welcome back to "squawk on the street." s&p up. that does it for "squawk on the street." let's send it over to the team at "squawk alley." >> thanks. good morning. it's 11:00 p.m. in beijing. 11:00 a.m. here on wall street and "squawk alley" is live. ♪

>> good morning. welcome to "squawk alley." carl is on assignment. we start this morning busy morning in washington from congress to the president's meeting in florida. our john harwood is in d.c. with the latest. hi, john. >> we have an extraordinary day in washington across the range of domestic and foreign policy. let's start with the headline news that's come out in the last hour or so and that is the announcement that nunez is stepping aside as chairman of the house intelligence committee for purposes of the russia investigation. here's speaker paul ryan on that just a few minutes ago. >> chairman nunez wants to make sure that this is not a distraction to a very important

investigation so he wants to go clear himself while this investigation continues on without any kinds of distractions. >> so let's look at the range of turbulence facing policy makers in washington right now. you've had steve bannon demoted from the national security council in the last 24 hours. nunes stepping aside. president trump facing crises in syria where we had a chemical gas attack and in north korea which fired a missile in advance of his meeting with president xi. how is the republican government going to adjust? first of all, speaker ryan announced an amendment to the american health care act to try to float possibilities for passage later in the year. that's an amendment that would create high-risk pools or expand the amount of money available for high-risk pools. you have the senate about to change its filibuster rules to speed the nomination of neil gorsuch. they're going to invoke the nuclear option to eliminate potential 60-vote filibuster

against neil gorsuch and you have trump meeting with the chinese leader in florida. that's going to be a meeting where north korea certainly is going to be discussed and we'll see what president trump lays out in terms of his agenda for trade between those two countries. now, finally, you've got question marks about where we are headed. on tax reform, we do not know there's not a unified plan from the white house, the house and the senate. each is moving independently. we don't know where that's going. we don't know what the ultimate fate of obamacare is going to be. finally, on infrastructure, you had president trump in an interview with "the new york times" yesterday saying he wants a trillion dollar infrastructure bill and may borrow the money rather than use private tax credits. said when you can borrow so inexpensively, makes sense not to do that. >> a lot of moving pieces there, john. thank you for keeping track of it all for us. john harwood. house speaker saying the divide was narrowing quickly over

obamacare and the new health care plan. we'll see where that goes. as john mentioned, in just over an hour, president trump flies to florida for the first face to face meeting with president xi. the markets are watching what will be a tenuous meeting given the president of china's rhetoric over the past year and a half or the president's rhetoric on china. have a listen. >> we don't have victories anymore. when was the last time anybody saw us beating, let's say, china in a trade deal. they kill us. we are going to enforce all trade violations against any country that cheats. [ applause ] this includes stopping china's

threat of intellectual data. product dumping is killing us. they don't follow the rules. we'll institute tariffs. they'll obey our rules quickly. >> highlights from the campaign trail. joining us now is president and ceo of the atlantic council. how will president trump translate those promises and that heated rhetoric on the campaign into the presidency? >> well, one thing that is safe to predict, you're not going to see a golf club in the chinese leader's hands. he's portraying golf as a temptation for the communist elite that leads to corruption. put that aside. i think what trump will want to show, he's been much more diplomatic in his public statements and tweets in the last while. there's been a lot of back channel talk where trump had less attack against the chinese and chinese leader realizing his political situation with the party congress coming up in the

fall. and on the other hand, from the chinese side, there have been more signs that the chinese are willing to negotiate a little bit more and give a little bit more on economic issues. perhaps not yet on north korea but on economic issues. you might hear words like equivalence in the next couple of days. equivalence essentially means the kind of access that the chinese give to u.s. companies, which isn't very much right now, in china. equivalent situation in the united states. tariff and nontariff barriers. investment access. so internet companies chinese don't allow americans to buy internet companies in the united states and therefore the chinese would not also get it in the u.s. so i think that's the sort of direction that you might hear. >> should we mostly expect to hear the usual about healthy dialogue and mutual respect out of this or is there any specific change or agreement that you expect to hear the leaders talk

