a very good morning. and you don't know how good a morning it is, welcome to "squawk box" right here on cnbc. we're live at the nasdaq. i'm andrew ross sorkin along with bill kernen and melissa lee. becky off this morning. we'll look at futures, see how they're opening up after a weekend here. dow owned down marginally down about five point its. let's show you what's going on in asia, keying off of that, because not much is happening there. the nikkei up marginally. the hang seng composite down just a bit. european equities we're looking at in a red picture for the most part. but not terrible for the most part. finally, a quick look at wti, crude, you can buy a barrel for $52.56 this morning. here's some big stories we're watching this morning, fed

president jim bullard said the fed could begin winding down its massive balance sheet later this year. he suggests the shift makes it nez to raise fund rates but bullard told reporters it differs on the topic. janet yellen is speaking at the university of michigan this afternoon. wednesday, look for import prices, thursday brings jobless claims and march cpi. markets as i just told andrew closed on good friday. so there is no work. >> is that why -- you didn't know? >> i said to you how great a morning it is on "squawk box." i did realize that there might not be a "squawk box" on friday morning. >> i'll give you the benefit of the doubt because easter is early this year. it's like -- so, i wasn't thinking. i mean, i'm not going to be here as of wednesday. >> right. you already planned your -- >> so, i knew that was coming because there was packing involved and things like that. but i'm glad that that set you

off in a good mood. >> as you know, positivity is my new mantra. >> three steps forward and two steps back last week. he came in -- was it wednesday, was your first positive day and you were good. >> monday, tuesday, wednesday then a little blip on thursday. >> monday was horrible. >> beaten down. >> then, tuesday you came in positive. >> do you have a log of this? do you keep track on a spreadsheet. you surely should. >> i'm in large part responsibility for -- >> sure. >> for him to stay positive. but for a lot of people with tds, it's hard to beat positive on a given day. you're trying to make the belt of it on a bad situation. you does successfully, but you did have setbacks. >> occasionally. >> i'm going to move on. even though the markets are closed on friday there's economic data, march retail, cpi

and consumer sentiment. earnings season gets under way on wednesday. with citi and wells fargo before the opening bell. and the merger of two of the largest truck companies, "wall street journal" reporting the deal will be announced society, swift which will own 50% of the company. and this would be the largest deal in the trucking business since xpo bought conway for $3 billion in 2015. it's good to be -- it's glad that you're in that process, we're going to talk about google. what's that atomic clock as we get closer to oblivion, we definitely moved a couple notches in the last couple of weeks? >> if we're all dead, we're all dead. it doesn't matter. >> you don't have to worry about your investments, either, right? if this was just a flash.

the general mood is a little disconcerting right now. i don't know who is going to back down, they're not going to back down. hopefully, people are talking behind the scenes. and then we're moving the navy -- i know that little clock is -- >> so, are you planning your plans for the summer, are you saying, you know what, i'm going to wait and see what happens. >> we're redoing the basement and the pool house. >> yeah. >> okay. radiation bunker. >> building a bunker. >> with food that lasts forever. stocks with google offering at least $880 million to help lg boost output of its oled screens. for flexible supply of flexible

oled screens. and tesla is denying a report it plans to open a factory in china. the report initially in the local newspaper in guangdong province. tesla said it's committed but the plans to open a factory is not true. and mondelez is reportedly looking for a successor to ceo irene rosenfeld. its board recently discussed candidates. the shareholder pressure and stakeho stakeholder ackman have earned mondelez to be acquired by someone and it won't even have to have that name anymore. i don't know what it means. it's like made up. >> i think when the name was first announced before saying there's a term in russian that's

almost like prostitute. >> you there go. >> it's a horrible name. >> did they give up on that -- >> see that company become part of something else. moving on, regulators investigati investigating barclays ceo. cashing barclays has republic from mansded him. the justice neil gorsuch will be sworn in today. kayla tausche joins us with more. >> good morning, andrew. judge gorsuch will become justice gorsuch as he's sworn in as the 101st justice to the

supreme court. it's a win for the white house which now has two weeks to regroup with congress. with infighting and potentially organize personality. it's widely reported that deputy national security adviser k.t. mcfarland is going to be reassigned as ambassador. elsewhere, foreign policy will come into focus with secretary of state rex tillerson meeting g7 leaders before russia's foreign minister wednesday as the u.s. steps up criticism of russia over syria. on "meet the press," u.n. ambassador nikki haley went even further to reiterate her push for regime exchange. >> in no way do we look at peace happening in that area with iranian influence. and no way do we see peace in that area with russia covering up for assad. in no way do we see peace in that area with assad agency the head of the syrian government. and we have to make sure that we're pushing that process. >> meanwhile, north korea has

