponent of tax reform. you probably would like less regulation. so there are certain things this administration is bringing that i'm sure would be a positive. plus, global growth, which you might get from that, would be a positive. what about the trade concerns? >> well, we're not a very regulated industry. selfishly, the regulatory environment is not hugely important to us. i think tax reform is important if they can deliver it.

there's a lot of work to get tax reform done. to do it right, of course, means there will be some winners and some losers in the business community. >> but the growth that would come from that would be something -- it could spread around the world. the u.s. can lead the world in growth. >> clearly. and there's clearly a lot of money offshore, which could come back and be in the u.s. economy broadly. i think would be quite good for that. the risk element and whether you look at trade talk or you look at the travel bans, they sort of relate to the same thing. are we in an environment in which folks are saying, you know what, let's erect literal and figurative walls to lessen trade, to lessen the movement of people, to lessen even tourism. which we shouldn't do because tourism supports about 10% of the jobs around the world. in the u.s., we think it's about 2.5 million jobs in the u.s. directly dependent on foreign tourists arriving to the united states. staying here, leaving their

money here, and going home. >> has there been a chilling effect from some of the comments about immigration? i've heard some stories about, for example, foreign students aren't coming as much to the united states. >> i think we're going to have to watch that. obviously we have a fall coming up, which could be the academic calendar, which will give you a much better read. the stories that have come out so far are about people doing searches in various countries around the world. searches going to the u.s. are down. you look at bookings, and we don't see anything terribly profound. >> can we go back to the one every 14 hours. these are new hotels? >> new hotels. >> bottom-up construction hotels? >> overwhelmingly. maybe 10% are converting from a prior use. >> but it's a new net addition of rooms to the market. >> overwhelmingly. 90%. >> how much out of the country? >> oh, about 50%. >> and how are you sure you're not going to overwhelm the market with supply here? >> well, again, it's a big world

out there. there are maybe 15 million rooms in the global hotel business. we're talking about 300,000 rooms. you can do the math. yes, that is supply growth, but in a global context, it's not extraordinary. and you have this growing global middle class that is a real additive demand for global travel. >> so how much is china out? 50 here, 50% elsewhere. how much is china? >> our pipeline in china is about 500 hotels. there are probably on average 300 rooms. >> you can't go in and say, hi, i'm marriott, i'm starting my own hotel. do you have to partner? >> everything we do, we do with a local owner. that's true in china. that's true in the united states. we own ten hotels. something like that out of 6,000. >> so that's an important market. you don't like to see things sour with china. >> that's right. at the same time, because every hotel is owned by a chinese investor, our business is as

much about chinese capital and chinese returns as it is about a foreign company doing business. >> so do you just have business travelers in china, or are you opening resort hotels on coasts for chinese tourists that are going on vacation? >> very much both. hainan island is the chinese hawaii, florida. we probably have 20 hotels over there. >> you do? >> yeah, including an addition. we opened one in december. beautiful, gleaming hotel. >> people there say i'm going to a marriott. they know marriott. >> absolutely. the brand is very well known. >> give us a couple three that you're really excited about in this whole expansion that really stand out that you remember, you've actually paid personal attention to. >> again, it's a big portfolio. i've got four kids, by the way. >> you love them all equally. >> we debate all the time about which one we love the most. we of course love them all.

i think, though, that luxury and lifestyle -- so think about ritz carlton and st. regis. i could go on, but just to use those as an example. they're the ones that intrigue people the most. the st. regis in deer valley, it's a special place where you're having a special experience with your spouse or your family or your friends, your parents maybe. so those are the ones that often we hear people talk about and love to get those stories. it turns us on in a way that, you know, some other hotels may not quite as much. but we love them all. >> wow. >> what's the message you most want to get across to wall street? what's the key takeaway you're hoping they'll get from? >> two questions, really that, they bring today. one is how's the starwood deal going? what's the risk that you're going to mess things up because you're doing a $13 billion merger? mergers are risky. and we think we're on a good track. i think one of the things that

is obvious is we're acquiring a company very much in our space. so the risk level is a little different, although it's still a lot of work. then i think secondly, it's just that even in a low-growth environment, we're talking about 1% to 3% same-store sales growth over three years, which in historical terms is not much to brag about. that is producing something like 16% to 20% eps growth over three years compounded. that's a powerful financial model. we just want to make sure we reiterate the strength of that model. >> arne, thank you. >> you bet. >> can you open one in davos? would you mind? >> that's a great idea. >> i mean, this year was a big year for us because our -- the hotel where we stayed had a kitchen. so you can order food at this hotel as of this year. you never could before. oh, that's right, you had the baby. you didn't get to stay in the famous -- >> upgraded.

>> it's one of those places you can go all day long and there's food everywhere, but you get back to your room and you haven't eaten all day. >> they didn't have a kitchen. >> not in the room. he means in the hotel. >> oh, nothing. >> no. can i get room service? they're going "ha-ha-ha." hotels do that in other parts -- anyway, thank you. >> good to see you all. >> thank you. coming up, fed speak, oil prices, and washington policy driving the markets. we'll find out if that's going to continue. later, fbi director james comey confirming the agency is investigating president trump's campaign ties to russia. we'll talk about the international implications and the state of american politics with former u.s. ambassador to sweden. stay tuned. you're watching "squawk box" on cnbc. can i get some help. watch his head. ♪

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welcome back. investors likely to focus on fed speak today, along with quarterly results from nike. some key events investors will want to pay attention to, including a discussion featuring new york fed president william dudley, and earnings from dow component nike, as well as fedex and general mills. joining us now, director of investment strategy at glen immediate. and mike ryan, chief investment

strategist at ubs wealth management americas. let me turn to mike. how much did yesterday's comey hearing matter to the markets? >> i don't they they matter a great deal. at the end of the day, we're going to focus more on what they're able to achieve from a policy stand point. to the extent it draws some of the political capital away from the administration and distraction, i think that's an issue. but i don't think at the end of the day it's going to have a real big material impact. at least not in the near term. >> jason, your take on it, the exact same question. it seems like there is some threat to the administration here, at least from a political judgment. the market makes no judgment at all. it doesn't seem to care. >> i think this is interesting. i think it's fairly similar to other cycles and other presidential cycles we've seen, where you've seen a two-term president replaced by an inbound administration. you've seen hope spring up in between the election and inauguration. you've seen basically realism set in afterwards. we're going through that period right now where realism is

setting in. these kind of misfires and political back and forth is the regular thing that happens as the administration kind of gets its footing and gets set in place. this administration has put forward a lot of policy ideas. reality may be that they can't implement everything they've said they want to implement on the timeline they want to implement, and therefore maybe a little bit disappointment from the markets. the markets may have to back off just a little bit to recognize that. still, underpinning that is a pretty good economic and earnings cycle that will end up setting the pace later on. >> let's stick with that. i think in the market's view point, earnings trump everything. >> i would afwree wigree with t. >> what are you looking for from this earnings season? >> we're looking for mid single digits earnings growth, which is better than what we saw last year. we had basically break even and negative earning. now we're seeing underlying

growth to companies. we're seeing that domestically. we're seeing it internationally. we just need that in order to drive the valuation base higher. because we're sitting at about 19 times earnings currently on normalized basis. we need to push that earnings number up norm to keep driving this market higher. >> mike, does wealth management suggest to you i should be looking more overseas for wealth rather than here domestically. >> we're still focused on the u.s. right now. i think it is all about corporate profits right now. we're actually a little more optimistic about the earnings cycle in the u.s. we see the earnings recession, which has really played the market over the last couple years, drew to a close really last year. so you had an earnings acceleration that started in the third quarter, progressed to the fourth quarter. now we're seeing the earnings cycle start to pick up a bit of momentum. we're expecting 11% earnings gains this year. again, part of this based on we're going to have less of the headwinds that have been buckling us over the last couple years.

