millennia. that's not the issue. >> what was the most important thing he rolled back, there were four. we don't have much time, the president. >> i think the biggest deal will be restoring balance between federal overreach and regulation, letting regulators set policy rather than letting congress set policy. >> that's what you like about pruitt. >> yes. >> tom fanning thank you for spending the hour with us. "squawk on the street" begins right now. ♪ all right, just dance good morning, and welcome to "squawk on the street." i'm david faber along with jim cramer, live from the new york stock exchange. carl quintanilla has the day off. half hour before trading on tuesday a lower open perhaps but not by much if at all after yesterday's down markets. european markets though not down after yesterday's down day

overall. you can see germany's dax regaining some of the losses, france is the only major indices in the red right now. the ten-year note yield very important, one of the reasons why the financials have performed so poorly and there is that yield, down just a bit, 2.362, although this is right around where we were yesterday. as for oil, up and up rather nicely. and the latest s&p case shiller home prices report, prices up 5.9% in january compared to a yearni year ago, faster than the 5.6% economists had been predicting. as for the road map, ford expected to announce significant new u.s. manufacturing investments this morning. the automaker receiving high praise from the president. plus futures are pointing to say flat open, the dow seeking to reverse course from the longest losing streak now since 2011, six years, and yum! brand ceo

reid will sit down exclusively with our own sarah eisen. >> nobody else's. >> she is a road warrior. >> let's deal with the bond issue up front, about an hour ago we got the results from a german two-year auction, 4 billion euro it failed. only got 3 billion in bars. >> what does that say? >> i'd rather have a piece of paper that yields 1.26 in america and take the currency rate. >> we're in germany. i got germans ten-year at 0.39. >> no cue pop at negative rate. it's about time one of the auctions failed and this one just failed and should have a major impact on where funds are flowing either to more risk or here. and the reason i mention this, so many people feel with interest rates dropping, must be about to have a recession. if you're a german institution

and decide this is a failed bond auction. this just happened, nobody cares. you should. >> people maybe should and we talked about the disparity of course between u.s. rates, which appear to be going higher for some time, jim, when the dollar was strengthening and the idea of a real, of higher growth coming to the u.s., which seems to be in some question at least, given tax reform, all these things we'll discuss, but the idea being that the europeans will follow, and rates will have to go higher there. >> yes. and they do. this is the beginning of the end. the beginning and the end because you can't have a failed auction, only 3 billion euros for 4 billion, this is a piece of paper. should have been snapped up like that. should have been instagramed like that, shouldn't have mentioned snap. ford news this morning, we don't have it yet but about it poised to announce investments in three of its michigan manufacturing plants according to "the detroit news" one of the papers sources characterizing

the investment as significant, it was part of the 2015 united autoworkers contract. unclear how much of this will be new as opposed to simply restating stuff they already had promised in the uaw contract but we'll find out. just hours ago president trump tweeted "big announcement by ford today, major investment to be made in three michigan plants. car companies coming back to u.s. jobs, jobs, jobs," although unclear whether there's a lot of jobs. >> the announcement we want to hear from ford is better than expected earnings and boosted dividends. the jobs are great, love jobs, jobs, jobs. i'll give you four jobs but the quarter was bad and the stock is down badly and remains to me very difficult to own. >> very difficult to own. >> very difficult to own. >> why? >> the long-term secular decline in just pure autos versus what you have to do for autonomous driving is so prohibitive that i just think you're dealing with a

20/20 r 2020 risk to cars and what they have to have. >> and the idea behind autonomous driving and the rise of that, which expect whether it's 2020 or when we start to see these cars on the roads in a much morrow bust way is you'll need fewer of them. >> yes but it's possible you save 20 million to 30 million who are disabled could drive. you have a combination, this combination of the uber generation, let's call it the lyft and uber generation they don't buy cars. the day that i turned 16, i went for my license, okay? now these people and such as city people they uber everywhere, and then you got the huge costs of the autonomous car, and i just feel like the people are just saying these are dangerous, and they always have one region that doesn't go well. ford is barely in china. they do have some good numbers in china, but nothing like gm and look at gm.

gm yields ford and nobody wants it. you want ford with a 5% yield because they're producing jobs? it's great, i want american people to be hired. >> of course. >> but if you're in the stock, that's not as relevant. >> again, we are waiting to see the specifics behind this, and how many real new jobs are going to be part of what is this new apparently new investment from ford. let's move on to the markets. the dow is looking to snap an eight-session losing streak, that is its longest since 2011, both the blue chips and the s&p 500 closed well above their session lows yesterday. certainly trying to shake off concerns about president trump's ability to push that pro-growth agen agenda. the s&p is on pace to break a four-month winning streak, as we are only a few days left in the month of march. tax reform, jim, continues to be the key question. it's not -- i have conversations with people, not inside the white house. >> right. >> i don't have those sources at this point but nonetheless seems

to be growing consensus we're not going to get reform. it will prove to be too difficult and we are going to end up with a lower rate of some kind. >> smaller. >> we talked about this, a cut, maybe a repatriation deal. >> yes. no days agreement there on that. i do expect some. >> you said yesterday and we did come off the lows yesterday significantly but you said still okay. >> yes, it's okay. it's fine and what makes it fine for me, okay, darden call going on, consumer spent in february, i mean in january, a little decline as the quarter went on, why for darden which is olive garden, because of federal tax receipts, that's been actually proved. they did buy cheddar and at the same time reddit had a call and saw growth in a decade, the internet of things moving to the cloud. comment about amazon raising price target, very big price target, 1,025, momentum in

e-commerce and the cloud and let's not forget, david, we've got, i always hesitate to bring this company up because it's a cold stock, but tesla got a 5% buy. >> they bought it in that offering from tesla, ten cent, bought 5% of the company stock which is interesting. you can see that is having a positive impact on tesla shares this morning. >> david, there is hee he a tord soul, david t automborino, an analyst covers tesla. says there's 29% downside and his firm is the banker. you got to love it. this man, i mean you have to appreciate the fact that he does say listen, orders for the model s and model x are what matters and they'll be good but can you imagine musk, we always joke, i mean snap, like bye, buy, buy, but muss something sticking by his 187 target but the firm is

urging to you buy. >> firm is urging to you sell. >> no, i'm saying the salespeople are coming to you and say listen, you got to buy some of this tesla deal. it's red high. >> goldman sachs is the underwriter for the deal that recently occurred but their analyst on the other side of the firm and this actually proves -- >> this is not only a chinese wall but more mines. >> has a sell on the stock, good for them. he's dead wrong, however. >> he should be saluted -- completely wrong. that should play a role, too. >> that's unfortunate. it would be better if he'd been right but he's been wrong. >> i should have mentioned that. >> you don't think he gets werereur from the bankers at goldman sachs, saying come on, man. >> in that book i think it's not his time. it's a suboptimal situation for him. >> tesla is up on the ten cent news and other nuews involving

musk his latest foray is the brain. >> we don't know anything about the brain. >> he has a lot of time running on his hands, tesla and spacex the reusable rockets, and so he has time. the hyperloop i'm sure doesn't take much time at all. he's only got five kids. >> is he a candidate to run twitter? >> why not. >> probably has more time than dorsey. >> i assume he does. >> he's a true multitasker. >> and shows up at the white house frequently for a few hours. >> jobs, jobs, jobs. >> he clearly has time to pursue merging machines and brains. apple now steve milanovic has the shares hitting 200 and for that to happen iphone growth must continue beyond fiscal year 2018. the company must establish new product categories and institute

more than 50 billion in buybacks president. share price of 175 is more likely. >> keeping the 12-month target at 151, this is the most luke warm positive, steve has been luke warm positive for 50 points. i read it, give me something else. give me a samsung 8. this is the evolution of the apple narrative. he's dragged kicking and screaming but he has a buy and when you get out to cupertino, it's not like people are saying milanovic has the heads up here. milanovic has basically i think on the conference calls distanced himself from the company in a series of questions that i regard as almost heresy. at the same time he's reflecting on the narrative in the stock price. another man dragged kicking and screaming by a higher stock but he doesn't have a sell on it. >> goldman sachs who is holding the line for purity of research. >> yes. >> 200 bucks it occurs to me it would take the market value well

above $1 trillion. somehow i don't know why that psychologically i have a problem with that market cap. i'm going to have to teal with that i guess. >> why, because infospace said they'd be the first trillion-dollar stock? remember, tremendous friendship between investment banking research in those days. just really buzzed. >> david weatherall of cmgi was also going to reach it. >> drop the i and the stock goes to five-liner but has to be 18 months. cmgi. oh, david, those were the days. >> go down memory lane, remember so many of those symbols back in the day and the dot-comcraze. always good to remember. i didn't get to share my thoughts on tax reform. >> we'll come back after a break. >> basically that's all i do, talk to people about tax reform. >> maybe the next 100 points. >> when we come back, sarah eisen has the exclusive

interview, our sarah eisen, that's greg creed, but she's our sarah eisen. we have a take on tax reform, too. >> wait until you see my guest, instead of our guest or her guest. >> also take another look at the futures. got a lot more "squawk on the street." hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias. get help on options trading with thinkorswim, only at td ameritrade.