about? >> i don't think there will be a specific agreement but the language is going to be important. this is a study in contrasts. president trump is man who takes extreme negotiating positions and backs down. the chinese leader speaks cautiously and doesn't like to say much in public and who is a careful communist leader. on the other hand, the leader of china has been trying to portray himself since january as the global grown-up. the person that the world community can rely upon. i think he's going to continue doing that right through his autumn convention. the question is what will trump do? will trump take a more diplomatic tact to get what he wants from the chinese behind the scenes or will he be tougher? will he push and press him a little bit. that's going to be very interesting to watch the body language and the actual language. >> and of course any language for investors on trade and on

currency, blackrock weighed in on "squawk box" this morning. have a listen. >> they are currency manipulator. they spent almost a trillion dollars keeping currency where it is. by all measures when you look at the relative to other currencies, china currency is actually pretty high and they've been keeping it high. their behaviors are actually, if you look at exactly their behaviors, they are listening to president trump and trying to keep currency strong. >> you heard that from larry fink. the president has focused on this issue many times and on that giant trade deficit. our largest trade deficit. how do you expect him to reconcile these issues? >> the president heard that currency manipulation is not the issue. i would be surprised if he makes too much of that. he will make a lot of the 350

billion trade deficit. that's more than half of the overall u.s. deficit. he'll make a lot of the fact that americans buy 17 times more product from the u.s. -- the u.s. buys from china 70 times more than the chinese buy from the u.s. you may see some concessions. you may see something to be said about boeing. you may be a little bit of leg here and there from president xi jinping. he gives cosmetic concessions to soften foreign targets. you may see a little bit of that in this meeting. >> this notion of a grand bargain, i heard it before in which china could help u.s. industry, u.s. manufacturing with investment or infrastructure or trade, what does china want in return? >> i think what china would want right now is just not to be put in a position where their leader is being embarrassed or being put on the defensive or being

put in a position where he'll have to show strength ahead of the party congress. so if trump pushes him too far, and i know he's been advised not to do that, president xi jinping would have to push back. at this point they would like to get away from mit where both sides see it's a problem and chinese are more cognizant than ever before this is a problem for them as well and then to meet another day to go more deeply on the issue. i don't think they want anything concrete here. like to come away without an embarrassment. >> we'll see if that happens. fred, thank you. fred kempe. when we come back, ceo of m amc networks has a new youtube streaming deal and amazon ceo jeff bezos lays out his plan to

send humans into space. a new look at the rocket and capsule that will get the job done and kara swisher has a message for the "tech bros" of silicon valley. [second man] how you doing? [ice cracking] [second man] ah,ah, ah. oh no! [first man] saves us some drilling. [burke] and we covered it, february fourteenth, twenty-fifteen. talk to farmers. we know a thing or two because we've seen a thing or two. ♪ we are farmers. bum-pa-dum, bum-bum-bum-bum ♪

but we've got the get tdigital tools to help. now with xfinity's my account, you can figure things out easily, so you won't even have to call us. change your wifi password to something you can actually remember, instantly. add that premium channel, and watch the show everyone's talking about, tonight. and the bill you need to pay? do it in seconds. because we should fit into your life, not the other way around. go to xfinity.com/myaccount amc networks announcing all brands will be available on google's live tv service. you can stream everything amc networks offers in addition to disney, cbs, fox and nbc

universal offerings. here to give us insight is david faber. >> we are joined by josh who runs amc and has for quite some time now. you've had a little bit of success. >> i've hung around. >> sometimes that's all it takes is hanging around. there's always that question now when you announce a deal like this, viewed as a positive, but it raises this larger issue of a company like amc dependent as you are on continued hits, can you survive in a world where more and more people are moving to streaming or skinny bundles opposed to paying for big cable package which you derive a lot of revenue from. >> we think that we're perfectly designed for the world of alternative bundles that may be lower priced. i say that because we have four of the top ten shows on tv. we have five channels that we offer. not ten. not 15. so we've been preparing for a world that's more digital, that's a little slimmer and where people really operate with