i think that dynamic means equity markets can continue to move higher. therefore, we're going to continue to focus on earnings as the strongest in the u.s. >> how is that contingent upon things like tax cuts? >> we haven't baked a lot in, in terms of tax cuts or regulatory reform. if we find up getting broad based kpre tensive tax reform, we think that could add 5% to 15% over the next three years. >> jason, what about the fed? two rate hikes more baked in for you? are you concerned about there being any more? >> we're in the camp of being three this year. our base case here is that they're looking at the numbers and they're seeing inflation a little bit more engrained in the system. it's starting to show up in wages, particularly the low end of the wage stack. that job market is relatively tight. i know san francisco fed just came out and said it's really not that type. it's forcing employers to drive wages higher.

i had a friend that was president of the philadelphia fed that used to basically point to this and say, watch out for sticky inflation. once sticky inflation shows up, the fed has to act a little bit harder. therefore, we're in that three camp, maybe even four. probably three though. >> all right. jason, mike, thanks for coming in this morning. when withe come back this morning, tim cook blessing a beijing bike sharing startup. that's next. "squawk box" will be right back. still to come on "squawk box," the battle for a health care overhaul. congressman kevin brady is helping lead the charge for reform. remakes i had fin remakes his final pitch before the house vote, first on "squawk box," an interview you don't want to miss. stay tuned. you're watching walk squawk on cnbc. the greatest population shift in human history is happening before our eyes. sixty to seventy million people are moving to cities every year. at pgim we help investors see the implicatio of long term megatrends like the prime time of urban expansion,

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still to come, one of former president clinton's top russia advisers joins us to talk about the trump campaign and possible ties to moscow. he's also an obama adviser. then he got an ambassadorship to sweden. and he's mika brzezinski's

brother. stay tuned. "squawk box" will be right back.

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good morning. welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square. among the stories front and center, a technical glitch on the new york stock exchange's platform affected closing prices for certain exchange traded funds. late yesterday, arca didn't give many specifics, but "the wall street journal" reporting etfs with a value of $150 billion were affected. arca sent out alerts after the close, saying it was using a back-up method to determine closing prices and it had canceled an unknown number of orders. wells fargo is seeing a notable decline in new accounts. checking account openings were down 43% last month compared to a year earlier. new credit card applications falling 55%. that all follows last year's sales practices scandals. >> they have new rules where they actually have to be opened by customers.

it's much more difficult. >> it's part of the overregulation of the economy. >> exactly. they want actual people. >> and here's something you don't hear often. rich new yorkers are asking the state to raise their taxes. a letter to lawmakers -- governor andrew cuomo makes that request, saying top earners should pay more to support bridges, roads, schools, and other areas. it was signed by 80 people. i don't know how i feel about that. i feel like new york -- you both live in jersey. i live in new york. it's a very high-tax state. >> we work here, so we get taxed here. >> we get to enjoy it like you now, since we moved in. >> can we get a close-up of your face when you say that? >> those potholes you're not hitting now, you're welcome. >> right. because of you.

>> yeah. in large part. >> new york is just a wonderful city. certainly compared to what it was 30 years ago or 20 years ago. >> absolutely. >> it's an incredible place. the fact it works at all is just beyond me. i don't understand it. >> me too. although, i still have some complaints about no lights on the first mile of the west side highway after you come off the bridge. i'm going to call it 311. >> i've never thought about that. that's true. >> they're burned out. they're there, they're just burned out. i'm going to call 311 and complain. anyway, tim cook making a stop at a bike sharing start-up on his trip to china. that start-up is called ofo. it's one of two major start-ups in china and cheated by university students looking to make commuting more convenient. they're quickly expanding across several cities in china, attracting the likes of dede for investment. cook writing in both english and chinese, thanks for welcoming me today. great energy behind your mission to make commuting greener, more efficient, and fun. fbi director james comey

confirming there's an active investigation into possible coordination between the kremlin and the trump campaign. joining us now is mark brzezinski, former u.s. ambassador to sweden. he also served as director for russia and eurasia in the clinton white house. thank you for being here today. >> thank you for having me. >> so we saw the news that came out yesterday. confirmation that there is an investigation. now what? >> becky, an active investigation is under way. in the short term, there will be less certainty at the tippy top of the u.s. government because any one of president trump's political associates could be a target of that investigation. after all, trade craft in terms of russian espionage is to cast the net widely, to cultivate people over the long term, and we'll see where the investigation goes. but this is a clarion call to our democracy that foreign governments have a self-interest in manipulating our electoral

process and public policymaking process. there are laws on the books to enforce against that, but the question i have is do we have the resources dedicated to the offices at the department of justice to enforce that. there's something called a foreign agent's remembgistratio act, which requires americans who represent the interests of foreign governments to register before they act in the name of a foreign government in our public policymaking process. under that law, you don't even have to be paid by that foreign government. but you have to register. and if you go to the foreign agent's registration act website at the department of justice, you see that there are more than 400 foreign entities registered to really, in certain ways, engage on and try to change american public policy. the office at the department of justice is tiny. it has minimal resources to even

enforce the law with regard to those who have actively registered. what we may see in this fbi investigation is that people very close to president trump b didn -- didn't even register. >> ambassador, are you suggesting that this is sending out -- you said it's a clarion call to other nations. do you think china looks at this and thinks, hey, we can get more involved in trying to manipulate elections here? you think that because this has taken such a public spin that it kind of changes our relationship with other nations going forward? >> it depends on how we handle this particular case. i think to answer your question, becky, other nations have an interest in changing american policy in a way that suits their interests. if there is a very weak response to what could be russian manipulation of the 2016

presidential election, and there seems to be a litany of events that are quite surprising in the leadup to the 2016 election and a closeness between trump advisers and the kremlin that needs to be investigated, depending on how we handle this, will be an important message to foreign governments regarding hands on or hands off our electoral process. foreign governments will try to manipulate our political process. the question is how far they can take it. there are very clear rules of the game governing this, but they need to be enforced. the office at the department of justice that does this is not really heavily resourced, unfortunately. that's the enforcement piece. in terms of our intelligence priorities as a country, you know, during the soviet era, during the cold war, america was able to outmaneuver the soviets because, thanks to signals