remember here at ally, nothing stops us from doing right by our customers. who's with me? we're like a basketball team here at ally. if a basketball team had over 7... i'm in. 7,000 players. our plays are a little unorthodox. but to beat the big boys, you need smarter ways to save people money. we know what you want from a financial company and we'll stop at... nothing to make sure you get it. one, two... and we mean nothing. ♪ ♪

yum! brands is holding its meeting in florida today. sarah eisen spoke exclusively with ceo greg creed a short time ago and joins us from jacksonville, florida, with some of the details. sarah? >> good morning, david. sax reform is front and center for washington, wall street, and for ceos and that includes one of the biggest consumer fast food giants, yum! brand ceo greg creed looking to boost not just for his own business and fellow, ceos but consumers as well. >> tax rates are 26, 27%, we're in 135 countries, a global

business. lower tax rate i believe would increase investment. i don't believe anyone at my level needs a tax cut but if we could deliver tax cuts to the middle income in the u.s., and below that people will spend money and i think that would be a good thing because remember, our corporate tax rate is low but our franchisees live in individual countries so our u.s. franchisees would have a higher tax rate than we have. lowering the tax rate as we move to being more franchise business would be a good thing for our industry. if you get lower and middle income tax cuts, corporate tax cuts, deregulation, i do think you will see a dramatic increase in investment and dramatic increase in job creation. >> so still hearing that bullish talk from ceos, as 3% growth may be a possibility, 4% sounds like a stretch. we also of course talked about yum!'s trajectory progressing an

aggressive sales goal, wants to bring the 4% to 5% sales growth sales to 7% and i'll play you more of the interview how he talks about getting there including pizza hut which has been the drag versus the taco bell and kfc, better growers. pizza hut lagged behind some of the competition. as jim knows domino's they've fallen behind on technology and delivering and how he'll speed up the process and your favorite topic, robotics and a.i. and whether that is in fact a threat to jobs in fast food. some surprising and candid answers coming up in the next hour. >> i'm interested to hear about that, the idea of introducing robots into fast food preparation. >> while sara was doing the interview carnival cruise reported an amazing number, just fantastic, this is an experiential company i've been recommending for ages. why, arnold donald is one of the

greatest ceos. he turned around a sinking ship, carnival actual numbers closer to 38. you got take one-times out of that but this is what i'm talking about, companies reporting better numbers and people don't care because they're so focused on einstein ryan. >> first of all, jim, people, i mean the market is up. it's still up for this year, rather nicely. >> you know what, denmark is doing better. whatever. i'm saying dax, swiss is doing better. they are. all that swiss has it the cuckoo clock. >> they have a few other things. >> i'm saying that's from "third man" great film. people don't get mad at me. i get surprised that carnival is such a discretionary spending item. can greg turn around pizza hut? i don't know. i think pizza hut is

technologically impaired as sara said. i think a company like carnival is part of the selfie generation. people go there, i don't know if, well your kids aren't old enough. my daughter does cruises. >> really? >> yes the electronic music emd, but they do instagram movies, and snap, they do snap fashion shows. this is what people do, david. get with the program. >> okay. i'll try. >> will you get older, please? >> no. >> i have of you've been the same age, john garfield and you same age. >> i refuse to allow time pass by. >> we'll take a break when they play that music. >> think about what you want to do for your mad dash. >> i'm all over it. >> get back to me. another look at futures here, see how we're setting up for the morning's trading. not much of anything, really. maybe a bit down on the dow and the s&p, but the nasdaq looking up.

more "squawk on the street" coming right back. alpha seems more elusive today. is it because so many go after it the same way? chasing after short term returns. instead if getting caught up with the crowd, the investment managers at pgim take a long term view, teaming specialized active investing with risk-management rigor, to seek out global opportunities. we manage over a trillion dollars this way, attracting many of the world's leading investors. partner with pgim. the global investment management businesses of prudential with e*trade you see things your way. you have access to the right information at the right moment. and when you filter out the noise, it's easy to turn your vision into action. it's your trade. e*trade.

not just the automobile, f tomorrow will transform but mobility itself. an autonomous-thinking vehicle protecting those inside and out. and it's the mercedes-benz of today that will help us get there. the 2017 e-class, with innovations no car has offered before. and that will change driving forever after. lease the e300 for $549 a month at your local mercedes-benz dealer.

mercedes-benz. the best or nothing. ♪ okay, now for that time of the show we stand up for a few minutes before the opening bell, we have our mad dash. let's talk a little bit of red hat. >> i don't know if you ever had any time with jim, the ceo, self-efacing, incredibly wry, absolutely dynamic when it comes to the numbers though. get this, david, they close 280 deals for 1 million, seven deals

over 20 million and closed their first deal of approximately 100 million, this is just a company that's on fire. these were surprise numbers and why am i bringing it up, whitehurst is executing incredible for companies moving to the cloud, okay, moving to amazon web services but the number of business, the amount of business he's doing shows you there's an acceleration in orders going on in all of technology. this follows oracle. the stock one of the first to rally in the downturn. it follows micron. this signals i.t. spending. >> sometimes i think it's worthwhile to explain to people who may not be familiar what it is they do. it's not as if they're offering the cloud backbone, that's amazon. >> right. >> or google for some people and/or microsoft. they add on for your enterprise all the different things you can do. >> right, and then they, you

have to all the iterations, it's a subscription business, like a sales force in that way and the subscription business is terrific. david, when you add up how well this company is doing, as great as whitehurst is, you see amazon web services, it is undervalued. that was one of my takes. >> really? >> but this also made me wanted to buy amazon. i love amazon. i want to buy it more because the movement, the migration to amazon web services is happening far faster than people realize. bezos could also run. >> has a lot of time on his hands, too. we'll take a look at amazon and talk more about that stock near highs and the opening bell a few minutes from now. at fidelity, trades are now just $4.95.

we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. and at $4.95, you can trade with a clear advantage. experience exciting offers on sales event is here. our most elevated suvs ever. get up to $2,500 customer cash

on select 2017 models for these terms. experience amazing at your lexus dealer. ♪ can i get some help. watch his head. ♪ i'm so happy. ♪ whatever they went through, they went through together. welcome guys. life well planned. see what a raymond james financial advisor can do for you. you are watching cnbc's "squawk on the street," we're live from the financial capital of the world. the opening bell will ring in about a minute and a half from now, see if we can break the losses on the dow, the index i

shouldn't be mentioning, what is the key to this market, mr. cramer? >> olive garden. will you stay with me for a second? because a lot of people felt that the consumer had gotten weak. that was one of the big raps and now housing was good. kbh reported a good number, they'll be ringing the bell, but david, i had almost given up on restaurants other than panera. darden quarter so excellent it tells me if you think the consumer is doing nothing, except for sitting on the couch at home watching netflix, playing "take two" and doing wwe, they'll go out to olive garden, you know why? >> not just bread sticks. >> no, the salad. it's so good. and it's a lot of technology there on the table now. you haven't tried it. wear cargo pants, take as many rolls as you can. >> i want to talk more about the

consumer and where you see things as a result of this quarter and a couple others. [ applause ] you hear the applause building for the opening bell. let's get to that of course. take a look back at the real time exchange. [ bell raninging ] here is the big board. kb homes celebrating its 60th anniversary. >> 1938. >> the nasdaq biotech an immunotherapy company did the honors. >> we should mentioned to sara, the shell oil but to sara with a break-through. put pressure on astrazeneca which has got that franchise. i continue to think astrazeneca, i hear that name and bristol-myers and glaxo but nothing definitive. >> tesaro shares are up on that positive news. >> i never want to get people's hopes up too much but that's great. >> all right.