more discretion and don't just take what comes down the pike. we think our size and genetics serve us rather perfectly for where we're going. >> how do you see it all evolving, josh? you are on this youtube offering. the only sort of your group so to speak that is. it's the broadcast networks and cable networks associated with those networks. that's about it. you're on sling. you're on directv now. you're on the sony. are they gaining traction? is this the future that we've been talking about? >> my own best estimation is that there will be lots of "conventional cable" video offerings for a very, very long time and there will be these alternative offerings emerging and growing and they will be perhaps surprisingly compatible in a certain sense as people pick their own offerings and as it relates to us, our thesis and our point of view has been for a

long time have the best content because increasingly you and everyone else will able to find what they want and not have to get what they don't want. so if you got the good stuff, you're in a good position so we've been investing heavily in content. we spent a billion dollars a year making tv shows. we got good ones we think. we have five channels. amc, ifc, bbc america, each of which means something. we think we're quite well suited for exactly what's coming. >> do economics break down similarly for a skinny bundle/streaming service as this streaming service is this and over the top as we call it versus traditional cable? >> it broadly does for us. for those who operate them there may be different sets of economics. cable operators sell broadband, et cetera. >> how close an eye are you keeping on the user experience in the new services like youtube tv? i'm not sure how easy it is to time shift. if i can stream the content any

time i want on demand without paying an extra fee. is this just one more step on a frustrating road to where we eventually end up or do you feel like this is actually great? >> i think the companies are doing -- i mean this every day. i see it as a consumer. a spectacularly better job with what's broadly called interface because they need to. the ones that come from digital backgrounds do it sort of organically. they began with a different interface. the ones that were conventionally cable tv, comcast, charter and others are making enormous progress in making their interface and consumer experience feel like it's everything you want when you want it. >> is the fact that your networks are largely ad supportive and commercials on the show, does it change the suitability of your networks for these platforms or is it basically equivalent to the user? >> it's interesting.

we have our up front event tonight, which is a big event for us. 600 of our closest friends for dinner. we have one in every three impressions, as they're called, in drama on cable tv. so i think that there's a place for non-ad supported material and place for ad supported material if it's good. we think that we'll be in a position to keep feeding our system because we're somewhat now unique with drama and ad availability. >> you're only as good as your last hit. you've had quite a few of them. you've had an incredible track record. "walking dead" one of the most viewed shows period. >> it's today in season seven the highest rated show on television by a factor of two. by the way, that competition is great shows, "this is us," and we're two times larger in demo. >> didn't you have softness last

season in those ratings? >> some ups and downs and mild erosion in season seven. the show today, today, this season, two times larger than every other show on television. that's pretty good stability. >> that's really good. you know what? the competitive landscape is only getting more for shows. netflix. you spend a billion. netflix will send six or seven. amazon is going to spend five. how do you feel confident you can continue to get access to the kind of talent you need to produce the shows you need to keep this thing going? >> it's part of the job. so we premiered a show last night on ifc and it's produced by funny or die. we made an investment in them. we like to think they want to work with us because we're a good home at ifc. we do "better call saul" and we think they like to work with amc. we do "dr. who" comes through

our partnership with bbc. it's a good home. we need to be a good home. we think we are a good home for creative people who want their material showcased and made successful. >> is there a money ball aspect to this? yo you're up against competitors now who just literally have potentially billions of dollars to spend on content but they're not necessarily that good at it. how do you make a decision on maybe placing a bet on a type of show that might not be obvious to somebody who has got money burning a hole in their pocket? >> it's a fun question because so many hits are so unlikely. they are so unlikely. i can give you our history. it's a fun history. we had "mad men" on and the script was in matt's briefcase for seven years and we aired "breaking bad" and others said not for us. the same is true for "walking dead." so -- >> is that a people think.

you have people with a unique set of skills? >> we have people with extraordinary tastes and sensibility and good judgment and so i hope that we have some science and i hope that we have a little bit of art and i hope that we have reasonably good judgment. >> what about price on these things? the youtube offering is 35 bucks. seems a reasonable price. directv now started a low price. moved up. is there a sweet spot in your opinion for what these things should cost to really get traction? >> you know, david, i actually don't know the answer. i think that the play of retail like 35 bucks could package a video, how does that compare to a discounted bundle with broadband from a cable operator for 90? is it a better price or not a better price? you know, i think there will be an evolution. personal opinion to what occurs in retail pricing and it will move around a lot. i think it will be good for people and for consumers. i think it's going to be very

