the 10 year note is still yielding right around -- yeah, still just under 2.4%. >> showing some oil while we're at it. >> yeah. >> wti crude, 5074. make sure you join us tomorrow. "squawk on the street" begins right now. ♪ good monday morning. welcome to "squawk on the street" i'm carl quintanilla. welcome to april and q2. complete with global pmi's, we have auto numbers on deck. europe is mixed, ism coming in at the top of the hour. and crude is still hovering around 50. we begin with the global markets where they left off the modest .

the investors are watching for signs of trump progress. >> and apple is up 24% in the first three months of the year. the best gain that stock has had in five years. >> and musk for the win. tesla delivered a record 25,000 cars. were others able to keep the pace? first up, despite the dow and s&p snapping four month win streaks in march investors have reason to smile. dow and s&p each extending the quarterly winning streaks to six while the nasdaq outperforms both in q1 with a 9.8% gain. april, jim, is seasonally strong. haven't had all three down since '05 in the month. >> we'll get earnings. i think the industrials which have kind of plateaued, the banks, are going to be up first. for the most part if you get the dollar to stay weaker, you hear about international orders i don't know if anyone saw that european pmi, but europe is

strong. they could lead a lot of the industrials. asia better. but i think that we're going to start off coming in hot for earnings season. i think we -- a lot of companies will make their numbers, beat rates. that's going to change things because this last bit was nasdaq. the last six weeks were nasdaq. those were all the companies that do well when the economy is a little weaker. >> european pmi, 562, a 71 month high. employment in europe an eight year low. >> but they're still -- they still have the ridiculously low interest rates. i think that keeps pressure on us to have low interest rates. why should you borrow and lose money instantly in germany. which the last auction failed. the two year failed so money is coming here. i think -- i wonder how strong our country was in the month of march. i just got a sense that some of the infighting in washington kind of took some of the steam out. thank heavens for the rest of the world. >> you're referring to consumer

spending on friday. we'll get another clue on auto sales today. >> yeah. i know that phil was talking about peak numbers. i think there might have been -- when i see all of the really classic fast growing nasdaq companies do well, i tend to think that's people huddled in what companies can do well regardless of the economy. not as good a sign as we had say at the beginning of the quarter when the industrials led. it does matter. >> certainly retailers took some wind out of the sails in q1. under armour cut today at fbr -- to sell. >> you heard that barron's story. dispersion on -- >> yeah, i think the lululemon stink pants still hovering over that situation. i think that it's interesting this morning jay jill gets a lot of recommendations. it's less brick and mortar and more -- it's really an online

company where the margins are higher online. so i think there's a lot of different cross currents in apparel and in retamil. the one that does well is walmart. there could be a border tax because they do better because they have a great balance sheet. amazon keeps to power higher. amazon has the $1,000 feel. i know there are momentum players, listen, why do i have to be in any retailer? i'll be in amazon. and, you know, people can make the mistake sometimes of assuming somehow that the consumer is weak because retail is weak. that's not the case. >> online -- >> it's fairly strong. but retail continues to be weak. what was the point you were making about the border tax and walmart? i lost you there. >> i think that walmart -- if you do a border tax they're the one that has the most balance sheet wherewithal. so they may not have to pass on the prices. i look at the jcpenney and the target. i think they have to pass on some higher prices. wall matter can eat the margin. >> border tax does not seem to be something that's given a lot

of credence at this point as being able to pass if it is even included in what we see as a bill and for tax reform if we get one. >> true. but i think the republicans are split. therefore, perhaps nothing will get done. i think this economic team is much stronger in the white house than their health care team. >> well, we're still waiting for mnuchin and cohn to come up with the white house plan. >> politico saying two things. one, they won't outsource the writing of this draft to congress. >> yeah. >> it will be drafted in house. and two, that mnuchin that the draft that's currently being written does not include b.a.t. we have heard both sides before. >> look, if that's the case i think there's some a compromise and get some tax relief. and that would be very good but you need to see it. if these huge first quarter numbers are going to continue, you need to see some relief. >> right. we can have the same conversation, we will probably for quite some time, you say

that -- okay, that'll be already. >> you want me to flip and take your side? >> not exactly what i'm looking for here. i guess we'll end up having the same conversation a lot. >> no, we're going to vary it. unless the markets -- the market -- the investors still seem willing to believe that whatever comes will be enough to justify the levels that the market has gone to. >> i think there won't be something. this is not health care. i continue to believe that the mainstream press is wrong. that the idea that they're a -- a tax cut will be somehow not liked. people love tax cuts. they don't like it when you mess with your health care. don't mess with my health care, but cut taxes, i'm game. i want higher taxes. who ever wanted higher taxes? name me someone. >> who was it on the hill who said the irs unlike the aca has few defenders. >> yes. >> it's true. yes. a swvery good point. other in fredonia, they're

willing to take up the taxes. remember? >> yes, i do. i know he's a big marx brothers fan as well. >> yeah. the president meantime is talking tough about both china and north korea ahead of a u.s. visit by chinese president xi later this week. quote, china has great influence over north korea and china will decide to help us with north korea or they won't. ft asks what's the incentive? and the president responds i think it's the trade, i think it's all about trade. when you talk about currency manipulation, talk about devaluations they're world champions and our country hasn't had a clue. pretty interesting transcript, they definitely give a big play on top of the fold here on the ft. >> i think this is the end of the policy of we continue to appease north korea. let's feed them and hope they go get better, no. let's pressure the chinese because the chinese if you do a pinzer move, then i think the north koreans which are paper tiger other than nuclear weapons which therefore makes them a real tiger i think if the chinese clamp down on north

korea it's a win. i don't know, it's in china's interest to clamp down on north korea but everybody is afraid. doesn't sound like we're afraid anymore. tillerson is not afraid. >> people point to the peso in the q1. and argue that trade is less of a concern because of the performance in multi -- u.s. multinationals. >> well, you know, i was going back and forth with some people in the administration about the idea that when you shut up about mexico the peso goes from 22 to 18. you know? that's big windfall. remember the peso is the way they manipulate it. they -- the peso is the number one differential. then wages. then health care. then pension. then environmental destruction. mexico -- >> this administration has continued to focus on the trade deficit led by trade adviser peter navarro. it does mystify a number of economists who feel that's not a real reflection and one that you should be focused on in terms of

economic weakness. our large trade deficit and the president continues to call out china as a that anyomanipulator. they have not been lowering their currency for quite some time. >> one of the things that navarro represents the extreme. i think it will be case by case. that's what i keep hearing, it's no longer going to be broad and just everything. i want to hear what constellation brands has to say on thursday because remember it's so hard to make mexican beer in america. they are on the front lines and i think they're very much involved with what's happening in washington. i think it will be much more subtle and nuanced. i think there are some industries that are -- that we're going to defend ourselves. just the way that obama defended us in steel. i mean, people forget obama saved ak steel and u.s. steel. obviously, you'd like to think they saved themselves but obama put through some big tariffs.