intelligence, we were able to completely understand every defensive and offensive structure of the soviet military. after the collapse of the soviet bloc, and understandably, especially after 9/11, u.s. intelligence resources were redirected towards the middle east and al qaeda, again understandably. but did we take our eyes off the ball off of the russians and others who might want to manipulate the electoral process. >> i want to get your thoughts on putin's end game here. what is he playing for? is he makesing a mistake? for most of the '90s, it was pretty much the russian policy to incorporate itself into the western world. is his objective now to piss off all of europe and the united states? i mean, it's one thing during the soviet era when they had this ideology they were trying to promote. what's he trying to promote now, and is all this going to end up well for him? >> it's a very interesting

question because the putin who came first to russian prime ministership and then to the russian presidency at the end of the 1990s replacing yeltsin is different from the putin today. you know, assessments of putin when he first rose to power -- and remember, this is a guy who made his career as a kgb operative and who has said in speeches that the single most cataclysmic, negative event of the 20th century was the disintegration of the former soviet bloc, when he first came to power in early 2000s, hand picked by yeltsin, he was very cautious, very careful, very happy to find himself prominent on the international scene. the putin we see today, shirtless, creating museums in honor of himself in moscow, is much more egomaniacal and quite frankly much more engaged in

manipulation in terms of western elections and the like than we've ever seen before. >> okay. ambassador brzezinski, want to thank you for your time this morning. >> thank you so much for having me. when we return this morning, it is tough to be a retailer. from the border adjustment tax to the pressure from growing e-commerce sites, a look at how luxury retailers are innovating to stay ahead of the curve. that's next. later in the program, congressman kevin brady talks health care and tax reform. it all goes through his committee. "squawk box" will be right back. ♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.

welcome back, everybody. the way consumers are shopping is rapidly changing. excel brands is trying to monetize these trends by reimagining retail as a convergence of shopping, entertainment, and social experience. joining us now is the chairman and ceo of excel brands. and judith ripka, who's founder and chief designer of the judith ripka brands. i want to welcome you both and thank you for being here today. watching what's happened in retail over the last couple years has just been stunning, to see these changes that have come about. bob, how do you handle this? how do you think about it? has it happened even quicker than you anticipated?

>> well, becky, the retail industry is going through an unprecedented cycle of change. it all started about six years ago when control over margins shifted from retailers to consumers. at the same time, social media, as ridiculous as this sounds, began to emerge. no one really knew what social media was. everything that we knew about marketing at that time changed. so what's happened now is there are five very disruptive forces that are impacting the industry. we have control over margin in the hands of the consumer. we have the emergence of the online retailers taking market share, driving traffic down in malls. we have the consumer now influencing trend in ways they haven't been able to in the past. so we have this whole movement now of see now, buy now, wear

now. at the same time, we have the fast fashion guys taking market share, delivering what the consumer wants, when they want it. most major national brands here in the u.s. are overdistributed. that takes us back to the consumers controlling margin. that's what we're dealing with. >> obviously this is something bob has to think about all the time, judith. is it something as a designer you think about too? are these changing influences the way that you reach your consumer, how quickly consumers want things, what they want, has that affected how you design your jewelry? >> well, we worked on it very hard to make sure that we change our styles every few weeks. there's always something new that's happening with me. it keeps me up until 4:00 in the morning, but that's fine. it's something i want to do because i want to make sure that i'm in the marketplace and that my things are selling. >> is that because the online demand of it, or is it just the consumer needs new and fast and different? >> it's the online.

we need to do that all of the time. of course, i'm on qvc for 20 years. so they need new merchandise every -- we have 500,000 people watching and buying, and they want new merchandise all the time. i'll be on, on thursday. there's new things. fortunately -- trump won't like this, but i'm in a factory in bangkok. they're all graduates of oxford. they're brilliant. they know how to work with factories here. they only have 20 people at most working for them. so that's how i'm able to do it. these people are brilliant at what they do. >> so will that change things? if there's a border adjustment tax, what will that mean for you if you're producing so much many bangkok? >> it's obvious what it will mean. we'll have to hold the price, and we plan on doing that. >> so bob, what does that mean for you, when you're managing not only judith's brand but

other brands? you've got isaac mizrahi and others. how do you stay ahead of this? >> as it relates to the border adjustment tax, given that our industry imports the vast majority of what we sell, there will be a severe impact. we would hope that common sense would prevail here in washington, and the border tax is given a transition period so we can adjust. as an industry, we're dealing with enough change now, this will complicate things even further for us. >> and what are your hopes? you think it just won't get put through? >> if it does become law, it would be very helpful for our industry to have a three to five-year transition period. >> is that something you could deal with? if there's a five-year transition plan, no problem. >> yes, that would be something i think the industry could adjust to. >> judith, how does technology

change what you do as a designer? aren't you getting immediate, constant feedback from customers right now in a way that you didn't, say, ten years ago. >> it's amazing. they're telling me what they want, what they need, how to make it. it's wonderful. of course, our technology, we're going to be using the machines that immediately make the product three dimensional. >> where's that going to be done? >> in bangkok. >> why can't you do that here? >> well, we can do the beginning part of it here. but the manufacturing part after that, the polishing, the setting, and everything else, it's all hand. and they don't have the facilities here. everyone on 46th and 47th street, i started there, they're all small, teeny factories.

they've got -- trump has to upgrade everyone. he has to figure out -- i'll be happy to make it here, but we have to get the people to do it. and i hope we do. >> judith, i want to thank you for coming in today. bob, thank you. we'll talk more with you as we see what happens with policy. coming up, why are retirees going back to work? jane wells looks at some interesting folks who are past the age of retirement but feel the need to stay involved. that is next. and the next hour, a "squawk box" exclusive. pick for car of the year. we'll talk hot wheels and big money in the next hour.

every day is a new day. yesterday the nasdaq brought us bacon. >> because you complained. >> i was doing something on shake shack. i said, have you ever had a shake shack burger? they're supposedly really good. i said i'd really like to try one. >> ask and you shall receive. >> but when a company hears that and goes to the trouble of doing it -- i mean, did you try one of these burgers? >> i've been there once. i've only been there once. >> did you have a burger?

