>> 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 a 2018 budget. the president was unequivocal

before the decision to pull the bill last week we are moving on and i don't see anything that would challenge that basic operating rule at this moment. >> thank you, john. john harwood in washington this morning. and good morning. good morning, it's 8:00 a.m. at facebook headquarters in men low park, california. 11:00 a.m. on wall street and "squawk alley" is live. good morning, welcome to "squawk alley," i'm john ford, and with me, kelly evans and mike santoli.

facebook rolling out new camera features on its flagship app. its latest challenge to snapchat. they encourage users to use the in app messenger. this is the fourth time facebook has cloned key snapchat features in the past nine months, watching snap shares now, they are under pressure. how much are they down? almost 5%. let's bring in yousef scali, analyst with cantor fitzgerald. guys, it might seem frivolous on the surface to some folks, this issue of features but engagement especially among this premium young customer going to be key to how these platforms are able to draw advertisers. yousef, what's your take on facebook's move and snap stock's reaction? >> well, i think it's a great move and it is one that we expected. now, the issue is how will it

impact the numbers? the last time facebook did something as important it was the middle of last year in june when instagram kind of copied snap and the impacts of that was slowdown in the growth of users and engagement at snap. i think it will be interesting to see what happens over the next couple quarters but if you're snap, you're worried. i don't think there is a whole -- go ahead, sorry. >> i was going to say i've got the updated app with me at post 9. >> is it live right now is that what's going on over here? >> it's live right now and our viewers can see the difference between me on the regular camera and -- there's good ones here. >> this is the new facebook app. >> do you know who this is? >> carmen miranda. >> this is my foxy look. you can control through these very quickly. this looks like maybe gold

leader sort of "star wars" thing. some of them scary. >> there's a lot as well. that's creepy. >> think pandas are cute, kelly? >> not anymore. >> they were a moment ago but not anymore. >> i think what that tells you is it's easy to copy a lot of these functions and the issue is around really engagement and user growth ultimately. >> raul, you are a veteran of both the hardware side and the service side and things like gaming and it's a really interesting time for that. do you think that this is an existential threat to snap's growth? the fact that facebook by using some of its previous acquisitions in this space has been able to clone so much of what makes snap distinctive? >> the interesting thing about snap is you kind of have to really understand the product or be within a certain category to learn how to use it properly. facebook is interesting because they can clone those features and they can add it to their platform so any facebook user

who extends well beyond the typical snap demographic, it gives them an opportunity to play with it and use it. the only thing i'd say about it is, you know, instagram tried it with their stories and it feels like an afterthought. it feels like a bolt-on feature to instagram. i don't get it, to be honest, on instagram so it will be interesting to see how facebook puts it into play. one thing i will say is snap understands their audience better than anybody. i was in las vegas this weekend at mgm and they actually had a kiosk where you could buy the snap glasses during spring break which is pretty interesting. these guys are hard core marketers. it's tough to say at this point. >> mike, you think evan spiegel is surprised like i look right here? >> i think you're making snap stocks sell off as people see this. >> to me the question is, look, if you bought snap, if you believe in the potential it can grow into this valuation you are betting on a second act, right? you're betting on their ability to parlay then gaugement with

the younger audience into something deeper. yousef, i wonder what that might be if instagram can come along and clone these things right now? >> ultimately snap today has been a great forum for the 13 to 24 but i think over time for the stocks they need the expand well beyond this demo. i have it because my 14-year-old daughter has one but if not, i'm not sure i would be on it. so they need to expand. it's a matter of time to see how creative they are. everything we've seen from snap is that they're super creative so they need to extend themonet don't think it's an issue for the next two, three, four quarters. because they're monetizing so little versus facebook versus youtube at one-eighth or one-tenth that i don't think it

will have an issue from monetization but they will if engagement slows, that's what we'll be looking at. >> youssef real quickly, i have to wonder, does facebook have to worry about ip going forward? they've so blatantly copied the features, could snap sue them and try to basically either force them to shut down or pay them quite a bit for what they're doing here? >> i'm not an ip lawyer but clearly there is a lot of copying going on. i would suspect that there is not a lot of copyrighted material behind what snap is doing, at least in terms of features and functionality. certainly from a pr standpoint, you know, more and more people know that facebook is really playing or trying to catch up with snap, which tells you that snap is the creator. so maybe from a pr standpoint it's not great but from a pure ip standpoint, i'm not too worried. >> by the way, i want to mention to everybody, we're seeing markets at a session high.