we forget anything that obama did, but he was a fair trader in the end, trying to keep the chinese and koreans from making steel, to keep their people employed and dumping it here. obama ended that. and that's important. >> well, speaking of defense, certainly one of the most important things on the agenda between trump and xi jinping will be north korea. >> right. >> geopolitics not something that the investors are focused on all the time, but it can raise its head as being a key issue. as north korea continues to advance towards the ballistic missile that can carry a nuclear warhead as far as los angeles you might imagine that's going to be a key problem for this administration to deal with. >> yes. >> and to potentially deal with china on. >> right. remember the administration is a little stuck. the worst so-called trading partners is south korea. where in order to be able to make it so they're a bulwark of democracy, we let them sell as

many cars as they want here. we are not allowed to sell -- barely a handful of cars there. but that's part of the old foreign policy that i think a lot of the foreign policy objectives are being rejected. the foreign policy that made it so our workers were sacrificed is something that the trump administration is elle a i wi-- really close to. the idea you go to china, forget south korea i think it's very important. because the u.s. is no longer inclined to continue to subsidize south korea either. >> no. that's definitely the case. we are watching these reports at least ten people are reported to have been killed by explosions at two metro stations in st. peters burg, russia. the cause of the explosions is not yet clear and putin is considering all possibilities including terrorism. additional security measures have been taken. as we get more information on that this morning, it looks -- very difficult over there this morning. >> hard-liners. remember.

hard-liners. they have gone after terrorists in their country in a way that is pretty much different from everybody else in the world. >> been pointed out putin is the former deputy mayor of st. petersburg. tesla hit the delivery thisthi thises morning. we kick off the month of april and the second quarter. more "squawk" in a moment. in july of '98.the y our 18 year old was in an accident. when i call usaa it was that voice asking me, "is your daughter ok?" that's where i felt relief. we're the rivera family, and we will be with usaa for life. please repeat the objective.

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getting auto sales today, let's start with ford. phil? >> and carl, ford out with the numbers a decline of 7.3% for the month of march. a little better from the edmond edmund's. remember, we're comparing with a march of last year that was not terribly strong relative to other marches. the overall industry sales rate is expected to come in at 17.2, 17.3 million. which would be an improvement compared to march of last year. again, ford coming in with sales dropping 7.3%. car sales, this is the one that's going to get some attention dowhere, down 27%.

it's peak autos we'll see the sales fall off a cliff from here. because we're a lot of warning signs out there. remember the number one indicator in terms of auto sales, consumer confidence. if that remains high, generally speaking, you will see auto sales remain relatively high. back to you. >> phil, we'll be coming back in a moment for gm. we have this discussion every month, and you resist the peak auto argument. >> i think employment and confidence go hand in hand. i think employment -- i don't know about this number. the march month because of what happened in washington may bring down consumer confidence, but phil is right. i think that what's happened is that in this particular case, ford is very much an f-150, 250. i saw the announcement about the 250 news. i have to see what everybody has to say. >> a study out today, "usa today" reports that ford is leading the self-driving pack

ahead of wamo and ahead of tesla and uber. remember the preannouncement -- >> the story is wrong. you have -- you have the numbers. they're right from the california motor vehicle department. the issue is how many people have to get involved when their car has a problem and i don't know. i have looked up the numbers. s these -- these numbers do not jibe. can we talk about the how big scare they were so afraid that advertisers were so afraid they'll be matched against terrible --ternab terrible camp or whatever. hate campaigns in google. it looks like the problem has been solved. i urge people to go to the california motor vehicle site and talks about the most critical metric. how often does the human have to get involved and way-mow is so

far ahead. it's not worth discussing. >> tesla is up in the premarket. it announced it delivered 25,000 vehicles in the first three months of the year. that's tesla's highest ever quarterly total, up 69% from a year earlier. the company aiming to deliver 50,000 vehicles in the first half of this year. stock's almost at 290. >> look, when ten cent put the money in it solved -- it solved all the capital problems. now you're starting to hear about model 3. remember how many times tesla missed the numbers in terms of deliveries. this is a make of the number and i think it's clear sailing. clear sailing for the stock because they don't need to raise any more capital. >> they may need to raise more capital. >> next year. >> yeah. but the belief is that ten cent will be there in the future as well and willing to take a larger ownership -- they're around 5%. >> can you explain how big ten cent is.

>> they're hundreds of billions. they're enormous. >> hundreds of billions, right, so that answers the question about -- in other words, the check they wrote for almost $2 billion was not something that put them in economic straits. >> no. they're not in any concern about that. >> it's not just -- >> the relationship they're cementing and conceivably could lead to big things for both of the companies. but it may go nowhere. but they have an economic ownership in tesla. >> we have to talk about the tesla monthly numbers at a certain point as bizarre as that is. >> an open price would be at an all time high on tesla. >> very short after they got that capital. and including goldman who has a sell on it and did the deal and that's ill advised. >> we diskudzed that last week. >> i have new things. >> i know you do. >> we have a lot of time to fill. >> as does elon musk, a lot of

time to fill. >> he's reusing the rockets. >> he's moved on tesla and solarcity. now he's dealing with the brain thing and the hyperloop -- >> did you catch john cena proposing this weekend? that was something. wwe. >> nice ring. >> huge ring. wwe -- they're starting to do much better subscriptions. i think there's new things. that just happened. >> wwe, they were here last week. >> i'm telling you the numbers are going to jump for them. these kind of events -- the snobs on wall street don't realize how big wwe is. >> but they do know how big john cena is. >> very big. >> very large. >> bell ringer. >> i think this matters. >> when we come back we'll get cramer's "mad dash." look at the premarket on the first day of the quarter, back in just a moment. see things your way. ♪ ♪ you have access to the right information

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♪ well, it is an monday, it is officially spring given the weather yesterday. the mets opening day today. >> good luck. >> that marks the beginning of spring for me. >> yes. >> it's a "mad dash" for this monday as well. >> you were learning about mergers on friday in tulane. okay. in the meantime -- >> i wish i had been but yes. >> well, in the meantime, a very important merger and swap occurred where dupont swapped for -- to fmc. they swapped their product protection the early stage. fmc gave them really a supplements business.

david, this prop protection that fmc got makes them a pure play ag. you know how scarce ag companies are ahead of a pretty good cycle and they have a lithium battery division they're talking about spinning it off. lithium, think tesla. the number is raised by four different firms. >> friday it did react to the news already. >> it reacted. >> as we see. >> it's -- people realize, wow, if monsanto merges with beyer, there's a shortage of pure ag plays and people love the ag business. once there's such consolidation, we know that the regulators don't want to hear this, maybe there's more pricing let's say -- let's say less pricing flexibility. >> these are deals with lack of competition. >> did i say that? >> or at least the marketplace might begin to think. so these guys get rid of the

lithium battery thing it will be a pure play. >> everyone wants lithium because which don't have pure plays. everyone wants prop protection. by spinning off lithium, they're a pure prop play and they have a lithium division that becomes an independent company. that means the stock can go much higher. >> got it. speaking of spinoffs and new companies we'll have csc which is now dxc ringing the opening bell. >> anybody who has hb gets 0.85 of this company. >> that's right. we'll look at how the stocks are performing in 4 1/2 minutes. ♪