let's talk a bit more about the consumer. you like the darden number. we've had this conversation so many times in terms of the mall not being a place people go any longer. >> right. >> doesn't mean they are not spending money, just not in the same way but for quite some time we were looking at the casual restaurant companies and not seeing the traffic numbers that would certainly reflect a great deal of consumer demand. >> totally true, which is why the reason darden is key to the market. i left out the key thing buying cheddar, not the new york stock exchange cheddar but a gigantic restaurant change with private equity, freeing up, a company that thinks that there's room for growth in the consumer. darden is a terrific company. remember who put that thing on the right path? >> yes, i do. >> starboard. >> jeff smith. of course well that was, they took over the entire board. >> did a fantastic job. >> not something we've seen in

activism, to take control of the entire board of directors and solve their own management and it's gone fairly well, a great success story for them. they've had some hits and misses, no doubt about that. parago, macy's, not ideal but darden certainly. >> parago you see that pearson? >> wants money, suing the company. mike pearson, former ceo. >> does he want the 280 stock? >> he wants to get made control on the vrx or the stock at 3 sn 00? >> good luck. let's watch facebook with this e eadviceration of snap. the key to snap you can't see what your kids are sending. that's left out of all, i read all the research and not one of them said the truth about snap. which is that you can't see it.

you can't monitor it. it's what your kids don't want to you see. that may not be what proctor wants to advertise. they're rapid dogs. you want to advertise on mobile and snap's got mobile. they don't realize what they're advertising against. i always click on the espn. >> they do the top ten. >> they do a good job. >> incorporating within the snap. >> and disney will get snap and snap will have the great four-minute movies and i'm not, look, i think snap at a certain price is fine and i do think they have tremendous growth. i am just saying that i just believe that facebook is the most competitive ceo since larry ellis is mark zuckerberg. larry was able to win the world cup while he was destroying everybody in software. another multitasker. zuckerberg is in hawaii, very nice part of hawaii.

why? >> right now? >> no but that's where he likes to go. >> yes. >> i shouldn't have said that, it's a big island. >> not going to run into the market on the island. snap shares are down 4% after yesterday's largely positive reviews from the analysts who came back after the quiet period expired with their various ratings on the company stock. >> what do you think about the idea zuckerberg the day after this snap comes out with basically snap two. this i'm telling you this guy does not like anybody encroaching on his turf, and he is such a natural competitor but he does it with the hoodie and this is the new kind of competitor. >> i don't doubt any of these people are incredibly competitive. >> musk is incredibly competitive, bezos. diebold has a solution to a lot of the stuff that amazon seems to be having problems with, with

its amazon store so dbd nobody talks about it, they demonstrated they have the store of the future, where literally you're doing this to all the different, you're wanding and you don't have to do the checkers. that stock has been a very strong stock. >> you're talking about the delay in the amazon store where you get to walk in and walk out without really doing anything other than having your phone on. >> diebold has it now and the future is now when it comes to diebold. diebold and european companies are using it. it's remarkable. the company stock like went up huge, they were on "mad money" but i do point out that david people have solved this problem. diebold did say to me that their 3 million checkers that might become sales assistants with this program because there's 3 million jobs at stake, and then your border tax would wipe out retail. you really have it in for retail. >> i do? >> yes. >> me, personally?

well we've got a president who tweets about jobs, jobs, jobs. >> jobs, jobs, jobs. >> a lot of forces at work here. amazon we talked about briefly at the end of the mad dash, not quite as high, 30 bucks off its all-time high, you were talking about strength you believe is still there at amazon web services. >> goes higher. >> even with increased competition from microsoft's cloud offering. azure. google trying to get into the game. >> remember, google 400 million to use that system, they better continue to meet the number. snap is going to do more than 2 billion next year. it's kind of in the cards. but you're paying, you know, that multiple you're paying for price. >> back to snap again. >> yes. >> what's with you and snap? every time i go somewhere else you bring it back to snap. >> i think snap is more interesting. >> i think the border tax is more interesting. i i don't think you ought to spend a lot of time on the border tax.

>> no? >> i'm going to say it's probably not going to happen. i don't think i'm going out on a limb there. >> and we haven't talked about coal. old king cole was a very old -- >> looks like the roll back of the carbon related rules. >> i think we have to give coal for the holidays. i mean that's the only place i know you'll be able to use it. it isn't like utilities are rolling it back. >> you can reregulate the use of coal or make it easier to use it if you're a generator of power but those companies are still moving to natural gas. >> natural gas is so much cheaper than coal. now i hear well the coal market will be the export market. okay so there was a fantastic idea if you're pro-coal to have a port from washington, the state of washington to export coal. in january it was killed, why, by the state of washington. now these things are heavily regulated. it's not all federal. they can go to epa and say listen, we want more coal plants. it won't matter. i continue to believe there will never be a new coal plant built in this country because natural gas is so plentiful.

the most in the world. >> it's cheaper and we continue to have it. renewables continue to move on a certain track. >> absolutely. wind. >> there are tax benefits in place for wind and sew loolar a they're making up a percentage, still smaller and natural gas is larger than coal in terms of percentage used of the percentage contribution to power generation. >> i have to tell you wind energy directly competing with coal. there's a passage, there's a point of what trump is doing which is about methane, and people may overlook that but methane is when you look over, when you go over this great world with a musk satellite, whatever he's got, you see these flares coming off, particularly flares that's methane being burned and i think that the president's going to allow kind of a much more aggressive methane burn, which means much more drilling for nat gas, which means the price of coal doesn't matter. >> speaking of the elon musk, we

should come back to tesla because the shares are up over 3% this morning. again, this on the news that ten-cent, one of the chinese giants of course, paid about $1.8 billion for 8.17 million shares off that recent stock offering from the company. that he did it through the offering and through open market purchases. remember the offering itself, tesla has never had any trouble selling stock. >> no and never made any money. >> that's why you got to keep selling stock. >> right and this solar panel thing, remember, the solar panels, the payback will be greatly reduced under trump, plus california, all the western states are cutting back on the subsidies, so the tile thing, a lot of people feel could be an achilles heel for musk, but every time you try to pin down musk in some negative way, he shocks you. >> he shocks you. as we've said a man with a lot of times on his hands. >> yes.

>> running tesla and spacex. and the hyperloop and new effort the brain. >> good look. neural link. >> to connect the brain with computers. >> yes, well jeffrey lorie had a fabulous piece in "time" magazine about the need for everybody to get together and conquer autism, the brain, again talking about the brain and i think when i thought musk, i said he should connect with jeffrey lorie, fantastic owner of the eagles and trying to do something bigger than just talk about the ratings of the nfl. finally, jim, broader market, you can see we're up a bit on the s&p, certainly reversing, yesterday was not a big down day but the financials showing signs of life this morning. >> they need the rates to come back up and i want to stay close again i'm staying close to tech and staying close to consumer. that's where you'll see some strength. i'm waiting for an toll bust out of this area.

netflix coming right back. what is not doing well, the coal burning utilities. that's a little irony. >> isn't it? southern company was on with squawk and the gang this morning tied in to nuclear. >> they're doing nuclear. westinghouse, which is toshiba in a bit of trouble. lot of people say they may have to file bankruptcy. >> way overpaid for westinghouse. >> kind of bad situation, but yes, they way overpaid for westinghouse and that company is a wounded giant toshiba. let's see what happens with their finances in the next 24 hours. >> next 24 hours? >> 24 hours, yes. >> okay. >> yes, oh yeah, and i wouldn't want to be building the nuclear for westinghouse if toshiba has to reorganize which i think may happen. >> it's amazing the places that you'll take us. right now we go to bob pisani, if that's okay. >> sure. >> bob, there he is.

>> good morning, david, happy tuesday, everybody. if you're looking to try to figure out what trend the market is moving in based on the open, i'm afraid you'll be disappointeded. it was exactly even on the advanced decline line and the sectors either side positive or negative, let's look, up moves generally in energy stocks. financials slightly to the upside, materials slightly upside, industrials unchanged, mildly on the upside. banks opened 50% up, 50% down in the banks so generally bb&t and zion opened down, fractionally upside, suntrust, huntington and citigroup on the upside. at the open it was 50/50. the big trend in the last day is wall street trying to get more focused on earnings and economic states and less on what goes on in washington. so toe bias lebkovic, typical,

choose fundamentals over politics. he noted we've been talking not only the lead indicators strong but the earnings situations strong. that's the fundamentals part. he concludes along with a lot of people they don't see a good reason to walk away from the reflation trade yet and look for dips and buy on the weakness here. that's typical of what i've been hearing the last few days. yesterday we talked a lot about earnings, the same basic theme here. the q1 earnings up 10%, best quarter in nearly six years. revenues have been strong recently, early reporters have seen revenue growth of about 8%, haven't seen that in a long, long time as well. let's focus on that and see where question move the markets around. short term trading action let's call it choppy but indeterminant, that's frustrating. lowery's great example, they thatthese every day, oldest technical analysis service in the united states, demand on the weak side. volume s have been crummy the