the dow only just turned positive, now we're up 70 points. meanwhile, the s&p is up. john, a strong performance for nasdaq but i don't know if it's because you're managing to spark some sort of new bull market. what do we call this new technology? >> i don't know, i think i've scared people enough. worth mentioning red hat up 6% this morning, tesla doing pretty well, too, which is interesting considering elon musk doing more and more stuff, which we'll talk about later on this hour. also a busy morning for amazon, that company unveiling three new products including amazonern from -- amazon fresh pickup and also confirming its acquisition of sook.com. others want to know about amazon go convenience stores. we told you the company is delaying its rollout of the

stores due to technical difficulties talking about timelines and when and if these projects will contribute to the bottom line. raul, you're from out in seattle, operating out there. how important is amazon innovation like these to the ecosystem up there? >> i mean, it's incredibly important. amazon is doing some amazing things here and, in fact, i have friends that work there that went through the retail experience. they told me it's a blind blowing experience. you walk in the store, you pick up whatever you want and walk out. that's like the ultimate -- sort of the future of what retail should be. when you think about back in the day when apple created the ultimate retail experience with no lineups, you know, that was thought to be innovative but amazon is taking it like five steps further. they're leaps and bounds ahead of anybody in retail and they're turning retail on its head completely by going from an

e-commerce giant to creating this ultimate retail experience that no one will be able to touch. i'm sure they'll bring it out and i'm sure eventually it will come out but, yeah, there are some bugs when you think about it. walking in and picking up products, who knows how these things are being tracked. >> it's being reported the stores work well when it's fewer than 20 people in there then it gets trickier. is it a matter of time and can anybody else jump in and figure it out before they do? >> i don't think anybody can jump in and figure it out before amazon. these guys are working on mind-blowing stuff inside. amazon is innovating not just in retail and drone technology with shipping and logistics and even -- they're even interested in the augmented reality space as well so there's a ton of innovation happening at amazon, it's very important for the ecosystem and i'm sure it's a matter of time. >> the thing that has me scratching my head about this, apple rolled out something similar, use of -- a couple years ago where you're able to

use your phone in the apple store, you scan something and walk out with it but it doesn't seem to be part of the culture. whenever i try to do it, the retail people are surprised. they want to be there with me checking me out of the store. is that a sign that i don't know maybe they're following me around the store wanting to give me good service or maybe that this didn't catch on as much as some people might have hoped. >> we don't officially cover apple but clearly in the case of amazon they've defined what e-commerce is and now they here in the process of defining what the new retail is. i agree with raul on everything he said and i would add that from a stock standpoint, from an investor standpoint, these are things you would want amazon doing. we're not talking about billions of dollars being spent on these initiatives. we're talking about tens of millions of dollars out of that cap x of about $8 billion. so you want them to take risks and expand their addressable market. that's what alibaba is doing and

that's the other one people need to keep an eye on and amazon is better positioned than anybody to continue to innovate and come up with a solution to will revolutionize the space for the next 50 to 100 years. >> and bear in mind you don't have to v the app in your hand. the app is open, you physically walk in the store and just pick stuff up. they make it as natural and as seamless as possible. so -- >> you just need to scan it at the entrance of the store. >> that's right. >> well, i hope it works, anything that makes that process simpler, i like that visual of just driving into the parking lot and somebody else puts the groceries in your car, too. that makes sense. raul pseudo, ceo of unicorn, youssef scali of cantor fitzgerald, thanks to you. >> thank you. coming up on the half time report, david einhorn joins scott wapner at noon eastern. we learned einhorn is pressuring

gm to make big changes. find out about that at the top of the hour. gm shares up close to 4% and just about at the highs for the day right now. and straight ahead, markets trying to avoid their longest losing streak since 1978 and then back from the dead. samsung says it's bringing that troubled galaxy note 7 back to market. and later, the president's new tone when it comes to taxes and infrastructure. we're breaking down the trump agenda when "squawk alley" returns. hey gary, what'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade

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markets trying to avoid their longest losiing streak in 40 years. session highs up about 90 points. we had strong consumer confidence numbers an hour ago and investors weighing this against white house policy. let's bring in the morgan stanley head of emerging markets. so glad you guys are here. steve, i want to begin with you, a huge not the consumer confidence. taking this above as mike was pointing out the highs from the last cycle, it took markets a second to catch up and now the financials are rallying. is this a sense that the mojo is still alive? even the defeat of the gop's health care bill? >> i think there's a couple major factors, one is the sentiment within the market which is in many ways predicated on implementation being good so there will be imperfections in

policy space. so to that extend the market is ahead of itself. but when you look at the mac macroeconomic data, softer data, harder data, there is two tracks and the harder data is showing the economy is doing okay, likely to be far closer to 2% than 2.5% or 3%. so we think this is a good opportunity to fade high valuations. >> and you mentioned a little excitement. the dow is now up 92 on a day when britain triggered article 50. it's practically gone unnoticed, european markets will close in 10 minutes time and you think that's an attractive place to invest, right? >> i think that the big comeback story of the past few months has been europe that's been the single biggest economic surprise in the global economy. in the current quarter, the european economy is growing well above 2%. over the past year the european

economy has grown at a pace which is slightly faster than the u.s. economy. it's been a very long time since that's happened so this is what's going on in the marketplace that we have signs of a synchronous global upturn which is taking place but this is very cyclical in nature but this is good news and europe and japan have been the two places which have led with the growth supplies worldwide. >> looking at the chart. they were big losses. is there anything in the volume or just consistency of losses that should give any pause? >> i think not, you had a massive compact runup. you've had a little bit coming off the boil as it were, i wouldn't read too much in that. i would go back to basics. what's happening in market sentiment and valuations. i've been boring you for many

quarters on this that valuations matter and where we're trading at in u.s. market that is increasingly compelling which is going in a different direction than europe and japan so when you start adding up late-stage economic cycle here, early stage in europe, valuation there is versus here you don't need to be drastic, just use it to be planful, be disciplined in selling at higher valuations and looking elsewhere globally. >> obviously key to that global investment story has been the dollar. it's backed off heavily, not evening up at all over the two-year basis if you look at the dollar index. is that a linchpin to the global story or has that been a tail wind recently? >> it's a very important chain which is taking place. the dollar is exhausting its third major bull market in the post-bretton woods history. the dollar's bull market seems to be coming to an end so therefore i think this is very important investment implication that basically means you need to

underweight the united states. so the dollar's bull market is extended and against many currencies now it looks expensive, whether it's the mexican peso, even currencies such as the euro and yen the dollar screens as quite expensive. so i think this is a major turning point with serious investment implications for a global portfolio. >> does that mean the price of gold is going up? does that mean the price of oil is going up? by the way, oil's reversal also helping this market. >> well, i think that, you know, these correlations are breaking down in the last few months. we saw a massive rally in commodity prices even though the dollar really hasn't done much so i think these one in one correlations are breaking down. i'm much less optimistic about commodity prices including oil because i feel that as far as oil is concerned, the supply story is really turning around which is that i think people have underestimated how productive u.s. shale is and how quickly u.s. shale supply can come back to the market and i'm

also quite concerned about what's happening in places such hinahich we've had a massive debt boom in china which is what has led to this big surge in commodity prices over the last year but that's showing signs of cooling now so i wouldn't take the dollar to sort of mean that commodity prices are going higher. i think those correlations have broken down in the last six to nine months. >> well, we'll see the synchronous global upturn would be good news. ruchir sharma, stephen wood, thank you for joining us. samsung slapping a new face on its troubled galaxy 7 smartphones. but first, check out shares of red hat on pace for its best day of march, 2015, yesterday hitting fresh 52-week highs. "squawk alley" will be back in a moment.

president trump leading a listening session this hour with the fraternal order of police. this is the president with the fraternal order of police, a meeting this morning just taking place there. he's sitting down in the white house, we'll take a listen. >> you're the greatest people. you keep us safe, right? >> yes, sir. >> you keep us safe. it's a tremendous honor to welcome the fraternal order of police to the white house, so many of you know for so long and you've been friends of mine and you do a great job. i want to thank you your entire leadership team including your national president chuck canterbury. i want to thank you for your

support during the election. i guess you probably know, the numbers were extremely lopsided, right? i'm trying to figure out who were the few people that voted the other way? who are they? could we find out who they are, please, and let us know? as i traveled the country during my campaign i had the great privilege to spend time with our amazing police officers who risk their lives everyday to keep us safe. i made a crucial pledge. we will always support -- and you people know that better than anybody, you know me -- the incredible men and women of law enforcement. i will always have your back 100% like you've always had mine like you've showed that on november 8. i'm also pleased to have with us our great attorney general jeff sessions. thank you for being here. it was a big day you had yesterday, too, on sanctuary cities. that was a very, very important thing you don't and frankly a very popular thing so congratulations. and jeff is with us. his strong support of law enforcement, you know that, he