said the syria air strikes justify its nuclear program just days as president xi and president trump agreed on denuclearizing the region. a spokesman for the foreign minister staying this, quote, our tremendous military muscle with a nuclear force as its pivot serves as a treasured sword of justice capable of fooling the u.s. shamsless hiel high-handed and arbitrary practices." some small concessions might be on the table over specific access to financial investments in china. and beef exports between the countries but as commercial secretary wilbur ross said over the weekend, words are easy. actually acting on them is a bit harder. >> we want to thank you kayla. thank you for that report. what do you know about what came up over the weekend, back to the tax plan, given the comments on friday and the idea of pairing

it with an infrastructure plan? did you hear any more on that? >> well, that's been an idea, and drew, that's been bandied about for quite some time. it's just a question of how much you can raise and what the structure of the program actually is. i think until you actually get details about how big they want the program to be, you could see a little bit more. infrastructure is something where i keep hearing you might see a few large-scale big-ticket projects that are pursued first. so the administration can show it's committed to infrastructure, rather than this wholesale $1 trillion program that comes out in the near term. we'll see, infrastructure being paired with the repatriation tax is something that discussed for a while. republicans, whether or not they can find common ground, we'll see. >> kayla, you've probably seen

or heard murmurs, the hard-core, bannonist types if we get bogged down in the middle east which is the last thing that those guys want, any type of intervention there, that lessens, i don't know, the political will, or the momentum for the legislative stuff. here we are bogged down in the middle east again. i was reading that in those circles i don't know. you can walk and chew gum at the same time, it's not theoretically like invading a country like iraq. but who knows. >> it is the first time that the u.s. has actually attacked syria which is why i think people are rightly taking this very seriously. but secretary of state rex tillerson has said over and over again, he reiterated this weekend that the u.s. policy and strategy in the middle east hasn't changed just by nature of this single series of air strikes that happened thursday night. but we'll see whether they

pursue anything greater. what congress does, if they come back early to potentially debate additional funding for this. that's really the wildcard here. >> we've got to go, but the palace intrigue, you think about how many different factions, it's kind of interesting, then you've got the kids. priebus is out. priebus is in. gary coons is going to go in as chief of staff. bannen is on a short lease. he's not on a short lease. a gun fight. there's a lot going on, isn't there? >> well, it was reported that reince priebus wanted to be the adult in the room. he convened the meeting on friday with jared kushner and steve ban tnon to try and settl differences for them. saying, look, we're all in this for the same cause. there's this idea that you can't criticize family. you can't criticize the

children. and they actually have some of the most power and the most trust within the white house. so, it seems that some of the advisers might be taking out some of their frustrations on other members of the west wing that they might have otherwise been able to direct at jared kushner or ivanka. >> what about blood -- blood is thicker than water. i was thinking about that. i don't know i'd want to go up against ivanka and jared. anyway, thank you, kayla. keep your ear to the wall. you should be reporting some of this. you love watercooler gossip. >> i love watercooler gossip. you know, i only know what they tell me. it may be a holiday-shorted week, but also the first week of earning season. lou breed, strategist. and lindsey stiefel, chief

economist. jobs slowing down, we're averaging 160,000 or something, what do you do at 4.5%, where do you find people? in a note it says you've been waiting for the rally to end since 2009. it's like i feel bad for you. i mean, where are you right now? do you think it's finally going to happen? >> no, i mean, i was being actually facetious, march 10th, 2009 comment. just all along, there's been a lot of good reasons during the last seven years when the rally could have ended it seemed. and there were some sometimes where we felt 17%. 20%. the fed was there each of those times. and now, the fed is not going to be there. and if there is some trouble, i don't know that the market ends but 5%, 10%, something like that that happens. markets trade. and i don't think that there's

anything right now on the horizon that suggests we're going to have any sort of a flip of the market. we're just 1.5% from the all-time high. but as you said earlier, there's some pretty dark news out there. and at any moment, something that we've taken, at least set aside, and not really paid attention to as far as the market goes. like relations with china or russia. or, you know, disturbances of trade. those things could have an effect on the market. and if the fed is not going to be there, which they have been throughout this rally, then it could get interesting but i don't see anything right now. >> i wonder if it would be a geopolitical thing or legislative disappointment, i wonder if it's anything? sometimes, you find out after the market correct what is it was looking? >> that's right. you know, how much has been priced in in the outlook for trump to get things done, when, you know, a couple months ago

