fast. >> and the role changes you. as we saw yesterday. >> the role changes you. >> absolutely. the s&p 500 is now up less than one point. i caution you that we saw delayed reaction to the fomc action. could see a lot of action on the final hour of trade. with that note, we start "the closing bell." >> thank you, melissa. we're here at the new york stock exchange. i'm bill griffeth with kelly evans. >> good afternoon, thank you for joining us. we're covering the president just landing on the ground there in palm beach, florida, following the arrival of president xi, who we saw rex tillerson, the secretary of state greet a short time ago. rex tillerson, the secretary of state, advanced a press conference, that we carried, on which he roadway marked boyle north korea and syria. a reminder of a myriad of issues surrounding this meeting between our president and the chinese leader that will shortly begin. >> other averages coming down

just in the last 30 minutes or so here as we see these stories unfold as the gang on "power lunch" talked about. you have not only conflicts brewing with north korea, triang gulated with china, but syria with russia. on the ground there in palm beach. things growing by the hour here as we prepare for the summit between president xi and trump, yes? >> that is correct, and cannot be overstated, bill. we are watching as the first family descends the stairs at the airport nearby in west palm beach, arriving more than an hour after the chinese president and his wife arrived. greeted by secretary of state tillerson. interesting that the chinese president received by the secretary of state and not the president himself. safe to say this is a tense relationship. both sietsz ades prepared for a difficult meeting where

potentially the chinese side comes with specific things it wants to see over the next four years while the trump team is said to look for tactical wins despite the fact that they have suffered legislative defeats in the past. we are still awaiting those pictures of the president, but we are getting some news about some items that he's addressed aboard the plane to the press. mainly assad saying he's still running things, still in power, something should happen, signaling for the second time in as many days his views on the situation in syria changed, and, again, he said he's prepared to go it alone on north korea. certainly, two increasingly escalating conflicts, and especially the north korea situation is one that's going to be at the top of the priority list for the conversations with the chinese president, whether they can actually agree, find commonground on how to approach that because the chinese have been fighting that situation and figuring out how to posture themselves with their neighbor,

and they are increasing nuclear threats, but it's unclear exactly what the trump administration's strategy is to get them to the table. >> steve grasso here at post nine preparing for the exchange in a few minutes, but, steve, again, like yesterday, we're seeing the markets selloff here late in the afternoon. this, not nearly as dramatic as yesterday, but do you think markets are sensing these tensions that may be prizing geopolitic geopolitically? >> a big week. president xi. it was the focal point was supposed to be about, but that's a conscious decision to run that headline that he's willing to -- the u.s. is willing to go it alone with north korea. that's a conscious headline to run the headline on syria, so these are something where president trump wants to let the world know that he is prepared to do one alone or all of them alone, all at the same time. so it's kind of shocking, shocking the world to have a

perp want to throw all of that at the, you know, at the world all at one time. this is different than what we are used to. >> suggesting it's hard to know what the intentions might be. steve, you said the marks are going ahead and pricing it in anyway. >> yeah. >> we're basically, you know, want s&p, two points turning negative on the session today. looks like it's okay because there would be this meeting between, and now it all seems to take a different tone. >> i think to bill's point, and it's telling. yesterday we learned from speaker ryan that tax policy, tax reform was off the table in the short term or would take longer than they thought, and the market fell down in a precipitous fashion. today, we are dealing with north korea and syria, and the market seems to hold in there. i think the market is focused on what the market thinks it has control over and what it can price in. we can't price in all variables

involved with syria. president trump has spoken to putin already. i'm shocked to see the headline he's not, and you had tillerson speak so pointed on syria already about assad. that, to me, shocking. maybe the market needs to digest it, but the market is so focused on tax reform. >> as you talked, we got a note from mr. cashin, himself, he agrees. he feels the geopolitical commentary is spooking the market. kayla, if you're there, quickly, i don't know what kind of a schedule you have in front of you, but we have nothing -- we don't know what's going to happen this afternoon, which is unusual for a meeting of this magnitude between two world leaders like this. it seems as though they are going to be taking it casually this afternoon, and that may be the uncertainty the market also is not comfortable with right now. >> reporter: well, we've not

been given many details either, bill. we know when the white house announced weeks ago there's a dipper this evening at mar-a-lago, which we'll wait for a readout from that and other meetings that happen. both sides with large delegations with them. you can imagine president trump includes secretary of the treasury, some of the top advisers, steve banon, secretary ross of the commerce department, and i've learned from a white house spokesperson that peter nevaro, one of the most outspoken china hawks, the most critical of the way that china trades and massages the currency he's also traveling to florida with the president. obviously, the president's going to be getting quite a wide array of view points on how to deal with china. it's unclear how he'll distill that into one clear-eyed strategy meeting with his counterparts from china. we know tomorrow there's a working lunch, and there's going to be meetings throughout the day, but, really, my guess, at

this point, good as yours until we get more details from the white house. >> there are the markets and nasdaq now, slightly negative on the session, the dow up by three points, kayla, thank you. back in washington, lawmakers are trying to squeeze in unfinished business before the two-week easter recess. how are they doing? >> kelly, it's not where the administration or republican leadership wanted to be ahead of the long break. clearly, the lack of a health care bill is the most glaring problem, house speaker paul ryan and conservatives in the party came together today on one aspect of the bill creating high risk pools for people with preexisting conditions. it's not repealing and replacing obamacare, but ryan framed it as a sign of progress. >> i actually think that divided narrowing quite quickly. what this idea represents is the goal that everyone from the freedom caucus to other groups represented here is seeking.

>> reporter: this is, though, a tiny step in a massive agenda, and there are fresh signs that tax reform is not going to be a slam dunk. ways and means brady promised democrats in the committee he will hold hearings on the tax bill, and that could end up pushing back the timetable for any path forward. the administration will probably miss a self-imposed deadline to start the count down to renegotiate nafta. a formal letter would be ready this week, but there's a lot of hurdles it still has to jump through. guys, lawmakers have to hit the ground running when they return just to keep the government open much less make a didn't in their agenda. >> all right. good points, thank you, ylan. in washington now, turning back to the markets, blackrock ceo and chairman is on "squawk box" today giving thoughts on how possible delays in that policy reform impact the u.s. market. >> if you believe it will be longer phenomenon these to

transpi transpire, and we have an economy that is slower because of the uncertainty, then i would say the market is -- the u.s. equity markets are probably higher than they should be. >> so are the u.s. equity markets too high right now? joining us now our "closing bell" exchange officially, john augustine, steve brasso, and rick santelli from the cme in chicago. john, i don't know, do you agree with larry, first of all, and, second, i mean, when you look anywhere, there's so much uncertainty, politically, militarily, economically, whatever's going on now, we don't know what happens next, right? >> true. headlines, earnings season, better economic reform. the feds put themselves back on the scene yesterday as well. so in our view, though, what's running our investment thoughts, though, is still the bond market and the low yield. >> yes. >> the stock market may be pulling values, but for discretionary money manager, we

can't go to the bond market right now, so -- >> can we -- there's the place to be outside of cash and bonds right now. >> and what about where just reported, the president meeting with president xi as we try to wait for more information about what might develop in syria and north korea, you know, you are sitting there, chief investment officer, and do you make any adjustments to that? just bring back the risks a bit, or none of the above? >> not bringing back the risk. we put in inflation protection as an example last december, and have a little tip. have bonds, obviously, as well. and then fully diversified in stocks, hold in our view, on the political headlines, react and act on the fundamental headlines. those arguably are getting better, although there's questions on the economy. >> rick, here we go again. talking about the bond market. any response there? we're at 23 had 4 on the ten now. do you sense that the treasury's

