we want to thank our very special guest host, larry summers and also we had president putin on. pretty incredible. great to see you as always, thank you for giving hip a hain time. melissa, thank you. "squawk on the street" starts right now. ♪ good morning, welcome to "squawk on the street." i'm david faber with jim cramer. we're live from the new york stock exchange. carl quintanilla is still off. you can see where we stand and of course european markets have been opened for quite some time. not getting into italy or spain anymore. >> and spain in major comeback mode. italy, third biggest bond

market. we stay foe cut -- focused. >> as we should. talking about our bond market hanging around that 2.3. under 2.4 in terms of the yield. that's been kind of the constant so far this week. you can see where we are on oil. let's get to the road map this morning. russian denials. president vladimir putin telling cnbc's geoff cutmore, quote, read my lips, his country never interfered in the u.s. elections and calls the allegations lies and provocations. plus, we're keeping our eye on the global economy. four former treasury secretaries sound off on financial reforms and risks and the trump agenda. and lulu sinks. shares of lululemon tumbling, this after the athletic maker issued a weakout lo-- weak outlk for 2017. let's start with putin.

he made news at the international arctic forum in russia. that was where he was part of a panel discussion with the presidents of iceland and finland and geoff cutmore was the moderator. he asked putin if they interfered in last year's elections. here's his response. >> translator: ronald reagan was debating about taxes and addressing the americans and he said, watch my lips. he said, no. watch my lips, no. >> putin actually of course referencing that famous quote from george w. bush who said read my lips, no new taxes. they did raise taxes, he lost the election. the russian president did not stop there. >> translator: we find the groundless allegations and accusations of alleged interference, we have been talking cyber security.

but do you know that us long ago proposed to the american side that an agreement should be elaborated and signed -- financial agreement on cyber security. it was our proposal the americans rejected. turned it down. why? probably because they just benefited from accusing us to match their political cycles. >> hmm. i'll tell you, it's funny, had he quoted the correct president, it would have been trust but verify. >> that would have been a ronald reagan line, that's right. >> it's funny to watch a conference that comes from the old archangel, where we gave the russians all the material they needed, the two ton trucks but they sacrificed 28 million people, so they had skin in the game so to speak. our relationship with russia deteriorating and maybe this pulls it back a little. >> yeah. i mean, expected to potentially

improve as a result of what has been numerous positive references to russia and to putin by then presidential candidate trump. today's lead story in "the wall street journal" says no rapprochement. >> this is a cnbc interview. we are a business channel. he didn't come on "e." this wasn't the golf channel. you come on the cnbc you want to do business. the comeback was sochi, the olympics. it was downhill because of the sanctions after that. this is a man who is actually there are representative group of companies that do quite well if we were able to make some -- break some bread with russia. but remember, merkel doesn't want that. we have that special relationship with merkel. this is all very muddy. i don't know where it leads to, but it's certainly an effort by putin i think to rejoin the family of nations. as limited as you may think it

was, he was very hospitable. and don't have to trust him necessarily on the whole notion whether he -- of his involvement in the elections. that seems a little -- let's just say -- >> yeah. you have all the major intelligence agencies in our country who believe firmly that in fact the russians did. >> i had a guy -- nate fick, a terrific marine before he run a cyber security people. if they had put people on the voting rolls and had them vote for trump, we would say we have to put these guys in jail and we have to go after them but this was -- he was relaying how come we take cyber voting fraud much less seriously than if they were to go hire 200,000 actors and put them all over the key states and have them vote for trump? >> although they did not interfere in the official election tally. that has never been alleged, you know that, that's not the case. >> well, fake news in another

way. >> it was fake news and it was obvious the stealing of private conversations and e-mails from the democrats and their political operations, particularly mr. podesta, who is running clinton's campaign. >> another great question in the arctic, and the u.s. is an arctic neighbor, the alutioeuti are 50 miles away. >> no impact on the stock market today. larger business impact, of course he addressed cnbc or he used geoff cutmore who's done it before, by the way. >> right. right. >> and lived to tell about it. >> yes. that in itself is exciting. we should watch the ruble. the company that has most at stake here is pepsi coco. pepsico didn't need russia it turned out, because their quarter was good, but they have tremendous business in russia. >> other things washington related though, former treasury

secretary jack lew and robert ruben and michael bloumenthal addressed the economic issues mainly between the u.s. and china and jack lew spoke out about the financial deregulation. take lap. >> rolling back financial regulatory reform and exposing us to more risk is a terrible outcome. we don't have many tools to respond to the future crisis as hank paulson had. >> more pointed words than i ever heard him say when he was treasury secretary. >> i guess he can be off script because there's no script now this he's not the treasury secretary. >> he's been unleashed. >> a word i would not have used with him, forceful. >> that was not a word that came to mind with jack lew but there he's stating his preference. yeah. yeah. >> the obvious. look, these are all democratic treasury secretaries.

>> yes. >> we have not really heard yet from mnuchin, but i would have said that he is sounding remarkably like these guys. so maybe they should have just once again this democratic and republican hatered would have one -- so pharfar mnuchin has ba typical treasury secretary. >> he's done a few appearances, he's been with us, we look forward to future opportunities to sit down with the treasury secretary but it appears that this administration, the voice of gary cohn is the louder one or the more forceful one. >> yes. but i'm told that they work very well together. this is from multiple sources. >> you're told that, huh? >> well, what am i going to do? make it up? >> i don't know. >> i make calls. you know what -- >> people are making that up or it's true? they work well together. >> i mean, i used to work at goldman sachs. we have a lot of friends. >> we don't work well together. >> my father doesn't like you today. he said, go make up with him,

he's a really good guy. >> back to gary cohn and treasurer mnuchin. today is the day when mr. cohn makes a presentation i guess to the president in terms of their plan in the white house for tax reform. not unimportant. >> no. it just -- now, what i think we saw yesterday was that when the washington clouds lift, people go to amazon. they buy apple, treasuries are down, if interest rates are down, they come back in as if nothing is happening in washington. i kind of like that because i think that in the end, einstein -- i'm sorry, the speaker of the house is going to do everything he can to derail the president. it won't look like that. but when you -- yesterday the retailers were up. it wasn't just because of restoration hardware and the bargain store. >> you made the point that the idea that the border investment tax is dead and buried.

>> nordstrom was up nicely for no reason whatsoever, ovther thn a belief other than that the speaker of the house's border tax may be not going anywhere, given that 90% of the goods sold at the department stores are from overseas and the people who elected president trump are hurt the most not the hedge fund managers. i don't think they'll be hurt when the dollar tree goes to $2 tree. >> you have turned on ryan a little bit. >> not at all. >> i nont what don't know what there. >> i called him a genius. i was on "meet the press," he's very nice. super. >> i remember being with him in the makeup room, complimentary our documentary we did years ago. >> it's business. it is business. >> very nice. >> it's business. >> got it. got it. it's business. >> let's go on here, conoco,

the. >> wherever you want to go. i don't think we want to talk about ruben in china. that's kind of right there. talk about that? >> yeah, bob ruben, i did a big report and he said, i want to thank jim cramer and i said, why did you mention my name? how much does it cost to give credit, zero. david, you're a great reporter. >> thank you. we'll talk about stocks when we come back. lululemon suffering the retail blues. they were down as much as 78% after hours. see how they perform when the market opens. look at u.s. steel. the shares have doubled, rebounding as president trump pushes for infrastructure spending. we'll have an exclusive -- >> some people are bigger than u.s. steel. >> i think you're bigger than u.s. steel at this point. a lot of people's bank accounts are bigger than the market cap. let's look at the futures as we set up for the open, 20 minutes from now. live from post 9 at the nyse. back after this.