there was the expectation that some of these big plans would already be entrained. and we're not sure how much of that was priced in. i think you can see some of that in the ten-year note. we got up to 260, since the fed made a move, we fell back to the yield pretty significantly. getting lower under 230. technically, it could be a very interesting story. >> the news cycle is insane right now. i mean, it was a week ago. and it was nehe's recused himse and find out what happened before the election. and we're not talking about that part of russia at all anymore. now, we're a totally different -- like putin -- bizarre. how does this play in with the economy? does uncertainty with ceos and

other leaders does it cause them to nauot act, i think we've mad that point in the past? >> well, i think the increase in uncertainty is certainly going to undo some of the optimism that has been carrying the market for quite some time. under this idea that the trump administration is going to usher in all of these pro-growth initiatives really, the reality has not changed the gdp is shaping up to 1%. march employment report on friday, very disappointing, down from january and february. we're talking about the weakest monthly gain in terms of job creations since may. we also talked about the slowdown and there's really not a bright spot that has this optimism in the market. now this geopolitical you certainty, this geopolitical risk maybe shaping it up differently, despite the fact that the economic data all along has suggested a very moderate

and tempered conditions in the u.s. >> second quarter, will we double first quarter gdp in the second quarter or more? >> i think that's very optimistic. i think right now, what you see is a declining trend, still positive in many of the key sectors. it's really that secretary derivative, that loss of momentum. as we go into the second quarter, should we see more pro-growth policies come into fruition, absolutely, we could see an acceleration in activity. but right now, there isn't any blueprint put forward to suggest yes, we are going to see a change in the tax code. yes, we are going to see a significant rollback in regulation. right now, it's political promises. and without actual reality driving some of these decisions in tellers of new orders, in tellers of hiring, in terms of new construction, it's going to be difficult to see anything

above a 2% growth profile in the second quarter. >> all right. thanks, lindsay. we'll check back. now, to sports, in a thrilling finish yesterday at the masters 18 holes were not enough to decide things between sergio garcia and justin rose so it went to sudden death playoff. rose mid-hssed his putt for par after he had to chip out from the woods. sergio had two putts to win. he needed one. curled it in. the 37-year-old won his first major title in 18 years on the pro tour. garcia is just the third spaniard in history to win at the masters. he had be in more major it's and not closed the deal than just about anyone. he's only 37, he's always had so much talent. maybe one of the greatest riter cup competitor. one of the greatest in europe. he drove us crazy if you're in

the u.s. my view on this, andrew, is that things happen sometimes in sports that are almost transc d transcendal. there are things that can happen. seve would have been s60 if he hadn't died that the early age of brain cancer. there are pictures of el nino as a kid with seve. everything that happens on 13, sergio hit it in the trees. he had to take an incredible -- you know it looked like he was out of it at that point. then he birdied 14 and eagled 15. just watching it happen, you could almost feel it. augusta for some reason, this tournament sort of brings out things like this. every year, there are -- there's

history and memories made at augusta that last a lifetime. >> this is like the spiritual side of joe kernin here this morning on a monday morning, right? like an angel watching over him? >> this is all sort of -- we seem like we're headed for heaven. i feel like i'm headed the other way. >> one other question, a fashion question, which is the green jacket, how many sizes do they have? it always seems to fit them quite perfectly? >> i'm sure they have every size. >> do you think it's good enough and maybe they do -- >> it looked like it fit perfectly. >> shoulders were perfect. it was cut perfectly, it was as if they spent time at the tailor in advance? >> it transcends human existence. >> did you realize, melissa is here, she's wearing green?

>> i was thinking gaufg ing aug. >> green, man in the boat overboard. coming up -- president trump is running the white house like a family business. that's not necessarily a bad thing. he complains after texplains af. ♪ it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average?