last four or five days. volumes on the light side. selling pressure light, nobody looking to dump massive amounts of stock right you know and the storm term conditions, they're approaching oversold. they're also arguing right now, intermediate term conditions are still bullish by on the weakness here. you see that yesterday. did you see what happened, it was an extraordinary day. it was a horrible open, we were down almost 200 points. bank stocks down 2% or 3%. look at the kbe. we moved in 4% ranges on some big bank names like citigroup yesterday. there's a three-day chart seeing what goes on. the dip at the open, and immediately yields started coming off of their lows and markets started coming back and heavy volume in financial etfs and value etfs. value is basically bank and energy stocks. people were trying to pick bot on its in other words. that's my point here, so everybody said oh we're dying for the market to drop 5% to 10%. there you go, the bank stocks, kbe was down 13% at the open from its recent high. people were picking away at things. i don't know if this is the

bottom or not but i saw people with heavy volumes in the etfs trying to figure out at these levels i'm getting more comfortable. some of the other names as well, caterpillar was moved in a 2% range yesterday, now it's down this month 5%. i know the numbers are not going to be great for this year but some people are interested there. some more fundamental problems may examinist in other sector, chevrons and exxons. chevron down 5% this month around there, around 10% year-to-date. the problem is they're expected to have huge numbers the next two quarters. 90 cents for chevron, it had a loss of 2 cents last year. everyone is anticipating it. we know oil is not anywhy near the $60 level where the stock really make money. $45 maybe you can do it. next quarter $45 they'll not make the numbers for sure. that's why the stocks have been going down the last month or so, so in some senses there's fundamental reasons why a lot of the markets aren't moving.

everything else, economic news is definitely a little better and maybe we should focus on that. dow is down nine points. david, back to you. >> thank you. the state of the housing market in the age of trump. we're going to talk with the ceo of kb home. and as we head to break a look at the movement of the treasury this is morning, that's right, bond report. rick santelli is out so i'll do it. the two, and five and ten-year note, aren't they beautiful with green and red. 2.367 is where we stand on the yield now. we're back after this.

( ♪ ) i moved upstate because i was interested in building a career. i came to ibm to manage global clients and big data. but i found so much more. ( ♪ ) it's really a melting pot of activities and people. (applause, cheering) new york state is filled with bright minds like victoria's. to find the companies and talent of tomorrow, search for our page, jobsinnewyorkstate on linkedin. search for our page, ♪you're a crazy big fan of sports. and you don't wanna miss a thing.♪

stream all your live ncaa march madness games. get directv for $25 a month when you have the new at&t unlimited plus plan.

after last week's health care defeat, republicans are looking to rally mind a growth agenda. president trump reportedly considering a plan to push tax reform and infrastructure

spending concurrently hoping to attract democratic support. in a few minutes we'll hear from house speaker paul ryan in his weekly address, give us a sense to the path forward. we'll take part of his comments certainly live. jim, what is interesting here i think is that the white house now is clearly creating its own tax reform plan. steven mnuchin, treasury secretary, gary kohn, keys to sort of helping to come up with that but they're not adopting the blueprint that is already in place from brady as house ways and means chair and of course paul ryan that plan we talked about so often that includes the border adjustment tax, that includes no longer deducting interest, that includes the ability to write off capitol expenditures immediately, and so many other important components that really would represent reform. the question is, ryan is not necessarily going to embrace what the administration puts forward. they seem to want their plan to

be the one that leads the way. who knows where this -- >> what a mess. i remember when reagan reformed the tax code and how hard it was. >> yes. >> but he had the mandate and he did a grand slam and went for simplicity and people loved it, both democrats and republicans. >> and he had bill bradley shepherding the senate on the democratic side and tip o'neill. here you don't have that. >> have a beer with tip o'neill and get that done. >> most importantly something we don't discuss at all is the fact with health care out of the way this will move on a quicker time line than we might have thought. maybe you get to the summer in terms of this idea of tax cuts, and most importantly i think we haven't heard from the senate at all and the people i speak to say you know what? senate is going to become very, very important here, orin hatch, that whole group but they're not saying anything right now. they're laying low. and we'll see when we get to the senate. meanwhile april 28th, jim, people are being concerned about

funding the government. >> absolutely. as opposed to health care, kohn, mnuchin, wilbur ross, these people speak up, authoritatively and they know that they're into it and the gop needs a victory b badly. >> it will be interesting to see competing plans from the white house and house and whether they can get together or whether they can't given the tension from the failure of health care repeal. >> stay with earnings. >> this story is just getting started. >> stay with earnings. >> we're about to end here. >> we just made it, tesla never going to run out of money again. >> we'll have stock trading with jim. later today on "power lunch," steve liesman will sit down with stanley fischer at 1:30 p.m. we'll be right back. careful joe, they've got you outnumbered.

the dinosaurs' extinction... don't listen to them. not appropriate. now i'm mashing these potatoes with my stick of butter... why don't you sit over here. something for everyone is awesome. find your awesome with the xfinity stream app. more to stream to every screen.

back to retail. >> jeffries cuts the price target for l.b. this is really important, david, because l brands is a mall-based company and pink is peaking, this has been their hot division responsible for a lot of victoria's secret growth. they've got bath & body works. the main thing, david, is the mall is just too hard. gamestop last week it was too hard. macy's it's too hard. sears, it's too hard. versus the strip, where you have companies like burlton doing quite well. i'm worried. good balance sheet. >> we'll continue to, decline of the mall. shopping patterns of consumers. >> that's amazon. >> what have we got on the show? >> all consumers show tonight and i'm going to reveal an unbelievable stock that i am

going to read on the chart and the fundamentals maybe you'll be talking about someday. >> really? >> yes. >> got my interest. >> you should. you should be very interested. >> "mad money" tonight. 6:00 p.m. coming up, speaker ryan's news conference is just a few minutes away. "squawk on the street" will be right back. 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.

is happening before our eyes. shift in human history sixty to seventy million people are moving to cities every year. at pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. partner with pgim

the global investment management businesses of prudential. ♪ ♪ i don't like it, no, i love it ♪ good morning, welcome back to "squawk on the street." i'm david fab ear long with let me check, kelly evans and mike santelli here at post nine the new york stock exchange. sara icen is also with us at the yum! brands leader summit in jacksonville, florida. we'll join us shortly with more of her interview with ceo greg creed. we were ekeing out small gains in the s&p, now in the red just a bit. crude also off of its highs of

the morning session. it had been up as much as over 1.2%. we got some news to get to regarding ford motor. it's detailing a $1.2 billion investment in three michigan facilities. all of this appears to have already been mentioned in its 2015 contract with the uaw. the breakdown of the investment though is $850 million on an upgraded mish ash assembly plant, a $150 million investment for the romeo engine and $200 million investment for an advanced data center. these in addition to the $700 million investment and 700 new jobs ford announced for its flat rock, michigan, facility, back in january. but again, as has been the case often it seems with corporations of late, they are repurposing previous hiring and investment decisions and bringing them out again, and showcasing them

perhaps -- >> wouldn't you? >> -- as a result of wanting to be in the good favor of the white house. of course the ceo of ford feels he's been a frequent visitor to the white house gatherings. we'll be joined by ford executive vice president and president of the americas, joe hinri hinrichs, to discuss this, what is behind it. lot of other challenges ford has been facing. >> we have economic data crossing the tape as well. consumer confidence index is out, 125.6 for march, that's compared to 116.1 in february. economists were prebitting a reading 113.8, this is a huge beat. here we go again with the confidence data continuing to shoot higher. all this with the dow roughly flat this morning. let's get straight to more on the markets. it's the dow actually trying to avoid its ninth straight loss. you can see there up about 4 points, everyone else in the red. jonathan golub, at rbc capital and jake ablan at beamo private

bank. jonathan, it's already shot up. >> you've seen business confidence is strong, consumer confidence today, the economic data broadly, you look at the economic surprise indices, the economic data continues to come in better than expected. i think ultimately it snaps this losing streak and pushes the market higher. >> which does? >> the confidence numbers today but in general just better economics are going to push the market higher. >> jack, one thing that's been interesting is what the market's doing depends on which index you look at. the dow is on a massive losing streak but the nasdaq has been having a great run. >> yes, i think a lot of it has to do with this perception of how much policy can ultimately get through. obviously there's been the pullback and pullback in confidence of now getting tax reform, getting some of the other regulatory rollbacks through. certainly infrastructure is on