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you're watching cnbc's "squawk on the street" live from the financial xcapital of the world. the opening bell in a minute and a half. as we enter q2 best quarter since the fourth quarter of '15. hasn't lost ground in a q1 since '09. can you believe that? >> yeah, that's incredible. maybe we should be aniy thinkina fund flow to come into the market. it's too ritualistic to think

it's happenstance. there's money being committed but not to individual stocks but evide etfs that are so loved. warren buffett loves the one. i don't lo of the little guys. if you look at the stocks all the health care traded together. it's the etfization of the market. the rest of the world was good too. you can't -- the emerging markets were good. europe was really good. actually europe was stronger in the month of march. >> and we're about to get our own ism in half an hour. the estimate is 568. february was 577. that was the best number since august of '14. some people did say maybe there was a little more dispersion of pmis this month. >> yeah. i want to be careful. the u.s. consumer went a

little -- there was a little pause. >> let's get to the opening bell. at the big board today it's dxc technology, a spinoff of the merger between computer sciences and hewlett-packard enterprises. at the nasdaq, the independent petroleum association of america. as crude hangs on to 15 1/2. >> well, a lot of people like -- a lot of people like the new company with just the csc, hewlett-packard enterprises services business. >> we should make -- >> enterprise. >> not hewlett-packard enterprises in its totally. this deal announced quite some time ago and now if you're a hp shareholder you own 51% of the whole company. >> my charitable trust owns hp. last quarter they mentioned if you recall, meg whitman said there was not a lack -- perfect execution.

i think this deal being done is going to help. but if you want to know more about it, bernstein has a piece. one is saying that maybe dxc is too fully valued. if you want to know what dxv does, for instance, procter & gamble had a lot of business on the mainframe, so you had to move from the mainframe to the 21st century. so you hire this company to move to the 21th sun churrentury and that's something they can do for you. >> and it's new gap numbers and new gaap diluted eps. we can look at the performance of both of the stocks and fill people in on the numbers as well. >> let's get to gm. interesting number here. phil lebeau in chicago. >> this is notten an encouragin number.

sales are rising 1.6%, well below of 9.6%. there are two figures from the gm sales release. they're going to get some attention because it will be troubling to some people. the first being that their prediction for the industry sales, the rate of sales this month is just $17 million. most will saying it will be 17.2, 17.3. it's not as optimistic as many thought. inventory, in this supply you want your day supply to be about 70, maybe 75 at the most. industries -- gm's day supply for vehicles at the end of last month, 98. 98 day supply. so there's an example of the inventory backing up gm sales are up 1.6% below the estimate of an increase of 9.6%. back to you. >> all right. phil, thanks for those internals. >> well, that's very disappointing. that's very disappointing. i know that there's a lot of hoopla about einhorn's proposal being able to separate the the

two streams. the income stream and the dividend stream and the stock is now back to where it was when einhorn proposed that. >> a lot of hoopla, it didn't lass lo last long. it was completely rejected by gm that said it had reviewed the proposal for a number of months. went and got a lot of investment bankers to weigh in. officially decided against -- firmly decided against it. i don't know what einhorn will do, try to move to the proxy fight. >> the fundamentals are asserting theptiasser asserting themselves in a negative way. >> they're bad. >> suddenly bad? they weren't bad last week. >> no, these march numbers changed your views entirely? >> no. remember, i have been saying that i think that month of march was not as strong in our country. and kind of unfortunately confirms that. >> geez. >> i'm telling you, march was not a great month. not a great month. washington -- >> you pointed to washington. >> it hurt. >> do you think inflation is

sort of taking a bite out of any spending? >> no. look, i think that what's happened is i think people just kind of felt that the u.s. was headed on the right course, that you had all -- you had congress and the president in agreement. it turned out they weren't. i think people are kind of really taken aback by it. i know it shouldn't matter what happens in washington shouldn't affect the psyche but i think something did happen. numbers were not that strong. >> why was confidence so elevated then? >> i think that measure is previous before things went really nuts. when i say really nuts, i think there was a lot more rancor than people realized. i think there was a notion coming into health care that there would be things done in washington. now i think that there's a perception that maybe that was premature. it matters. it matters to what the small business people think. small business is -- well, actually they -- remember, small business is a big buyer. i don't like to see that

inventory number. that gives me cause more than anything. because that means more discounting. but let's see what the employment number finds. that's an important number. this week seems devoid of news. untrue. fed people speaking today. that number on friday is very important. >> yeah. we're. >>ing -- we'll get to doug lead out of new york. as we go into the minutes on wednesday, jim, where people are hoping for some clarity on timing of discussion of balance sheet, how they coordinate that with the end of the -- or a pause in the rate hike stuff. >> i know that steve leishman had a good report today, waiting to sell the bonds. there's tremendous demand for bonds right now. i don't know why they're taking it up later. tremendous demand. i mean, the most i have seen in my career. because it's international. not just here. just really huge demand for bonds. >> for bonds overall? >> yeah. >> not just sovereign bonds, but

corporate bonds as well? or are you making -- >> there's demand for higher yield. >> there's a demand for higher yield. interestingly at this conference i attended, kurt simon from jpmorgan kept talking about the possibility of a $100 billion deal in terms of being able to be financed. >> that's unilever. >> yes. that would be -- you'd be able to finance that or, you know, verizon charter. i mean, $100 billion advance -- >> what -- >> no, nothing going on as far as i'm aware. >> why did you pick those two? >> because charter -- to your point, that there is a lot of demand for bonds. i am pointing out that there was a banker who was basically advertising at a conference full of mma professionals. think they can do $100 billion financing for a deal. >> that happens every year. another place where people kind of chatter, this would be interesting and that would be interesting? >> yeah. >> just chatter?

>> just chatter. >> and some good meals. >> in new orleans. >> that's why i recommend people go to new orleans. make the reservations first. you can't get up to the restaurants. >> no, you can't. >> starbucks by the way, today is the first official day that kevin johnson is ceo. >> i wish when the people when they read the articles, not say what are we doing with a tech guy. look at domino's, pat doyle said you know what, we have to become technologically proficient. half the people in their headquarters are tech people, try to figure out ways to be able to get a pizza to you. what is the biggest problem of starbucks? how to be able to solve the mobile pay conundrum and what's going on? well, you need a technologist. kevin johnson is that technologist. >> you talked to johnson on "mad money." >> i think he's strong for this. >> march 22nd. take a listen. >> anyone stepping in this role would acknowledge that they have venti shoes to fill. my good friend and my partner howard is someone that i have

the utmost respect for. you know, i'd say first and foremost we have known each other for a long time. we have worked with each other. intimately for the last two years. we have co-authored this five year strategic plan and he's in the office right next door to me. so that gives me some comfort that, you know, not only do we have the opportunity, but we've got the leadership and the world class leadership team to take us into the future. >> yes. >> venti shoes to fill, i like that. >> yes. but remember howard is staying on as executive chairman. going to be involved with the top part of the pyramid of starbucks which is reserve and roastry. which they believe will move the needle in the next couple of years. if it's a technology problem, why don't you get a guy who understands technology which is kevin. kevin johnson. they have adam broten on this thing. the u.s. sales have been the drag. and howard said on "mad money" that they will solve the problem of through put, not unlike what

panera did. remember their stock went up 70 points when they solved that problem. the stores that they have made the changes in, adding a barista, starting to reconfigure the whole traffic flow at starbucks. have led to much higher comp store sales. it's a second half this thing. this quarter is going to reflect problems, but howard schultz assured me this thing will be solved. i'll take howard schultz at his word. >> we have not mentioned apple this morning, saying they're going to essentially make their own graphics chips. dumping a supplier out of the uk called imagination tech whose shares fell two-thirds. >> when apple drops you, you never -- you had a company that made certain kind of screen, certain kind of glass that they dropped. and this is why everyone is so afraid to have apple be such a big part of their business because you're just too dependent. i know that no one wants to be

depend deb dependent on cell phones either because they're slowing. if you're not the internet of things, like qualcomm is buying nxb and they're 6 1/2 points from where the stock is going to be. the regulators -- there must be some issue. but there is a tremendous excitement about being in the apple iphone 8. whether it be from cyprus, corvo, and these companies are being taken up. sirius logic, i don't like to use the word super cycle but it matters. nvidia is coming back. the internet chips. >> i remember it well. it was the best performer of last year. >> it's been marking time. not marking time anymore. >> it's coming back. >> coming back. >> exactly. >> been a horrible road for nvidia which is up how much? >> up 200% last year. we went over nvidia constantly.