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♪ welcome back to "squawk box" this morning. critics have complained about president trump's family members being tapped as top white house advisers, the next guest wrote in "political" magazine, here to talk about it jeffrey signs at the yale school of management. jeffrey, we have not seen you in quite some time. you're like mr. governance, you normally hate nepotism. you hate family members being involved in all of this stuff. you talk about the conflicts of interest constantly. here you are in politico saying

not so fast. >> trust is what's political. family enterprises are not necessarily awful things. wee seen lots of well-run businesses with family stakes in them. ford motor company, a strong family stake. campbell's assume. we've seen family members -- >> oh, but i've heard you talk about dual stock structures that you hate because they belong to families? >> i don't have a problem with b-class stock. it's a great strength. that's one of the strengths in chinese enterprise, often longer term investments, and that reminds us why panera, just as we saw at the end of the week, by selling themselves to longer term patient -- even though they're spacing the market, still i think there's advantage to having family behind you. in this case, we're not talking about a private enterprise with

public trust. we've seen this completely unjustified moral outrage against a supposed youngster and inscenesed family member jared kushner stepping in. we have a long history of seeing these personspecial assistants pr broad portfolio. you know, kissinger had parallel kinds of things. all of the stuff he took on was a special assistant not as a formal title, henry hopkins who was a special assistant to fdr did everything from the lease programs, he's a social worker, by training and young. and opened up the doors to china and russia and stuff. we've seen people with broad portfolios in the past, we've seen them inexperienced and making a big difference. >> you can trust him is a big thing? >> in this case, dare i say,

trust over experience? >> definitely trust over experience. >> no, i understand that's happening, but you're saying that's a good thing? >> i think if the president is getting new information brought to him that wasn't getting to him through the bubble before, this is apparently somebody who has a handle in the removal of manafort in the campaign. perhaps the removal of stone. we've seen a change in the national security council, anybody who brings the best uniform to the pentagon, that's a good thing. >> are you seeing this in the context that life is relative? meaning that you could make the argument that there's been lots of turmoil inside the white house. and given that turmoil, yes, you might want a jared kushner in there as in life is relative kind of way. in a perfect world, would you not want somebody with more experience looking at each of these different items that are on his agenda? >> you know, sometimes, we overrate the role of

bureaucratic, technocratic experience. you read bob woodward's book "the agenda" like a baseball team, a soccer team, kids all chasing the ball down the field. >> i understand with people with little bureaucratic experience may actually be a good thing but isn't this disturbing the air wave that this is a family run business because this guy is president? isn't that the concern? >> melissa, this is where andrew was asking me and i tried to divert him on the asian experience. the family role complex, that can be anticipated they have jamie gorelik, former deputy attorney general in the clinton administration is very good at untangling it. they sold 60 of the businesses.

but even on the financial side they have to watch out with trade deals with jared not be involved. kennedy said when he named bobby kennedy who said there's nothing wrong with nepotism, as long as you keep it in the family. but that still raises the conflicts that can be there. if there are conflicts we see in the white house, blood is thicker than water with jared kushner. so you worry about making sure things are settled in course of fairness and merit. having somebody he can trust above all is critical. >> how do you feel about just the idea of this turning into something die nastic? how do you feel the country fees about dynastic fouy iic power. we may see ivanka trump running for president.

hillary clinton running for president after bill clinton. clearly people didn't think there was a high pothat? >> we have seen the adams family that brings up a whole different thing. >> i did see the kennedys. we've seen the bushes and others and the roosevelts, it's not necessarily a bad thing. i don't think we're looking at crown prince jared, by the way. this is just somebody who is trusted adviser, thomas moore who was an adviser to king henry viii, once you suffer it, you're forever gone. president trump needs somebody he can bounce ideas off of it. he's not somebody who had experience in public office. jared is somebody who is smart, hard working, apparently trustworthy who has given advice when he goes to kissinger.

>> what is the equivalent to the board of directors of the company that could vote somebody out if they're not doing a good job? >> well, the board of directors is congress. >> you have things that don't need to be approved by congress? >> look what alexander hamilton was doing under protection of washington and others. throughout history, a lot of jefferson's movement in office. whoever elected benjamin franklin to anything. we had huge sweeping policies by people who were not in politics. henry hudson actually lived in the white house for a few years. in the midst of a war, era of depression, a huge portfolio. they've done a great job. some people are worried that the kitchen cabinet has become a shadow state department. everybody can tell you that hopkins towered over the state

department. and kissinger was not for most of his career in government secretary of state. there was somebody there, some guy william rogers, nobody remembers him because he didn't get to do anything. kissinger was doing it all as a one-man show. i think we're lucky to have somebody who is smart, trusted and hard working. and the moral is completely unjustified as fun as it is to attack him. >> we've got to run. give me one single grade to the cabinet. >> to the cabinet, probably, "b," "b"-plus. i think madison and charo and wilbur ross are excellent. and mnuchin, i think there are very strong ones but there are others frankly not of that caliber. we'll see how secretary of state works out. >> okay. >> thank you. u.s. and russia at odds over missile strikes in syria.