the ropes so i think that the biggest companies, the global players that have really been taking advantage of this kind of mess of global supply chain are kind of pulling back and kind of the smaller players mid cap, small cap should do incrementally better. >> jonathan, i guess the big question now is, just exactly how much is the market really placing bets on policy outcomes right now? a lot of people talking about the fact that those high tax rate companies that shot out to the upside after the election have been underperforming. you've seen a lot of the traditional kind of trump policy cliche trades not working. so would any policy move be upside or still banking on it? >> mike the key point this is where i disagree with jack. if you look at the companies with the highest tax rates, the ones that would win the most if you got trump policy through, they've been underperforming for the last two and a half, three months. actually, after the first three weeks, after the election, they've been dogs straight

through. if you look at the same thing for america first kind of companies, companies that are domestically oriented they're also lagging, so this big optimism bounce on the policies, but after that, the market's going higher, but on better economics, and the economics is a story not washington policy. >> so why has that been the case in your opinion? why have these companies conceivable eyely with benefits and changes in policy not responded? >> what the market is basically saying the economics are way more important, and also markets probably saying the likelihood of getting the tax cuts through in a massive way are just, just probably not going to happen. it's not going to be a '17 event, it will be an '18 event. we're not taking the corporate tax rate from 35 to 20. maybe from 35 to 28. there's disruptions to supply chains and importing inflation, these things are messier so are they good, yes. is there upside? absolutely. but the market's unwilling to give the benefit of the doubt which is actually great news

because that means if they don't happen, the market's not fragile and what thank's what everybody is concerned about. >> we're looking there, hang on one second, jack, a live picture of capitol hill where we are awaiting the house gop leadership weekly news conference. we expect speaker ryan to be there and to be part of this q&a. if he's not, still going to be interesting to hear how the leadership deals with the fallout of them not passing the health care bill. >> buying into jonathan's argument of upside, we don't get the domestic tax policies that we thought and international will likely do better than the u.s. they're priced at a 20% to 30% discount. u.s. dollar will likely decline incrementally, as the fed raises rates at a rate slower than the rate of inflation, and so given that framework, i would suggest that investors take a hard look at emerging markets, take a hard look at international, especially if you believe that the s&p will likely gain

incrementally this year. >> you know, before we go, jonathan, our steve liesman is going to speak withstand fischer, the vice chair of the fed today. do you expect him to be dovish, to admit the fed doesn't have to go as quickly if some of the policy moves aren't come through? >> no, here i agree with jack. there's inflationary pressure here now. the fed is in the process of trying to renormalize rates. i think the likelihood if we have something other than the three it's four and not two. >> referring to the number of rate hikes this year, everybody knows what the shorthand three means. jonathan, jack, thank you for joining us this morning. appreciate it. >> thank you. >> when we come back, sara has the interview with the ceo of yum! brands greg creed. and ford's president of the americas joe hinrichs a first on cnbc you will not want to miss and awaiting house speaker paul

ryan and gop's first news conference since pulling the vote for the health care bill last week. we'll take you will tlif. at fidelity, trades are now just $4.95. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.

so you'rhow nice.a party?trade with a clear advantage. i'll be right there. and the butchery begins. what am i gonna wear? this party is super fancy. let's go. i'm ready. are you my uber? [ horn honks ] hold on. the biggest week in tv is back. [ doorbell rings ] par-tay! xfinity watchathon week starts april 3. get unlimited access to all of netflix and more, free with xfinity on demand. welcome back to "squawk on the street." i'm sara eisen, live just outsideiac jacksonville, florida, where yum! brands is in the middle of a transformation a

few months after spinning off its china business last year. i spoke with ceo greg creed moments ago and asked him what to expect from yum! this year. >> we're here how do we grow 4% to 5% to 7%. i think there's a lot of doubt we can do it. which is probably why the stock is in the sort of mid-60s where it is but i remain eternally confident because we have great insights, great products but most important thing is we have great people and when you've got great leadership, and i've got the top 200 leaders around yum! here, this week, to talk about how we're going to grow faster, i am really confident we're going to surprise the street and do really well. >> is 2017 going to be a comeback story for pizza hut? >> i don't think it will be a full comeback story for pizza hut. we're working with our franchisees closely to say we've got to put a different plan inf.

i think internationally you'll see us really accelerating our net new unit growth and improving same-store sales growth. i think 2017 internationally for pizza hut will be an improving year and we have a lot to prove in the u.s. but we're starting to do the right things. you may not see it as early as the end of 2017. >> because people look at the 12% comps the dominos, that must be a strong competitive force. >> look they've done a really good job. they're impressive results and i think the key thing is we're going to double down. i'm totally committed to pizza hut as being a part of yum!. we can really turn this around. i know what we've got to do. i think we've partnershiped with the franchisees. we proved it with our kfc business. three years ago people were like there's no way you can turn around kfc u.s. and we've just had, what our tenth quarter of consecutive same-store sales growth. the business is growing. i was with the franchisees last week, they couldn't be happier. we've done it once, we can do it

again. >> technology have been up front when it comes to digital payments and delivery, panera, starbucks. do you feel like yum! has been behind on these things? >> i would say we have been. i think we missed the plot a few years ago that food had gone from food as fuel to food as an experience and part of the experience is making the whole experience easier. i mean this whole seamless society that we now live in, we were probably a little slow to catch onto that. the most important thing is we're trying to catch up quickly, not just on pizza hut but on kfc and on taco bell. we deliver 6,000 of our 20,000 kfcs around the world. taco bell now has delivery in 900 restaurants. so i think this whole channel growth through delivery but an investment in technology and an investment in people because we had to get new people into our organization to help us on the technology journey. >> is the failure to repeal and replace obamacare a blow for your franchises? >> no, i don't believe so. i've said often there's a lot of

speculation, watching not much legislation going on in washington. i think things like tax reform will still be important. i think deregulation will be important for the industry, and no, look, it was a part of doing business. it will remain a part of doing business. i think the key is to give us certainty. it's what pice doesn't like and doesn't matter if it's health care or tax or doesn't matter if it's deregulation. businesses don't like uncertainty. >> have the recent immigration orders from president trump affected you and the industry, very heavy imgrant labor force. >> it really hasn't, in the sense of, you know, we do verifications for everybody that works in a yum! restaurant. >> what about the immigration, if there is a further crackdown on illegal immigrants, what would it do to the industry at large? >> i think there's also -- the good thing is there's still population growth in the u.s., obviously in a lot of places it's students also, their first job as well, so look, i think it would be difficult but i don't think it's impossible for us but

what it makes you, you have to be the employer of choice. >> and just a reminder creed is bullish on the prospects for getting corporate tax reform done. he says if you can lower the corporate rate, lower middle and lower class tax rates, and also go on with the deregulation agenda, you heard some of the specifics there, when it comes to getting franchises open across america, then you could see a "dramatic increase" in investment and in job creation. as for those consumer confidence numbers you just reported at the top of the hour, blowout numbers. creed still describes the u.s. consumer as value oriented and perhaps that has to do with the fact that there is a lot of competition, not just from a resurgent mcdonald's and restaurant brands which just bought popeye's backed by 3g of course but also the grocery store where food deflation made the grocery prices cheaper, all of that and still a pretty

ambitious forecast for sales growth from yum! and pretty bullish on the trump agenda so far from what he sees. back to you guys. >> sara, not only competition from the fast food he mentioned dominos but darden restaurants up big today largely driven by ol ive garden to go. people want meals on demand. >> meals on demand, technology and that's why they have a lot of, to ofwork to do, not just yum! but when it comes to fast food ordering and payment, and the fast casual deliveries are absolutely a growing influence. look at shake shack for instance, popping up all over and you've got the whole new class of restaurants. so there's the values. there's the fact that consumers are spending their money in different places, and on experiences, something we talked a lot about, and when it comes to technology, i just wanted to mention that in the next hour i saved it for "squawk alley" because it's relevant but this whole idea of a.i. and robotics

and automation being used in the service sector to help make your food, serve your food, something that you think about maybe for the future, our treasury secretary steven mnuchin says it's not a threat to u.s. jobs for another 5100 years. greg creed has something else to say about that and already working on and looking at ways of integrating robotics. it's very interesting when it comes to how all the companies and businesses are integrating technology. guys? >> sara, see you soon with that. thanks very much. as we head to a quick break, look at the markets here. we're nosing above the flat line for the dow and the s&p 500. that strong consumer confidence number gave treasury yields a lift, financials following along, with it seems like a little bit of pocket distraction. when we come back the ceo and president of kb homes will be with us, check on the state of housing with him next and we are still awaiting house speaker paul ryeon and the gop's first news leadership conference since pulling their health care bill last week. we'll take you there life whve

we come back. onomous-thinking ve protecting those inside and out. and it's the mercedes-benz of today that will help us get there. the 2017 e-class, with innovations no car has offered before. and that will change driving forever after. lease the e300 for $549 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. the following ad for your viewing convenience. so i just switched to geico. what took you so long? i know, i saved a ton of money on car insurance. that's what i'm talking about! geico also gives you 24/7 access to licensed agents! booooyah. good game, you really crushed it. no son, geico crushed it. ♪ ♪