was in alabama, they was attorney general, he was the u.s. attorney and a lot of people don't know that, they know him as the senator but the law enforcement people knew him even more as the others so going to do a great job. good job, great to have you with us. sadly, our police are often prevented from doing their jobs. when policing is reduced, the main victims are the most vulnerable citizens of our society and you see that all over. in too many of our communities, violent crime is on the rise and in time places our citizens have not been safe for a very, very long time. these are the painful realities many in washington do not want to talk about. they just don't want to hear about it. and we have seen that, we've seen it all over. by the way, who is from the standpoint of new york? where are my new york guys here? that's terrible. [ laughter ] i have one sitting in my office,

he's the greatest, he's coming right in. last year in chicago 4, 368 people were shot, nearly 700 more have already been shot since january of this year alone. ski what's going on in chicago, right? what is going on? there's no excuse for it. there's no excuse for it. i'm sure you're asking the same question, what's going on in chicago. i also want to thank our vice president for being with us, mike pence has been amazing, an amazing vice president and very much a believer in law enforcement and the job you people do. all of our citizens have the right to live in safety and peace. we will work everyday to remove the gang members, drug dealers and violent criminals from your communities and we already are. they're being moved very quickly. in fact general kelly, as you know, has done a fantastic job on the border. down 61% since inauguration, people coming in, down 61% which

is a tremendous number. my highest duty as president is the security of our people, the security of our nation. that is why i've already taken numerous actions to enhance domestic security, including the creation of task force on reducing violent crime, an interagency task force to dismantle criminal cartels along with historic actions to secure our borders and remove criminals from our country. we're removing ms-13, we're removing criminals all over the country. they're getting out. we're taking them out and for that i thank you folks, i know you're in coordination with general kelly and the border patrol and i.c.e. and you've been doing a fantastic job. as president i will work night and day to make america safe again and we've already done a big part of it.

you'll see the numbers come out very soon. i want to thank all of you for your leadership. i want to thank all of you for your expertise, the job you've done. it's a great honor to be with you today and we'll go around and introduce yourselves. >> that is the president with the members of the fraternal order of police expressing his support for law enforcement. of course, early today the president tweeting -- applauding a move by ford motor company to invest in plants in michigan. those were mostly previously disclosed but the news has been on general motors as we've been telling you, green light capital, david einhorn's hedge fund, has proposed a radical structure of splitting gm stock into a dividend-paying security and one that would be more for capital appreciation and taxing the growth of business. gm responding basically opposing this move says that the company has engaged with mr. einhorn over the past several months several times to talk about such thing and gm's board and management concludes this would create an unprecedented security

that creates unacceptable risks and isn't in the best interest of shareholders and points to its existing shareholder return plans, buybacks, etc. >> you have to wonder if the move is just investors thinking maybe they'll do more shareholder friendly moves to appease -- if they don't go all the way for example, gm saying they're going to return cash this year and then the slate of directors that's been nominated. >> spotlighting the fact that this is a depressed valuation on a big company that hasn't been able to change that situation for a while and maybe there will be other measures and we'll hear from david einhorn. >> and david's fundamental point we'll hear on the half time show is that gm's dividend is being undervalued in the market. do you think he has a case far? >> you can say as a general proposition in this market if your stock yields 5% or 4%, well above the average for everybody, clearly the market isn't placing great value on it because it's keeping your stock below at this

very above-market dividend but ford motor company similar high dividend yield. so it could mean the market says, hey, these are businesses that face long-term pressures. >> i wonder if there's a creep against shareholder rights. look at the snap ipo. you don't get a vote if you buy the stock. are perhaps corporates becoming emboldened to make moves like this? >> in this case a hedge fund proposing this, because the world seems open to these infrastructures we were talking about the fact that green light a few years ago asked apple to create a special preferred security as this vehicle for returning its catch holdings to the market and that didn't fly but it did show you that people are prying to propose experimental structure. >> you could say apple has a unique situation. we have to figure out a way to distribute the cash. in gm's case there is questions about how profitable is gm going to be in the medium to longer term, it seems like a different question than for apple. >> and gm says as green light

grants -- this would not do anything to change the underlying operations. >> all right. >> wapner will be asking the good questions on the half coming up. still to come, president trump reportedly striking a new tone when it comes to tax reform. but first a quick programming note. we'll be sitting down with fed vice chairmanstanley fischer at 1:00. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.