like the other topics we go over. nvidia we talked about a lot. >> we talk about it a lot. >> and panera they solved the mobile pay issues. >> they had the through put problem dealt with. >> through put is important. that's how xip xchipotle had a through put problem and chipotle is coming back and i know that's somewhat controversial. >> 12 months, 201%. wow. very nice gain. and some of the tech gainers in q1 an the s&p are all -- >> oh, geez. >> semiconductor rematlated. >> i read flash is up 14% and in the last month there's such a shortage of flash. remember the semiconductor equipment companies which have been the best. like lamm research, that ease because there's -- that's because there's so much demand for plain old flash. >> you know in my world the best

performing stock in the first quarter was viacom. >> i know. by the way, good deal not to sell it to cbs which was unwilling to pay much of a premium at all. the stock was well beyond what cbs would have envisioned to pay -- >> that's your world, huh? >> the two companies get together. >> that's your world. mine is kirby's fourth world. >> if you had bought that stock when bob took over, you're very happy. >> viacom and cbs. remember, there's a scarceity value because of time warner buying back the stocks. >> i think a double grade. double grade. although time warner is trading well below the implied price of the deal. now that you mention that. >> by the way, guys, auto parts makers are leading the list of losers too. carmax, autozone. >> and there were positive notes

and there were bad things said about the auto parts -- the auto parts stores. carmax, wow. being assassinated there. that's remember new and used. auto sales has a big buy back. i would not sell that down here. they come in at 10:00. they start buying you're going to look a little dumb if you keep selling. >> all right. dow is up 17. let's get over to bob pisani on the floor. >> good morning. happy monday. happy first trading day of april. 2 to 1 advancing declining stocks. nice open here. look at the sectors it often happens in first day of the new quarters, the losers are the winners and winners are the losers. so we had trouble with banks stocks and it started to the upside. energy started to the up yside. and tech was the big winner. some stocks for sale but it's moved to the positive area. industrials moving sideways for a little while now. start of the second quarter i

described the market last week as a solid hold. why? the last three weeks of march kind of sideways action. kind of choppy and there wasn't a lot of buying interest. not a lot of buying interest at all. but not a lot of selling pressure. nobody tried to sell the market in a dramatic way. volatility is low. vix are 11 or 12 and the volume was notably light. less light volume there. let's talk about what the good news is overall here. tax season trends. so normally we start seeing some kind of weakness in the first two weeks of an april. that's fairly typical. these are our friends at kensho. but this is usually at trik contributed to tax seen -- attributed to tax season. we see technicals and technology does better in the second half and financials. all up about 2% in the second half of the year. also, the other thing that tends to do well right now is the earnings situation. besides everybody being obsessed

with the trump agenda earnings are going to be great. barron's had a big story this week. grand slam quarter for earnings. we have been talking about this for several weeks. the s&p poised to increase earnings 10%. that would be the best quarter if this happened in nearly six years. but in particular the two biggest sectors, tech and financials, poised for 15% gains. that's not a typo. i know that sounds absurd. 594%. but we were deeply negative in the numbers last year. that's why i keep saying energy companies are having big turn arounds this year. that's why the price of oil becomes very important. because a lot of them of course get better and more economically viable as we get oil towards $60. a lot rising on what oil is doing. another sector turning around is the ipo business. i said a month ago there's some week we'll see 6, 7 ipos come out. if they all come we might have six ipos including some big transport companies.

snyder national, supposed to go on thursday. they call dhethemselves the sec biggest trucking company out there. then we have the brazil's third largest airline run by jetblue's founder david meal ayman. that should be coming out on friday here on the stock exchange. that's azulle. then hess and g -- that's the pipelines essentially, that'll be trading on wednesday. we even have a coal company, a coal company that announced this morning here. that's warrior met coal. they produce metallurgical coal. they should be trading some time next week if this goes. why are we getting all the ipos suddenly? not only is the market better, but the ipo aftermarket has been better. the ipos have been coming in the last six months have been doing notably better. there's the s&p 500 and then the ipo, renaissance, a basket of

about of 660 ipos. it's up about 12% so far, versus 6% for the s&p 500. as i said many times market's the primary determinant and after market performance of ipos and they have improved notably in the last couple of months. that's major factor why suddenly the market is opening. six potential ipos this week. we'll keep an eye on that. the dow is up 17 points. carl, back to you. >> thank you very much, bob pisani. a lot more on apple's record run and what to expect in the second quarter as we go to break a look at the movement in treasuries this morning. checking out the ten year, right around 2384. back in a minute.

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allows us to look back on q1 and talk about the leaders and laggards on the s&p. vertex, atvi among the best gainers. >> nrg it got oversold. vertex is that fantastic hopefully cystic fibrosis drug. you know, arcanic, a split-up for alcoa. can i point out that we are in the couch economy. activision, these companies are doing quite well. incyte had a deal this week. >> investing in east ports a lot. people watch these -- >> i know. >> the competitions between gamers. >> well, take two has -- trying to be involved in showing the sports. they sold out the boston garden in two minutes when they did it. that's by the way if you want to play that, it's really, really hard, you know? if you want an investment.

but i recommend lodge atech which has the fastest keyboards. >> laggards. almost all retail. under armour, signet is in there. your face -- >> boy, "the washington post" article about signet. i just got the under armour downgrade, you know, under armour madness out of bounds for now. rebounding. this is a lot -- under armour got into kohl's, nike has a gigantic business in kohl's. there will be some price -- you know, there's a war going on and winter has been footlocker which is one of only two mall -- i should say j jill. but footlocker and children's place are the only winners in the mall. burlington has been unbelievable as a strip mall player. >> did you see nine retailer bankruptcies this year.

>> shrink to not grow, shrink to -- >> just to survive. >> yeah, i mean, gamestop, wow. i mean, they closed another 200 stores. talk about a mall based -- >> we'll get stock trading with jim in a moment. the dow's up nine. e*trade's powerful trading tools, give you access to in-depth analysis, and a team of experienced traders ready to help if you need it. it's like having the power of a trading floor, wherever you are. it's your trade. e*trade

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time for cramer's -- >> here's one, hold to sell acen szczur. they expect bookings to slow. they're killing the stock. i thought the quarter was fine. they gave guidance that was a little bit light. i thought it was under promised, overdelivered. i'm not in a rush to sell acen chur. it's been guiding companies how to go to the web and a lot of companies don't know how to do it. by the way, that's what the company that rang the bell does. how do you go on the web? i mean a lot of companies don't really know how to do it. and they need help from outside. >> yes. >> because they're good at what they do, but they're not good at what they don't know. >> by the way, jim, nasdaq all time high, amazon all time high will help out. >> unbelievable. well, i have the fastest grower that i'm going to reveal tonight on "mad money." i'm not going to say it here because that's what's called a

tease in the business. >> fastest grower. >> fastest grower. >> period? >> yes, period. yes. so you want to tune in. as opposed to -- >> small or large -- >> come on, if you pin it down, people will guess it. talk about the same old things. all we do is talk about the same old things. that's a nontease. >> 15 hours a day we have live. >> that's good. no repeats. >> jim, see you tonight. "mad money," 6:00 p.m. the road ahead for apple after the record setting quarter. the dow is up six points. don't go away. that's not good. [ engines rev ] rated pg-13. ♪ rated pg-13. guyhey nicole, happening here? this is my new alert system for whenever anything happens in the market.