♪

guyhey nicole, happening here? this is my new alert system for whenever anything happens in the market. kid's a natural. but thinkorswim already lets you create custom alerts for all the things that are important to you. shhh. alerts on anything at all? not only that, you can act on that opportunity with just one tap right from the alert. wow, i guess we don't need the kid anymore. custom alerts on thinkorswim. only at td ameritrade. kb home ringing the opening bell this morning celebrating its 60th anniversary and coming off a strong earnings report. this is home builder stocks

continue their hot streak. lennar, d.r. horton, pulte all up over 15% since the start of the year. kbh up 30%, a bit more actually since the election. for more on the trump bump and the housing market we're joined by the ceo of kb home, jeff mezger nice to have you here. 60 years, building homes a long time. >> a great legacy. >> put this in perspective this market if you can. >> right now it's very good and as we shared on our earnings call there is momentum. things are getting better, so a lot of demand and not a lot of supply. >> for quite some time we're hearing of people having difficulty obtaining mortgages, too tough credit from the banks. has that changed? >> a little bit. it's still pretty tight. i saw the report that came out this week that projected it would have been an additional $300 billion in gdp if they loosen up underwriting a little bit.

debris wi i agree with that. >> the longer term trend since the housing collapse the in the earlier, that we'll have more renters and never get back to 70% home ownership. are we seeing a reversal of trend, people moving out of their parents' basements? >> we are. bottomed out a little over 63% and it's starting to tick back up. it's very encouraging. >> what's been amazing is looking at the shortages on the supply side that we're talking about. existing homes last month are down a little bit. the inventory a ton of turnover and not enough properties. what are the labor shortages you're dealing with, what kind of deregulation might help you guys meet that so we don't keep seeing home prices shoot up and people who want to be in the market feel like there's nothing there and they're priced out. >> it's an interesting time. loosen up underwriting which is tight because of regulation would be a nice start to helping with first time home buyers in particular, able to get into a home as opposed to renting but if you look at the dynamics of

the market, we have job growth. we have income growth, consumer confidence came out today, the highest it's been in 15 years, people feel good about things. last week the resale supply number came out, it was the lowest in the history of tracking resale inventory, and on the new home side, we've been underbuilding by 300,000 to 400,000 homes a year. you have strong demand. it's accelerating and at the same time supply. >> how much capacity do you have to flex that try sploo i. how quickly can you meet that command? >> you touched on labor being tight in many areas so there is limit. in the market we're in, in our peak year we delivered over 25,000 homes with current management, so we have a lot of capacity just in our serve markets. >> what are you doing now by comparison? >> annualizing over 10,000. >> on the labor issue, i'm just curious. the crackdown on immigration, there's been a number of reports about roofers, for example.

is that an issue at all or is that something that's been overblown? >> it's been overblown. labor is tight. it's a supply and demand thing. wages go out for roofers, all of a sudden you have roofers and we're trying to keep the balance of how fast do you grow, you have to make returns, you can afford to pay so much to get the home built, and you balance things out. but i think the worst of the labor shortage was about a year ago, frankly. it's actually a little looser today. >> why? what's changed? >> people coming back into the market. >> you think they're coming from the side lines, maybe out all together? >> yes, for a few years you didn't want to be a roofer because there weren't any roofs. >> i'm thinking from the point of view of what's expanding the labor market today overall, not just that people who want a job are looking but coming back in, you see that happening in your industry? >> absolutely. >> that's fantastic. >> what is your sense as to how long this will continue, what you've described at the beginning of our interview as a very good period? >> you go to historical, and

then you assume we're in normal times which i think we are again, our industry typically produces for sale or for rent about 1.7 million, 1.8 million a year. we're the 1.3 million right now and we have been for a decade. so that's how many houses we're short on the new home side. >> longer term -- >> we've more than made up for what was the huge surplus of course from the years back. >> that's gone and that's part of why the markets are firming up. it's nice dynamics. >> longer term there is the story that baby boomers will be net sellers of houses, going to be this other wave of supply. >> yes. there's another generation coming up that's just now entering their home buying years and the millenials, i have a millenial, get out of the house, go buy a home. >> friends and family discount maybe. >> again we appreciate your joining us. congrats on 60 years. >> it's a great time for our company, thank you. >> thanks for being here.

jeff mezger, ceo of kb home. we're going to speak with the company's president of the americas joe hinrichs on a first on cnbc interview. we're awaiting paul ryan and gop leadership giving first news conference since pulling the health care bill last week. we'll take you there live coming up. the command performance sales event is here. experience exciting offers on our most thrilling models ever. get up to $2,500 customer cash on select 2017 models for these terms. experience amazing at your lexus dealer.

so what else is new? humm..she's doing good. she needs more care though. she wants to stay in her house. i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird.

did want to make note of sharsz of fm, it appears that investor david einhorn has taken an interest in the company and urging it to do a number of potential things to get its stock price up, this according to dow jones, wants them to create two classes of stock again this is dow jones reports and separate dividends from other earnings. unclear exactly what role mr.

iron horn wants einhorn wants to play. he's considered an activist but doesn't tiply go after proxy fights. harry wilson, people may remember back a couple of years ago with at backing of a couple of hedge funds was trying to get some change at gm as well and get board seats. >> interesting this engineering solution he's proposing, separating it. it almost sounds like when people were pushing companies that had some real estate to do a spin-off. investors want the income, other ones you want the growth or operating leverage. >> how common for a separate dividend paying class of stock? we're spawning all the types of stock classes, voting rights, you can have none in the case of snapchat, the ownership, i understand there's an attraction for people who have different priorities and different reasons why they want to invest but i can't think offhand of another example of a company where there's one class of stock with the difficult dnd avidend and o.

>> i want to share some information from people close to the matter involving gm and green light, of course the firm run by mr. einhorn, it appears senior management did engage directly with greenlight over the last few months, perhaps as much as seven months. i'm told members of the board have met directly with mr. einhorn as well, and the company carefully evaluated this proposal, has used top investment banks, consulted with rating agencies, so this is something that has been in play for some time clearly, and gm making it clear to me this morning as well that they did not agree with his proposals. they believe it creates unacceptable risk. they are also saying that it would not have a positive impact on gm's underlying business or cash flows, it might result in the loss of their credit rating in terms of investment grade credit rating, and so for a

variety of reasons, it appears that they are already saying no thank you to this news that we were just getting involving mr. einhorn's wishes for gm. i should have a bit more on this, but at least we can share that at this point in terms of gm saying not interested, and by the way, this does come after months apparently of back and forth, including directors meeting with mr. einhorn. >> if you remember a few years ago now that i'm recalling it einhorn proposed apple create a new special preferred stock to distribute its huge cash holdings, that didn't go anywhere. there is a precedent saying look there's an engineering solution to this perhaps. i think it also reflects just big picture a lot of investors for us, how cheap gm stayed at least by pe basis. >> in the proposal he proposes one would be the capital appreciation shares with gm, one would be the dividend shares or gmd. if this were to gain traction

even just the fact it's out there in the public domain, you wonder how many other investors might push for this or find it interesting they have concerns about credit rating. >> not to mention governance challenges arising from having two different classes of stock. it would appear at least again to put this in perspective, the news, the dow jones reported mr. einhorn interested in pressuring gm to get its stock price up, create two classes of stock but now we can tell you of course this is the result what have has been a back and forth between einhorn's firm greenlight and gm and its board of directors that has gone on for seven months. gm made it clear it is not interested in pursuing einhorn's potential plans for the company at least when it comes again to this dual stocks, and a number of other moves that he wanted to make. they believe it creates an unacceptable level of risk. >> he says it would create a combined $43 to $60 a share in

value. >> you can't get away from the fact this company had a near death experience within the memory of everybody who is running it right now so it's not as if they're necessarily looking to take these experimental corporate structures. >> interesting on activism overall in terms of reporting lately, i've been hearing there is a lot of big name activism and big name companies, this may be one example of it, we'll see if we get more in the weeks ahead as well. but activism far from dead. mr. einhorn typically not one who undertakes proxy fights and goes all the way, but certainly has a high profile ands had pressured companies in the past, including apple mike said, quite a few years back. sue herrera, what else is going on in the world? >> thank you very much. good morning, everyone. here's what's happening. maryland police say an 18-year-old girl planned on using a shotgun, ammunition and bomb making materials found inside her home in a school attack. her parents discovered the alleged plot and called police. the girl was removed from school