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hello, everyone, i'm sue herera, here's your cnbc news update at this hour. a prominent republican is raising concern about devin nunes's action. nunes is under fire for visiting the white house to view classified information while leading an investigation into the trump administration. here's what senator lindsey graham said this morning on "today." >> if he's not willing to tell the democrats and republicans on the committee who he met with and what he was told then i think he's lost his ability to lead. the tsa is facing criticism after video of a teenage boy receiving a patdown went viral. the boy's mother said she asked agents to use a different screening method because her son suffers from a sensory disorder. the agency said, however, it followed procedure after the boy's laptop set off an alarm. the first new british pound

in 30 years is making its way into circulation. the 12-sided coin -- you heard that right, 12-sided -- is supposed to curb counterfeiting and it features a hologram. and facebook is looking to beat snapchat at its own game. the company is rolling out a camera feature on its app that creates masks and frames as well as shares photos privately with a friend. we'll keep track of that one for you. that's the news update for you, back down to "squawk alley." >> john's already a pro at it, sue, we've seen him as a panda and with flowers on his head and as a merman. >> that's why i love john, he's into pandas as much as i am. there you go. >> but you still haven't managed to erase that yet, kelly. >> that was the first thing i mentioned. because it was green. >> john knows everything technolog technology. he's the go-to guy. >> thank you, sue. we're counting down to the close in the uk and across

europe. let's get back to seema modi. stocks in europe rebounding. just in fact in the last 20 minutes closing at session highs or i should say moving to session highs here as politics in the u.s. take a backseat for now. traders focusing in on the countdown to brexit. tomorrow is the day uk p.m. theresa may is slated to kick off article 50, officially kicking off the two-year process for her country to leave the european union. there's a lot of uncertainty around what a brexit will look like. the depreciation in the pound suggests a weaker uk economy but the ftse 100 is up about 15 or 16% since the ukraine referendum, benefitting from that currency affect. meantime, the scottish parliament is debating a motion that would give first minister nicola sturgeon authority to demand a second independence referendum. lawmakers expected to vote in 30 minutes from now. this comes one day after surgeon

and uk prime minister theresa may failed to overcome their differences over scotland's opposition to brexit and push for independence. let's talk about politics in france, though. the french presidential election less than four weeks away. the latest poll shows far right leader marine le pen would have the most votes in the first round at 25% followed by centrist man yawl mv -- emmanue macron. in the second round, he's expected to beat le pen as he'll get the support from candidates that will be eliminated in round one. that's how we're shaping up ahead of that april 23 first round election. mike? >> seema, can you clarify this -- so is it another hour till they close or. >> no, we have close, for two weeks we did have the european close at 12:30 p.m. eastern but we are back in action. european markets closing higher.

>> that we go. thank you, seema. with the gop fractured on health care president trump looking to make headway with tax reform and infrastructure by appealing to house democrats. joining us is jared bernstein, senior fellow at the center on budget and policy priorities and the tax foundation director of federal projects joining us from d.c. thank you for being with us. >> thank you. >> kyle. i guess there's a lot of different pieces of going after something on tax at this administration. there's doing in the a big overhaul way maybe just to take the rates down. who among these onkss do you see as a likely path? >> so far i think there's been push towards a comprehensive package. that's the hardest thing to do. there are tradeoffs like in health care so that would take tim time. but most of the proposals put forth are individual reform and

corporate reform at the same time. >> jared, what do you think in terms of i guess the will to try and get just anything done on taxes or is it going to be bogged down in some of the same factionalization that we saw with health care? >> the will to do something on taxes is very strong among republicans and these guys and gals are much closer on taxes than they were on health care but style said an important phrase there. he said broad reform, that's complicated. we saw what happened to a complicated health care plan so i think the prospects for broad reform are small and getting smaller so instead of reform i think we'll look at tax cuts. what shape they take, whether they're favoring the wealthy or corporates, that's the kind of thing we're talking about right now. if trump wants to deal with the democrats, that means you're probably not going to get the regressive tax cuts they tried to pull off in the health care

bill and were unable to do. >> how likely do you expect that to be? there's talk about the trump administration dealing with moderate democrats. that could allow him to outflank the conservative wing of the party but if he does that, he's got to consider the proposals they would have on the table and will willing to move forward. is that something you expect to happen? >> i don't know if that's going to happen without them taking another look at the proposals. what trump put forth in his campaign was a significant tax cut as jared mentioned, republican plans tend to cut taxes for the top more than for the bottom and trump's plan was no different so i think you would have to not only bring in infrastructure but also take a look at how he structures his tax proposal. >> on the infrastructure point, jared, what kind of coming together -- this would be a bipartisan effort?