have been anticipating the issues involving north korea and syria before other markets have? >> you know, if you look at the close monday, tuesday, wednesday, today, it's all within several basis points on ten. all maturities are unchanged. dollar index up sixth of a cent. i don't like extra volatilities, patterns displayed over several sessions. we talked many times, price volatility is now a fundamental, in my opinion, keep it simple. get the most volatility, and we're extreme top, but i'm impressed. the issues are difficult to tie in the marketplace. it's holing. i'll make it simple. i still say that, yes, pay attention to bonds, equities are the main actor on the stage because i think what dents the actor now is lower rates. if we get below 227 to 225, tomorrow's number our other

fundamentals or other forces, i think that would be interpreted as weakness. the stocks would have a bigger problem than the patience issue on trump legislation and geopolitics. >> steve, what do you have to add to that? >> fair point. i think when we started the conversation, it's a rotation. they are coming out, and eight years of demand, a stock market that roared and risked higher, you also have people in position where they had another return. so they were looking at that bond portfolio, and coming out of the election, people said, o', we're going to break out of the funk of 1% to 2% growth, and we're going to reach higher into 3% growth world. people had to be invested in the equity markets, so that's the biggest head wind that i see for the marketplace is that we can't break out. we've seen some cracks, retail sales, cracked, durable goods, we've seen flattening of the yield curves so if those things remain persistent and look at

value as far as pe ratio on the s&p, we start to look a little bit symbolic of what we saw in 2007. that's what has people afraid to put new money to work in the marketplace, and you start to see earnings come iing through, course, people dive back into the marketplace, but look at the market right now. we're still up. >> yeah. >> it has every reason to selloff. they couldn't pass the repeal of obamacare. >> yeah. >> they couldn't get anything done, but yet people still maintain a positive outlook. still maintaining their propensity to buy equities. >> we have to go. you disagree with larry, you are a buyer of blackrock. >> we are a buyer. we like the stock. >> thank you, guys, appreciate your insights on another moe mentous day that wall street's watching carefully. >> the dow is up 16 points right now, 45 minutes to go. down as little as two, but hanging on to gains here. s&p up and russell and nasdaq

up. >> pulling back on comments, ahead of the meetings with china's president, look at reaction from former u.s. ambassador to the united nations, bill richardson. that should be interesting. >> watch out, google and facebook. the ceo of the world's largest advertising company said snap could be a force to be reckoned with. martin sorrell picks it exclusively next. you're watching cnbc, first in business world wise. with e*trade you see things your way.

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[ [ screams ] ] [ shouting ] brace yourself! this is crazy! [ tires screeching ]

whoo! boom baby! rated pg-13. [ screams ] >> we were just discussing the next guest. it says here he's critical of facebook and google -- >> fake news. >> stepping up the game to exert more control over digital ad placement. this interview has been going on for two minutes already, folks. >> with the rise of fake news story, martin says the tech giants are not doing enough on their platforms. welcome. >> they are media companies, not technology companies. >> well, that, so this is important. so -- >> very important. >> their claim is we are internet companies, we don't have to take ownership of the content. >> digital engineers. tinkering. >> you don't need the ear piece, just talk it out.

>> educational pools to the news feed to help people learn what is fake news. >> so what we've been doing is working very closely with google who is the medium in which we placed $5 billion, just under $5 billion last year, and so it is, like it or not, the most powerful media channel, but it is a media channel, and google publishers, they are media owners and put that just like we do, and for your -- what you sell on air. >> the reports don't view it that way, but google as publishers that could immediately -- >> absolutely. interesting, the regulators in europe have facebook and google on the agenda at the moment. see what decision comes down, but an issue they are mulling over is whether technology companies should be subject to the same that any classical or traditional media owner is. >> we have been talking a lot

here lately about the tipping point witnessed in the retail industry. especially in the united states. away from brick and mortar. stores closing now because -- >> the rise of amazon. >> exactly. and other e-commerce. are you seeing that in advertising as well? migration more to digital advertising? >> well, you're certainly seeing the rise of the all-powerful everywhere amazon. my favorite question is asking people what worries you, what keeps you up at night? crimes and i would say 80% of the time amazon is mentioned. used to be google is what troubled people in terms of what to do, but you see it in cloud computing, contempt, if you see it in payment, this morning, there were some articles about payments, that ad platform, valued at $350 billion. i think by one analyst yesterday, and now they take the view amson will not compete, and so what our clients want and agencies want is more

competition in the market place. anything to give you competition of facebook and google, accounting 75% of digital, in turn, about 30% of worldwide advertising, so that means google and facebook are 21% of worldwide advertising through that online. anything that balances, snap chat is another important possibility in terms of balancing the marketplace, so getting more than two solutions is important. aol and yahoo! are another potential -- >> as we go -- >> shame on me. >> report, owner of news corp., published yesterday -- >> very disinteresting. >> but he, again, kind of makes this point about, you know, the difference between just monetizing content and actually publishing, it, for example, taking ownership of it.

if you look to every analyst on the street that covers stocks, other than add milting there's near term -- you get to the numbers, this is not an issue, the platforms grow in strength and power. you're in charge of placing money out there. >> i'm not in charge of it. we have five -- >> do you see them changing any behavior in the overall shift? >> well, they changed their behavior. there's been boycotts, that we disagree with. your negating or the most arguably one of the most powerful mediums, so why would you do that? maybe you stop for a little bit. you pause. you wait and see and improve the technology. i mean, they go about media placement for a minute, which is what all this in the u.k. was about and spread to the u.s. and india and elsewhere. what we'veresponded well, actually, to be fair, come up with new technology, open slate, to define what are white stripes, in other words clear

sites and black sites. i saw an article this morning that jpmorgan chase, not a client of ours in the media area, other areas, yes, not in media. reduced the number of sites they put their online content on from 5,000 whatever it is to 400. so people -- that white list is what i refer to. that's where you put your content where the content is cure ated and controlled. not controlled where we put stocks that you don't know the circumstances in which which content is reviewed. >> you get fake ads. >> misplaced ads. >> yes. >> this is the problem, against inappropriate content. >> running out of time, much more to talk about. let me ask, your thoughts on -- i've lost count a number of advertisers who pulled from the o'reilly factor on fox. how effective is that as a tool or weapon, and what do you think happens here? >> well, i think people use it to make a point, and we were talking about this before.

direct correlation, a 1:1 correlation between withdrawal and boycotts whether it's mentioned in the press or phone calls reported. one e-mail to one ceo of our client company who immediately say, what do we do? so at least they paused. people are making a point because gender equality, diversity, this whole area of csr is becoming more and more important, it motivates consumers and people to join you or not join you as employees, it motivates people with you one way or another. this is a critical area. what we're seeing here is this play out in a more and more significant way. >> one final question. if you had seen pepsi's ad before it ran, would you have advised them to pull it? are the other companies -- >> what i would mention is it came from an in-house agency, and as somebody responsible for

agencies, maybe not so bad. >> this is how they are trying to appeal to the youngest generation. >> you know, authenticity are not making comments, but a authentici authenticity, i mean, that's -- millennials or centennials, not 100-year-old people, but those born after 1997. they sniff out autothen tisty. you have to be very care fful. >> actual protest, for example might have been -- >> be very careful how you ask questions. >> you took a ding, cutting back on spending -- >> you had to sneak that in there. >> here's the question -- >> with all do respect, people did not look at it carefully enough. they said they would sweat air

assets more effectively. they were going to cut the number of free agencies by 15%. that's a big opportunity. >> is that a specific story or are you starting to see a slowdown in ad spending? that's the question. >> the question is slowdown. we are seeing increasing pressure amongst the packaged goods sector for three things, disrupted technology. we talked about amazon, you know, bricks and clicks. that's one example of it. from activist investors like procter & gamble. >> great point. >> and kraft-heinz made the proposal in 48 hours in which strategic review, this response came as a direct result of that. the answer to the question, there are sectors which are growing, like technology, whether it be google with us or alibaba, whatever it is, but on

the other hand, packaged goods is under significant pressure. prolonging the agony, but neilson david for the first couple months of this year is not good for packaged goods. you saw something -- i saw a statement, january and february packaged goods categories up 3.5%. a span of 9.5%. >> wow. >> people are starting to see the things we see from the administration and making people concerned, so that, plus amazon inviting manufacturers to seattle, to talk about direct relationships, again, more martin targets, means a lot of disruptions. in that environment, it's tough. >> fast changing world. >> yep. >> martin sorrell, will corrected me. >> no problem. >> thank you so much. >> thank you. >> like moral, he said. thank you so much. >> always good to see you. >> thank you very much. >> very constructive. going to the close in 30 minutes.