and is now in the hospital undergoing an emergency evaluation. a michigan judge is expected to approve a $100 million settlement in the flint water crisis. the state and city were required to dig up the pipes leading to 18,000 homes by the year 2020. writers in hollywood moving closer to a strike, as contract talks between the unions and the studios continue to stall. board members representing the western part of the writers guild union approving a motion to send strike ballots to its members. writers last walk off the job nine years ago. and scientists in australia have found the world's largest dinosaur footprint, measuring in at five and a half feet long. they believe it belonged to a four-legged plant eater. which is probably good news for all the other animals around that huge dinosaur. that's the news jep date this hour. kelly, back to you. >> nothing wrong with big feet. >> nothing wrong with big feet but it's good it's a plant eater. if you were another little animal around there, i don't

know. >> be a little more scared. see you later, sue. >> see you. we're continuing to await house speaker paul ryan and his news conference. we'll take you there live when it happens. it's a huge week for financial reform on capitol hill. senate and house committees are taking up a debate on three issues central to finance services company. kayla is there with a rundown. >> hey kelly. there is a lot to talk about today, let's start with health care, awaiting the house speaker who is expected to take the podium any minute, following the conference meeting for the entire house republican party. that is expected to have dealt squarely with health care and i just want to give you a quick quote from a spokesperson for paul ryan, who says we still have a promise to keep, so the speaker wants members to continue discussing this issue until we can find a path ahead. the question is, of course, what exactly is that path and how will the republican party move forward from here? now on to financial reform elsewhere on the hill, committees will be questioning

former regulators and conservative thought leaders about a handful of topics that are crucial to this industry. banks role in spurg goals for the economy. the label the committee calls arbitrary and inconsistent and whether the volcker rule hurts liquidities and onerous hurt lendings, the last one the president has taken up personally. >> we expect to be cutting a lot out of dodd-frank because i have so many friends of mine that had nice businesss they can't borrow money and can't get money because the banks just won't let them borrow because of the rules and regulations in dodd-frank. >> the president ordering a wholesale review of the law facted after the financial crisis. of course regulatory agencies will do much of that, but the rest will likely be manifested in a replacement bill, the financial choice act. the purpose of these hearings today is to set the table for the content that will appear on

that. interested parties say a final draft of that bill could be months away in the pipeline. insurance companies could move today. the entire sifi panel is expected to reaffirm the chairman's view, they should not be lumpld in the same category as the big banks, that brings costly compliance and capital raising with it. that's why shares of metlife in particular rising since trump's election, and since this memo came out with some new details of this bill about a month ago. chances are good that metlife will get this label removed. it has been suing to actually get that removed and in the last year its stock guys is up 21% so watch that sector in particular today. kelly? >> now everyone else maybe doesn't have to spend the money trying to get the same outcome. thank you, kayla. lot happening down there in washington today. the financials could use a little reprieve here. as the trump administration looks to roll back the regulations, our next guest

could be trump's top bank cop. reportedly on the short list to be the fed's vice chair of supervision, joining us is harvard law school professor hal scott. welcome, sir. >> thank you. good morning. >> so what do you think are the main objectives when it comes to financial deregulation today? >> well, i think the two most important parts of regulation that have a negative impact on economic growth is the way we set capital requirements and liquidity requirements. these bind banks so that they are impeded from making loans. i think that would be the focus. >> capital and liquidity requirements, so does that mean, you know, there are some, including cash carr on the minneapolis fed think cap needs to go up. do you think it needs to go down for banks? >> i think it's pretty high at the moment. we've raised $600 billion of capital since 2007 in the banking industry, but i think

more importantly is how we set capital, whether it goes up or down. probably the most important part of that is the stress test, that the fed conducts, and in my view those tests are flawed because they employ models that we can't assess, that keeps them secret, and the economic scenarios that they forecast are so extreme that it has a real negative effect on or a positive effect, depending on how you look at it, how much capital banks have to hold. i think the process needs to be reexamined on capital. >> sir, when a lot of analysts on wall street talk about the potential for deregulation of banks and potentially lower capital retirements they say it will be great, capital return to investors, more buybacks and dividends so how can we be sure if we eased capital requirements it would even stoke lending very much if that's what's needed. >> well, you know, i think most

of the studies i've seen particularly when it comes to consumers and small business would predict that there would be more lending to those consumers and small businesses as a result of some lessening in capital requirements. i also want to stress liquidity, you know, since the crisis we've imposed liquidity requirements and they're now holding about $4.3 trillion in government securities as a result of this. if those requirements were relaxed, we would also see more lending, so it's really the combination of capital and liquidity regulation that needs to be reexamined here. >> and where do you think, so the federal reserve of course has been spending the last decade trying to clamp down and that's been true internationally as well. so there needs to be a rethinking now? this sounds like it's putting the end of the financial crisis behind us. >> no, no, i don't think we should put the financial crisis behind us.

we were underprepared in 2007 and 2008. i think the issue now is sort of what is the proper balance between financial stability and economic growth, and in my judgment, i think maybe we need to recalibrate that balance. >> all right, well we'll be looking to see where you might be able to make those arguments in the future. hal scott, thank you for joining us. >> thank you. ford announcing this morning that it is investing $1.2 billion in three michigan facilities banking on america continuing its love affair with trucks and suvs. this just adds color to the investment and job promises made in the 2015 uaw contract. joining us in a first time cnbc interview is joe hinrichs, ford's president of the americas, joins us from ford headquarters in dearborn, michigan. mr. hen riches, pleasure to have you this morning, thank you. >> good morning. >> how much of this was already part of the announcement we saw

back in 2015 from the uaw, in which they said they secured 9 billion in investment from ford, and 8500 newer secured jobs? >> the michigan assembly announcement of the ranger and bronco and romeo engine plant announcement were part of the 2015 negotiations. the data center investment we announced a $200 million to add to our capacity on data is new news and was not part of those conversations. >> so the new investment we're learning about today is $200 million in the data center. >> well also the michigan plant investment dollars taken up from. 00 to 850 million. >> so 350 million basically additional investment beyond what we knew about given the uaw negotiations from '15. >> that's right. but we are confirming all of it today but the $700 million investment we made in flat rock that we announced in january was new and incremental to the 2015

uaw negotiations. if you keep track of it all we announced $1.9 billion of new investment here in the state of michigan just in the first three months of this year, and about $1 billion of that would be incremental to where we started from. >> why have you done it? >> we're doing it because we invest in our communities here. we're proud to be a part of the state of michigan and the u.s. we're the largest manufacturer of vehicles in the united states, and this is about the future, new trucks, new suvs and new capability to serve our customers with connect i feel and mobility solutions and of course all that data coming in the autonomous vehicles in the future. >> joe, when you recently gave your outlook, there was some talk of increased long-term investment spending. obviously this is part of the same strategy. to what extent is ford envisioning a relatively rapid transition in the market to either alternative fuels or autonomous driving? how ready do you think you have to be very soon for all this? >> we have the infrastructure in place to be ready.

today we start 13 pettabytes of data and we expect to handle 200 pettabytes of data. that's why the data centers are going in. autonomous vehicles we're going to bring out in 2021, we have a few years to get ready for that and electric vehicles coming, 13 new electric vehicles coming over the next several years over $4.5 billion of investment so we're getting ready for that future but of course as you know, customers are buying a lot of suvs and trucks, they want to provide those alternatives as well. >> joe, we know you had some disappointing guidance. can you talk a little bit about what the struggles are with the company, what's happening with prices in your market and how that goes back to some of the announcements you're making here. >> well, we're expecting 2017 to be another strong year of sales in the industry, maybe down a little about last year but a healthy level. we've seen stabilization in the pricing environment when you look at net of revenue so

incentives are going up but so is the transaction prices. when you look at that on balance it's been a pretty good start to the year especially for ford, given the strength of our new trucks especially the superduty. we have said we're making big investments this year which are going to weigh a little bit on the profits this year, but we expect 2018 to be an even better year. >> i guess my point though is what's happening with the price of used cars dropping so much? it seems there's a lot of supply there. does that put pressure on your leasing business in particular you? get the cars back and can't sell them for what you thought. >> we've seen that. actually it stabilized lately. we saw that last fall. going back three or four years people were leasing more cars so there's more cars coming back to the marketplace, smaller vehicles and the demand right now is for suvs and larger vehicles. there's a mismatch between what was sold three or four years ago is coming back to the auction and used vehicle market and what customers are wanting now. it's starting to stabilize now in the last few months and hopefully we'll so he that