is that possible? >> it's definitely possible and frankly i've got to say this is something i hope these guys can pull off. we can't be too confident about their ability to do much. i think the nation really needs an investment in our public infrastructure and the problem is that donald trump's initial plan was actually a very bad one. it basically was a tax rhett giveaway to investors who were doing stuff they would have done anyway so no marginal productivity improvements on top of that. democrats have some good ideas in this space and it's possible there's a compromise having to do with repatriated earnings as part of a tax package, we're getting into complexities but these are the kind of things you might see going forward. >> kyle, during health care now with taxes we're getting educated on the rules of reconciliation and what can be done within that format and what other kinds of measures we have to expire after after ten years. what is the appetite among

republicans in congress to allow the deficit to grow with tax cuts even after they get sunset after a decade? >> that might be the path of least resistance. tax reform is very difficult. you cut marginal tax rates but you broaden the base and those that get impacted by the broader base may not like that so you may see a tax cut however you are right that in a reconciliation package that means those tax cuts would need to expire over time so the best case, at least for those that want to see tax reform is something that is closer to revenue neutral that would be able to go through the reconciliation process. >> all right, a lot of different approaches, we'll talk about it for months, probably, jared and kyle, thanks very much for your time. as we head to break, checking apple, one of the better-performing stocks on the dow up about 1%. ubs out with a new note on apple saying the bull case for $200 a share over the next two to three years. the firm says a share price of

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and start gathering the information you need to help you keep rolling with confidence. go long™. ♪ [vo] quickbooks introduces he teaches lessons to stanley... and that's kind of it right now. but rodney knew just what to do...he got quickbooks. it organizes all his accounts, so he knows where he stands in an instant. ahhh...that's a profit. which gave him the idea to spend a little cash on some brilliant marketing! ha, clever. wow, look at all these new students! way to grow, rodney! know where you stand instantly. visit quickbooks.com. i'm scott wapner, coming up on the half time report, the first interview with green light capital's david einhorn as he puts pressure on general motors to create two classes of stock. those shares surging this hour. plus, a noted wall street watcher's call for investors to run from the financials.

he's identifying the banks that will fall the hardest and the biggest hits and misses from the half time traders this quarter. that starts noon eastern. see you at the top of the hour. >> can't wait for that. it will be an awesome interview. let's get to steve leaseman with a rapid update on the economy. steve? >> hey, kelly. good morning. the trade data boosting the outlook for first-quarter gdp, the economists we survey in the cnbc rapid update along with moody's boosting their outlook by .2 to 1.6. what's important about this is we had been going the other way. there was fear we'd be going below 1%, we now look to be solidly in the 1.5%, maybe trending towards 2%. you can see the range there, 1.3% to 1.9% and q 4 tracking 1.9%. bank of america. goldman is at 1.8%. morgan stanley is up to 1.5% and moody's which puts the survey

together. they're on the low end 1.3%. we're about a half to two-thirds through the first quarter. just giving you an idea and that fear we'll be below 1% looks to be fading. >> what is the average or the key number here that you're seeing? >> i think there's always a fear with the first quarter it can come in weeker because of a seasonal problem that seems to be in the data and the government has tried to work that out and fix that problem. we don't know if that's been fixed yet so we're looking at that, consumer spending is the best place to look is but business investment, whether the confidence is translating into machine buying and plant building on the part of companies, kelly. >> we'll see how much that plant billing gets done in the last three days of the quarter. coming up, how venture-backed startups are targeting toy giants lego and fisher price in helping parents

and schools teach kids. that's when "squawk alley" comes right back.