dow up 20 points, up 98 at the peek today, but there's been a day of slow moves out there. >> geopolitics, and president trump said the u.s. could act alone if north korea does not step up. former u.s. ambassador to the u.n., bill richardson, weighing in on the high stakes for both leaders. >> up next, kissing cousins and genetic researchers meet. i can't wait for this one. coming up. who wants a donut? it use to be everyone had to be in the office. we lacked the technology to be flexible and productive. then cdw orchestrated a collaboration solution for us. using the lenovo x1 carbon. powered by intel core processor technology. now we can access our network and work together from anywhere. hey! hey everybody. you coming back for the team building? mobility by lenovo. it orchestration by cdw. ♪

iceland's geographical isolation makes it a genealogists and medical researchers heaven, and some enterprising programmers cash in as a result. we are joined now from iceland with the latest installment of cnbc's modern medicine experience. good evening, i think. >> reporter: good evening, bill. that's right, we're four hours head of you, waiting all day to talk to you about this place. they have incredibly genealogy records here. a quick note about the genetics and why iceland is a treasure-trove of genetic research because of what's known as the founder effects. this idea that the population here descended from a small number of ancestors. a company formed cold gene code genetic to mine the research and come up with new answers to diseases. we sat down with the ceo about

what they are doing there. take a listen. >> the citizens of iceland help to contribute to an understanding of the fundamental biology of humans, and so they are making an enormous contribution to advancing the basic science of biology. >> reporter: so not only are they contributing genetic, but gene yolgs records as well. we vi we visited some of the earliest census from 1703. you can trace ancestors wall the way back to that document. still, records go back further to the sagas with medieval story about iceland in the 12th century and back further to the 800s. we talked with the national archivists about the collection. listen to what he said. >> we have 44 kilometers of documents, and the oldest document is from 1185 or

thereabouts. they have the memory of the nation on who we are. >> reporter: decode, the company mentioned, they digitized this data online called the book of islanders. anybody who is iceland can look themselves up to trace the family history back. we asked the national archivist to see if he was related to bjork, and it dated back to the 1700s. you can research families and genes inherpted, using things to study things like asthma, for example, making inkreden discoveries there. driving research forward through genetics and genealogy. >> i'm about to get on a plane. >> i'm jealous. i told you and the producer, i would have loved this trip, and just as we are hearing that the fda is now allowing 23 and mae,a dna testing service, to test for ten different diseases, slowly getting this service back on

again. that's part of the outcropping ability the companies to do this as a result of the dna testing, right? >> reporter: yeah, absolutely. this is really big news in the genetics world today. 23 and me, a testing company where you basically spit into a tube and send it in to give you back a lot of information about yourself. back in 2013, they were shut down by the fda for giving risk factors information back with al timer's, breast cancer risks, things like that. now they have the go ahead to give ten diseases to parties directly. it does not have the barc gene for breast cancer, that's are ask factor for a different disease, but it's big news in the direct medical testing, guys. >> great stuff, thank you. appreciate it very much. indeed, a genealogists heaven. i know you've been there. >> it's amazing. the waterfalls, all volcanic. >> you see that. i want to go to the archive.

see what that's about. 27 minutes left with the dow up ten points. >> and former u.s. ambassador to the u.n. weighs on market moving comments about syria and north korea. stay with us. i chose you for this squad

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less than half hour to go, time for the cnbc news update. >> here's what's happening at this hour, 52-48 vote, the senate triggered what's been called the nuclear option barring filibuster of the supreme court nominees. making clear of the way for the nomination of judge gorsuch to serve on the high court allowing the nomination to go forward on a simple majority vote. a mock explosive device found in a suitcase in toronto held up a chicago bound united airline flie flight for hours. they swabbed the device for explosives, and the results were negative. winds in lake michigan, warning of strong gusts that could hit up to 50 miles per hour. chicago land will be under a flood and wind advisory until

7:00 p.m. tonight. one of america's comedy legends died, don rickles suffered from kidney failure. appeared with johnny carson over is 100 times, and he was most recently the voice of mr. potato head in the animated "toy story" films. he was 90 years old. that's your update at this hour. back to you both. >> thanks. tight on time, but go home tonight, get on youtube, and watch an old tonight show with don. they were absolutely hilarious. nobody was funnier. rest in peace. thank you. stocks off the highs now after president trump said, quote, something should happen with syria's assad and prepared to act alone on north korea. all of this ahead of the meeting with china's president there at mar-a- mar-a-lago. let's bring in former under secretary of state, himself, a former ambassador, nicholas

burns. gentlemen, good to see you both. ambassador richardson, mr. trump is willing to go it alone on critical issues involving syria and north korea. what do you think of that? and how high are these stakes with president xi right now? >> well, this is the most important bilateral relationship right now with china because of the differences of north korea, trade, getting sb inting into a china, i hope not, but the issue in my view having been in the national security cabinet is who calling the shots in the administration. obviously, the president says one thing about what he's going to do with syria. i think it was encouraging what he said, that he's not going to continue supporting assad with these mass murders, but at the same time the secretary of state, u.n. ambassador, seems to be on another plane with syria. with north korea, i think the

issue is we need china to help us pressure north korea, and if china doesn't do it, the president says he's going to go it alone. i don't know what that means. we need china. are we going to do a military strike? i think that would really bring a real conflict into the peninsula where we have thousands of american troops, treaties with japan, treaties to defend them. it's an important meeting, and hopefully they'll have a good chemistry. the president, who is not very disciplined and flamboyant and the chinese leader who is programmed and quiet. we'll see how they get along. >> you know, mr. burns, as all this happens, the latest from the new york times, options for military strike in syria, so, you know, these are two very difficult problems that pose himself themselves to be more urgent. >> well, i think this is, this week constitutes the great challenge for president trump

and national security with north korea and syria. arguably, the two most difficult problems out there. i think they have to be careful on syria. there's a statement from tillerson there's an international coalition to out president assad. president trump inferring implicitly that action is possible, that military options are being drawn up. you don't want to have the president in a position where he goes up to the line of threatening action, and then backs off. that's what happened to president obama in september 2013. that was a low point of the obama administration, and i worry that president trump is putting himself out because ambassador richardson said he's not disciplined. he tends to say things in public that are not plugged in or backed up by the rest of his administration. if we're going to threaten syria, that's a very serious course of action. all sorts of risks. got to be careful here. >> ambassador burns, i'm curious, what do you expect, you think, out of the summit meeting