>> i've got a burger here. >> did you try it yet? >> no. >> it's unbelievable. >> remember you complained about me having food in my mouth the last segment. the negative feedback has stuck with me. >> that tells you about management, when they're smart enough to do that because they know i'm going to talk about it. i'm telling you, this is one of the best hamburgers. >> you've taken a couple bites out of it. >> i'm going to finish this thing. >> were you here when terry h d lundgren had the red velvet coat? it was christmas, you were away. >> did you keep that? >> no, but it was a red velvet coat i wore. kind of the same thing. >> i have no use for red velvet. put a beard on and you'll be fine. this i'm going to use. >> what else should you talk about? what else do you lack? >> the fries are really good. >> what are you going to ask

for, for tomorrow? >> jane wells would appreciate this. she would. i'm going to stand up, look over here, and eat while you talk to her. >> the annual report that measures workers and retirees' attitudes on retirement. jane wells joins us with more on the new retirement, which is not retiring. jane? look at you. >> reporter: guys, it's a little early for a shake shack burger here in palm springs. the motto here is ageing is natural. getting old is a choice. in the survey, 60% of american workers have at least some confidence that they'll have enough to retire on. but the confidence level is even higher among those who have already hung it up. like you said, steve, the new retirement is not retiring. >> i got a world map, and i started mapping out places that i wanted to go. >> reporter: sherry goodlow worked at trippiaaa for 30 year retired at age 62.

>> i had breast cancer six years ago. i looked between 62 and 65 and i thought, do i really want to stay there another few years, or do i want to start really living? >> reporter: she ran the numbers, realized with a little downsizing she had enough retirement to, quote, start living. now through a website called trusted house sitters, she house sits and pet sits around the world for free from england to australia. we caught up with her in dallas pet sitting a doxson. the employee benefit research institute found almost 80% of retirees feel confident they have enough to make ends meet and a third of retirees who left the work force earlier than expected wanted to, like sherry goodlow. she says her best friend says she's changed. >> she says, it was almost like a rose that was closed and it just opened up. she says, you had your hair wrapped with the scarves and

these flowing dresses and you're out on the beach. i plan to do this as long as i can. i love it. >> reporter: now, later on "squawk alley," we'll hear from two guys, one who's 67, the other who's 77. they have both gone hollywood in their retirement. one because he wants to, it's fun. the other could use the money. that is something we will also be talking about. right now on cnbc.com, more from the survey, including how many american workers have actually put together a formal retirement plan. guys, back to you. >> that looks good, jane. jane, you still live there in l.a. i lived there for a long time. you know what i miss most about los angeles is where you are. >> in-n-out. >> no, being two hours from the desert. i don't need the ocean. if i could get out there and have a house out there, the weather, it's dry, it's gorgeous, it's clear, the golf. it's just phenomenal. >> reporter: joe, i had dinner

here last night. there is a lot of -- they've done -- there's a lot of new stuff in palm springs. it is so -- it was such an awesome, cool place. very hip. very hipster. >> give me any of them. you don't need anything else. why do you need an ocean? the sand getting in your toes. >> there's sand in the desert. >> reporter: don't bad mouth the pacific. >> there's ocean people and desert people. i don't know. the golf is great. big horn, vintage, iron wood. they're all great. >> reporter: and right now it's almost 70 degrees before 5:00 a.m. >> exactly. it's beautiful. never rains. >> jeaane, thank you very much. when we come back, john engler will talk job creation

and deregulation. plus, kevin brady is our guest. also, a quick programming note. don't miss ibm ceo gin ibm ceo ginni rometty. this is a first on cnbc interview you can't afford to mis. "squawk box" will be right back. the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.

health care overhaul. the gop unveils new proposals to the reform bill. house ways and means chairman kevin brady will join us ahead of a key vote on the hill. new this morning, pimco reveals its latest read on the km i. why the investment giant's key them this year is scaling it back. plus, buckle up. the hottest cars of the year pull up to cnbc. we go behind the wheel. the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york, this is "squawk box." good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square.

i'm joe kernen along with becky quick and steve liesman. andrew is off today. the futures right now have been trading in positive territory for most of the morning. up just under 40 points on the dow. up just under six on the s&p. the nasdaq indicated to open up about 16.5 points. take a look at treasury yields as well. we've been watching those closely. you'll see that the ten year right now is just under 2.5% to 2.493%. among our top stories this morning, the department of homeland security announcing that larger electronic devices will be banned on certain inbound u.s. flights. this new rule applies to flights that are arriving from eight countries in the middle east, including egypt, saudi arabia, and the united arab emirates. general mills out with earnings. the food producer beating estimateds by a penny with adjusted quarterly profit coming in at 72 cents a share, but revenue did fall short of expectations. the company pointed to a gap in pricing and promotional activity. that stock is down by just over

2%. in political news this morning, house republicans releasing a package of amendments to their health care bill. the two changes accelerate the expiration of the affordable care act's taxes. they also further restrict the federal medicaid program. president trump will be meeting with lawmakers on capitol hill this morning to try and push for support of the american health care act. we'll talk more about health care reform with house ways and means chairman kevin brady coming up in less than half an hour. >> and he's the guy. >> he's the guy for that and for taxes. everything has got to go through his committee. >> some of these proposals -- the journal has an interesting piece. one of the editorials. i don't know whether you read that one too, steve, about this one other provision to actually try though hold down costs that's being overlooked. everybody is talking about coverage. might be the top thing in "the wall street journal" about one of the provisions not being sold. i want to ask brady about that. and a story we're watching this

morning, the apple online store is down for scheduled maintenance. that's weird. so the site needs some maintenance. that's weird. even the site -- like a physical place that needs maintenance. this needs maintenance. it has a message that says we've got something special in store. no other details, though, at this point. but there has been speculation that the tech giant is planning to launch a series of new ipads. shares of apple above 140, closing in on $800 billion not too far from now. steve, you tried the shake shack burger. >> i did. >> it was an excellent -- >> it's pretty awesome. i have a smash burger and a five guys and also an elevation burger near me. this ranks. >> it does. >> it's up there. >> see, i've never had a five guys burger. >> wish list for tomorrow. >> have you had a steak from the palm, joe? >> i don't believe i have.

>> you haven't had a steak from the palm? >> haven't had any onion rings from there either. >> no onion rings from the palm? >> all right. actually, this is bad. this is almost like pandering. >> this is pandering? >> it's almost pandering. we should go to the governor probably. >> i just want to remark before we do that. we could be sitting here and having no discussion about the testimony yesterday from looking at markets. there's no imperative here. >> i'm not boing to sgoing to s >> you can say it. >> i mean, i saw the hyperventilating, i saw the dems and the mainstream media. a month ago, even yesterday, they said there's been nothing. just confirming the fbi is looking at it -- for everybody else on that side of the aisle, it means there's something there. >> i get it, joe. i'm reading the articles that

say yesterday was an historic event, that an fbi director was saying the president's people from the campaign are under investigation is a transcendent historic event. you look at the futures this morning. >> it's not just that. >> it may just be that it's comey, and we've heard a lot of other things that were you should -- under investigation. >> this is why i wanted to tie in the conversation. consumers might be feeling a sting in their wallets. joining us now, former governor john engler. we know what happened yesterday. you can't see it looking at any data point in the market this morning. >> i think becky just touched on it briefly. i think it's comey. i think he's got so little credibility on both sides of the aisle that, you're right, it's a unique admission, but i think

comey has been all over the map. who believes what he says? we'll wait until something happens. >> governor, let me push you on this a little bit. i really want to explore the tails on this thing here. yesterday i think it was "the new york times" described it as an historic event. is it not historic to have the director of the fbi come forward and say that the president and his team, for actions in their campaign, are under investigation for relations with russia? >> sure, but the whole build up to this has also been, in my judgment, historic and unusual and unique. we've never been through a campaign like we've just had. we've never had a campaign that had the machinations that were taking place. we've never had a campaign really where the two candidates were as unpopular. the emotions -- i think this is part of what's going on. everybody is so wrung out. >> so yesterday was old news. >> continuation of the story, yeah. >> let's push it forward then.