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cnbc's geoff cutmore was the moderator of the arctic forum panel discussion with vladimir putin and geoff joins us live from russia to tell us what went on there. of course, geoff, you're an expert in these areas, you asked

a lot of questions, got certainly some answers to them. what stood out to you perhaps as the most important of those answers you got from the russian leader? >> i think the critical issue, david, is this one that we're still chunking through and that the senate intelligence committee is looking at and that is what role did russia play in the u.s. presidential election and of course there very lots of allegations of disinformation, lots of allegations that russians were involved with president trump's team running up to the election. but at this point, it seems it's just a rot of smolot of smoke a see the fire. this was an opportunity on stage with the russian president to ask him the question directly, did russia seek to change the outcome of the u.s. presidential election race? let's hear how the u.s.

president -- how the russian president answered my question. >> translator: ronald reagan once debating about taxes and addressing the americans said, watch my lips. he said no. he said watch my lips, no. >> well, i'm not sure he's got the right u.s. president there but i think the message was fairly clear from vladimir putin. he continues to insist that whatever committee investigates russian activities they will not find any clear evidence or evidence per se that points to russian involvement in disinformation running into the u.s. election. of course you would expect the russian president to say that, no doubt the committees in the house and the senate will roll through their own process here. but i think a very interesting time for president putin to

enter this debate. back to you guys. >> i was going to ask geoff, i guess -- geoff, can you hear me, it's jim cramer. >> yes, i can. yes, i can. >> first of all, unbelievable interview. fearless questions. you are obviously a fearless journalist which we most appreciate. can you give us the translation is difficult sometimes. it seemed to me that this is a friendly and an olive branch reach out to president trump -- putin. you're in the room, could that be an accurate depiction? >> i would say very clearly. i think there's frustration in the russian government that there has been very little communications since the initial telephone call where president putin congratulated president trump. i think there's a certain amount of bemusement when you talk to russian officials about what they see as going on right now in washington and where they actually fit into that story.

and just to focus on this forum for a moment, the arctic council has a rotating chair. the u.s. has that chair at the moment. it will go to finland in may. now, the finnish president was also on the panel and said that he would be willing to host a president to president meeting in finland if washington were prepared to reach out to president putin at this time and make those arrangements. so i think, jim, where we are right now is that this was a very clear attempt by the russians to say, okay, there are many issues that we have a difference of opinion. not least ukraine and the sanctions. but we do need to continue the dialogue so any time, any place, anywhere, let's have that meeting. back to you. >> all right. thank you very much, geoff cutmore, reporting for us from the arctic i guess.

>> that was terrific. look, there are people who would not want to press putin on a question like that given putin is not necessarily what i would regard as being -- >> friendly to journalists. >> he's not gandhgandhi. >> geoff will be on our air, but under a different identity in the future. won't be hearing from him. you know what lululemon we mentioned we'd get to. how about you do it as a mad dash. >> i think that makes a lot of sense. >> good. we have that coming up and another look at futures here. ten minutes before we get started trading on this thursday and we have a lot more ahead for you. yes? please repeat the objective. ♪

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all right. time for a "mad dash" on a thursday. we haven't mentioned lululemon, but we haven't gotten into why the stock will be down. >> this is serious, david. serious because they went from being great comps in the previous quarter to being bad. i mean, just plain bad. negative comps. meaning same store sales are done. they missed the right coloration, didn't have the right colors. i spoke to laurent potdevin. i thought they had left the panoply behind. mall traffic was bad and online commerce that was bad. now, they're claiming they're addressing it right now. at the end -- in the last couple

of weeks of march getting better. get this, they have big buy back. they could be in buying. we don't know. they're inclined to do so but david, it's an episodic story not a secular grower. i had thought it was a secular grower and we have to drill down. >> how as an investor are you supposed to address companies such as this one to your point, it's episodic. you're dealing with the quixotic tastes of consumers and in one quarter you can watch everything go away in an instant. >> i have to go back to when j. crew was public and remind myself that fashion is a business that's just too hard and better left to private companies because they did not have the right fashion. i don't believe that it's secular mall -- they lost traffic in the mall, absolutely. like everybody else. mall traffic was the lowest since 1972. thank you nordstrom up yesterday, maybe the border tax not happening. this was a wake-up call because

laurent has done a fantastic job. but if it's true that it lacked the right colors and the current website is doing better, this becomes a different kind of story. some people say this company is just a fad. i say wait a second. there's far more risk here than i thought and that is worrisome if you're trying to pick a long term theme of health and wellness -- >> can we get maybe two years. >> yes, we can. it came in three years ago. >> that's year to date. keep going, guys. >> right. he turned the company around. so he came in, came in three years ago. you know what, david, what is at issue here is retail in general and fickle nature of the consumer. i had felt that no matter what they put out it was going to sell. but it turned out that colors did matter and that was news to a lot of people, therefore, the stock should get a lower priced multiple. that multiple is going to

shrink, every one of the analysts was bush whacked on this one because it happened so quickly. it was a drop-off in the quarter. they have a fiscal year. this one started in february. so they have february, it was already not good, march not good. they need an april come back and yet he's completely unfazed. he said things will come back. but if they come back i don't think it will pay us as much as it would before this, unbelievable. you know a lot of people talk about the north face of everest. >> now they'll talk about the north face of lulu. >> this is impossible to scale. >> we'll be watching that stock. when we have the opening bell, less than four minutes away. stay with us on "squawk on the street."

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kevin kevin trusted advice for life. kevin, how's your mom? life well planned. see what a raymond james financial advisor can do for you. 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. you're watching cnbc's "squawk on the street." we are live from the financial capital of the world. the opening bell will ring in a minute and a half. this is the time when i turn to you and say what is key in your mind in the market? what going to dictate perhaps to a certain extent the way we trade today? >> conocophillips.

$2.7 billion of stock the vast majority of the canadian -- the dark oil sands. the crummy oil so to speak. that means getting through the pipeline. go through the canadian pipeline and through the keystone pipeline and down -- thank you for this. did you know if you wanted to build a new facility up there you need 90 to $100 oil to make it work. you know in one fell swoop by getting rid of this, they go from having $35 costs to $40 and they break even. this is the beginning of the end of the really hard to get oil. >> so what happens to all that stuff? sun core is another name up there that benefited quite some time -- >> you know, the canadian -- the cana canadian -- i believe that oil is going to be higher. the five year oil curve shows

it's up in five years. and also royal dutch when they off loaded the properties seven weeks ago. the key is to watch oil and the recognition and it and i going up any time soon. >> all right. we'll keep an eye on oil. but first, we'll look at how we'll do on the s&p 500 now that we have begun trading for the morning. the moves this week have been fairly muted although we had one decent up day. >> don't forget this amazon and apple, they have become the market in some ways. they're so huge. so -- >> apple particularly. over $750 billion market value. here at the big board by the way that was just energy group that specializes in electricity and natural gas celebrating its 20th anniversary. you mentioned oil of course. and where that is and you mentioned amazon and apple as