between the two presidents this week, beyond just to get aquainted session? do you think there's anything of substance in foreign policy? >> well, i think there will be. the most important thing is they have to take the measure of each other. they have to get to know each other. these are the two most important leaders in the world, frankly, building some kind of relationship with xi ought to be the first priority. clearly, north korea's going to be on the front burner because of the ballistic missile test, and this, i think, the trump administration is right to pressure china to use its leverage if that's going to happen to try to convince north korea to back down from its present stance. that's a tall order, but i think that the trump administration is right to go there. like ambassador richardson, don't think the united states can or should go it alone. we have two very important allies in japan and south korea, so a consequential meeting in florida and two crisis to deal with. >> well, you said go it alone,

does that not mean the likes of japan or south korea or imply that the u.s. is willing to be the lead on this and not wait for the chinese to do so. >> i think it's the latter what you said, and i agree with ambassador burns of the importance of this meeting. it's very critical that we recognize with north korea it's the big test for president trump. the north korea's leader is unpredictable. 20 nuclear weapons, i'm told, ballistic missiles. they don't want to see the dialogue. the only way i believe right now to get north korea to the table is with china of the they provide north korea with food, energy assistance, and all kind of economic aide. they have the major leverage, but china really in the past has not wanted to help us. they like the turbulence and problems for us in the northeast peninsula, so the most important test, i believe, is how they get

along personally. i think it's important that the president restrain himself a little bit, you know, and not try to punch the chinese leader who is not only very disciplined, but very tough. >> oh, heaven forbid. let's not have that be the headline tomorrow. gentlemen, thank you both. good to see you. former ambassadors bill richardson and nicholas burns. >> thank you. >> appreciate it. heading to the close with 16 minutes left, dow up 25 points. we've had -- it's come back a bit throughout the close. >> turned negative almost earlier. coming up, whether republican lawmakers could lose political capital. amazon chief seeing his stocks down today, but he's still looking skyward towards the moon, and beyond, with blue origin. we'll take you inside his new shepherd and capsule coming up. go after it the same way? y chasing after short term returns.

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cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. welcome back, the amazon founder held a rare meeting with the press to unveil the vehicle he hopes takes blue origin to the forefront of space exploration. we had a reporter there joining us now from the lovely colorado springs. hello, morgan.

>> reporter: hey, kelly. that's right. the blue origin, a brain child of amazon's jeff bezos, revealed here at the space impose yum, the actual model of the new shepherd capsule to carry paying customers to the end of space. they are going to be reusable just like the rocket, and as you can tell from the experience of the rocket behind me, this one here has actually been launched and landed five times. that concept of reuseability is key to get millions of people living and working in space. >> if we can make access to space low cost, then entrepreneurs will be up leashed, creativity, dinism, not the same thing in space that i witness on the internet over the last 20 years. >> reporter: bezos stressed this

is going to take time while he's hopeful it starts service next year, the company has not yet started taking reservations or disclosed the price of these trips, so you might be wondering, how is blue origin being funded right now? well, the billionaire also disclosed yesterday that he's selling about a billion dollars worth of amazon stock a year and investing it into his space startup. also noteworthy, i spoke with blue origin president one-on-one as well, and he also confirms that the company is considering and looking into the possibility of developing an amazon-like cargo delivery service to the moon. guys? >> richard branson wants to do the same thing, he would go in space. did jeff bezos say whether he'd be on a flight? does he want to did into space? >> reporter: he has for years expressed interest in going into

the space. as of yet as far as i can tell from, and i've been trying to fact check this all day, as far as i can tell, he's not actually pledged to be one of those, for example, first passengers, but he has expressed an interest in going into space. we'll see what happens. a lot of emphasis from yesterday on the safety and the testing of this. >> yep. amazon shareholders could have a problem with that. great, morgan, thank you. >> morgan brennan in colorado springs. >> i would not be quick to get up there. ten minutes to go. >> looking at the potential business impact on the meeting between presidents trump and xi and whether the market is in for a rough ride based on comments about syria and north korea.

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dothe only thing theyut can't handle...t you. dominic toretto just went rogue. i don't know what she's got on him, but that wasn't dom. it ain't too late to stop this. come and get it. [ grunt ] now i know what it feels like to be every cop ever chasing us. dom! is that a torpedo? take the wheel. [ grunt ] rated pg-13. experience it in imax. art told us the market on close are selling by $900 million. we heard it was a big number on the sell side, 900 million. we'll see if that has an impact. meantime, l brands among the best performers in the s&p today. same store sales fell by a slightly worse than expected 10% last month.

the victoria secret parents of the sales negatively affected by two to three points due to the late coming up east ere day this year, another ten days away. advanced microdevices lower. goldman sachs initiated coverage of the stock with a sell rating and $11 price target. citing competition from intel and nvida and said valuations are difficult to justify. that stock down 6.5% as a result today. timely, twitter's cofounder and current ceo of medium, evan williams announced he's sold 4 million shares was social media giant's stock and reportedly plans to sell up to 30% of his shares over the next few months, cutting his stake in twitter from 5% to under 4%. they do that for estate purposes or whatever. dow up 14 points, we are watching things, but we're going to come back with the closing countdown. >> after the bell, plenty of

talk about the high stakes summit with china, what it means to president trump, and the event is critical for president xi. we'll go live in beijing for the best and worst outcomes for china. you're watching cnbc, first in business worldwide. i'm only in my 60's. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. call now and find out about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, it helps pick up some of what medicare doesn't pay. and could save you in out-of-pocket medical costs. to me, relationships matter. i've been with my doctor for 12 years.

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in the trading session. the dow up 19 points. i want to show you this. we peak before 2:00 eastern, and then we saw the arrival of president xi and president trump, gets comments made on air force made about syria and north korea, the market went south, a selloff not as dramatic as yesterday, but a selloff nonetheless, apparently in response to the geopolitical tensions. them look at, for example, the dollar index. so you're seeing the response in the equity market. you don't really see that in the dollar for the most part. >> let me throw the ten year in here as well. you know, both of these considered safe havens under normal circumstances. we dropped one basis point on the ten year. >> good market watch that you are, your conclusion is there was a slight response in the stock market, and really not much of a response in the currency market or in the treasury market. that's correct observation.

i agree with you. i think there is a legitimate question, and we talked about the traders about the go it alone attitude. go alone to north korea and syria. what's it mean? what are the implications, so i think there is a little bit of worry about that, but not an awful lot. remember i said a couple days ago, you really want to watch the trump agenda. watch the russell 2,000. that held up well. look at iwm, we had active volume and big ecs, there were problems recently, big volume, the russell 2,000, and i'm telling you, that's the ref run depp there, the iwm, and the retail index, all created a lot of problems recently. they had a very good day on very, very good volume, so, yes, there is a legitimate question of the go it alone thing, but i don't think the impact on the market is too great today. >> and if you want more evidence of the different world we live in now, we've gone the whole hour, and tomorrow morning, jobs

number, the expectation, any idea? >> numbers float around at 175 range. >> after the strong adp number, they are going up. >> certainly 200,000 is in the barrel. >> that number tomorrow morning at 8:30 a.m. eastern time on "squawk box." more on the summit in the second hour of the closing bell with kelly evans and company. see you tomorrow, kelly. ♪ thank you, bill. welcome to the "closing bell," i'm kelly evans. beginning with the close, up 16 points on the bell for the dow, turning negative almost, amid tensions throughout the afternoon about syria and north korea. more on the situation for you shortly. the dow the worst of the performers, by the way, less than tenth a percent, and everybody else managed to stay positive and even more so, the s&p was just a fifth of a percent to 2357.5.