stabilize, come down a little bit more throughout 2017. >> when we look at the top level numbers and people start and we saw the share price of all sorts of auto related companies taking a dive on this, that you would say hey it's an argument a supply of the wrong kind of car, the small cars nobody really wants today and other parts of the market are doing better. >> we're seeing small cars and small suvs under pressure in the used market over the last six months or so but the bigger suvs and trucks are doing well. that stabilized over the last few months. hopefully spring and summer it will stabilize more. we've seen a mismatch. if you go back in time more cars are selling and coming back. >> mr. hinrichs this morning the president tweeted big announcement by ford, major investment made in three michigan plants. car companies coming back to the u.s., jobs, jobs, jobs. i'm only seeing 150 jobs being added and again that's previous to the announcement that you'd

already made in '15 about the romeo engine, correct? >> that's correct. you know, the announcement in michigan protect 3,600 jobs. that's a big deal. there will be new jobs tied to the data centers. we haven't disclosed those and of course the january announcement had 700 jobs to flat rock so over time a number of job announcements but with you are correct the number of these were consistent in what we committed in 2015 with the uaw. >> so do those who would be cynical and say you're just trying to create favor with the white house, what do you guys say? >> well, we reached out to the white house for the first time a little before 8:00 a.m. this morning to let them know what we were planning to announce. we didn't have conversation with them prior to that. we're supportive of the pro growth initiative of the administration around tax reform, infrastructure, investment, those kinds of things and hope we'll see progress because they're good for at industry and good for u.s. economy and jobs. right you know we're focused on

executing what we promised to the uaw and our shareholders, growing the suv and truck port yoel and getting connected in the future with autonomous vehicles. >> you reached out at 8:00 a.m. even though the president tweeted at 6:36. >> well there were some leaks that came out last night. dealing with the state of michigan and all the local communities, it's a hard time to keep all the good news quiet so i suppose he saw some of that news that was brought out before we made our announcement and before we reached out to him. >> understood. it is good news and we appreciate your joining us, thank you >> thanks for having us. >> joe hinrichs, president of the sports americas. shares of gm moving on the news the company rejected a push from david einhorn. and awaiting house speaker paul ryan and gop leadership giving its first news congress since pulling their bill last week. we'll take you there live when we come back. tools, right at your fingertips,

>> we want to go to house speaker paul ryan doing his

weekly press conference after the collapse of the attempt to repeal and replace the aca last week. >> we all want to make it easier for families to pay the bills and take care of their loved ones, we all want a system in health care where everybody can have access to affordable coverage and we have more choice and competition. we don't want a government-run health care system. we all agree on these things. so we're not going to retrench into our corners or put up dividing lines. today we broke down many of those dividing lines within our conference. there's too much at stake to get bogged down. we're going to move forward on the things the american people sent us here to do. today the house will act on another measure to reverse bad regulations, so far congress has sent ten of these measures to the president's desk. in the 20 years before, this congress did one of these. we're also committed to securing our border, rebuilding our military and fixing our infrastructure and we want this to be the last tax season americans have to put up with this broken tax code.

since i became speaker i have talked about the need to go from being an opposition party to being a proposition party and a governing party. it may take more time but we are listening and we'll get there. the way i would describe the meeting we just had with our members, we're going to listen and work together. it's too important. obamacare a collapsing law. obamacare is doing too much damage to families. so we're going to get this right. and in the meantime, we're going to do all of our other work that we came here to do. >> i agree with exactly what the speaker just said. we had a very good conference. a conference from a microcosm people on all sides. and the discussion was what the american people are talking about. we promised we would repeal and replace obamacare and that's what we're going to do. friday the timeline wasn't

there. the votes weren't there yet. that doesn't mean we won't get there. that's what this conference is about and what we're working towards. in the meantime, we go back on to the floor as the speaker talked about from our regulatory reform. as you've watched, prior to this congress only one has ever been signed into law. well, we will take the fcc privacy regulation up, that will be the 15th one that has has passed the house. the president signed four others into law yesterday, again surpassing the total. this is the part of the plan of putting america back to work, bringing common sense regulation back and continuing on our path to repeal and replace obamacare and coming out of that conference i have more confidence that we will get it do done. >> after this morning, the resolve of our conference to repeal obamacare and replace it has never been stronger. i think it was a really poisive the -- the openness members have to working to get to yes that weren't there and i do think it

was important to point out that the vast majority of our conference was already there in support of the bill that we want to put on president trump's desk. to my democrat colleagues who were celebrating friday's action, i think their celebration is premature because i think we're closer today to repealing obamacare than we've ever been before and surely even closer than we were friday. so we're going to keep working. this issue isn't going away. obamacare continues to fail the american people. you're going to continue to see double digit increases in premiums because obamacare doesn't work. and so the fact that our conference is more resolved than ever to repeal this law is very encouraging and we're not going to stop until we get it done. >> coming out of the conference i remain very optimistic about our agenda and from the beginning we've known it is an aggressive agenda that we have and we remain committed to a better health care future to every person in this country. we also want to get to tax reform, keeping america safe,

rolling back the regulations. we're working on that again this week. putting people back at the center of this government we are fully committed to rethinking this government from top to bottom. because if there's one thing that last week taught us is that we are united around shared goals. now how we go about implementing our vision is sometimes where we differ but i am confident in our ability to come together, unify around shared goals and improve everybody's lives in this country. more freedom, more opportunity for this country. >> does anyone have any questions. kasie? >> reporter: should nunes recuse himself from the russia investigation? do you know the source of his information? >> no, and no. >> reporter: can you talk about what you mean by.

[ inaudible question ] >> probably before that. >> reporter: [ inaudible question ] >> i won't tell you the timeline because we want to get it right. we have an aggressive agenda and we've been moving quickly on this aggressive agenda but we want to make sure we get it right. we had a very constructive meeting with our members. some of those who are in the no camp expressed their willingness to work on getting to yes and to making this work. we want to get it right. we'll keep talking to each other until we get it right. i won't put a timeline on it because this is too important to not get right and to put an artificial timeline on it. you're right the insurers -- that's why i'm worried about this issue. this law is collapsing. you're going to see -- if obamacare stays as is, that's not acceptable for the american people. that's not what we said we would

do. so we'll figure out how we get this done. and i think what's confusing to everybody is we have to use these senate rules, we call them reconciliation, you know what that is, that means you can't pass the bill you really want to pass in the house because it gets filibustered in the senate. you have to pass a bill in the house that can get through and prevent a filibuster and it's that frustration our members are grappling with right now. the lady behind you. who are you with? >> reporter: [ inaudible question ] >> we think reconciliation is the tool. reconciliation is the way to go. go ahead, i'll give you one more. >> reporter: any time the freedom caucus members are willing to compromise? >> that's what i was saying. we have our members -- i don't want us to become a factionalizeed majority. i want us to become a unified majority. and that means we'll sit down and talk things out until we get

there. that's what we're doing and we saw good overtures from those members from different parts of our conference to get there because we all share these goals and we'll figure out how to get it done. thank you. >> that was house speaker paul ryan answering a couple questions after the weekly gop leadership meeting. he came out of there and said there were some people in the no camp, referring to the freedom caucus who wouldn't support the gop health care bill on friday who said they were trying to work on getting to yes. he left open the prospect of returning to this issue and having a gop plan when it comes to the campaign promise to repeal and replace obamacare. he said no artificial timeline. that's a brief news conference than we might have expected, john. >> that's right. and i think that's because the republican leaders wanted to deliver a happy message to their base to say "we haven't given

up, we haven't forgotten about our promise." steve scalise said "we're closer than ever." but they didn't want to engage too much on that because there isn't a whole lot of meat to that story. the white house doesn't want to go back to this right now. they want to move on to other things. they're talking about moving -- working with democrats and so this was a happy talk message being delivered by the republican leaders. one big piece of news is speaker ryan said he did not believe devin nunes should remove himself as the leader of the house intelligence committee's investigation of the issue of trump campaign contacts with russia. democratic leaders have called for nunes to be removed. paul ryan is staying with him right now. >> he said no and no when it came to that question about whether nunes should step down. and hospital stocks big mover this is morning.

>> they were weak this morning. i don't think if the emphasis about the possibility of trying to get to an agreement on health care was going to put more pressure but from the markets point of view they preferred in the a rear-view mirror, not something relitigated? >> we can see community health down 7%. what's the thinking in washington about whether they go back, do a repeal and replace and that's something on the timeline from the market's point of view. do we look past it? focus on the next priorities? >> well, look, it's up to the republicans to set their schedule but i would be surprised if that comes back any time soon. it was clear from the signals that have come from the white house that they want to get to tax reform, infrastructure. they need to pass a bill at the end of april to keep the government funding and avoid a shutdown. they need to pass