being -- in some ways the key to this market. >> well, i have to tell you, david, the galaxy 8, i have read all the mainstream reviews. the mainstream media. >> yeah. >> and it does seem that it is a light device, but the question is how much of the apple ecosystem have people gotten involved in when the galaxy fire was pulled? so, you know, how much -- >> how much are you going to change? so much of your life is i believe -- embedded on this device. think of all the things i do with this -- whether it's -- >> yeah. >> everything. everything. every app has taken a lot of jobs away but people in tech are willing to say, what it a second. it's creating a lot of jobs. i'm talking about the service revenue stream that apple has broken out with. i think it will be a fortune 100 company which places it in the $28 billion range. it can double in a few years, that's why apple should have a higher price to earnings

multiple. amazon it's both web services and -- >> still growing and very profitable and retail. of course they still have great top line growth. theyn don't make much margin on the retail side of the business. but web services has contributed mightily to the bottom line growth of the company. >> when people think of web services, google has it. that's snap, 400 million. i have done -- >> google has cloud. nowhere near as large or powerful as amazon. but it's $4 million a year they outsource it. >> did you see our parent company, nbc did a deal with the olympics. i think snap is fabulous. the stock i think is a little too high. >> you enjoy the product but you differentiate between the product and the underlying value of the stock. >> i like espn, i like the journal's app. you scroll through.

i think that there are so many kids who love it. remember i know that -- look, zuckerberg is so competitive. i wonder if a government doesn't get involved to say that facebook is actually trying to monopolize, eric johnson, thank you from the street for suggests that. but i think the stock is too high. >> that did you say? >> well, facebook is trying to own all of it. i don't think it's monopolistic. >> like an antitrust movement as there was against microsoft a few years ago? >> i think that europe creates antitrust movements where you don't need it. they went after google and microsoft. >> well, we went after microsoft. >> well, janet reno and jim balmer criticized the attorney general of the united states of america. that has always been ill advised when they're investigating you. remember, they had klein. >> yes, they had klein as their lawyer. >> the government did.

>> yeah. which was a bad -- >> then went on to run -- >> you know the government plays for free. never get on the other side of the government. but for free. >> is that a real risk in the face of the facebook -- >> i think you have to recognize that facebook is doing a lot of things to wipe out a company. but you know what? snap's not going to complain. they're squl they're just going to be giv competitive. i'm trying not to count out snap the company while saying that they have price risk. the company is smart and doing a lot of great deals. right now, doing a lot of great deals. keep that in mind. >> still haven't had -- i mean, their growth rate has been slowing in terms of -- >> that's true. but they have that users, a colgate or a proctor would want, because they're looking to go with colgate, crest or sense adine. >> apple is up 24.5% this year,

jim. at what point does this thing finally take a rest? we're talking about a market value that's still a bit below its all time high which was somewhere around $765 billion. remember the company has repurchased a lot of shares and paid dividends. if you were to reverse that and say okay, over the last few years what have they bought back and what have they paid in dividends you'd get close to a trillion dollars if you added that to the -- that's not really fair. >> i was debating with scott berman who works with me on the charitable trust. we're thinking of saying, listen, this is not the level to come in because it's had such a run and that can often be a lot of shorts were busted at the 140 level. shorts were putting it out on the technical basis. that's something you and i sometimes joke about, but some felt it stalled and broke through. is this the level to start at the apple position? i would prefer a swoon in the overall market to give you a better level. but amazon gave you a better

level. all the analysts got scared, it turned out not to be that consequential. you have to listen to the company. lululemon, consequential. >> but it was samsung's weak product offering that may have benefitted apple to a certain extent. they're introducing a phone that's well reviewed represent any kind of a threat? >> that's what i'm saying. the press on the samsung phone is so positive. apple won't have the new phone out. a lot of the component makers for apple are moving up. what is thought to be a tremendous demand for the new phone but what i don't like, people are using the term super cycle. that's set up, that's like just -- you know what? we're going to call it a super cycle and when it's a cycle we'll downgrade. be careful of super cycle lingo. >> let's get back to energy. >> remember the coal super cycle in 2011? >> i do. >> peabody.

there's a new peabody, great symbol. >> who can forget mr. peabody. >> you're going way back. >> yeah. wti is near a session high. 50 bucks. that's the highest it's been -- >> and remember if they sell a -- u.s. companies sell futures there they're able to bring in a very good price on the $35 basis. permian, it's 22, 25. permian it needs more pipe. four pipes being build right now. so you're able to get it there. keep in mind that conoco wanted out of high price. royal dutch wanted out of high price, they want to raise the dividends and buy back debt. conoco is buying back a lot of debt. they're well ahead of the november targets that they set. conoco, very forward thinking company here. >> ge, we haven't mentioned that name in a little bit. the sole bidders for a railway project worth $2 billion, building two rail lines, and connecting northern cities in

nigeria. >> they've got the locomotives and the rail lines. the locomotive division was down like 40%. but a lot of people would say, jeff immelt, why do you headaan to the business that's like that? this gives him ammo to say, that rail as are not done. >> it met on the bottom line in terms of estimates. it was the cash flow numbers that were anemic. the inability to cut costs as much as the shareholders might have wanted. so they have committed to cutting as much as $2 billion in costs over the next two years i believe. >> that's the trying number -- they want that company less geared to doing the number and again, nelson peltz. >> both of them -- >> they're in jeff's facing saying are you kidding me? they align the compensation. >> and that pressure will most

likely continue. it will be interesting to watch ge and its ability to perform over the next six months. >> and it has been -- i mean, i have dave cody on final -- >> he's saying good-bye. >> yeah. he will be missed. but honeywell has crushed it versus ge. >> they have. >> so has boeing for that matter and greg hayes, united technology. >> greg hayes has a problem though. it's an engine, not working very well, jim. >> but they have 35 -- it's not his part. not his part that's not working and fixing that. he said the rim was fixed in the last quarter. he said the rim was fixed. >> it was an overall issue with the large -- with the engine. >> with the turbine. the big gear turbine fan. i have great confidence that the gear turbine fan problem will be qui fixed by q3. >> why? >> it's remarkable. it reduces sound. makes it -- lots of countries don't want noisy planes landing in their cities and dramatically reduces fuel use and they're

getting through the gtf. >> they're having problems early on in terms -- >> teething problems according to pratt and whitney ceo. >> when we make a decision as to whether that's truth or fiction? >> greg hayes is about the most straight shooting ceo. >> they don't get straighter than him it would seen. >> i trust him when he said it will go away. i'm big believers. >> a year ago -- remember that -- >> of course. remember what's driving united technologies here is a big order uptick in carrier and hvac. big order up in otis. that's u.s. base. a big turn. >> otis is not doing well in china anymore. >> no, because the chinese are not building as much as they were. you have otis, those two divisions are very important. can i point out, david, united technologies, fighter plane.

they're delivering on that. >> yeah. >> on the joint fighter. that they're delivering on. >> right. one would expect if there's increased defense spending as the trump administration wants there would be a beneficiary in that. >> and since the decision in indiana, the president is a big backer of united technologies. at one point everyone said buy carrier, the salesperson in chief it's okay. >> well, apparently there were some increased sales. >> the business is good. united technologies, inexpensive stuff. look, all the industrials had a giant move. that was part of the trump stock, trump stock, industrials, now it's come back to tech. some biotech and obviously the consumer package goods because of your friend who is still on the prow. >> well, no. kraft-heinz -- >> yeah. unilever is breaking up. >> we don't know. they're doing a study, studying what to do. >> what is kraft-heinz going to do? they're all that people talk about when they get together.