nasdaq up 1579, and russell outperformed, 1%, 1364 for the small caps. mentioning president trump holding a two-day summit with president xi in florida, how the meeting could impact business here in the u.s. and xi's political standing in china. we're going to have much more on that coming up. joining me on today's panel is cnbc procolumnist, and kicking it off is jim research at post nine, and stefanie at post nine from ciaa investments. mike, first to you, you know, it's tough. it's one to be appointmented out earlier, explain to me how the syria and north korea situation impacted earnings this quarter. >> well, yes, earnings are important, but the markets have a lot to discount, right? >> i'd say it doesn't. the market doesn't think it does, but i do think that you have, essentially, a very, very minimal bounce underway either in the middle of the day from

yesterday's selloff, and two-sided nervousness. we're trapped in the range, skiddish, and the bond markets, yields refuse to lift on the sustained basis, and that does not give the stock market permission to get a little bit more enthusiastic, and it's much more complicated than that. >> president trump and secretary of state rex tillerson talking syria and north korea, putting pressure on stocks in the time hour. john harwood with the latest, john? >> it's a dramatic moment in this young presidency. within the last 24 hours, we've had an apparent reversal of the administration's position on syria in the wake of that news of gas on children, that horrific attack watched on television for the last 24 hours. now, president trump who consistently argued against intervention in syria had this to say about the future of bashar el-assad. >> what happened in syria is a

disgrace to humanity, and he's there, and i guess he's running things, so something should happen. >> reporter: something should happen. we had an even more dramatic direct reversal from just a few days ago from secretary of state tillerson. last week, he said it's up to the syria people to decide if assad stays in power. here's what he said moments ago. >> it is very important that the russian government consider carefully their continued support for the assad regime. his role in the future is certainly unclear, with the acts he's taken, it would seem there would be no role for him 20 govern the syria people. >> now, both parts of that sentence or quote were extremely important because, of course, russia is a strong ally of assad, and if the united states takes military action with president trump in the pentagon, which they are now considering,

that potentially could put us in a challenging position vis-a-vis russia, even the potential position of hitting some russian forces who are in syria, so very touchy moments for this young administration, which has had turmoil with the staff trying to find footing. you just had steve pulled off the national security counsel yesterday. we'll see how they work through this challenge as the president goes ahead with that meeting with the chinese leader in florida. >> john, thank you. john harwood in washington. it's certainly enough to, you know, these are tragedies we're talking about, finding situations in north korea, and steve brasso said, the fact these markets just continue to try to take this in stride, and if anything, try to look tapped in and focus on controllable items from washington tells you something more about the sentiment right now. >> this is serious. you can see why and understand why the market actually took a dip when these headlines came out, fur sure, but we are from a

stock point of view, equity market point of view, so focused on the macros right now. by the minute, i mean, yesterday we had the trifhawkish fed, pau ryan walk back the tax bill, and we also had oil invenn stories, very disappointing, and i'm of the mind set we needed that oil inventory to be good so we could confirm global growth. that surprised people. today, it was geopolitics and ryan again resuscitating aca. all the thiengs day-to-day, you ignore if you're long term investing. focus on fundmentals. that's next week with earnings. the big macro might take a step aside while we focus on what companies say. >> what's the best way to position while this happens? >> the economic data continues to be pretty good. i mean, even if you look at some -- i know we talked a little bit about last week about retail in the consumer being kind of, you know, mixed at best, and we had good numbers

today from costco, good numbers from young china, and we had symptom pretty good numbers across the board so far in what we heard from companies, so we just need more of that, i think, to get confident, so i still have the cyclical bias for sure. i'm adding to energy, adding to consumer where there are pockets in the marketplace that are kind of dislocated and have lagged. that's where i favor at this point. >> jim, what about you? the fed yesterday basically described stock valuations high, and bond yields are drifting and sagging here. how do you expect all this to come together? >> well, the bond market is suffering from two things. on the one hand, there's a fear that inflation or growth pushes yield higher in 2018. very well understood story. the media between now and next summer, this summer, is everybody shorts up on markets. everybody's positioned for a rate rise. i was at an investment conference this morning, 250 people at the conference. how many people are bullish on the bond market?

ten hands went up. the person who asked the question, not me, said, that many? i mean, that's how bearish everybody is in the bond market which i think the short is already in having a hard time selling off from here. >> what about stocks, then? >> stocks will continue to tread water to be okay. i think the biggest problem in the stock market is look energy, earnings up 5% or 6%, x-energy, 10% with energy. sounds like the year's done now. doesn't mean we sell off. something's god to change in order for the market to move forward. >> we have not done earnings season. >> we have, we're at the point in the cycle where you see work on this. the difference between the better and worse performers on the fundamental basis for companies reporting results should widen out again. this is the nature of where we are now. that means maybe the overall market pulled forward gains, but it means it's a washout from here. >> by the way, we have the big jobs report in the mornings.

you know, i'm not sure how high the stakes are, frankly, i mean, you can argue it's been so strong even if it disapoints, and in april, it has in history. what do you think? do we need that to be strong in order to -- you mentioned something out of the oil inventories. that hurt. you know, do we need the job report and wage numbers and all that? >> i'd like to see the wage numbers go higher. we are rooting for that. i think the bond market would react if we actually got a little hotter wage number. i think the stock market would like that. for sure. i don't know we'll get a block buster number. talking about weather distortions dampening it. look, at the end of the day, we have a healthy -- if that's the one consistent thing we had over the last two years, consistent improvements, and that's a good thing. that's good for consumers, which is why they are actually shopping, choosing why they are shopping. that is why we see manufacturing pick up. that's why you see a 2% gdp, and that hopefully will increase as

we get throughout the year. >> most hopeful thing the other day, story of two bus drivers, school district changed, kids schedule schedules can't afford to pay them more. julia, what's happening with twitter? >> yes, kelly, that's right. twitter is suing u.s. government over a demands for records on an anti-president trump account. those demands reveal who is behind the account. twitter saying in a filing to the federal court in san francisco that, quote, the rights of free speech afforded twitter users and twitter itself under the first amendment of the u.s. constitution include right to deseminate such anonymous political speech saying that a special agent within the u.s. customs and border protect agency demanded records that would lead to the unmasking of the user account. they said it's unlawful unless the government shows that they are trying to invest gait a specific occurrence. that account called itself immigration resistance created

in early 2017 and has now more than 33,000 followers. in response to the lawsuit, they tweeted the first amendment and retweeted the aclu, they would go to court to defend the user's rights on twitter. now, twitter has a history of protecting users' privacy, such as protecting an occupy wall street protester, and there's guidelines for law enforcement explaining how to request information about twitter accounts via a valid legal process. kelly, over to you. >> all right. this is an interesting one. i mean, any thoughts, guys, on what happens now with twitter filing a suit against the government and trying? >> it's obviously raising stakes on the back and forth administrative thing going on behind the scenes. julia said it's a consistent position on twitter's part. they have a very, you know, high minded self-regard for what their mission is, and i think they stick to that. i don't know that we can infer whether this was an education kalation under the current

administration of any efforts of trying to find out who the people are and on what grounds they wanted that person. >> it also reminds twitter wild west. a lot of stuff going on there, if you're an advertiser, you want to look away in horror, and go, do i want to be associated with the things going on there? maybe this was completely legitimate. maybe twitter's got a chase here. but, you know, it doesn't remind me of what can be seen on twitter makes you want to be an advertiser. >> at the same time, nucleus blocking ads from channels with fewer than 10,000 views. that's a major shift the wall street journal reported after a backlash over advertising how trustworthy some of the critters are. >> we're in new ground here. we don't know how it's going to work out. never had this, these platforms with this growth with this many users on at the same time. you know, growing pains if you will, serious in that, of course, but i think that twitter going after trying to find, you know, the culprits, the bad guys and going after them is actually

a good thing. they are trying to protect the people on the site. >> i feel it's straightforward too when law enforcement looks at this. i imagine the treatment of the property is somewhat consistent, so if it was enough to, you know, be valid for a warrant to search x, that applies to twitter, and it not valid for x, it should not apply to twitter. >> that is true. twitter, of course, tries to police, you know, abusive tactics, abusive speech by use eres, right? they reserve to basically knock you off the platform if they feel as if you have been consistently abusive, right? they have done that with prominent examples, so maybe there's going to be some clarity as to the policies on when to defend free speech and what they take action. >> again, that news is that twitter will be suing the u.s. government or their demand for records on an anti-trump account. thank you, guys, jim, stefanie, joining us here this afternoon. president trump set to host chinese president xi in florida. trump's highly critical of chinese trade policies and tensions could be high. next, what impact the meeting

could have on american businesses, and the republicans in congress at risk of using all their political capital before they even take up tax reform. we'll debate that. the impact on the markets still to come on the "closing bell," you're watching cnbc first in business worldwide.