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>> all right. the dow has not fallen in the month of april since 2005. can it hold on to its gains? look at the markets resilience to possible threats that may lie ahead. and washington watch, world leaders making their way to the white house this week. look at the economic agenda ahead, go live to d.c. and plus apple shares are shining. they gained 24%, the best quarterly performance in five years. details and analysis straight ahead. okay, it's the first quarter coming to an end, record highs for the major indices as we begin q2. tech is outpacing the dow and 500 and hitting an all time high today. on the first trading day of the second quarter, what will impact market sentiment? joining us here at post 9 is the chief investment strategist at oppenheimer and mike santoli. gentlemen, the first day of a new quarter. try to rethink our positions. like we mentioned markets close

to all time highs. even though we have stalled lately. bond markets sending very different signals that it's worried about something that economic growth is is not going to live up to the expectations of the stock market. who's right, john? >> i think the equity market is really right and the fed is not likely to be as aggressive as it initially thought. i actually think we've seen a whit of a rebound in the bond market. i think it moved ahead lower of the meeting there. economic data softer that's come out and perhaps we can just grind higher here. >> you know, ultimately we're still talking about corporate tax reform. whether or not that's going to deliver earnings to the bottom line for all these companies. what i'm surprised about is the retailers today. we get this report out of politico that the border adjustment tax is not going to be part of treasury secretary mnuchin's plan for corporate tax

reform. they're not doing much today. >> they're not. it's been hard to separate out expectations of the threat of a potential border adjustment tax to retailers with the general secular decline story that's weighing down that group for a while now. i think more broadly though i don't think the market is particularly closely priced for any specific policy outcome when it comes to taxes. i think there's this general sense out there that there's a range of probabilities. the worst case scenario is status quo and plus deregulation. the best case is add a few bucks to earnings next year. the fact that other stuff is working, look to the earnings growth in the second half that's projected and the rest of it means you don't have to hinge everything on what might come out of washington. that's the way i'm reading it right now. i think the whole question that you set up, michelle, of expectations versus reality, bond market versus stock market is one of the big questions you have to kind of put to the -- >> the key phrase in there everything else working in the absence of policy. what happens when consumer

spending softens, auto sales disappoints? this pmi is no good to this point, john. >> you have to recognize that the numbers can be volatile so you need to see a weaker series to get concerned. as it is right now, based on what we have seen of late, it looks like first quarter earnings season is likely to be a very nice earnings season. a lot of positive surprises and likely growth of around 9% or better for earnings the first quarter. then interest rates are relatively low. especially based on expectations that we saw in the fourth quarter. dollar is weak. gosh, things dornn't look so ba >> a muddle through year is not what you're priced for here with stocks. i think it would be air pockets in earnings if you're not getting them come through as you expect. if you see the normal rate of decline in earnings forecast for 2017 that you see in a year, the market's trading above 19 times this year's earnings. it's stretched so it will have

some vulnerabilities. >> you sound optimistic. do you buy some sectors that have been laggards, are they going to catch up? the financials haven't done what you'd expect considering. >> we had been overweight financials last year at one point, then we moved back to a market weight when we realized that it just didn't look like we'd get the kind of lift in terms of the net margin spread for financials. but we would think financials look good here. health care continues to look attractive and still it's begun to rally. but it likely still has more -- >> still trades at a discount to the market. >> absolutely. >> and then in addition to that, technology continues to look like a good run. >> really? even with the nasdaq far outperforming up almost 10%, names like apple as we mentioned, 24%. amazon 18 or 19%. you had some significant moves in those stocks that make up a lot of that technology area.

>> you certainly did but the likelihood is that technology will feed into materials and industrials. consumer discretionary to make those sectors more efficient going forward. if we do get the infrastructure spend i don't think we'll get this year. but we might get the package outline significantly. those sectors may move up nicely. that would be good for tech because tech would get some investment from the outfits to increase efficiencies. >> bombing in st. petersburg, nobody blinks. just like what we saw with the comparable situation in the uk last week. i mean, we are inured to terrorist events at this point. >> yeah, especially when they seem as if they're kind of these sort of localized -- obviously as damaging as they can be, i remember this after 9/11 for a while you had the markets sell off and now it's back -- basically a part of the scene. i don't think that's a question, but more broadly a lot of people are pointing to the fact that

the market seems too calm in general. basically too unnaturalable. the vix below 10. it's should be nor jumpy. the market's demonstrated behavior has been so steady and the sectors are kind of offsetting one another, i think it kind of explains why it's been this way. >> the front page of the ft, huge story that donald trump says he'll go it alone on north korea. as we -- as he meets with xi later this week and this fear about a possible nuclear attack by north korea at some point, do you think about that at all? how does one possibly calculate that when trying to decide do i buy biotech or not? >> having been through the cuban missile boy as a little boy, but old enough to remember the negative projection around it. i don't consider the push is going to come to shove on this. if anything, this is a considerable amount of rhetoric, necessary vocal response.

perhaps too much theatrical response in some ways. plus the british press tends to really jump at trump whenever they can. just consider the front pages of the economist since the election. >> touche. >> it was his words. >> i mean, do you doubt he said it? >> i don't doubt he said it, michelle. but it's just -- they feed off each other. let's face it, the british press and donald trump are a very interesting match. i should say president donald trump. >> we're all getting used to it. thanks, john. >> what a busy morning it has been in the car business. we have got auto sales for the month. tesla delivering 25,000 vehicles in q1. our phil below lebeau has all t numbers. >> they're mainly losers right now, when you look at the major automakers in this country. three of the four reported less than expected for march sales. let's start first off with toyota. sales last month down 2.1%.

the expectation from edmund's was for an increase of 1.2%. fiat chrysler reported negative sales, dropping 4.6%. well below the expectation of an increase of 2.7%. also saw bad numbers or relatively bad numbers from general motors which reported a much lower than expected increase in sales and ford is the only one that beat. let's talk about tesla. q1 deliveries reported at more than $25,000. model x coming in at $13,450. you see the model x numbers rising to 11,000 of deliveries in the first quarter. this is an important number because when you look at the an natural -- annual sales from tesla, they have said they expected to deliver at least 47,000 in the first half of this year. so they appear to be on track to at least meet that target of delivering at least 47,000 vehicles. the focus is all about the model 3. in fact, a number of analyst

float no-- notes we have gotten past the delivery question if, they're on target. let's see if they can meet the next projection, model 3 deliveries are scheduled for later this year. why are with showing you this? yes, tesla has passed ford in terms of market gap. goes to show you what kind of world we're living in. tesla is not profitable, guys. not cash flow positive and yet, it has a larger market gap than ford. back to you. >> wow. that is -- that's a moment, phil. >> yeah. watershed moment for sure. >> phil, we'll come back to you later on this morning. apple shares shining in the first quarter, up 24%. a look at how high that stock may go. plus, morgan stanley's robert kin kibd her will join us. bd her wi.