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welcome back. you're watching "squawk box," live from the nasdaq market site in times square. welcome back. the search for unified approach in syria is sure to dominate

talks in italy today. joining us it larry korb at the center of american progress. larry, thanks for joining us. >> nice to be with you. >> you know, there was an interesting round of sunday talk shows this weekend. one of the standouts was secretary tillerson saying russia was either complicit, those are strong words. how do you think the meetings turned out given the strong rhetoric laid out for the american people? >> i think the meeting is going well. if the russians were as upset as they claimed i think they'd cancel the meeting. they'd also pull back from what we call the deconflicting which the planes coordinate over syria. i think secretary tillerson's remark was right on. my feeling is basically the russians are really upset at

assad. because the last thing they wanted to do is give the united states an excuse to get involved. don't forget, they're the ones who worked with united states and claimed the victory in getting rid of all of the consequenc chemical weapons. >> you know, the one possibility, they didn't cancel the meeting which is certainly a good sign. but at the same time, putin could still deny an audience with tillerson. do you thank you happens? or do you think that would really be sort of going too far? >> i think that probably would be, you know, going too far. and i think, basically, the russians feel they have to do something to show that they're not happy with what's going on. the good news out of this, it may lead to us being able to come to some sort of agreement with the russians about the future of syria. because, you know, they've been bogged down a long time. spending a lot of money that they really don't have. and if you could agree to some sort of federal system or a transition for assad, and they can keep the air base and naval

base, i think that that's really what they want. >> it sounds like you think the russians have got to do something at this point. how do you think the reaction is, though, if it is felt that the u.s. and secretary tillerson are putting them in a corner where they are force to take some sort of action? >> well, i don't think they're forced to, you know, to take some sort of action, because by and large, they have kept assad -- he was losing, you know, when they came in. don't forget, we've had these talks between lavrov, the foreign minister, and our secretary of state over the years, trying to coming up with some sort of violation. the real problem is, if assad should use chemical weapons again, basically then what? i don't even know if the trump people have thought through this. and i'm sure that the russians are going to make it clear to him that this is the last thing you want. and don't forget, we've warned them about the attack. and there were no russians killed. there were russians on that air base who could have been killed.

so, i think basically each side is doing what it has to do to preserve its own freedom of action. >> so, in terms of the trump foreign policy so far, you know, it has been, i guess, characterized as improvisational, i think some people would interpret that as a good thing, situational, and reacts to that particular situation. other people might say improvisational is risky because you don't know how they're going to react. what is your take on that? >> well, i'm concerned about that because you got to have a strategy and long-term plan and you don't want to react just to events. and what it look like here basically is the president reacted to a particular event without thinking it through the long-term consequences. by and large, what happened to syrians after, you know, we hit that air base, they went out and started bombing again. now, they didn't use chemical weapons.

but if you get killed by a barrel bomb, it's just as bad. so, i think, you know, really, that's what i do worry about, what is the next step. and why was it -- to a certain extent, just so limited. remember, they have six air fields. we could have easily have hit a couple more if we really wanted to do significant damage to him. >> larry, thank you for joining us. larry korb. >> thanks for having me. up can go whcoming up when former white house chief of staff william daly. and later, a "squawk box" market master. mow hamdz el eramo hamed el eris going to weigh in here on "squawk box" on cnbc. with little in alternatives. yet alternatives can tap opportunities that traditional assets can't.

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welcome back to "squawk box." time now for "the executive edge" taking a closer look at retail real estate which you might think, you know, if you look at the state of retail, that maybe there's some weakness there. i guess looks are deserving,

diana olick joins us now. >> you might think that, despite the big headlines on store closures at manhattan's fifth avenue and sears, retail is not in quite as desiire straits as think. there may be deals to take advantage of it. the vacancy rate steady at 9.9% unchanged for the quarter and year. asking rents increases 0.4% this is according to a real estate research firm. analysts say store closures are not significantly impacting overall rents as new retailers fill the space. at big malls, vacancies increased 7.9% to 7.8%. mall rent is up a little bit as well. it's helping that there's very little new retail construction. the lowest in fact since 2011. now, class "a" malls which are those with high-end anchor stores are doing well, but the

reits behind them, general growth, simon, macrich, they're getting whacked. they make up over 85% of the value in those reits. they should have pretty good prospects according to a recent report from green street advisers. analysts there say the stocks were hit way too hard with the hype and current valuations they could be good buys going forward. joe. >> it is not what you think, necessarily, diana. thank you, good to see you this morning. appreciate it. okay. coming up when we return -- digital news, a platform that might target millennials and it's getting investments from big media backers. the ceo joins us after the break. right now, let's take a look at what's happening in european markets. ♪