president trump hosting president of china at the resort in florida for a meeting on trade and north korea. we are nearby in palm beach with the details, kayla? >> reporter: kelly, the two leaders are in palm beach, each arriving at the respective hotels separated by eight miles of coastline here. it will be a very intense conversation. whether it begins. the president aboard air force one telling reporters that the two topics are north korea and trade saying, quote, we've been treated up fairly and have made terrible trade deals with china for many, many years. that is one the things we're going to be talking about. those comments made back in a press cabin up front with the president among others were secretary ross from, and economic adviser, and steve bannon and priebus. they confirmed peter nevaro, a china hawk and trade adviser to the president will be joining on

this trip to meet with president xi. tillerson, though, the secretary of state, has been leading the public engagement, receiving the chinese delegation today. last month, in beijing, he echoed the communism party's language say iing he wanted a win-win relationship, and he wanted mutual respect between the two countries, but today to reporters, there was a harder line. >> today will be a time to exchange candid views on the nature of the u.s.-china relationship, and we look forward to additional discussions in the future on topics of mutual importance. as president trump has said, the chief goal of our trade policy is the prosperity of the american worker. >> reporter: so those were the comments that set the table for meetings over the next 24 hours, kelly. the only real schedule item on the agenda are a working lunch tomorrow and a dinner tomorrow at the resort tonight, and interestingly that's taking

place despite the fact the president, president trump in the past, has criticized the american government for hosting state dinner for chinese leaders saying he would just take them to mcdonalds to negotiate. unclear how dinner will go whether there's images of the two leaders together. >> we'll watch out for mcnuggets, thank you so much. blackrock ceo was on "squawk" this morning for expectations about the meeting. >> i personally believe that the chinese government will be good listeners to see what our new administration is -- what their intention is. i actually am on tptimistic tha this will be a good meeting, both sides actually, both sides need a form of success. i think you're going to find ways to improve the relationships. >> joining us to talk about how the meetings impacts businesses

is the national committee on u.s.-china relations, and scott kennedy for the center from strategic and international studies. steve, how long has your organization been around? >> 50 years. >> wow. >> we were set up 50 years ago and hosted the chinese ping-pong team in 1972. >> how do you describe relations between the two countries today in the context of that history? >> right now, they are undetermined. i think the next 24 hours is going to tell us an awful lot. i think that president trump is welcoming president xi down here in palm beach is a statement that he wants to try to make this relationship work and be constructive, create jobs for the american people, and bring the chinese closer to american terms of restricting north korea's nuclear weapons program. >> the skscott, a major issue. in the meantime, it was reported xi's going to be arriving with a gift basket of quote on quote tweetable deliverables.

the idea it may include trade sweeteners, look for u.s. -- get easier control of exports for things like high-tech. these are all on the trade front, which is just one piece of obviously the many different aspects they'll discuss today. >> yeah. they're going to have a wide range of issues that they're going to talk about on security and economics front, and i think we shouldn't expect too much in the terms of deliverables from either side. i think this is really more of a get-to-know you meeting, laying out concerns and goals and hopes are. i think if they are going to talk in detail about deliverables, the most urgent issue, of course, north korea, and talk about trade issues to some extent, and i think president trump lays out two paths, one is, if we can get greater chinese cooperation on trade, here's what a relationship could look like, and if we don't, here's the other way it looks like where there would be more tension.

>> steve, the relationship struck a position of defending world trade since president trump. what note do you expect president xi to strike when it comes to all this in the sense of trying to be look like he wants a better relationship, but defending the principles of open trade? >> i think he is going to say that a lot of the trade deficits is in china, exporting back to the united states. it's a mea culpa. you tell your companies to stop setting up in china. i think they are going to look kind of for a frame work, talk about investments, somewhat. the easiest way for china to create jobs is through greenfield investment, through infrastructure investments, and i think that's going to be a portion of what president xi says, and that is, even if it's not specific, is a deliverable of sorts. we'll come out with a report next -- in a couple weeks, that

say 141,000 americans now receive their paychecks from chinese companies. >> wow. >> done through acquisitions, but what president xi says, we can build that. we can grow that. we still have 3 trillion of reserves, and we should kind of find ways to use reserves productively in the united states. >> so, scott, we were asking the question of what business community should know or look for coming out of this meeting. with all this said, what do you think american businesses should be looking for? >> i think they probably should be looking for whether both sides walk away feeling like they've gotten something from the agreement, and that there's a productive path ahead. one of the things that they are going to most likely talk about is the type of institutionalized dialogue that they should have. over the last eights years, under the obama administration, the u.s. and china had something called strategic and economic dialogue, and there's a

possibility that will be reformed, the two dialogues split, one to security issues, one into economics. if they announce that, that's a positive snag. >> all right, gentlemen, thank you. news alert on ferrari. what's happening there? >> that's right. looking at the very first interview that pharara has given. he spoke with the new york times on monday, but the report was just published. it was his first day as a distinguished scholar in residence at the new york university school of law. now, my favorite quote in this article is where he says that his firing, resignation, was an example of a direct example of the kind of uncertain helter-skelter incompetence when it comes to personnel decisions and executive actions that was

in people's minds when this out of the blue call for everyone's resignation later came. he is referencing, of course, the administration, and they are about face when it came to his job because if you remember, kelly, back in november, he was told that he could stay on as u.s. attorney, and then out of the blue, at least according to this interview, he was asked to resign on march 10th. to plenty of interesting stuff in here, and we'll continue to dig in and report back with what we find. >> leslie, thank you. there's been plenty speculation about the timing of this, mike, whether he was looking into trump or people close to him, for example, and now questions about what steps pbharara makes. >> they had to know you gained a well-sourced critic, immediately, a vocal one. not a big surprise bharara strikes this note frustraom the outside. i doubt it escalates, but i expect peeling away of the layers of what was underway in

that office, u.s. attorney's office. >> donald trump jr. may be getting into -- >> reports say. >> that's what the reports say. we have to emphasize. we'll see. another company getting into the wireless war, comcast, our parent companying, offering a wireless service becoming the first major u.s. cable company to do so. coming up, why it could be an attempt to stop cord cutters. going public, but in a very unusual way. that could be the latest indication that the wall street business model is broken. we'll have details when we come back. well in life, with help from our advisor, we made it through many market swings. sure we could travel, take it easy... but we've never been the type to just sit back... not when we've got so much more to give when you have the right financial advisor, life can be brilliant.