all eyes on washington as world leaders prepare to meet with the president this week and just over an hour from now the president of egypt will be at the white house. our eamon javers has more on that. >> good morning, carl. you can see the military honor guard is in position to welcome president of egypt. the president did not set a whole lot of agenda items, not saying what they want out of it, other than a broad reboot of the

u.s./egyptian reptilationship h. the trump administration has said that the foreign aid budget is going to be cut. egypt obviously is a big beneficiary of that. they might want to press the administration on foreign aid. and then later in the week, king abdullah of jordan. then as you talked about, president trump is meeting with the president of china, xi jinping, at mar-a-lago in florida over the weekend. now, this is the headline from the ft this week. the president giving an interview in which he signalled that the united states might be willing to go it alone on north korea saying well if china is not going to solve north korea we will. that comment prompting a lot of discussion here at the white house over exactly what solving north korea necessarily means and what it would mean for the united states to go it alone there. a whole lot on the foreign policy agenda here at the trump white house today. >> we'll come to you in the 11:00 a.m. hour. eamon javers at the white house.

switching to apple, surging 24% in the first quarter, hitting all time highs in the process and they're exploring a bundle of premium cable channels. how high can the stock go? we're joined by drexel hamilton analyst and tim ar curian. brian, what explains the price action in the first quarter? >> well, i think this still remains one of the most underappreciated stocks in the world. and so i think what people are starting to understand is they were negative on apple for all the wrong reasons. and you had a hugely negative comp that impacted fiscal '16 and iphone units fell after growing in '15 and then you return to growth. buffett got involved. they started to talk about services doubling over the next few years. i think -- and the stock is very, very cheap. i think this came into play at the same time. >> tim, you go along with that and are expectations about the 8 inflated here or in line with what you expect? >> no.

look, i had been consistently saying that people are underestimating how big this cycle will be. you know, you look at just the size of the install base today. you know, this phone is launching into the install base that's 50% bigger than the last big phone. the iphone 6 launched into. even if the upgrade rate is much lower you'll sell way more phones. i think people are 10 or 12 million units too low look out to the end of this year. that's per quarter. i think the numbers are still way too low. >> what you're both telling me, this is really a phone company. when we see this story they want to bundle hbo and show time and starzz in a kind of package which i would love, but i'm not sure it contributes to the stock moving, right? we're still talking about a phone company. >> exactly. phones still dominates what they do in terms of sales, in terms of profits. but they have to keep this ecosystem interesting. and part of that is adding

increasingly adding more content. whether it's original programming. whether it's bundled package. this ecosystem is really what makes them shine. they have to keep it interesting, that's part of it. >> tim, obviously they have done an amazingly good job keeping the product fresh that being the phone. but they haven't done very well in tv. i mean, couple of years ago we were talking about a tv, a lot of excitement around that. there's been talk about cars. it doesn't seem that they have moved in any other areas other than obviously increasingly this ecosystem of services which is so important. >> i think that's true. but, you know, again, they have at least one more big phone cycle here. there's a ton of innovation left to come in the phone. you know, you're going to have an affordable phone from apple probably in 2019. it will be a truly foldable phone. i think there are more lengths to go with just the phone. look at services -- services, you know, they're growing very,

very quickly. they're going to add their own content to it. there are a lot more legs to the phone story. >> i thought you said floatable phone. i don't need to go swimming with it. >> do people want to fold their phones? >> you know what we don't hear, the way you hear about other stocks is concern about an investment cycle. right? it's not like google in the old days that people worried about sg & a and headed into the period they'll spend money. is that because the cash is so huge? >> they have done a good job with margins. the cash balance is outstanding. i think you know what they're creating here is something -- a vehicle that can capitalize on the world as it becomes a computer. whether it's a tv, whether it's your watch. whether it's your home. whether it's a car. that's that they're ultimately doing. today the phone is the biggest piece of it. but i think it's going to give people kind of the walkway into the other areas over time. >> the next one being car?

or something else? >> i think ar and vr are interesting. we'll start to see that with the new iphone and do something in car. >> do you have any retail on whether they'll do the bundle, how much would they charge? >> i read the reports like you did this morning. to me it makes sense and i know they had tried things like this in the past. but the market is clearly ready for it. people are cutting cable. i cut my cable. >> no no. you don't say that here. >> we can be streamed too. >> you're also available on the web. >> are you ready for consider. >> i'm not sure i'm ready for it. >> you're also available on subscription. doesn't have to be through cable. >> sales pitch. thank you, guys. see what q2 brings for apple. >> thank you very much. when we come back, morgan stanl stanley's vice charge and head of global m & a, robert kindler.

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all right. 2017, well, deal making off to a kind of a slow start this year, at least in comparison to last year. global buying came in light. only down 4% versus a year ago. but what can we expect for the rest of the year? the three quarters yet to come? here is robert kindler, it's not just here, it's everywhere. >> intergalactic. >> you and i were just down at tulane, the big m & a conference. mostly lawyers of which you were one once. i got different reads. i want to get yours. i started to hear the words uncertainty from high powered attorneys who were advising on potential deals, now it depends and others saying full speed ahead. second half of this year is going to be really busy.

where do you come in? >> i think the market has been stronger than i thought it was going to be. morgan stanley, the first quarter we have the same announced deal volume, it's stronger than i thought. the reason i thought it was not going to be as strong early on is there is a lot of tax uncertainty. no one knows what's going to happen with corporate rates or repatriati repatriation. so how can you actually do deals on a large scale when there's so much uncertainty. having said that, people still feel that they -- that the need to do deals. >> all right. so where do you stand right now? i think smaller deal that's not necessarily hugely transformative for a company is one thing. but those large deals that are aren't you still on the sidelines waiting for tax reform to settle itself out? >> there's been large yields that don't depend on that. we'll see what happens. ppg making a hostile bill fors a

toe, and the over $12 billion sale, which again wasn't that affected by taxes because it's a global economy. i think some are clearly on the sidelines but i think again the market has been stronger than i thought. and if we do in fact get some kind of tax reform this year in this clarity, whatever that clarity is, whatever the corporate rate is, i think repatriation is going to be a very, very big factor. >> why do you think so? >> a lot of cash -- i think both sides of the aisle want repatriation. i think a lot of cash is going to be come into the u.s. so what's going to happen with that cash? well, the fact is that politically, using it for buy backs is not going to be politically that palatable. what people want to have happen with it, using it for capex and for m & a. there will be some buy backs. i think they'll be significant but i think that helps the market just putting more liquidity. >> given the time line for reform -- by the way, some believe it won't be a reform,

but a repatriation deal. it won't really happen until '18 so does that mean the rest of this year is sort of a kind of waiting game? >>i actually think that's a possibility. it's been stronger than i thought it would be. i think the activity will be fine. and will probably end up being comparable to the last year. but for m & a to really take off, i think we have to have more clarity on tax reform is there y-- reform. >> you do? >> i do. >> and we see kraft-heinz, trying to do something, and it failed for unilever. >> it worked fine for unilever, for the shareholders because at the end of the day they'll do much better. >> there are a number of industries that there seems to be a expectation of consolidation. food being one of them. telecommunications and media being another. i wonder if we'll look back on this year and say we got overexcited and expected things that weren't really ready? >> i think there's a real possibility of that. there are a number of large