good for amc networks because i think it will separate the performers, meaning you have to pay for content, from the less than excellent performers. we like to think that we're an excellent performer. so we will find redemption. >> was that your idea to bring gus to "better call saul." >> vince is behind all things brilliant. >> you've given us lots of reasons why your company will remain a strong one independent. continuously you get asked and i'll ask again, don't you need scale for this new world we're describing? >> yeah. so we're asked a lot. we've been roughly our size we're around numbers of $3 billion company. when we spun we were a billion. three times larger but still small. it seems like scale is critical. i think there are certain benefits to being efficient and

arguably economically sort of elegant and at proper weight, not necessarily overweight. so i think if we do well in the system of our economics, we actually could have a certain sort of superiority by virtue of our size. >> josh, thanks for being with us. >> still to come, two ipos at the nyse elevate just open for trading and it is up about 15.3%. the ceo of the online lender will join us when we come right back on "squawk alley." the valiant taste times of death, but once!!

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stocks are near session highs. dow up 58 points being propelled higher by goldman sachs adding 10 or 11 points to the dow. caterpillar also strong. so is nike. retailers are up. s&p up 0.3 of a%. energy, financials and consumer

discretionary are best performing sectors. and mike viqueirick santelli wa about how sales were better than feared hoping that stock out. when we come back, kara swisher's message for those she calls the tech bros of silicon valley. then the bold vision to ferry humans in space. a live report not from space but from the rocket when "squawk alley" comes back.

i'm courtney reagan. here's your cnbc news update at this hour. president trump thanking wounded veterans for their service as we welcomed them to the white house. he praised them as real heroes. >> you've earned our freedom with your sweat and your blood and your incredible sacrifice. we salute you. we salute your service. and we salute the flag you have so courageously protected. >> the kremlin calling the chemical attack in syria a monstrous crime but says there's no objective data to block the u.s. conclusion that the syrian government was responsible. russia is urging the syrian army to ensure chemical weapons fodot fall into the hands of terrorists.

iraq says they have had the first incident during the operation to retake the city from the militant group. that's the cnbc news update for this hour. let's get back over to "squawk alley." >> courtney, thank you. it's 11:30. that means markets are closing in the uk and across europe. let's get to michelle caruso-cabrera to see how we finished. >> you can see modest moves in europe. markets getting the first chance to react to the u.s. news the fed minutes which indicated yellen and company are planning to wind down the balance sheet. that moved stocks but you have reacting to central bank news of its own. stopping speculation that end of negative rates is here. he addressed economists in frankfurt this morning. >> we're confident that our policy is working and that the outlook for the economy is gradually improving. as a result, the forces that are currently weighing on domestic price pressures should continue

to wain. >> news that negative rates weren't going anywhere fast hurt the banks and euro fell sharply on draghi's comments. they say the economy is improving and than means it's time to scale back stimulus. >> i do believe europe is looking better every day. i think what you're seeing in europe and every country you're seeing a move away from populism back to centralism. i actually have probably inkremtinkremt -- incrementally more money in europe than i would have it. >> because you look at it as a better value? >> much better value than the u.s. today? >> and ulilever are michelle, t. michelle caruso-cabrera. in less than an hour, president

trump departs for the winter white house ahead of the two-day summit with chinese president xi jinping. we're joined by kayla tausche with the latest. >> reporter: two leaders will arrive this afternoon kicking off about 24 hours of formal meetings in some cases accompanied by their high ranking respective deputies from their countries. senior white house officials call this an introductory meeting. president trump is meeting the counterpart he criticized so long so early has critics wondering why he's doing it. on one side you have a trade hawk who called china the planet's most efficient assassin and then you have globalist and

free trade supporter and the nominated u.s. ambassador to china who has been a friend of president xi's since the early 1980s. branstad is not attending. a white house spokesperson tells me that she believes that navarro will travel to florida as well. one question that's not been answered is whether paying members of president trump's mar-a-lago club will be granted remember entry privileges during this week's summit. you may remember with japan's prime minister shinzo abe, north korea fired a test missile into the sea prompting the two leaders to discuss the matter on site and criticism whether access to sensitive information was safeguarded enough. i called mar larand they haven' commented. the chinese delegation is