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welcome back. we do have a news alert on youtube. julia has all the details, julia? >> kelly, announcing steps to protect its creators, the changing design to protect advertisers. app issue that's driving an advertiser boycott of youtube. youtube announcing it will no longer serve ads on youtube partner program crater videos until their channel reaches 10,000 likes on views. the new threshold, youtube says, gives enough information to see the validity of the channel and whether the channel follows community guidelines and advertiser policies. they have a new review process for new creators applying to be in the youtube partner program, allowing them to share ad revenue. kelly? >> how big a deal is this, julia? seems like a shift. put that 10,000 number in context, if you can. >> well, i think the key thing

here is that youtube wants to make sure that it keeps on encouraging creators to put the best content on youtube. so many other platforms to share content including facebook. in order to do that, youtube needs to ensure that advertisers are not boyboycotting. to do that. you need a new threshold level. a channel that has 10,000 views, that's a beginning point where you make significant money. below that is not significant money generator, and youtube said it's not going to let people with fewer than 10,000 views generate revenue. it's not worth it given the potential risks they are doing something offensive or extremist. >> they might know as people grow and put out the content. got it. our parent company announced they are getting into the wireless business of the what can you tell us about it? >> well, that's right, kelly. just today comcast unveiled

xfinity mobile to 25 million broadband customers. they are looking to lock in existing customers by offering this additional mobile service and potentially lure in new customers. they are going after the 130 million mobile phone lines that are in that comcast foot print. they are pairing verizon's 4g-lte network with hot spots that automatically connect the service. customers of the t-mobile service get up to five lines with no per line fee and switch back and forth between data options with no extra cost. unlimited data option is $45 a month for customers, and the top package is 65 for other customers, or you can pay $12 a month per gigabyte 6 data. comcast said they'll roll out the service later in the quarter. the most popular devices are the iphone and samsung8 family of devices. the main goal is not to compete

directly with other wireless carriers, but to use the service to grow customer loyalty to its bundle. this comes as at&t steps further into content. just yesterday announcing they will give away hbo free to unlimited customers. this is cable companies competing against each other to differentiate services. kelly? >> if i don't have xfinity or subscriber, can i use this mobile service? >> you can if you're within the foot print. in order to sign up, in los angeles, we can't access comcast either broad band or cable. i couldn't become a subscriber here, but if you live in a neighborhood where you can access comcast broadband, you can sign up for the service. you have to -- it has to be bundled with internet service, so the idea is that you're not just doing it as a stand alone thing, but figure most people subscribe to a broadband package and ultimate level phone pack,

bundled together. you don't have to pay for a tv bundle to get the phone bundle. that's a different thing. they have 25 million right now paying for broadband. they automatically sign up for this mobile phone service, or if you're within the comcast foot print, sign up for broadband as well as mobile. >> rall right. i think i got it. favorite point in this is, of course, wireless industry does $82 billion in earnings effectively. cable just $35 billion. >> tremendous pull. the other piece of the backdrop is there's talks that once the wireless networks get much many better, you'll be able to get everything over the air. you might not even need bundles, so allow people to access it. it's always been hype and content over the pipes, but the last mile of the pipe is virtual, wireless. >> i think charter has it coming next year too. getting interesting. >> here's what's happening at

this hour. health intelligence community nunes will temporarily step aside from the investigation into russian interference in the 2016 presidential election. he'll be replaced by mike c conaway, a republican from texas. >> nunes earned my trust for years of integrity and dedication to the critical work that the intelligence community does to keep americans safe. he continues to have that trust. >> clashes broke out between police and striking labor unions near argentina's capital. they fired water cannons and tear gas as protesters attacked them with sticks. they are protesting government austerity measures and demanding wage increases. a new tool to spot fake news stories and other misinformation that spreads. they feature the top at the news feed for a few days in 14 countries. kelly, back to you. interesting move. >> exactly.

thank you very much. house speaker paul ryan says tax reform may take longer to get done than replacing obamacare. could republicans end up using all their political capital before taking it up? up next, that debate. stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker. that's the power of and.

welcome back, a nail bitie ing finish to the close. we almost were negative in the final hour or two amid tensions surrounding the meeting between trump and the chinese leader xi over what aspect of the north korea strategy might come up, and, of course, over syria. tillerson gave a news conference and trump making headlines about how the u.s. may go it alone with north korea if china does not participate, and them, of course, syria reports from the new york times and elsewhere there could be military action considered there. all of that, again, effectively going negative for some of the an averages, but closing positive. republicans have also been promising to repeal and replace obamacare for years. president trump promised it would be done quickly, but the house was unable to finalize the bill, and now there's talk about moving on to tax reform, but as

the gop squandered its political capital, here's mark meadows on this very question earlier today. >> i'm optimistic on tax reform if we do it differently than health care. i believe we'll get tax reform and think we can get it done before august as long as we are really serious about having real debates. >> joining us now, the american enterprise institute, and cnbc contributor and chris edwards, director of tax policy studies at cato institute. thank you, guys, for both being here. what about the political capital? how much is left here? >> well, i know it's like the natural interest rate. it's tough to measure directly, but you can try to figure it out, and one thing that popped up today, goldman sachs had a report, stock links to various trump initiatives, tax reform, infrastructure, a few more, and every one of those baskets of stocks is in retreat.

some are back, you know, where they were before the election. i think that's just one sign, also, the president's popularity. they did not start out with a lot of political capital. i guarantee there's a lot less now. this agenda, particularly tax cuts, amazing as it sounds, the idea of big tax cuts is in tremendous jeopardy, but the moderate tax cuts is in more trouble than i imagine given these are republicans and they control congress and the white house. >> yeah. chris, you are an optimist. why? >> absolutely. tax reform is going to happen this year. particularly business tax reform. never seen a president so committed tax reform. bush wasn't, clinton wasn't, nor was obama. trump is visceral against the corporate tax rate problem. the highest priority here is flashing the corporate tax rate. britain and canada slashed there's down to 15%. they did not lose any money. that's what we ought to do. republicans have to get rid of the boarder adjustment stuff. it's dividing supporters,

dividing members, and they get rid of that, they go whole hog on the corporate tax cut and do it a smaller individual tax cut. it can absolutely happen this year. i don't believe it has to do with political capital, whatever it is, but it has to do with arms lifting and horse trading. obama passed obamacare with horse trading. republicans ought to get down to the horse trading, do what they need to do to pass big tax cuts. >> what's common with all sorts of popular leaders, whether it's this country, other country, they don't recognize political and economic constraint, and at this point, the talk about a tax cut, a leer rate, 15-20%, and no border adjustment. don't try to pay for it. i think that's not going to happen. it loses a ton of money. now it's a cut down to 28%. that's not the math -- >> jimmy, yeah, you're not looking at the experience of other countries. >> not dynamically scoring the analysis?

>> i'll give you a precise comparison. britain cut the rate 28 to 20. canada 28 to 15. i looked at data in detail. neither country lost any money in terms of corporate tax revenue as a share of gdp. these corporate tax cuts pay for themselves because multinational they invest more. >> even the tax scoring from the tax foundation, tax cuts lose money. aggressive dynamic scoring. >> the most -- the real world dynamic scoring is two of the our biggest trading partners. proof in the pudding. they did not lose money. rates came down across the world for this reason because both politicians of the left and right realized cut the rates. >> looking for the mother of all tax cuts. that time passed. >> chris, i guess the question is, you know, what do you say to the president who is very committed, he gets it, but why not run into the same types of

businesses that health care did, where you have people, saying, listen, we have a hard line here. it's basically on paper buy our math. wydens out the deficit, we don't want to go for that. >> it's going to happen, i believe, these things don't happen overnight. reagan tax reform in '86 was years being moved back and forth between the white house and congress, and it was all kinds of horse trading. it may take a while. tax cuts are the central balloon that holds the republican party together. they know they got to pass it. it's been a central promise of theirs. i think it's going to happen. >> they have no plan. >> last word, jimmy, last word. >> they have a president -- >> they -- >> the president did not pay attention to policy. they are sitting here in appraisal with no plan. what they had in political capital, not much. >> they have a plan, but too focused on the border adjustment, diverting attention. get rid of that. get down to rate cuts. >> we gave you the last word, chris.

oh, no, going back and forth. >> thank you. >> fun to watch it, but nerve racking for investors admittedly. 2017 is a politically critical year for the president xi too. what he needs to do over the next two days to keep beijing happy. first, potential plans to go public why that may spell trouble for wall street when we come back. the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares.