deals. but i think it's a possibility that the things don't happen this year. >> all right. activism. you like to come on and talk about the activists. you don't like them very much. we know that. >> no, it's not actually true. well, it depends on which activists. >> right. but they're back. they seem to be back. >> they're back, but they're back in a different way. what you're finding is that to the extent activists are proposing financial engineering and buy backs, that falls completely flat in the market. >> so you defended gm against einhorn, didn't you? >> yeah, can't comment on specific situations but i will say that fell totally flat in the market. i think the perception is that financial engineering is not what people want. people want strategy. people want m & a. they want capex. and it's the same thing with buy backs. buy backs generally there's a place for it. i mean, companies have to have the right balance sheet. but buying back stock is not a strategy. so i think that that was indicative -- that situation is

indicative of these activists just running out of ideas. not a lot of companies you can break up anymore. not a lot of fortune brands out there anymore so what is your platform? >> so you think -- >> it's very difficult. >> the activists who embrace more of a managerial focus on changing the fundamentals of the company are still going to have traction? >> i think activists, you know, like tryon who is clearly very long term investor, with nelson peltz and very constructive investor, yes, i think they're going to have more traction because it's longer term. but those who expect to come in get a quick pop in the stock and get out, i think those days are over. >> what about hostile bids? you mentioned ppg. that doesn't seem to be going anywhere. at least right now there is that shticking. see? >> i can't say it. my mother wouldn't like me using language like that. >> i'm using it only in a professional context. >> professional in netdneth in .

>> they're tougher to do. >> they're not unprecedented but they do happen. as an example of both ways is sanofi going after medivation. that was a hot property. didn't succeed. they're hard to do. very hard to do. >> as you know, because you advised -- >> i did advise on that -- >> failed bid. >> depends. long term you have to see if it was a failure. >> they still want to do things. sanofi is in the bidding i believe for act till on, which j jj ended up winning. do you think we'll see more consolidation? >> i think they need to. i think over time these companies need to consolidate. i think they likely will. >> have an ending on that sale of "time" magazine you're working on -- not time, time inc. >> that's right. >> time warner is called time warner, even though time inc. --

>> not for long. >> that's true. >> you mentioned at&t/time warner. any concern on the regulatory front? is much of the m & a community right to believe it will be more of a hands off up approach under the trump administration? >> that deal never had regulatory issues. it just didn't. it's an it's unimageable that it would. the trump administration it's easier to get deals done, but on the other hand, there's uncertainty as to what deals he'll favor or not favor. that's not new. when continental merged with united the fact they were moving the headquarters to chicago, the fact that they were naming it unit united and the fact that president obama was from chicago didn't just happen from accident and that deal went through. so it's always a political gloss over all of the regulatory. but i think generally the view is that a divisive administration will be easier to get deals done. >> bob, thanks for filling us in as usual.

look forward to your next appearance. a quarter or two quarters from now. i'm going to grade you. >> sounds good. >> rob kindler, global head of m & a at morgan stanley. >> thank you. let's get over to sue herera. >> here's the news update. russian media reporting at least ten people have been killed, more than 50 injured in the explosion on a subway train in st. petersburg. all the city's metro stations have been closed. another bomb was found at a second subway station and was deactivated. dozens of colombians who survived the deadly mid slides that swept through the city are finding refuge in a local shelter. hundreds are still missing. heavy rains causing widespread flooding in parts of central mississippi overnight. a number of vehicles were flooded at an apartment complex and there are also reports of downed trees and power lines in the region. a survey by career builder finds that half of u.s. workers

will wait until at least age 70 to retire or they won't retire at all. one-third of workers aged 60 or older say they aren't even sure how much they'll need in order to retire. that's not good news. that's our cnbc news update our hour. back downtown to you, carl. >> sue, thank you very much. when we come back, the president is getting set to meet with world leaders this week. we'll talk to some ambassadors about what's at stakes. the dow is down seven for the moment. back in a moment. the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.

keeping our eye on the dow, down ten points. s&p is down two points. interesting morning got some auto sales disappointments. the is m's widely considered to be good. above expectations for the month, michelle, at 572. but not quite as good as we saw in february. >> don't you think the markets are trying to digest what does health care reform failure mean

for everything else in the trump jed, right? now we see the white house says according to politico we're not leaving this up to paul ryan, we're going to be in charge this time to try to ensure that that is actually going to happen. doesn't seem to help today though. >> no. by the way, it doesn't necessarily set up a kumbaya moment for paul ryan and the trump white house if they have competing health proposals. he wants house ways and means to carry the day. very interesting to see what get from mnuchin and cohn and how it differs from what the house has proposed. >> you knemade the point about retailers not responding favorably. between the auto companies and auto parts suppliers, more jitters after friday. >> yeah. auto sales have been very high. we think about 17 million in terms of annual sales when you

look at the monthly pace. i always think back to the financial crisis, remember when they got down to 10 million. that was a full on depression. so it's hard to, you know, look at those and say it's bad. but certainly they're coming off the higher number. especially when you look at what's happening with the ten year yield. you wonder is that telling us something about growth? >> yeah. two years at the lowest in a week. >> and gm stock prices telling us something this morning. down almost 4% as we got the surprisingly weak numbers. >> okay. as we head to break, taking a look at shares of imagination tech. wow. have you seen this, plunging nearly 70% after the biggest customer also an investor by the way, apple said it would stop using the british firm's graphic technology in the iphone and other products. up to two years time by the way, apple holds an 8% stake in the company. much more ahead on "squawk on the street." stay with us. n, meet your fathe. kevin

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managed by humans, not robots. before investing, carefully read and consider fund objectives, risks, charges and expenses in the prospectus at thriventfunds.com. geopolitical risks front and center today. president trump meeting with egyptian president el sisi today. also, china and jordan's leaders coming to washington this week or to palm beach. joining us right now is a former ambassador, former assistant secretary of state for political and military affairs. and ambassador james jeffrey, former deputy national security council to george w. bush. gentlemen, thanks so much for being here. and ambassador jeffrey, let me startyo with you. let me show this headline from the "ft," if china doesn't solve the problem with north korea we will. explain something to me. i read this u.n. report about

the attempts at getting nuclear missiles. the chinese buy their coal even though they say they're not going to buy the coal and the chinese look the other way, don't enforce sanctions when it comes to the banks. why ambassador, ha have the cin not solved this? >> because they fear chaos on the peninsula and refugees. turkey has taken millions of refugees from syria and survives nicely. the real reason is that china uses north korea as a pressure point against the united states. china is more concerned about america's threat to china's ambitions in the western pacific than it is the threat to international stability that north korea with its missile programs can create. this administration is trying to change the dialogue with china by saying it can do something, possibly destabilizing on its own to get china to do the necessary. in the end it has to be china

who has to act. >> so we're showing on the left-hand side of the screen, keeping you informed of the live pictures, we are waiting for the leader of egypt. you see the color guard in preparation for this arrival. we'll be watching for that. ambassador bloomfield, will a change in tonality from the u.s. administration when we hear tillerson say strategic patience is over, is that going to make a difference with the chinese? are they going to start enforcing sanction as they have promised to do? >> well, in the pacific, as jim jeffrey just said, the united states is trying a new -- turning over a page and trying something different. so this is a high stakes game when president xi comes to mar-a-lago later in the week we'll see if they have a collegial summit. then do some hard talking behind the scenes. china does have a lot of influence over north korea. as jim says, you know, they haven't really lifted a finger. it's very volatile situation though with seoul, korea, below

the dmz and artillery and nuclear testing going on in north korea. it's highly dangerous. so they clearly have a plan. i think this is the art of the deal in motion. we have to watch and see how they play it. >> it's fascinating to watch. ambassador jeffrey, i'm curious what you think is a more effective cudgel against china with regard to north korea? saying we can do this ourselves or using trade and tariffs as a stick. >> trade and tariffs have been used against north korea and certainly at china without any effect. it has to be the threat of force that will get china to turn around. but here's the interesting thing. the xexigencies of the north korea threat to us will force the trump administration to shift its view to north korea as a possible strategic ally against north korea. or as a strategic threat.