the only thing i think that matters here -- we're a business channel here. what did yesterday and this ongoing investigation, what does it say about the ability of president trump to get his policies through, the economic policies, the tax cuts, the infrastructure spending, the deregulation? >> well, i think it's going to be hard because of the political division. this doesn't obviously fix anything, but it doesn't frankly make it worse. you're seeing a president who's being described by members of congress, and chairman brady might talk to this, but he's rolling up his sleeves. he's personally going to the conference this week. i expect the health care bill to pass the house on thursday. i think speaker ryan will get that job done. there is a great deal of moment tunn -- momentum, in my view, on the tax issue. you had discussion on a phase-in period on adjustability. that's an important kind of

statement. i do think there's ways. brady and his team are outstanding. they're listening and looking and molding and shaping. i think they can get a bill out. i do think on taxes, unlike health care, that tax bill that comes from the house is going to be very close to a final blueprint for what goes to the president's desk. >> we have congressman brady on next -- or chairman brady. he's the guy who's crafting that plan. but let's talk about health care. does health care get out of the senate? >> i think it's hard. that's going to be a lot of negotiation. i don't know what that's going to look like. ic -- president trump is sort of uniquely blessed. i don't know that it's fully appreciated maybe by him and the white house, at how skillful he's got in the leadership of people like speaker ryan and leader mcconnell. if it can get out of the senator, senator mcconnell is the person that can get it done. i think they'll get it done. i think it's going to look differently.

the one thing i'm pleased with now as a former governor is that they're really starting to hone in on the importance of medicaid. i don't want to go back into history too much, but '5095 and '96 we put a bill on president clinton's desk. we didn't have an answer as to how it was going to work, but we knew among the 50 governors, somebody would figure that out. i think we're still at the same point in 2017. give these men and women, our chief executives at the state level, the chance to mold and shape health care for people of very low incomes. that's where the gain has come and the coverage primarily is in medicaid. let them figure out how to run these systems. i think you'll get a better value for your health care dollar and a much more effective system with a federalism approach, not a top down from washington. it blows my mind that some of the people who say they're conservatives and standing up

for conservative principles can't see this. we've got members in this freedom caucus who simply don't have an economic sensibility about anything. they would lead everybody over the cliff. they need to follow speaker ryan, and they need to get off their obs on city answer in -- obstinanc and get on board. this is legislative 101, politics and negotiation. but pass the bill and stop standing in the way. i think rand paul is embarrassing himself with his opposition. >> governor, are you unhappy with the changes that have been proposed overnight to paul ryan's bill? you think that's catering too much to the very people you just talked about? >> well, no, i think that's negotiation, becky. there was an interesting piece in the journal.

hey, we're back to actually watching a legislative process. it was always described as the sausage making. sometimes you don't want to get too close to it. i think you've got to negotiate. in a real robust legislative process, democrats would also be part of that negotiation. at this point, they're not participating. so they're not going to be, you know -- they're not ep haddihel create this recipe. i think what brady has done and what ryan is doing is exactly what they need. the senate will do more of that. the house and the senate likely will be in a conference where they'll be writing those final details. >> governor, thank you very much for joining us this morning. we'll check back in with you as this process unfolds over the next several months and probably more than a year maybe. >> i'd love to do that. a lot going on. >> thanks. coming up, some of new york's wealthiest residents are calling on the state to raise their taxes. we'll tell you why. "squawk box" will be right back. still to come on "squawk box," the battle for a health care overhaul.

congressman kevin brady is helping lead the charge for reform. he makes his final pitch before the house vote. first on "squawk box," an interview you won't want to miss. starting at 8:30 eastern time. stay tuned. you're watching "squawk box" on cnbc. the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.

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♪ a look at times square this morning. in fact, some of the wealthiest new yorkers are asking the state to raise their taxes. 80 people, including george soros and steven rockefeller, wrote a letter to andrew cuomo that would create new tax brackets to raise a projected $2 billion. the letter was obtained by the associated press. those who have signed on say they should pay more to support schools, roads, bridges, and programs to help homeless residents in new york. coming up -- i don't think there's -- steve, correct me if i'm wrong. they can send in as much as they want. >> that's what someone on twitter wrote. go ahead.

>> they could double. >> there's nothing stopping them from paying as much tax as they would like to pay. >> right. >> there's no limit on the amount of tax. you must pay the amount you're legally required to. >> god bless you. go for it. coming up, "squawk box" goes behind the wheel. one of these rides took the top spot for hottest car of the year. we'll tell you which one and how much it will cost you. it's not really about them. they want other people. "squawk box" will be right back. various: (shouting) heigh! ho! ( ♪ ) it's off to work we go! woman: on the gulf coast, new exxonmobil projects are expected to create over 45,000 jobs. and each job created by the energy industry supports two others in the community. altogether, the industry supports over 9 million jobs nationwide. these are jobs that natural gas is helping make happen, all while reducing america's emissions. energy lives here.

the rob report out today with its highly anticipated car of the year award. more than a dozen of the most luxurious cars in the world competed for the top spot. robert frank joins us now. a couple of them, i think, robert. there you are. how are you doing, robert? >> good, joe. we have a couple of them. for the first time in its 18 years of doing this award, the robb report, we have two winners for the first time. joining us now to talk about this, david arnold, the managing director of robb. thank you for joining us. so two winners. first time ever. tell us about how this works. >> sure. we have about 200 judges that pass through the event. we do seven separate sessions.