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welcome back.

brazilian airline founded by former jetblue ceo is set to price the ipo any moment. the carrier had plans to go public twice in recent years, meanwhile, spot jify may go public in an untraditional way. leslie picker has the details. >> kelly, rather than an initial public offering, it's an initial public listing. that means is that spotify would not sell new shares or market itself in a traditional road show. instead, the swedish company would register its stock to allow current holders to sell on the market. supply and demand would determine the price. this is something the company is seriously consider, sources say. why do something so unconvent n unconvention unconventional? for one, spotify has 1.7 billion dollars in cash on its balance sheets and doesn't need to raise money through an ipo. spotefy could save millions on bankers frees and talk freely to get others to the same place and

not have the rules that come with an ipo. one investor likes this alternative method. >> if you are going to offer an initial public offering, that means that shares are going to get deluded. if the company doesn't need the capital, then there's no need to raise capital just for the sake of it. >> he said he has not decided whether he'd sell yet, but experts say it comes with risks. liquidity would not have a set offering size, and spotify will not have the benefit of banker introductions in a road show, but spotify is successful, there could be others following suit. >> fascinating, thank you. is this the same thing the maker is doing, saying they go public, but not really, and if you buy $5,000 in shares you get a rotisserie or something. >> a nonpublic offering selling

stock, but this is grum a grudg way to be a company, allowing investors in the private market to have linquidity, but not goig through the process. i don't know that it's about fees. it reflects the fact that these big, very well-funded private companies needed in the areas just don't see the need. there's a provision, i don't know if it's in play, leslie knows, if there's a certainly number of shareholders whatever it is, you file papers saying you're public thinkway, so you have some of the downside of being public without the listing making it easier to fill stocks. >> the jobs act got rid of that for the most part. definitely companies have been able to raise so many rounds and become so massive that they can do this, and what's interesting here is that it seems like a lot of unicorns taking in money in a very expensive way, which means that they've taken these debt structures, debt securities, making it so that it becomes more expensive the longer they wait to go public.

now why spotefy has exactly chosen this method is something i'm continuing to report because i think there's more to the story here. it is something that we could see be emblematic of the unicorn phenomena trying different things. >> too cool for school. >> you wouldn't want to have an unwritten offering, make a big deal going public, and the public valuation is lower and embarrassingly so. i don't know if that's the equation or not. >> for wall street, i know 7% fees on ipos. it's come down, probably, but still lucrative, and they would not get a piece of that if ha happens. >> a law firm in new york did a study that showed that the average ipo, and much smaller ipos than what spotify would be doing, prices are $12 million. they can run as high as $100 million. that's just for ipo fees, so that does not include some of the other expenses that go along

with the megaipos. >> spotify has been a trend setter, and the opportunity is here as well. thank you, leslie. >> thank you, guys. >> leslie pick ir. tale of two world leaders with chinese president xi by the book and president trump is off the cuff. upcuff. up next, they are hoping their two-day summit in mar-a lago will bring. one beaten down sector that has the chart mast, saying you have to sell now. wheel be back right after this. ? ? i hired some help. he really knows his wine. this is the new guy? hello, my name is watson. you know wine, huh? i know that you should check vineyard block 12. block 12? my analysis of satellite imagery shows it would benefit from decreased irrigation. i was wondering about that. easy boy. nice doggy. what do you think? not bad. dearthere's no other way to say this.

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>> welcome back. president trump's two-day meeting with president xi jinping at mar-a lago is under way. there is a lot at stake.

good morning, eunice. >> reporter: good morning, kelly. well, i know it's early in the morning over here, but the level of coverage of president xi's arrival so far is very, very minimal and unusually low for an event like this. so far what we're seeing is a 100 word acknowledgement in the state run news agency xinhua that she has arrived. there are no photos of xi, no video. all conversations of event have been blocked. the media is a part of the government's overall effort to control the narrative around this event to its people from beijing's perspective. what's most important is that president xi appears strong in this meeting. for domestic reasons, because china is facing a leadership shuf him in the fall, it's very important for president xi to appear tough. one of the worst case scenarios reeling for the chinese government is if there are any unscripted moments in this

event, which could potentially embarrass president xi. so any disrespectful tweets, awkward moments, signs of open hostility and the best case scenario is that china manages to avoid a full on disagreement over trade, market access, north korea or other issues and also if they're able to establish a path for constructive dialogue and sent a sign of civility in the relationship, that's really what china wants and kelly, i don't know if you remember yesterday, but i was telling you about how there was a bit of grumbling on social media that mar-a lago was chosen as the venue, instead of the white house and that some people saw that as a sign of disrespect. well, that conversation now, has been completely censored. kelly. >> wow, i'm surprised there is so little coverage, it's really interesting. eunice, thank you, we will see how that changes as the two leaders continue this meeting. the ceo of one of the largest companies is meanwhile getting a massive pay cut.

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bp flashing the 20s 16 pay package of ceo bob dudley to 40% to just under $12 million. it comes after the 2015 pay package that gave them $20 million. it's like the company loses $5 billion during that period, mike. >> it seems it's a trend against all investors in uk companies. there seems to be a big backlash after corporate scandals, just the sentiment is running against it. so big votes against high pay packages are perceived as high, they're not binding the company is responding, glox so smith klein. the big ceo, his pay was cut. still very much competitive with other big oil companies in europe. >> how common is it in the u.s. for shareholders to push back? >> there are these stay on pay votes. every big company, they're non-binding as well. i think the research is completely mixed. i think many investors don't see it as their role, basically in the u.s. it's look, you can tell the stock if you don't like how they're paying.

>> it's taking, seems to be picking up momentum in the uk, there are signs in europe, the corporate governs is improving. you can look at elliot, the ppg situation, but there is a lot of hurdles as well. >> it's going up over there. i think that's the case. when it comes to pay, there is ratio on ceo pay and worker pay. so it's a little different tone over there. >> speaking of pay, we get the wage numbers tomorrow morning. >> we do the wage number and labor force participation. we tell you about this, too. >> they can vote this down if they don't like the number. >> you can do what you want with your bonds, based on what comes out. i think the market is prime for a soft number. i think the incentive is maybe we can give back. >> you bring up a good point, if it's as important. i know people have been saying this for a while. the broader one the president still talks about this all the time. >> you want to see that go down, but also, if, in fact more

workers come into the work force, it does give the fed more leeway to say maybe we're not a full employment. maybe we don't have to rush so much. the interpretation is more labor slack than we thought, if it does go up, if workers do come back. >> we look forward to that report. we will learn what is happening then. >> that does it for "closing bell." "fast money" begins right now. >> "fast money" starts right now! we start with two major stories out of the trump administration as global tensions are on the rise, secretary of state rex tillerson and president trump are both getting tough on syria and this as the president has arrived in florida, getting ready to meet with chinese president xi. the tough talks, the stocks say that was up at 100 points, the highs on the day, ending up high higher, about 15 points. eamon javers and kay