>> i've noticed. they'll do another deal, that their top line growth is not significant enough. there's a premium in the stock given their success in reading costs out so they'll do another one. the question after that horrendous job they did in unilever what they do now has to be friendly from beginning to end. how many companies are willing to say to them, okay, we're willing to listen and talk and make us a good offer and it will be nice from beginning to end because they have typically used pressure from the share holder base to help them. unilever it was more than that. when you look at 3-g, with the old abi guys that they did in sab miller, that's a weapon that's gone. >> let's say the -- let's say one retires because he's a couple years older than i am in the game. and is that an opening? even though he designated the successor is that an opening because the stock has

underperfo underperfo underperformed? >> possibility. >> the joint partnership with nestle -- >> we'll see. >> i'm staying close to you on this. that's why the stocks don't come in. even when interest rates go higher they don't come in. >> i know. let's get to bob pisani and get more on what's moving this morning. >> good morning, david. happy thursday, everybody. mixed market, but the key is the reflation trade is holding up pretty well, a second day in the low. look at the sectors, energy doing very well. oil up. conocophilli conocophillips' news is helpful. and banks are moving up. a problem at the ten year, and there's the reflation trade. tech also the market leader this quarter. look at the couple sectors moving, infrastructure is up a little. treasury secretary elaine chao said that trump would unveil an infrastructure plan later on this year. we don't have any details, we don't know anything, but you can

see some of the classic infrastructure plays here moving up on that news as well. i think the bigger news this morning is the exploration of production names. all up on the conocophillips news. remember, you heard from -- they did sell the oil sands assets in western canada. look at that, conoco up 6%. they erased all their losses for the year. they've got $10 billion in cash and some synovus stock. conoco was down 8% going into the trade. look, it's practically wiped it out here. you can see the exploration and production companies having a tough time of it. hard to fuel capital spending when you've got the dividend, hard to fuel capital spending, dividend from the cash flow. so this has been a major issue and conoco of course has gone a long way to helping to repair the balance sheet here. xlp you want to watch here, down

10% so far this year. kind of flat today here. that's one of the major disappointments that we have seen for this year. remember, earnings are expected to almost double for some of the stocks as we go into the latter half of the year. asset managers today are mixed. remember that big story yesterday. we were all talking about the journal story on blackrock. the important thing today, legg mason comes out and announced they're cutting 3% of the staff because of disruption. xablg exactly what we were talking about yesterday about the move to automation and less need for the humans in the active management space. tomorrow is the end of the quarter. we're sort of lichl -- limping to the close. there's not been a lot of selling pressure, but volume is way below normal in the last six or seven days. 20% below normal as we go in. volatility, well, we're back down below 12 in the vix volatility index. the big winner as we all know

has been the technology group. the major tech stocks are on the upside. s&p is up 5%. but you see a lot of the dispersion, russell 2000 is flat. transports are flat and banks after a tremendous start are down 3%. talk more about the quarter tomorrow. right now the dow is flat. david, back to you. >> thank you very much. i want to alert some viewers from some news on the commerce department and at&t. some of it came out yesterday. department of commerce and what is now the first responder network authority essentially they're creating the first nationwide wireless broadband network dedicated to first responders. there's wilbur ross, secretary of commerce, of course. and at&t has gotten the contract to build it. which is going to take quite a few years and a lot of money. they're getting $6.5 billion over the next five years from the government in success based payments. they are going to get a lot of spectrum to about doing that and at&t is going to spend a lot of money to build, deploy and operate and maintain this

network. wilbur ross will be our guest at 2:00 p.m. >> a fabulous interview. >> to discuss the awarding of the contract. the government contracts have been in the works. broadband for first responders. we'll take a break and be back with more on "squawk on the street."

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vladimir putin denying any involvement or meddling in the 2016 election. listen to what he told our geoff cutmore this morning. >> translator: we perceive the united states as a great power with which we want to establish a good partnership relations. although things are fictional

and provocations, lies. all these are used for domestic american political agendas. >> for more now we're joined by a former nato secretary-general anders rasmussen. sir, what is your tame on what you heard from mr. -- take on what you heard from mr. putin? i'm sure more of the same to a certain extent. anything new there or any expectations on your part for what it means for the evolving relationship between russia and the united states? >> first of all, i didn't hear anything new of course. he would denounce any allegation of russian interference with the elections in the u.s., but i personally i have no doubt that the russians tried to impact on the democratic processes. not only in the u.s. but also in europe and next election will be

in france and i have no doubt we will see russian interference in the french elections as well. >> you believe that the russians will continue to try to insert themselves in the democratic process in france. why do you believe that to be the case? >> because there's a lot at stake. recently, one of the leading candidates marine le pen visited mr. putin in the kremlin. and she promised to work for a lifting of the western sanctions against russia. and we have seen negative stories spread about her most probable contender, naand i hav no doubt that the russians are behind those negative stories about the leading candidate as

well. >> president trump has met with angela merkel of course from germany. yet to meet with putin. at the same time, there are continued reviews just really beginning in both house and senate intelligence panel about a potential relationship between the trump administration and russian hacking. what is your sense here in terms of where the relationship stands and whether or not what many believe would be a rapprochement between the two countries would still be the case? >> well, i think recent developments in washington have made it more difficult for the american administration to reset relations with russia. that would be much too controversial. my guess would be that mr. trump

and mr. putin will not meet until after the nato summit on the 25th of may. and i also think it would be of utmost importance that president trump and the president of ukraine meet before president trump meets president putin. all in all, i don't think we'll see major changes in the relationship between the united states and russia in the short term. >> and specific to the united states continued commitment to nato given the president's previous comments about that relationship and his desire of course to see all the participants in the alliance pay their fair share is nato still under pressure? >> well, of course candidate trump's statements during the

campaign trail were a matter of concern because he raised doubts about american commitment to defending our allies, but after the election i think he has slightly changed his approach and in particular the security team that is surrounding him secretary of state tillerson and others, they have made very clear reassuring statements about an unchanged american commitment. so i don't think nato is under pressure. on the contrary, i think a message from the 25th of may nato summit would be -- could be the american commitment is unchanged and the european allies will invest much more in defense in the coming years and that would be a very positive signal also to the russians.

>> mr. rasmussen thank you for your time. >> thank you. >> former nato secretary-general. let's get back to the market in the brief time we have, jim. lululemon was the feature of your "mad dash." going to have the ceo on -- >> and remember, this is about guidance. it was not about the actual quarter which was terrific. the guidance was dramatically lighter and it had to with the fact with let's just say they missed the mark on the style. >> what's cote going to be do? he's not that old? >> i don't know. he sold his house next to me. i want to know if he's going to work to cut the debt. his two passions are the new england patriots and cutting the u.s. debt. >> that's a good show you have. >> a good man. good man. by the way, i think that the company's leaving is is an excellent one that remains a fantastic way to play global growth plus. in other words he's not relying

on just global growth. i want to point out that chipotle is moving here. i have said that the average time it takes to forget about an incident is 18 months. that's what happened with taco bell, that's what happened with jack in the box and then one more month with chipotle. one more month an then people will forget what happened. i have backed them all the way. congratulations to mr. easterbrook for bringing in fresh patties for mcdonald's. >> great mr. easterbrook -- >> that's for the quarter patty. >> got it. see you later. be good. >> all right. >> be good and be productive. because i worry about your productivi productivity. still to come, former dupont ceo chad holliday. hear how he thinks top executives should deal with trump.