staying eight miles from mar-a-lago. there is heavy police presence there. despite the fact there's been some communication between two leaders, there's a healthy amount of distance in a very small space on the florida coastline here. back to you. >> very important meeting. we'll continue to watch. thank you, kayla tausche in palm beach. and switching gears to silicon valley, kara swisher's latest article is out and it's an open letter to the tech bros. she joins us now on the phone. good morning. this continues the conversation we were having earlier this week. it seems, if i'm reading you correctly, the point of this column is to say, hey, if you're uber, yahoo! twitter, it's success that makes people forget about your mistakes and success comes from honestly addressing your problems, not doing pr, am i right? >> exactly. i have been hearing a lot of growing things among investors of uber and also some of the employees that it's a pr problem

that press is too tough on it and not handling it correctly and they need crisis pr. i was sort of offended by it at first. not just because i'm a reporter, it sort of strikes me as a little misguided to blame pr on something that's clearly a systemic problem with management that needs to be addressed and should be addressed assumed by this investigation and other moves that they're making inside the company. >> would you say that this is a systematic problem specifically at uber and other individual companies that obviously have kind of crossed certain lines or is there something about the culture? clearly some of the tone from the top has not stopped these companies from becoming successful, these entrepreneurs from becoming successful. how broad is this issue in the culture of silicon valley? >> i think it's an issue. obviously as i said in the piece, entrepreneurs have to lie to themselves continually to get things going. you have to say it's not a failure. i'll keep pushing through. things like that.

i think what happens a lot and this is the most extreme case of it is that they're growing so fast that they ignore basic systems like hr and these are legal issues too. obviously that's what they're facing. they're facing a lot of possible legal challenges and things like that. one of the things they should keep in mind is now that they've grown this big, they have to put systems in place and they ignored them for so long. i think you're making an argument that we could be jackasses and still be successful. i think that may not work quite as well as they get to be a certain size. >> kara, anything new about this era in tech broism. steve jobs got criticized for the way he ran apple's business and during their time working together, there are many others. is it a fact that so many in the mobile era of these apps and services touch our every-day

lives and people feel more connected to the companies? is it social meedia making thes things much more immediate? >> you can go to google. google had all kinds of problems like this. facebook did too. i think things get amplified and overshared in a lot of ways. it's not possible to behave this way and not sort of pay for it more. uber is a consumer facing company more than a lot of others. i think they really do have to pay a lot of attention to the idea of how they're coming across in almost everything they do. not everyone is going to like everything they do. you really can't -- when i started to hear that, are you going to actually address the issues or just talk about the cosmetic issues which is people are angry at you over this behavior and as i said, some of it is unfair like "the new york times" article that we talked about earlier this week about psychological tricks that it's using. uber is not even close to how good facebook and google and amazon are at restricting

consumers if you want to use that term. written about uber, my god, manipulating drivers. well, of course they are. so does every single internet company on the planet. i think you just have to -- why is it uber that gets more? >> not exactly fair. one man's trick is another man's gamification which everybody loves. great column. thanks for joining us. >> thank you. >> coming up, a look at jeff bezos and his blue origin space capsule that could carry humans to space sooner than you might think. first, rick santelli, what are you watching this morning? >> i'm looking at the landscape coming up. we're going to get a look at first quarter. how did it look? were investors happy? are they going to continue to keep their money in the equity markets? beginning of earning season it's always corbin advisers after the break. rice of trades to give investors even more value. and at $4.95, you can trade with a clear advantage.

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blackrock ceo larry fink calls for investors to skip the u.s. and buy stocks in europe and mexico. we debate the best places for your money. striking numbers showing how poorly stocks do after the fed warns about an overvalued stock market. we'll show you those and what it means. goldman sachs' urgent warning for investors to sell the s&p's top stock. halftime report starts at the top of the hour. we'll see you in 15 minutes. >> thanks, scott.