that's different than in the campaign and it's evolving as the white house faces the problem coming out of north korea. >> that explains lincoln bloomfie bloomfield, the idea that the relation between the u.s. and china has not been as contentious as some feared going through the transition. >> well, look, i think the trump administration takes the view that it's better to take care of hard issues in private than to embarrass people in public. i have to say we don't get far with influencing other countries by disrespecting them publicly. so differeplomacy should be don different way and we have said to china, why don't you do more? but we need a more explicit conversation. what happens if north korea implodes, what happens if they launch a missile toward japan and we have to take action. what happens if war breaks out on the korean peninsula, it ends with the north korean regime a

probably destabilizing situation, but could end up with a unified korea allied with the united states right up against china's borders. so they have an incentive to talk now with the trump administration. >> ambassador jeffrey, what does going it alone look like for the u.s.? i mean, it's a number of options that would seem none of which are particularly appetizing. >> now, we looked in the bush administration at various military options. certainly well short of all out conflict. this could include intercepting missiles in the air. it could include more aggressive military posturing and exercises, it could include overflights of north korea. we have all kinds of ways to up the pressure. the problem is dealing with an irrational -- seemingly irrational regime. their ability to respond and escalate should not be ignored. >> here's the thing. ambassador bloomfield, when we

talk about whether or not they're rational or not rational. the one thing rational thing about kim jong un he wants to stay in power as long as possible. the leverage is, when he uses the nuclear weapons, they're probably gone in terms of being a regime or maybe you said that. so the market looks at them and says, the chances of a real nuclear missile they don't think it will happen. is that a good way to think about it? >> it's very hard for me to counsel the market but we have seen north korea under kim jong un and his father and grandfather they have made serious threats and they have done some very violent things over the years. but they generally made threats that are more severe than the actions they have actually taken. does that mean we can rest easy, we don't think that kim jong un will take aggressive action, no.

but what he needs to understand is that nuclear weapons really don't buy him anything. we weren't looking to invade north korea. we don't want to invade north korea. having nuclear weapons we have spent years since the cold war trying to talk down the currency of nuclear weapons. they're not a good investment. and frankly, they make the world more dangerous and more nervous but you can't use them. so i would discourage any notion that nuclear weapons give kim jong un any particular advantage. >> thank you ambassadors bloomfield and ambassador jeffrey. >> thank you. well, new filings from the white house give us more of an inside look at ivanka trump and jared kushner's business empire along with two dozen of the other advisers. our robert frank has more for us. robert? >> david, in a lot of filings, in fact, 58 pages of documents released friday night by the white house showing jared kushner and ivanka trump with combined assets of between 240

and $740 million, kushner earned up to $180 million last year from the family empire. he has resigned from 260 entities and he's divested from 58 of them. but he's the sole beneficiaries of hundreds of the entities that own his family's businesses. buildings and properties and ivanka trump she earned up to $10 million last year from her brand and other trump organization properties. she has also resigned from her company but like jared she owns a stake in the d.c. hotel valued up to $25 million and she will receive income from trump organization entities and companies. now, kushner he also has more than $30 million in personal debt. mostly from deutsche bank and the u.s. branch of the israel discount bank. now, critics say kushner and trump's vast real estate holdings create a potential ethical minefield especially as kushner becomes more important and involved in the foreign

relations like the upcoming visit with china. now kushner's attorney is saying quote the remaining conflicts from a practical perspective are pretty narrow and very manageable. but guys, the important point here is that jared kushner and ivanka unlike the president and vice president are subject to ethics rules which prevent them from doing anything that would benefit them from financially. when you look at all of the companies, the hundreds of llcs that jared and ivanka own along with the hundreds of partners, lenders and investors, there's a lot to possibly pose a conflict with, guys. >> robert, explain this spread to me. they're worth between 240 and $740 million. you read some newspapers and they said worth up to $740 million. they don't mention the smaller number. they're clearly extremely wealthy either way. but -- >> yeah.

>> but why so little clarity? you can drive a truck through -- >> there's two reasons for that. an important question. one is the federal guidelines for forms for whatever reason don't require require a specific net worth or asset value number. they just give you a range of one to five or five to ten so you just apply that range. the second reason is that as we all know, real estate is sort of where you can say my building is worth 100 million and some says 50. until you sell it, you don't know what it's worth. it's the nature of what they hold and forms that only require you to give a range. >> got it. thank you. >> thank you, robert. robert frank. let's head over to john ford for a look at what's coming up on

"squawk alley." >> we'll dig in and michael roth of ipg joins us to give us the state of the ag market. all that and more coming up. excuse me, are you aware of what's happening right now? we're facing 20 billion security events every day. ddos campaigns, ransomware, malware attacks... actually, we just handled all the priority threats. you did that? we did that. really. we analyzed millions of articles and reports. we can identify threats 50% faster. you can do that? we can do that. then do that. can we do that? we can do that.

as president trump pushes for a manufacturing rebirth, companies are inventing new technologies changing factories and the job descriptions that go with them. morgan brennan joins us with more on that story. morgan? >> this is a top focus in manufacturing right now. how new tech think automation, 3-d printing is fundamentally transforming factories. take general electric. it's rolling out its "brilliant facto factory" concept in action at a plant. big data, software, robotics, used to fit locomotive engines. workers are transitioning from paper to digital and scanning bar codes and jamie miller, ge's transportation chief and architect behind this new factory model, says this is creating a big demand for skills that you may least associate with all of this tech. >> traditionally where it may have been how people can do the actual work, that's really been

supplemented by deeper look at the soft skills, deeper look at how they work in a bigger environment. >> so in other words, communication skills, team building, problem solving. as productivity increases and actual manual labor part of the job decreases, workers have to become more predictive and interact more. that's especially since longtime machinist and engineers are now teamed with data analytic experts. ge is retraining 150,000 employees but it isn't alone in this. more and more companies including lockheed martin and john deere and a number of others are investing in workforce training. retraining but also to attract the next generation workers who actually tend to be more comfortable with tech already. david? >> okay. thank you. and as we head to break, check out shares of carmax sliding after a negative mention in barrons.

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

welcome back. markets are mixed right now. they've taken a leg lower after a positive start. you have telecom, health care stocks, the best performers so far today in early trading. leaders in the health care side of things include insurers like hum humana and united health up. the sector overall up 8% or so year-to-date and 9% since the election. if you look at the overall picture, we're talking about health care as one of those sectors that will be one to watch given what's happening with the trump administration and its agenda in congress. as we take a look at health care overall, the markets as we stand now with the dow down about 60 or so points will be a big focus. it's been one of the more defensive sectors out there of just generally speaking along with some of the interest rates. health care will be driven by some of those biotech names.

remember the mega cap names within biotech will be a huge driver for what will happen in the sector overall. keep that in mind as we head toward the later part of this morning and this afternoon. let's send it over to the "squawk alley" screw for tleig "squawk alley" crew. >> it's 11:00 a.m. on wall street. "squawk alley" is live. ♪ >> good mda