♪ good morning. welcome back to "squawk on the street." i'm sara eisen along with david faber and mike santoli live at

post 9 on the new york stock exchange. let's check in on the markets, we have a minirally going on with the dow up 19 points. again the nasdaq in the lead. it was the big gainer yesterday. technology continues to lead up 0.2%. also helping out you have wti crude oil up half a percent just below $50 a barrel. you have the russian ruble, david, at 18 month highs against the dollar. >> thank you for that, sara. let's get to our road map this morning. it starts with read my lips, no. russian president vladimir putin speaking to cnbc's geoff cutmore and speaking out on election hacking allegations. u.s./russian relations and more. and plus, lululemon getting crushed, they missed assassines. what laurent potdevin had to say about the numbers. we'll talk to the former

dupont ceo. and vladimir putin spoke to our very own geoff cutmore at the arctic forum and he has the highlights. hi, geoff. >> good morning, sara. the key issue was that one, what is going on with the investigation into allegations that the russians had some role in the u.s. election outcome. and were using disinformation throughout the campaigning to try and get president trump elected. that was a question that i put directly to the russian president. were they involved in trying to change the election outcome in the united states? he insisted read my lips, no. he also went on to say the reason that this is being argued is down to domestic action against president trump. let's just listen to the sound

bite. >> we perceive in regard to the united states as a great power with which one -- which we want to establish a good partnership relations. although things are fictional and provocations, lies. all these are used for domestic american political agendas. >> well, there you go. lies president putin said. read my lips, no we didn't interfere. but what is clear here, whether they did or they didn't, there is still a significant breakdown in relations between these two powers. at -- my follow-up questions involved how to get the agenda back to something that looked like cooperation and perhaps there is one place where that could happen. the common ground that both countries have in the fight against isis. so that's where i went to in the

conversation and i asked president putin whether he'd be prepared to work with president trump on isis. let's just listen to the clip. >> president trump believes he's going to launch a new campaign against isis. he talks about wiping them off the face of the earth. would this be something that you would -- if mr. trump, if president trump reaches out to you, is this something you can find common ground and work together early on? >> translator: we definitely have the common ground which is fighting national terrorism and the fact that president trump has this as his goal is a right thing and we'll definitely support these efforts by joining hands and we can combat terrorism decently. >> well, the problem of course is there isn't an early meeting

between the two presidents scheduled. it did appear on this conversation that president putin was reaching out in the hope that maybe something would happen between the two presidents before ultimately what's in the diary. that is a june 20th meeting in germany which is not until july. back to you guys. >> geoff, you know you pushed him hard on the point about the u.s. elections. i thought that was quite a moment when he quote ronald reagan who was actually george w. bush. you have done this before. i think you have done this event or you have interviewed president putin. was he different this time? was he more defensive? how did it feel to you in terms of his posturing specifically when it comes to the outlook for u.s./russia relations? >> yeah. i think that's a fascinating question, so i shared the stage back in 2014. we were talking at the st. petersburg international forum

just ahead of the first democratic presidential elections in ukraine and of course the whole issue of sanctions and the rest of the world's revulsion at what they saw as russian activity, military activity in the ukraine and the annexing of crimea. at the time i think my sense was that president putin felt that yes, he was in a difficult relationship with washington but at least it was a predictable relationship. my sense this time around is that the president here is just frustrated about what he sees as at this stage a difficulty in getting to first base in a conversation on sanctions, on syria, on the whole host of other issues like the arctic here that clearly washington and moscow need to find common ground on. so it did seem to me this was a very different vladimir putin in the sense that he's just trying to work out who's running the

white house at the moment and how he can get into a conversation with them. >> a more congenial putin, maybe. i don't know if that's how you'd put it, but certainly reaching out. geoff, go ahead. >> okay. no, i was going to say i mean, i don't know if you can describe president putin as convivial in that sense, but i thought there was a reaching out. on a number of occasions i pressed him on that issue as well and said, look, if it's a question of any town, any time, anywhere, would you be up for it because there are a number of opportunities. the slovenians offered their capital, the finns offered their capital and the icelanders offered reykjavik, which might be chilly for both, but i got the feeling that president putin would like this face-to-face good time soon. >> good interview, thank you,

geoff cutmore in russia. europe and the u.s. face a growing push toward isolationism in issues and particularly in trade. we'll talk about these big picture ideas. joining us by phone is ambassador michael mcfaul former ambassador to russia and michael porter, harvard business school professor. he's looked at the economics of the shifting landscape. first to you, ambassador mcfaul. your reaction to president putin, read my lips, watch my lips, no on the answer as to whether there would be any evidence found on russia hacking the election. >> i thought it was a bad historic analogy. number one he garbled out. as you pointed out it wasn't reagan, it was george w. bush. after he dsaid that he did rais taxes. you know, i think it's clear as day that the russians did intervene in our elections. our entire intelligence

community has documented that fact. they stole data from the dny and mr. podesta and then published it through wikileaks in a way to influence our election. moreover there's other evidence that you can just read. we don't have to -- we don't have to have cyber security specialists to help us. so when sputnik the russian government news agency tweets #crooked military, that's a clear statement about what the russians are thinking during our elections. >> so going after the election, you know, there was so much optimism. at least in the markets. the ruble was rallying. the russian stock market was on fire and there would be a thawing between the u.s. and russia and that president trump would be more open. you heard geoff, putin is reaching out to have that meeting. has that changed because of all the investigations and all of this noise, the fact that it continues to be front and center? >> yes.

what i would say two big things. number one, because of the investigation, because we are so focused internally, president trump has not defined a foreign policy generally i would say and most certainly not towards russia. and if you compare where the trump administration is today to where the obama administration was in the spring of 2009, they're way behind. i worked at the white house at the time. i was the russia guy. we'd already come up with our policy. we had already had a meeting between the secretary of state and the foreign minister and on april 1, 2009 in london, president obama and president medvedev had the first meeting that's just a few days away. they're behind because of this internal churn but i think the second thing that people don't understand or because we're not focused on it, as president trump has put together his foreign policy team, a lot of

senior officials are not as eager to have a reset in relations as the president is. hr mcmaster i think is in a different place, so once they start to formulate the policy i'm not sure they will be as aggressively seeking a detente with president putin as candidate trump promised last year. >> professor porter, a lot of your work looks at the competitions among the nations, whether it's for trader oothr or advantages. how would you place russia, looking to play at a certain advantage and the entire approach, stated approach, at trying to find leverage points in these bilateral relationships? >> well, i think to russia, russia actually is not a