elevate opened for trading. take a look at the stock. it's up 20% now. the online subprime mortgage lender is going public after postponing ipo last year and this week a number of delays in the 11th hour. we have the ceo of elevate and also at post nine our own bob pisani. ken, what was the difficulty in getting this ipo out the door? seems to be trading well now. how frustrating was that? what was so hard about getting it done? >> we like to add extra drama to your day in the morning getting things through the s.e.c. they've been terrific. as you can see, already showing some good growth in the stock. >> you specialize in what others consider subprime borrowers with credit scores below 700. there are concerns whether these people will payback losses that have grown a bit year over year. are you optimistic that this new

administration and some changes in regulation might help you out? why should investors think this is going to get better? >> we're serving a huge percentage of customers that have terrible credit options. more than two-thirds of the u.s. have a credit score less than 700 and need products like ours. we've been growing like crazy. 100% growth rate over the past three years. the fastest growing company. i think that's because of this large underserved market that we have. >> very interesting to see drama this morning. you spent the morning on the phone with the s.e.c. that's always a great way to start the day. as a result of the repricing that you had to do, your market cap is significantly lower now. can you explain what does that mean for the ability for the company to expand? how does it impact your ability to repay debt, for example? explain what repricing means for you? >> when you're ready to be a public company, you're a public company and get out there. we raised just a little under the amount that we originally intended to raise. we'll be able to paydown the debt we want to paydown and

really fuel that ongoing growth we see serving such a massive market. >> one of the things that's interesting about your company is, of course, you're dealing with the subprime market. loans are uncollateralized, is that correct? >> that's right. >> we all know when the economy is in good shape right now so obviously the loan portfolio is in good shape. what happens when the economy weakens and you know what happens in those situations. those kind of loans are the first to go south. >> twe're unique that we're lending through the last recession. we saw incredibly consistent charge up rates year and year out unlike the rest of the credit world. our experience for unsecured credit to our space is a great hedge against future volatility in the market. >> that's counterintuitive to what every other lending practice that i've ever seen or heard of. >> it is. what we find is that our customers are more recessionary all the time. they are used to dealing with the world where they have maybe

less savings, more income volatility. they get through. the other thing that happens is in a recession as we saw in 2008 and 2009, everyone else tightens up their credit. we start seeing better quality credit through the door. best quality credit we had and fastest growth we of in that 2008 and 2009 time frame. >> what's the average loan rate? >> it ranges very much for the different types of products we have. we price to the risk of the custom customer. we've saved our customers over a billion dollars of what they would have spent on other products like payday loans and other things and have focused on helping customers reduce rates over type and build back up their credit. >> give us a range. >> current average across the portfolio is 150%. we've continued to drive that down year after year as we improve our underwriting and dropped average rates 40% over the last three years. keep pushing that down. when you think about customer dealing with terrible credit options with payday loans, we're

the best option out there. we'll keep getting better. >> that's quite a number. >> think about the world that they deal with. 400% payday loans and overdraft protection, fdic is 135% credit. we're a great option for customers. they keep coming back. customer satisfaction scores are terrific. we have served 1.6 million customers just getting started. >> ipo trading well up 23% as of -- >> even better. >> congratulations. thank you. >> watching markets in recovery mode from yesterday's afternoon sell-off. s&p regained a third of what it lost in the last couple hours yesterday. treasury yields turned positive. energy a leadership group and more on jeff bezos and his space plans coming up. dom, your team is about to go up against

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this is crazy! [ tires screeching ] whoo! boom baby! rated pg-13. [ screams ] real estate can mean big money for big investors but how is the market going to change under president trump? diana has an inside look and joins us live from midtown. diana. >> john, the most common word i'm hearing at the conference where the heavy hitters of commercial real estate are gathered is uncertainty. they'd like to see economic growth, they'd like to see tax and regulatory reform, but some just don't see how president trump can deliver. >> how many of these things they'd like to do can actually get done. we're having trouble find

skilled labor to build the apartments and things under construction today, let alone where the labor will come from to build a trillion dollars of infrastructure or the capital expenditures that will occur from some kind of change in taxes. >> equity residential is the largest apartment in the nation. they have been focusing on seattle, san francisco and here in new york, which they admit has been a challenge lately. >> we've kind of had a situation here in new york where we've got a lot of new product all pricing at the high end and the job growth at the high-end new jobs has not been as strong as the past so there's some weakness there. so you've had situations where some market rents have rolled down a little bit. we've given guidance to the street that we'll have negative revenue growth modestly here in new york this year. >> now, despite a drop in occupancy nationwide in the last six months, he is not concerned,