welcome back. parents are trying to get a leg up for their kid's futures and

looking to do that with high-tech toys. julia boorstin is in los angeles with more. julia? >> hey, kelly. with about half of the highest paid american jobs now requiring some coding knowledge, toy start ups are lining up to offer kids fun ways to learn those vietnam b valuable skills and parents and schools are buying. the global market for child development toys is projegted to reach $40 billion by 2019. a number of start ups are taking on industry giants lego and fisher price and trying to break tech education free from the tablet. now, osmo conneipads with real objects. it's raised nearly 40 million from mattel and "sesame street." the most popular kit costs $189! we believe that there's a huge influence on children's growth and learning and that's where

the value is and we've seen that parents are willing to pay premium if there is inherently a learning value. >> wonder workshop brings coding so life by teach iing kids to program robots, dot and dash, with mobile devices thchlt pairs $200 and has been adopted by 10,000 schools worldwide, including some 7,000 u.s. elementary schools. >> these robots are very affordable and that's been a core focus for what we've witbe trying. >> 15-year-olds in the united states are currently ranked 38th in the world of terms of math skills. these companies hope their toys can help change that. they are just two of the more than l 00 companies in the running for the 2017 cnbc disrupter 50 list, which will be revealed in may. >> thank you. "sesame street's" venture

capital arm. who knew. coming up, young brand ceo sitting down can sarah this morning. his take on how his industry is changing. when we come right back.

the dow is up 100 points near session highs after starting out in the red. we got a little rally on our hands, up about half a percent. meanwhile, automation and the use of machines, a key issue for business and in no industry greater than restaurants, which see significant labor costs. back to our sarah who spoke to greg creed about the impact of robots on fast food. >> when it comes to technology and fast food, there's been two approaches. so far. there's figuring out delivery and digital order. look at dominos on that. and payments. going to mobile payments, away from cash, even look to starbucks for a good example of that. i talked to the ceo about this and asked him when would start

using technology and thinking about text message when it comes to the service operation. labor costs you mentioned with run of the biggest costs for these businesses along with food. here's what he said about artificial intelligence and jobs. this whole artificial intelligence, the whole watson thing, not sure we're going to have you know, robots replacing people soon. though to be fair, i was in shanghai recently at new pizza hut concept store and i was greeted by a robot and it greeted me at the door, took me to my table. and so, i think it's the beginning of robotics, but i don't see it wholesaling, changing people's jobs in the short-term. we're not going to be driving cars. we're not going to be, think about how amazon is developing and how machines are telling amazon to deliver the goods. i think one of the key questions is what are we as humans going to do in ten or 20 years? what will we be doing?

>> our treasure ki secretary said artificial intelligence won't threaten u.s. jobs for 50 to 100 years. sounds like you would disagree. >> i believe having a listen to the people in the artificial intelligentsia and we're starting to work with them this n that area, i think this is way too long. i think it's going to happen next year or the year after. but i do believe by the mid to late '20s, you'll start to see a dramatic change in sort of how machines sort of run the world. >> automated? is. >> that will be hard. i think it will be hard to automate. i don't see how running down a line at taco bell where, i don't think people realize, we don't make a lot of the products until the customer orders them. and you know, standing on the taco bell line, putting the ingredients on the taco, maybe that day will come. i don't think that day will come particularly soon b, but in terms of order, using kiosk, mobile ordering, i think part of the process will change.

the manufacturing part. i think we're further away. >> so, that's going to be the big question b about when these ceos and companies can use automation to try to deal with some of the labor costs. pretty candid comments from a company that employs over 100,000 people around the world. when it comes to technology, the front and center issue is figuring out ordering. and that is something that he is thinking about and so many other of these other restaurants. they go at it alone with an app or work with a third party like a post nate or grub hub, which could bring them into the system. up could also become like a travel agency and control the prices for some of these restaurants. that's going to be the big question. >> panera is probably the best. just ordering straight from your phone. the best case for driverless cars is bringing me my food. whether it's groceries or fast

food, right? >> that's certainly going to be the case and that's what these ceos are going to have to figure out. how this fits together. how many food apps do you want on your phone or do you have to work with a third party and how powerful do they become. >> we will don't watch it. kelly, mike, thanks for joining me on sidewalk squawk alley. over to scott wapner and the half. >> and welcome to halftime report. we begin this hour with breaking news. hedge fund manager david einhorn turning up the heat on general motors with a plan he says would raise the company's stock prices. the stock is rising on his proposal and he joins us on the phone. welcome. good to have you. >> thanks. nice to be here. >> you want to split gm stock into two classes, which you would would unlock value f