fundamentally important country for the united states or increasingly any other country in terms of economics. it's degenerated into primarily a natural resource exporter. now that we have a very low cost energy in america and the opportunity to grow our energy supply, i think russia has diminished as an economic issue for the united states. that said, there are very important disruptive, destabilizing factor in the global community and therefore i think some better way of interacting with russia is important. but more generally i think what's going on right now is this very, very unstable and unsettling debate we're having on trade. the administration has sort of portrayed other countries as taking advantage of the united states, as sort of distorting trade and we have been very, very aggressive about talking about opening up the trading system, removing the distortions

and obviously mexico has been a major brunt of this. china has been a major brunt of this. i think it's high time that america started to rebalance some of the trade relationships that we have had around the world because we were the generous guy. we were the guy that was more generous in order to get these deals done. we opened up the world trading system primarily in america. but to do that we had to be generous. we were in a great position to be generous because we had a tremendous competitive advantage. and we could afford to kind of allow some countries to kind of take advantage of us in some respects. now i think our economy is frankly very weak. our recovery is very fitful. our competitiveness has eroded over the last 10 or 15 years and so i do believe it's an important moment for the u.s. to have a much more assertive trading relationship but that

doesn't mean, you know, starting a trade war. that doesn't mean going back to protectionism. i think we're in a dangerous discussion right now in terms of the international economy. >> yeah, which brings us back and we'll end where we began. ambassador mcfaul, with russia, i know you're watching the politics of this but we're trying to figure out what it means for the u.s. and the russian economy. there's a big trading relationship there. the fact that the reset hasn't happened exactly as president trump anticipated what does it mean for the russian economy, what does it mean for the u.s. economy and the global economy? >> well -- >> well, i think the russian economy is in trouble. >> go ahead, that was to ambassador mcfaul. then we'd love to hear from you, mr. porter. >> i'm sorry. thank you. >> well, without question on election day in moscow, they were elated that president-elect donald trump won the election. there were celebrations.

they anticipated that he was going to be the guy that would lift sanctions. because after all, he hinted at that as a candidate and by -- and to remind everyone the other candidate said the xarexact opposite. they thought there would be a break through and then the announcement by secretary tillerson as secretary of state he negotiated the biggest joint venture in the history of russian relations, in exxon mobil. there was a great expectation there would be a great breakthrough and now it feels that it's stalled in moscow. there's beginning to be doubt that donald trump will have the political will and power to move this forward. >> professor porter, your thoughts on the economic implications on all of this. >> well, again, i think the economic implications right now are mostly just destabilizing and making people nervous about what is going to happen in this

relationship to russia. again, as i said earlier, russia is not critical to the u.s. economy. you know, we don't have a real stake in russia. china is much more important. japan is much more important. latin america is much more important. given the way that russia has evolved into the pure resource based economy and not where a broader -- and not a broader impact into trade. frankly what's going on right know, we had a lot of optimism around the election of donald trump. donald trump was talking about doing some things that made a lot of sense. bringing down corporate tax rates. dealing with infrastructure. removing regulation. being a little bit assertive in the trading system so that we could have a fail trading relationship for the united states. but i think what's donning on a lot of people is where's the beef? this isn't happening. nothing's moving. the political system -- we're fighting against each other.

we're not -- americans are fighting against americans and we're not making progress. and this russia breakdown is another example of something that was supposed to be a problem solved and not much is happening. that's partly a function in the way in which the president is running the country right now. but it also has to do with our political gridlock. the inability of the two sides in america to actually work together to do anything frankly. and this has been the pattern in america for the last 10 or 15 years. >> it's less than 100 days in. we'll continue to check in with you. we have to leave the conversation there. gentlemen, thank you for your reaction to our putin interview. ambassador mcfaul, former u.s. ambassador to russia, and professor porter. the s&p wipes out the march loss. >> yes, it does. with it up about 0.2%. this morning we got 30 year

projections from the congressional budget office. we have details from washington. >> u.s. debt will rise to 150% of gdp by 2047 the highest level on record. that's the warning from the cbo if current laws do not change. interest payments are projected to jump to 6.2%. but the biggest factor driving up the debt is the growing cost of mandatory spending programs on health care and social security. together they're projected to make up nearly 17% of federal spending. president trump had pledged on the campaign trail not to touch the programs. the skinny budget does not add to the deficit but some of the proposals like the trillion dollar infrastructure plan could wind up increasing the debt. the cbo minced no words about the nation's long running prospects saying it increases the odds of a fiscal crisis.

>> yeah. we'll see. thank you. when we come back, shares of lululemon, they're down 22%. that's actually i think the session low at this point. this of course after the retail reported earnings that actually it wasn't the earnings that missed expectations. it was the guidance for the future of the company. sara will tell you about it. colors, apparently they make a big deal. >> colors for spring. >> and let's give you a look now at the stocks. as we said, overall session highs. we have more ahead on "squawk on the street."

shares of lululemon are getting hammered, down 21% after the company's outlook missed estimates. the retailer expects weak same store sales in the first quarter. and they blamed a product outlook that hasn't really hit the mark. lower online sales and fewer shoppers in stores. i spoke last night to lululemon's ceo laurent potdevin after the numbers were released. he said we should have been bolder with the colors, we didn't switch to spring with the colors. he said we have gotten used to the moves, it's a very emotionally charged stock that moves a lot on earnings. when it comes to where the company was hit the hardest, he said most of the softness was online and that means we can fix it the fastest. as for where he sees growth, he said china business is on fire. that's a new business for them

going international. he said men's is the best kept secret out there. he's not concerned about the whole category of ath leisure. he said this is fixable. you will see it soon. he says that you'll see some color changes in the stores as soon as next week. will investors buy that argument? clearly not so much today. down 22 cent. >> that's not an insignificant amount down when you lose quarter of a market share. >> wiped out. >> it takes him back to the end of 2015 so you had a rare of a grinding comeback in the stock. i think it's interesting as we were talking under armour and nike are down in sympathy. look, there might be a category issue. not entirely as part of the story. >> so there's this idea that's floating around in the stocks for the last year or so. that ath leisure has peaked as a trend. fashion trends come and go and these ceos will tell you, it's something i talked about last

night, the active lifestyle is here to stay. you think ath leisure has peaked, look at what we posted in the fourth quarter. they have comp store sales that are 20% so they're still seeing the growth. they're above trend when it comes to the other retailers. nike has crept back up since earnings as well so the stocks are getting rerated a whit. is this true, if the category will be alive and well, are they cheap in a retail environment? >> i don't think you can describe it as cheap. i think you're still talking about 20 plus times pe multiple and i think they have said about why are they guidance is weak shows you that's high fashion content and it's a hit driven business. that's a great thing that the category is growing. but clearly customers need a reason to pony up for new merchandise. >> their stuff doesn't go on sale as much which is a pride from the ceo's point of view. >> it makes it more difficult to

invest as opposed to trade these kind of things it would seem if you're at risk of suffering the kind of decline we are seeing today because they got colors wrong. >> without a doubt. they say that fashion content -- look, it's still fashion growth. not easy to find 10 or 12% earnings growth in consumer retail. it's going to retain most of the multiple. i think the street is lukewarm on its. i think less than half the analysts have a buy rating on it. i think it's a -- >> some do like it. i'm oliver chen at cohen saying he's sticking with the bullish argument he believes the company and the ceo, this is a fixable problem. they have been investing a lot in the merchandising to try to sort of ramp that back up. and he expects that to continue. they have got a lot of new product launches in bras. lawyurent said they'll set the a category on fire in the month of may. >> i'm happy to hear that. every time i hear his name i

think of denis potvin, from the islanders -- >> yeah. he doesn't pronounce his name with the inflection. coming up we'll stick with retail. the industry feeling plenty of pain. we will hear from one investor in retail who identified a key theme and that's still hurting the sector. that's david berman and he's next. 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.