>> judges. and these aren't judges. these are regular wealthy consumers who would buy these cars. >> indeed. affluent vips. we asked them to take the cars as if they were picking them up from a dealership, drive them around the roads in napa. >> and the criteria is what? do they just pick a favorite and you figure out how many people pick that favorite? >> there's about a dozen questions. it's an a through f grade. we ask them in essence, does the car deliver on the promise that the manufacture states, the perception of the promise of the vehicle. it's a hard choice. >> and what i love about this year, these are almost opposite ends of the philosophical spectrum of what a sports car should be. let's start with the lamborghini. this starts at $313,000. it's a v-10, 0 to 60 in 3.4 seconds. what did people like about this car? >> so one person actually said it was they advocated for the fact that driverless cars should never be in existence when you can drive something like this,

which we thought was amusing. fun, great handling, great performance. somebody said it's like having a car on rails. doesn't shimmy, doesn't move at all. >> and lamborghini, it's all about flash. it's sexy. the design is a little outlandish. opposite end, the porsche. this is the 911 turbo s. this is, i believe, one of f , not the, fastest 911. it goes over 200 miles an hour. yet, it's a mere $190,000. >> it is. in fact, we encourage people to buy both so they can get the comparison of the different driving experiences. porsche is jusuch a reliable vehicle. this latest iteration certainly, i think, has put the performance mark out there. >> look, the 911 has not changed much in 50 years of being in existence. the secret to porsches is always what's under the hood, the engineering. the stuff you can't see is what gets better and better every

year. >> and great value. >> and this color, which i guess is called graphite blue, is brand new for this model. what do people love about porsches? >> reliability. plenty of our judges got into the vehicle and said, well, i've driven 911s, what could be different? then they get out and say, now i see. >> let's talk about the broader car market. we've seen the luxury market for almost any high-end goods after the trump election doing very well. car market did terrific at the fourth quarter of last year. ferrari, best year ever. lamborghini, record sales. porsche, record sales last year. do you think that strength based on what you're seeing with luxury consumers at the robb report, is that going to continue? >> it's certainly continuing right now. the special editions, the limited editions, porsche being a master at that with a new series released every year. there doesn't seem to be any slowing down in that luxury

segment. >> but there's so much supply. even in the sort of 1 million plus range, all the super cars people are making, does it feel like there could be too much supply out there? >> not right now. i think largely because the manufacturers are keeping this limited edition strategy. so it's a supply and demand situation, which obviously you're very similar with. that seems to be working. >> you joked about driverless cars. will you ever have a driverless car in the mix for car of the year? >> absolutely not. >> not. >> absolutely not. >> it's all about the driving. >> it's the experience. it really is the experience and the joy of what the automotive manufacturers can do. i think for a luxury consumer, it's of no interest to them. >> all right, guys. buy them both. that's the answer. and the robb report hits stands today actually. you can read more about all the other cars, how they did, and why they were chosen. guys, back over to you. joe, this is an mamazing value. this car is actually faster than

this $300,000 car. totally different experiences, but value for money, this is a great car. >> it's timeless. they do tweak it a little bit every year. he's right. since i lease it, it's every couple years. they get better and better. people say i want the air cooled engine or whatever. i mean, the state of the art 911 is absolutely unreal the way that it -- >> and to get a car that goes over 200 miles an hour for under $200,000, i know that's still a lot of money, but that's really good value. the germans, they know their engineering. >> what's the 0 to 60 on the 911? >> 2.9 seconds. >> 2.9? >> i wasn't listening to everything, robert. that's got to be a turbo or something, right? >> the 911 turbo s. >> yeah, that's 200 grand. >> and they're both all-wheel drive, so you can drive them in

the snow. >> that's frightening to me. >> you can get a nice 911 for half that. that's less than a tesla. think about that. anyway, thank you. >> thank you, guys. >> is it the robb robert for robert frank? >> not yet, joe. maybe some day. >> i just think of it that way because you're so associated with wealth. it's almost branding. it almost goes hand in hand now. >> well, you know, david and i will chat. we'll come back to you on that. >> all right. >> we haven't had any porsches on the set here, have we? >> going to be hard to get in here in the elevator. coming up, house republicans proposing changes to the obamacare repeal bill. ahead of a key vote this week. we'll talk to congressman kevin brady about the health care battle next. as we head to break, take a look at u.s. equity futures, which are on the positive side, maybe a little weaker than they were

today. up 34 for the dow. five for the s&p. 15 for the nasdaq. yes? please repeat the objective. ♪ thrivent mutual funds. managed by humans, not robots. before investing, carefully read and consider fund objectives, risks, charges and expenses in the prospectus at thriventfunds.com.

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, walmart is launching an investment arm to try and help expand its e-commerce business. the new unit will be led by mark lore, who joined walmart when it bought jet.com for more than $3 billion last year. the investment arm will partner with retail start-ups, venture capitalists, and entrepreneurs. adobe and microsoft are teami teaming up in effort to better compete with companies like salesforce and oracle. plus, two big name earnings reports that are set for after today's closing bell. we'll be getting quarterly numbers from fedex and dow component nike. softbank has reportedly dropped a $100 million

investment in smartphone start-ups that competes with the iphone. softbank was planning on taking a stake in the firm called essential products, which was founded by the android software. it scrapped those plans because of its close relationship with apple. a u.s. federal judge has rejected a bid by leon cooperman to dismiss the s.e.c.'s insider trading case and his firm. the judge says the s.e.c. made a plausible claim that cooperman and omega reaped about 4 million in illegal profits in 2010. separately, the judge dismissed claims by the s.e.c. that cooperman failed to file about stakes in eight public companies. a trial date has been set for november. speaking to cnbc, cooperman said, i look forward to going to trial to prove my innocence. as i've said all along, there's no case of insider trading here. he's told us that on set. we're going to get now to josh lipton. he has breaking news on apple.

josh? >> steve, this news just crossing from apple. apple today is announcing iphone 7 and iphone 7 plus product red special editions. looks like they're be available to order online worldwide and in stores beginning on march 24th. remember, when you buy red products, what occurs is that apple makes a contribution to a charity. that charity then uses that money to finance hiv and a.i.d.s. programs in africa. over the past ten years, apple has collectively raised about $120 million for that charity. what's different is other products in the past that have been part of this campaign have included ipods and cases and wristbands. this is the first time you're going to be seeing an iphone. it is a 7, which means that apple is going to be making some percentage of donation on a $650 device, which could be substantial. of course, apple has been on a

run here. it's up more than 20% year to date, on track for its best quarter since 2012. guys, back to you. >> all right, josh. yep, market cap keeps going up and up and up. watching that. see if the law of large numbers ever takes over. house republicans are unveiling a package of amendments in a bill they hope will repeal and replace obamacare. joining us now, house ways and means chairman, kevin brady. thanks for joining us. >> you bet. thanks, joe. >> i've read a lot of stuff in the journal and elsewhere. we'll get to the lead editorial, which i think is very interesting and something i wasn't even considering. i think it's a good selling point. what about changing it for older americans? what kind of provisions are you looking at? has that been done yet? >> yeah, it has. so look, there's two big provisions already in the

replacement bill that helps seniors. not those on medicare. those 50 to early 60-year-olds that haven't retired yesterday, may be running a body shop, their wife is doing the bookkeeping. those type of workers. we want to make sure that they get even more help. so the house is creating really the financial space for the senate to look at solutions like increasing the tax credit for them. >> we had former senator evan bai on. i just asked him, you know, democrats know that obamacare, you know, isn't perfect. after round one, when you get these other rounds, two and three, where you need 60 votes, do you have any open that you could get any cooperation given the poisonous atmosphere down there? >> well, great question. we hope so, but some of these changes we're proposing are very