sees no cracks and overwhelming demand. back to you, john. >> thank you, diana. now let's get to the cme group. rick santelli. >> thanks, john. if you're an investor or an innocent bystander looking at all the markets, looking at the political landscape, it's kind of like the bermuda triangle. that's why we have rebecca corbin to sort it out. what's the sentiment of the investors you survey saying? >> thanks, rick. great to be here. heading into first quarter, expectations are very high, in for a very strong performance. organic growth, we saw a big spike in bullish sentiment around that as well as earnings-per-share growth. the little factor we have to worry about is the perception margins will erode due to higher costs. >> so one of the driving forces were the upward mobility of stocks, you are seeing that, right? but you're also seeing the more tangible kind of earnings per share metrics also improving in their minds? >> absolutely.

we've seen a continuation for four quarters of increased earnings performance. and so this is real and they're expecting that it's going to be there. >> so are they optimistic or pessimistic on the legislation that hasn't come to fruition yet? >> this was probably the biggest surprise that we saw. we polled everyone on all of trump paoliciepolicies. we released the report today. the shock era is most of them think they have a high probability of passing in 2017. >> they also believe market valuations are? >> overvalued, 97%. >> so they like the metrics, think everything will pass and it's overvalued. >> they're starting to see some cracks. the time frame in terms of when trump policy -- they were excited in the first quarter and starting to really understand that's not going to come to fruition probably any time soon. >> but it's crystal clear what they're thinking about the federal reserve and rates in general? >> oh, sure. that's yesterday's news. they think that it's going to increase. they're looking for two or three

25-point basis point increases through 2017 priced in. >> balance sheet probably didn't make the survey. >> no, did not make the survey. >> usually when those variables are in play, emerging markets get a little skittish. >> we saw bullishness across every single region outside of the u.s. the u.s. sank in terms of positivity. eurozone the strongest, so the biggest increase in positive sentiment followed by india. >> so india, emerging markets. what areas, industrials, tech, what's the driving force from a global standpoint? >> in india we see a lot of u.s. corporate investing over in india. the prime minister is very pro business so we're hearing that come to fruition. this is early stage and this is a long-term play in india. >> thank you, rebecca, it's always interesting. see you next quarter. john, back to you. >> thanks, rick. great insight into investor expectations. "squawk alley" will be back right after this break. entertainment plus unlimited data.

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jeff bezos giving a rare sitdown. morgan brennan joins us live from colorado springs with more. hi, morgan. >> hey, mike, that's right. this is what the insight of the

new shepherd crew capsule is going to look like. you've got six seats, all dedicated to paying customers, no pilot. so this is fully autonomous. the capsule will be like it's accompanying rocket, reusable. that's a strategy founder and ceo, jeff bezos, speaking here yesterday said is key to bringing down the cost of space travel, growing the $2.5 billion launch services market and enabling millions of people to live and work in space. >> most of the things you want to do in space that are truly interesting right now have a very high price of admission. and as a result, you can't unleash the creativity of thousands and thousands of start-up companies and kids in dorm rooms everywhere. >> now, he likened that vision to what he's seen with the internet over the past 20 years, but also adding that as he's learned from his own internet

company, amazon, that disruption really lies with the customer. >> at amazon, we've had a lot of inventions that we were very excited about and customers didn't care at all. and believe me, those inventions were not disruptive in any way. and so the only thing that's disruptive is customer adoption. if you can invent a better way, and if customers agree that it's a better way, then they will use that. >> so in that regard, bezos says he i, quote, super optimistic about demands for new shepard, this capsule and everything coming out of blue origin. >> i love his judas priest look that he does when he's talking about space. >> i thought it was sort of top

gun. he wore the top gun sunglasses. >> speed, aviation. >> all the major indices up modestly. to continue covering the markets and more, we'll turn it over to scott wapner and the half. welcome to "the halftime report." our top trade this hour, with a question over whether the u.s. is really the best place for your money and why some say the answer now is no. with us for the hour today is jim laventhal, rich sapperstein is here as well. let's start with that debate. it's been a strong start to the year for u.s. stocks. take a look around the globe. you'll see a better picture almost everywhere else.