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company ceos continuing to meet with president trump as he ramps up his push to boost jobs in the u.s. are top executives using the right approach when it comes to dealing with the president? joining us now from the u.s. council on competitiveness is chad holliday, royal dutch shell chairman, former dupont chairman. good to see you. >> thank you. glad to be here. >> so ceo optimism has jumped to the highest level since 2009 according to the latest business roundtable sentiment indicator. do you share your fellow ceos'

optimism around president trump's agenda? >> well, there's a lot of things that the council on competitiveness what we like about what the current administration's doing. we're focused on those fundamentals to make our country more competitive. you know, labor unions, research universities and businesses all trying to find common ground. and innovation is very much a part of what we think's important for the administration. >> so what policies specifically? i would think you're looking forward to lower corporate tax rates, making america more competitive that way. do you worry at all though -- >> absolutely. >> about tax reform getting done after the health care bill failed? >> oh we're optimistic about tax reform. we want a globally competitive tax rate and there are different techniques to accomplish that. at the council we are not focused on any particular answer but we need to make it global so it's an even playing field across the world. plus, there's so much more trapped cash overseas. if we could find a mechanism to

get an an immediate infusion into the coffers we think it will be a shot in the arm for the economy ligright now. >> do you think any provision for bringing that cash back at the u.s. at a reduced tax rate should or will come along with any terms of strings as to how it's used? part of the attraction is not to not get the tax revenue. >> this is not the first time that the government did that. 15 or 20 years ago we did the same thing and i'd look at what the restrictions were and see if they accomplished the result and perhaps tighten up the restrictions to make sure they're invested in the future competitiveness of our country. but i think it's definitely the right step to do. i'd focus on making it happen and making it happen as fast as possible. give a tight time line so companies are encouraged to do it quickly. >> mr. holliday, just because something needs to happen doesn't mean that washington will make it happen.

i'm not sure your optimism on tax reform is shared by many close to the process right now and it's much more likely we'll end up with a tax cut and repatriation. is that enough to make corporate america feel good? >> i think corporate america is really focused on innovation now. that's what we're talking about here at the council. we're actually in meetings today with a broad cross-section of people and we're excited about opportunities around w biotechnology. more funding for energy research. look at what we did with shale in this country. with the department of energy funding over a couple decades ago, now we have the technology to make the shale revolution possible today. so we're focused very much on those kind of steps that we can be taking and any step forward will be a real progress from what we have seen in the last few years. so we're quite encouraged that real progress will happen. >> on the issue of

competitiveness and climate change, you probably have an interesting perspective as chairman of royal dutch shell. recently the trump administration started rolling back obama era legislation on climate change. he's trying to help the coal industry. do you buy into the argument that critics make that that actually opens up the door for a china or another global power to take the lead on climate change? >> i think the steps that have been taken, the administration will have to make its judgment around that. we're a member of the paris accord. i think that's the right step, you know? at shell we believe that climate change is real. we believe if you look at the past 50 years the next 50 years, clearly the primary cause of climate change is green house gas increases and that caused by human activity and we're taking new steps with energy policies and more use of natural gas to replace coal. we think that are the right steps going forward. i don't see anything that the administration has done that

fundamentally changes the direction that our country is headed. i think it's good for our competitiveness. i don't think it necessarily sets us back at all or gives us a second seat to china. >> you don't think the coal industry in this country can ever really come back, is that what you're saying? >> well, i think we just need to look at fundamental economics and if you look at the economics of natural gas today versus coal, when it comes to power plants the economics are pretty strong. but we don't stop natural gassious ga gassiogas just replacing coal. we look at the ships, and even trucks. i think there's a lot of opportunities for gas and that's osomething we're strong -- that's something we're strong on in this country. where coal can compete, we'll compete. but it's a challenging role. >> and you don't think the trump administration has done anything to change course. they did roll back the attempts to introduce more clean power,

so they're -- and the president does not believe that climate change is real. so you're simply saying you think the marketplace is going to outrun the ability in this administration to change things? >> i wouldn't go that far. what i'm saying is that i think the marketplace looks at the long term consequences and rolling back a ruling for a few years or how ever long it turns out to be until it's replaced with something else i think companies look at fundamental economics that's what we're focused on at the council. i think you find the advances that we made in natural gas, it has a lot of advantage over coal in many places. it doesn't necessarily require regulations to make that happen. >> finally, chad, does an america first policy make us more competitive globally or less competitive globally if we start to pull back from global trade? >> i think global trade is critical to our competitiveness. here at the council we actually

have a federation on councils on competitiveness and we have gone to our counterparts in 25 other countries to understand what what they're doing. what we have concluded is that goeb globalization is a plus and our country should be leading at that because of our technology and capability advantage. many times we don't focus on the fact that we have got the leading research universities in the world. we're turning out the best technology and we need globalization to be able to be rewarded for that work. >> so sounds like you are fighting for the globalization argument away from the america first. chad, thank you for joining us. from the national competitiveness council. chad holliday is the chairman of royal dutch shell, former ceo of dupont. mike? >> well, now let's get up to sue herera with the cnbc news update at this hour. >> good morning, everyone. here's what's happening at this hour. secretary of state rex tillerson meeting with his turkish

counterpart president erdogan and he held a joint news conference where he said that the u.s. was grateful for turkey's contribution to the fight against isis. >> today's conversation's built on three mutual long term goals. working together to defeat daesh, isis, building stability in the region and bolstering economic ties between our two nations. >> a suicide truck bomb targeted a police check point in southern baghdad last night killing 15 people injuring 45 more. the bomber debt nated the vehicle which was an oil tanker laden with explosives. three policemen were dead. north carolina legislators are expected to vote on a repeal of the controversial bathroom bill known as hb 2. this after the state's house speaker and senate leader announced an agreement with the governor two repeal that bill. you're up to date. sara, back to you. >> thank you. when we come back, retail

investor david berman, what his theory is on what's dragging down the sector and what to do next. "squawk on the street" will be right back. 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. 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.

we are looking at a market rally. your session highs, the dow is up 80 points. s&p 500 is up seven. that's 0.3%. taking the lead here, financials, energy and industrials and materials, the trump trade back on. utilities and real estate are down. of course you have yields higher. take a look at shares of conocophilli conocophillips, it is up big after selling oil and natural gas assets to partner synovus. more "squawk on the street" up next. uh, yeah. it's over, larry. what is? the whole wheelie thing. what do you mean? i just got this baby to get around the plant floor. right, but now ge technology monitors every machine.