common sense. letting small businesses join together to pool and get the same discount as the gbig guys, letting consumers buy the best health care available to them, even if it's in the state next to them makes great sense as well. plus, we have some important health care programs coming up this year, like the children's health program that has universal support. i think these common sense measures fit in those provisions. at the end of the day, i'm hopeful that we can move all this across the line. >> the original -- one of the original rationales for obamacare was to try to somehow slow down health care inflation and premium increases. if you come to these people on the other side of the aisle with genuine practical ways of holding down health care inflation, do you think that they'll be open to that? i guess that's the same question. i'm very skeptical. >> well, i sure hope so because, look, everyone acknowledges that

obamacare did nothing but actually lowering health care costs. it was just sort of the model of very expensive medicine chased by very expensive subsidies directed from washington. our approach is much more affordable health care, much more affordable credits to buy it, directed by you as a patient, as a small business person. so we're hopeful that they join us in here because health care is so critical. >> i've seen zeke emanuel and others say that some people characterize the individual insurance market as in a death spiral. i've seen them say, no, it's not at all. the journal's lead editorial today says the biggest gamble is whether there's enough reform to try to stem the death spiral in the individual insurance market. it goes into this ten-year, $100 billion stability fund. it's the first time i've heard of it. can you go into that? >> yeah, look, this is a sinking ship. however you describe it, it's

going to pull out of people under obamacare. by allowing states to have ample amount of money for low income or handle those high-cost patients, that could result in a premium decrease for the rest of those citizens in a state by 20% to 30% done right. if you take out some of the other regulations, some of the other exchanges so those other added costs, you can lower it further. so there is a real way to lower health care costs so there's more affordable products for americans. that's the approach we're taking in this bill. >> by going retro active on a 2017 taxes, do you need to rescore? i don't know if you really agreed with the first scoring by the cbo. the deficit reduction wouldn't be as significant. >> it won't be. so for a couple reasons. one, we are going to accelerate that tax relief on job creators,

on local businesses, on consumers who have health care plans. we think that relief needs to be automatic. it will cost some money, but we think that's good for the economy. certainly good for consumers. we're putting in those dollars for the senate here in the house so the senate can muscle up the tax credit for seniors. that will cost money as well. so yeah, that deficit number is going to come down, but i think for the right reasons. >> chairman brady, some of the things you're doing, repealing those taxes sooner in 2017 versus 2018 and also freezing an unwinding medicaid sooner, i know those are things you're doing to try and negotiate and work with people in your conference, making sure that you bring in some of the people who said they couldn't support it otherwise, but when this goes to the senate, the senate is very likely not going to be on board with a lot of those issues. it goes back to conference. it's going to be changed and taken out. is this just a head fake to get some people to support it so that it goes through? >> no, absolutely not. in fact, every stem of the way we've looked for ways to improve

this bill, listening to our members. the truth is, the house is doing the hard -- it's march madness. maybe the appropriate analogy, we're driving the ball way down the court, making it easy for the senate to complete the shot. certainly they'll want to make some changes. we recognize that. but look, this is a partnership. at the end of the day, these are real reforms in the house. these are their rules that we're abiding by. they can make even more improvements as they see fit. at the end of the day, we're going to get this done. >> does that mean it can't be changed in conference? very likely some of those measures will not pass the senate. >> so most of the discussions we're having are very positive. we'd all like to do more. but these are the senate rules we're abiding by. so to the degree that they can help control their own role over there, that's always helpful. >> so yesterday didn't throw a wrench in the works of the thursday vote? then we'll talk a little bit

about yesterday. i want to get your comments. it's going to happen thursday. how many guys you think you're going to lose? where are they from, and what's going to happen to them? >> look, i think there's going to be extremely strong support for this for a simple reason. this is what we promised, relief from obamacare now. in the replacement, restoring state control and the free market to people. >> that will be thursday? >> this will be thursday. >> okay. so yesterday -- i just wonder, the reaction -- and steve pointed out "the new york times" editorial versus "the wall street journal" editorial. i don't know how you could be watching the same developments and come away with that. you watch either side of the aisle. comey is able to talk about the investigation into the russian links, but could give no information on the investigation into the leaks. does everything seem like it's proceeding the way you would expect it to from the fbi director? or were a few eyebrows raised on what the hell is happening here. >> you know, joe, i have to be

honest. i have my head full down on health care and tax reform. >> good answer. >> every day. truthfully, if it's not in that wheelhouse, i'm aware of t but that's where i'm focused on right now. >> all right. that's fair. the worry is -- you know, it's like a -- what are those rube goldberg devices? if you don't get repeal and replace, there's no tax reform. this russia thing -- just because there's an investigation now, one side thinks, well, it has to be true if there's an investigation. at least that's their narrative. if that happens and that messes up repeal and replace and that messes up the tax reform aspect, we're going to start worrying about the stock market. i don't think you want that. >> we don't. but here's my point. you know washington. all they do is try to distract the president from his agenda. in this case with president trump, it is about repeal and replace.

it is about the economy and tax reform. i don't think anything is going to knock congress or this president off his priorities. >> congressman, did the amendments overnight -- to they change or get at the estimates of the number of people who will potentially lose coverage under the republican plan? >> you know, probably not. although, by giving states more flexibility on medicaid, they're going to be able to serve that population, especially the help you give for those who are aged or in nursing homes. that makes good sense. then on the tax credit side, the financial space we're giving the senate to address those 50 and early 60-year-olds, we think, is going to improve coverage for those -- that population in a very positive way. no, we haven't seen those numbers. i think we'll get the raw budget numbers from cbo before we go to the floor for a vote. >> so the idea is you make it less expensive for people in that 50 to 65 range, and that's part of the cbo estimate as to why they would lose coverage, because they couldn't afford it.

you make it more affordable, you think you bring that number down. >> the thing is, today those 50 and 60-year-olds are paying extraordinarily high premiums because of obamacare. remember, they said, look, if we punish the young people, it will keep your premiums down. young people are smart and said, no, thank you. seniors are paying higher premiums today. our approach is lower the cost of those health care products, have a stability fund so states can target and help those in that population. then we're adding a third degree of help here in this big by giving the senate the space to perhaps increase the tax credit. >> where are you now on the feeling of the border adjustment tax and whether the administration, whether president trump and the white house are 100% behind that? i'm going to -- i always risk things. at the risk of -- someone just sent me some mail. not going to say who it was. said that the two goldman sachs democrats making economic policy

are at odds with the sort of populist nationalist group and they're butting heads about whether to do border adjustment. they don't want to do it. do you have any anecdotal evidence about what's really going on behind the scenes there? >> my sense is that border adjustability has become a given. it will be part of the final tax reform plan. really, now the discussions are how can it be designed and transitioned in a very positive way. for the rest of businesses, and i would say for importers as well, looking at this strong economy, taxing everyone equally in the u.s., eliminating any tax incentives to move overseas, and making sure made in america products can compete around the world, everyone wants that in the final tax reform plan. so really, now i think it has shifted to how best to design these provisions. >> just a moment, chairman brady. this is very important for our audience. can you just clarify on that. you say that this has become a given, based on what? it has been the senate in the past that we thought there's no

way. have you got a new count? >> again, i never speak for the president. i certainly don't for the senate as well. i think people are coming to realize that as a key component tied with the lower rates, no longer taxing worldwide, the critical role the border adjustability plays in being able to leapfrog from now 31st in the world in competitiveness up to third and keeping us there for the long term is really key. >> but again, what's different? what we had heard in the past is opposition obviously coming from retailer, opposition from anybody importing a lot of things, opposition from plenty of key republican senators. and still having the president not signing off on this just yet. what's changed? >> look, this is naturalists. special interests protecting tax breaks. i get all that. >> they would say that it's not special interests. they would say you're doing

things -- they say 15 different arguments. >> i get that argument. the truth of the matter is the tax code going forward is not going to favor foreign products over u.s. products, nor is it going to chase u.s. manufacturing and research overseas. i think that is a given. what i sense is just a change in momentum as we move forward on this. >> congressman, there's talk about phasing it in. are you in favor of that idea, of doing a partial border adjustment for a period of time and then phasing in over a number of years? >> i think that will be one of the modifications on this, to make sure it's done in a way that the economy adjusts efficiently, effectively, so we can see as this moves forward. i also think we're open to design changes. look, we want the most pro growth tax reform we can muster. we think this is critical to it. so we're listening to the import industry, and more poimportant, they're engaging on the design part of this. i just see a shift in the

thinking that the at end of the day this will be in there. let's make it the most pro growth provisions we can. >> when you say open to design changes, what does that mean? what aspects of the design would you be willing to bend on? >> so we're looking at -- just as we do in the current tax code. on the import industry, you've got issues like raw commodities. you have component parts that might go through automobiles. you have finished products that might ind up in tend up in the store. we know the exchange rates will adjust efficiently. a fair concern is what if they don't immediately or completely? well, design, in my view, of this tax revision can accommodate those in a good way so that they're seeing 3% and 4% growth, not what we have today. a much more competitive u.s. and a simpler tax code where they can use their capital from around the world where they need it hopefully in the u.s. so i just see very positive directions in the design in the transition of that provision.

>> always a pleasure, chairman brady. thank you for all your time this morning. >> okay. up next, pimco just out with a new read on the economy. the firm's global economiced a vie -- economic adviser will explain why scaling back is the big theme this year. hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade. hi, i'm frank. i take movantik for oic, opioid-induced constipation. had a bad back injury, my doctor prescribed opioids which helped with the chronic pain,

but backed me up big-time. tried prunes, laxatives, still constipated... had to talk to my doctor. she said, "how long you been holding this in?" (laughs) that was my movantik moment. my doctor told me that movantik is specifically designed for oic and can help you go more often. don't take movantik if you have a bowel blockage or a history of them. movantik may cause serious side effects, including symptoms of opioid withdrawal, severe stomach pain and/or diarrhea, and tears in the stomach or intestine. tell your doctor about any side effects and about medicines you take. movantik may interact with them causing side effects. why hold it in? have your movantik moment. talk to your doctor about opioid-induced constipation. if you can't afford your medication, astrazeneca may be able to help. 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, everybody. pimco is updating its yearly economic outlook. the firm is dialing back a number of the global macro risks.

joining us right now to tell us more about it is the global economic adviser at pimco. you think that there are some tail risks that are less likely to happen now. why don't you tell us what those are. >> yeah, so going into the year, we worried a lot about tail ris coming from china, coming from europe, coming from trump's economic policies. these tail risks are still here, but i think what has happened is that they have become a little less fat. so we have less fat tails right now. in china, i think the risk of an accident is much reduced. the buzzword in china is stability ahead of the 19th party congress later this year. they've clamped down on capital outflows. they are curbing some of the successes on the credit side. the risk of a disruption of the chinese currency is lower. europe, the risk of a populist

victory is lower. they didn't win in the netherlands in the election last week. in france, it is suggested marine le pen will not become president. here in the u.s., a risk of a trade war sparked by very aggressive trade policy by the trump administration is also lower now. trump could have started a trade war. he could have imposed tariffs by executive order from day one, but it hasn't happened, arguing for a more moderate approach. this is why we've scaled back the tail risks. this is why we think the global economy will be doing well this year. we're in the midst of a broadening and more synchronized, global economic recorr r recove recovery. the outlook is good. >> as a result, you feel more comfortable telling people to buy stocks? >> no, actually, not really. the interesting thing is that the stock market, i think, is prized for an outlook. the stock market has really

focused on the right tail risks, the positive aspects of u.s. economic policy in the last few months. so we think stocks are relatively expensive. and we think that this is a time for investors to maybe take up some cash race, some liquidity in order to deploy the cash and liquidity when we get further bouts of volatility, which we'd expect. >> what's the point of having a feeling that there's less risk out there if it doesn't translate into on action from an investing perspective? are you less likely to tell people to sell? >> no, becky. one thing is to, you know, have a good assessment of what the economic outlook is, but you have to look at what is priced into market. where are the opportunities? we think, this is a time where, you know, credit spreads are extremely tight, so we have reduced our credit exposure

somewhat. this is also a time where we think think that inflation risks, at least medium and long-term, are on the upside. this argues for being overweight inflation bonds, tips particularly in the u.s. >> sure. >> where are the opportunities? well, we think the u.s. housing market, for example, is very robust, very solid. we think there are opportunities in non-agency mbs, for example. >> great. thank you very much for your time today. coming up, today's top stories, first as we head to break, a programming note. kelly evans will sit down with ibm ceo first on cnbc at 2:00 p.m. eastern time. "squawk box" is coming right back.

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eastern time. we'll be right back. 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. there's always something different to do like skiing in the winter, jet skiing in the summer. we can do everything. new york state is filled with bright minds like samantha's. to find the companies and talent of tomorrow, search for our page, jobsinnewyorkstate on linkedin. i am benedict arnold, the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound)

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various: (shouting) heigh! ho! ( ♪ ) it's off to work we go! woman: on the gulf coast, new exxonmobil projects are expected to create over 45,000 jobs. and each job created by the energy industry supports two others in the community. altogether, the industry supports over 9 million jobs nationwide. these are jobs that natural gas is helping make happen, all while reducing america's emissions. energy lives here. let's get a final check on the markets this morning. u.s. equity futures have been in the green all morning. the dow will open by 37 points. s&p futures up by 5.5%.

the nasdaq up by 16. you're looking at the yielding at 2.493%. oil prices are up by 12 cents. steve, thank you for being here. >> go carlton knights. >> strong pitching. >> they do. >> strong pitching, upcoming. >> that does it for us today. join us tomorrow. now it is time for "squawk on the street." ♪ good tuesday morning. welcome tow quintanilla with sa eisen. the president makes his way to capitol hill. even as we speak, drumming up support. we'll watch that along with news on apple, facebook, general mills and more. europe is steady after the debate with le pen