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fidelity, where smarter investors will always be. welcome back. back in 2013, it was august actually right here at the nyse and my next guest david berman of burman capital introduced samsung, apple and it meant a lot of weakness coming in retail as people used amazon for so many of the purchases and used the wireless devices to not just buy things, but also create community that perhaps they might have once been able to get by going to the mall. david berman joins me now. it was a great call. we have said it many times of course. i don't know if you benefited from it. but we have seen since then weakness across the board more or less in retail, david. so the question is now with saa in full force is that still the story? >> you know, that was -- gee

whiz, that was four years ago. >> almost four years ago in august. >> yeah. every quarter and with you, that people still underestimate the power of this thing called amazon. but working together with apple and samsung. you know, they work together. you have to have an apple and a samsung -- the ipad and the s samsung to be able to buy online. we call it saa, we sort of say that apple takes -- excuse me, when you buy an apple phone, it's -- saa we include that in sales. when you include saa back then it was almost half of the increase. >> so any of the growth was half. where it is now? >> now, this is a pretty good time to be speaking to you because retailers have finished q-4 reporting. and we -- every retailer in the states bottoms out and took three quarters of the growth in america that's coming from saa. it's mind boggling.

so the inverse, 90% plus of the headline stories are negative on retail. >> right. >> and you can't help but read these news headlines every day. you know, target misses. >> macy's. >> sears and macy's misses. every day, you know, you're an investor, geez, things are bad. you kind of forget because the headline news is so everything off. but when you look at the amazon numbers they're so huge. that they more than make up for it to the point that we've got the numbers in the last few days. >> tell us, what does it look like? >> we are seeing an increase of 5.8% in total sales growth including the saa including retail. >> you're telling me three quarters of that growth is made up by amazon largely. you're also including apple numbers as -- >> apple and samsung. apple is stronger. >> yeah. >> so we are. but the remarkable thing is that

the fourth quarter -- which is not unexpected given where we are with the change in the administration and optimism, the remarkable thing is that the fourth quarter jumped quite dramatically from the prior quarters. >> but the point is that the consumer is strong. it's just retail that's weak. >> same theory as four years ago but even more so. yeah. >> all right. but you run a hedge fund that's supposed to invest in retail stocks. you haven't had anything to invest in them, have you? >> sometimes in prior years when i have spoken to you we have managed to talk on the tv about how american eagle, skechers and others have done well -- they do well for a year or two. they have been recluck tant -- we can say not to invest in the retail. >> you can short the stocks -- >> we can short stocks. we have had -- you know, a pretty good time doing that. >> you come on here today, you have nothing to tell us about? >> not what you should try to do is avoid the group.

you know, the amazon is still -- i guess the key take away from this if there is one given that we have the latest numbers, if there was something to use is the fact that the economy in the united states is stronger than people believe it is. and that the back end usually catches up, so you've been seeing strong data you'll continue to see strong data. how does that affect the macro guys in terms of bond yields going up? you're starting to see wage pressures, for example. that's not good. starting to see minor inflation, that's not good. so i'm a little worried about friit from the macro perspective. >> given it's three or four years since you introduced this to our viewers, where does it end? three-quarters of the growth is because of apple, amazon, samsung. are all of these things going to end up in bankruptcy? we should differentiate because

the home improvement guys are doing well. >> and the supermarkets. >> and the supermarkets. but for the other group. >> the main thing would be the balance sheets. i have been trying to encourage management that i speak to a lot not to intbuy -- i just care ab the health of the companies. they keep on buying back shares in -- you know it's not really helping so they get the balance sheets that are becoming worse and worse. the ones that go down are the ones with the bad balance sheets. smaller ones are going bankrupt too. you have some places that are balance sheet issues. >> what do you do if you're in macy's? you have a significant portfolio in there. you're talking omni channel and talking about being able to compete with the likes of amazon. >> i think that's an overused idea. because i think over time people -- you and me we have shopping. we want to go to one place. we want to go to amazon and push

one button. we don't want to go to macy's.com and nordstrom.com and target.com. you have to give me a good reason to go to target.com. >> what if i'm brian cornell at target and i come off not a particularly good quarter? from what i'm hearing you say it's bleak. >> target calls for example we've been saying for a long time are in the eye of the storm. they don't really offer anything particular necessarily amazing for the shopper online. the shopper in the store, target, yes, much better environment. always going to get people to coming to target online. where does it end? a lot of these companies like walmart for example they're doing a better job lowering prices so they're actually doing a lot better. and they can do a lot better. they are realizing this by the way. they've just formed a group to try to get more involved in the internet. they're starting to realize a little bit actually very late. where does it go? the good stores are still going to be good. the guys who have good merchandise will still do well. at some point it will start to slow down. the malls will always be there. they're not going to blow down

the malls. rates will have to come down certainly. they'll be bankruptcies. normal economics. rents come down, they come out of bankruptcy, but the good -- >> there will be a day where you come on and actually have some names to buy? >> well, you're right now could be trading if one was to make money on the trading side, a lot of these names have lowered guidance and numbers have come down a lot. so you could see a company like walmart that's doing okay but some of these other companies have lower numbers, you could see a rally if the market keeps going higher because the first quarter is not a big quarter. so the chance of companies missing again in the next two months, i mean, i'm not saying they're zero, but they're pretty low. over time in the next month or two people get exuberant, start buying, it's a good time. you're now coming off a period when they all reported the big, big fourth quarter. and the big fourth quarter you couldn't really play around with the numbers. it is what it is. so they miss numbers. this could be a good time to invest from a trading perspective. >> david, we have to leave it

there but we know you'll be back to keep us up-to-date on this ongoing theme in retail. thank you. >> thanks a lot, david. >> david berman, durban capital. >> thank you very much. let's send it to jon fortt for a look at what's coming up on "squawk alley." >> we have samsung's galaxy s8. we'll have it onset. look at the latest in the smartphone wars. phone so far getting rave reviews. also the ceos of deere and u.s. steel talking about what's coming for the economy and trade. all that and more coming up on "squawk alley." for walking me th 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.

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markets firmly higher as we head to 11:00. you see the dow up 82. s&p 500 up about a third of 1%. you had that upward revision to fourth quarter gdp. it's old data, but the bond markets seem to take notice of it. and the yields went up. and financials, sara, followed the lead. we have oil up a little bit. so energy as well. so the aggressive cyclical sectors are carrying the market higher. we had that low on monday in the s&p. didn't really approach it again and seems like people think we can recover from there. >> turning the month of march positive for the s&p. goldman leading the dow. nike is the worst performer after lululemon craters down 20%. as we head to break, hooerere's

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welcome back to "squawk on the street," i'm jackie deangles. the last day of the quarter is coming tomorrow, take a look at how crude prices have fared. loss is roughly 7% part of that due to the concerns opec production cut is not enough to support the market. still, this quarter's losses have been tempered by inventori inventories paring bit here. we see this phenomenon every year, prices get a lift starting april until the peak, which is around july 4th. also worth a mention, fact set estimates the s&p 500 will see about 9% earnings growth in the first quarter. and the sector contributing the most, that's energy because of the relatively higher oil price. remember, mid february of last year prices were roughly $26 a barrel. and that hurt energy stocks.

now let's send it back to "squawk alley." >> all right, thank you, jackie. good morning. it is 6:00 p.m. at the kremlin in moscow. 11:00 a.m. here on wall street. and "squawk alley" is live. ♪ ♪ keep your eye on the road, your hand up on the wheel ♪ good morning, it's my lucky morning. i'm jon fortt at our post nine. our own kelly evans and sara eisen. it's like a month with an extra paycheck. good morning to both of you. >> female takeover. >> all right. turning to the big news of the morning, russian president vladimir putin saying he's denying his administration played any role in th