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.. welcome back to "squawk box." digital news site platform has raised $52 million since the launch in 2011. joining us to talk about it the ceo and co-founder. good morning. >> good morning, andrew. >> congratulations. where is this all going? are you like buzzfeed and vox

now? are there sort of different tiers of new digital sites? >> i think so. i mean our focus is determining defining news brands for the next generation which is pretty narrow but a huge opportunity as we see it. >> how much does brand actually matter? you're a new brand. talk about reaching this millennial crowd. when are you going to be old brand? >> i think the old brands are great. and we've seen that the msnbcs, the fox newses, cnns continue to have huge ratings, big revenue, big profits and very important businesses. but as we think about what's relevant to the next generation, mic is now one of of the leading news brands for young people in the u.s. >> one of the things that's been a big question mark is online advertising. and you've seen in the past couple of weeks, controversy around online advertising, whether it be youtube, people pulling ads from youtube. the head of marketing for procter & gamble, just an

article in "the new york times" that shows the past 24 hours saying the entire industry is murky, nontransparent, in some cases fraudulent. do you believe that? >> much of your growth and traffic has come from a lot of these -- from distribution on sites like facebook and snapchats and elsewhere in >> yeah, i think it points to one of the key points in the industry. which is you have a lot of user generated content and you have a lot of professional content on these new distribution channels. and how do advertisers navigate that? the advertisers that haven't paid a lot of attention have gotten burned with their ads showing up next to content that's really not good for their brand. >> right. >> so what's traffic to be important is the new digital brands and legacy brands being healthy on this new plrms. i see you're going to see the facebooks, youtubes of the world, the amazons of the world, really invest in making sure that their partners, media brands, successfully publish on their platforms are healthy,

generating revenue and can support high quality content. >> how are you different? >> our focus is on up and coming young people in the u.s. we're a very optimistic brand that focuses on being relevant and making people smarter. and, that's resonating deeply. >> you see it as competition? >> i think there's going to be space for multiple winners in the news business. but if you look at mic's reach on a daily basis with millennials, nobody reaches more people in news -- >> what would you wake up and think about? meaning, or if there's a white board at your office with the competitor's set, it's who? >> we wake up and think about our users first and being relevant to them. >> right. >> but in the long-term, who do we admire? we admire "the new york times," we admire the big cable news networks, and as we think about the business we want to build, we're very excited to build something that's that big. >> talk about premium video. what is that going to look like? and how much are you going to

have spo pend to do it? >> it's really interesting. a couple things are happening. one is, the content that exists in the streaming world, call it the amazons and the netflix, and the social world of facebooks, youtubes, instagram and cable television are converging now. you're seeing everybody trying to be like the other. when you think about who is building the most relevant news channel, that's where we want to be. it will probably include a great mix of live content. it will include premium high quality docuseries and it's going to be sort of the news bundle of the future. >> you talk about cable news doing so well. but cable news, dare i say, has a carriage fee associated with it. that's sort of the unspoken profit center of so many of these channels. the carriage fee does not exist in the online world. >> it's starting to exist. >> unless you're getting into the streaming business. >> in the streaming business, amazons, netflix, already doing some version of that.

>> right. >> and then you're starting to see facebook and others. i wouldn't call them licensing fees. they're going at length to not call them licensing fees, but they are supporting their content creators in new and interesting ways. and so i think that will be something that develops over the next couple years that will determine the health of this new ecosystem. >> between facebook and snapchat, which would you bet on? >> it's hard not to bet on facebook. >> hard not to bet on facebook? >> yeah. >> have you seen -- are you succeeding on snapchat right now? >> we're seeing growth on snapchat. but the pure scale of facebook is very hard for anybody to compete with. >> okay. chris, thank you. congratulations on the new round. >> thank you for having me. >> what's going to happen -- are you going to sell this thing when it's all done? >> we're trying to build a big, independent business. in this latest round we brought in time warner which obviously is a super relevant big media company. but we also brought in two modern advertising agencies, and

so we think this is -- we think this is a space to watch over the next -- >> you might be the first investor in snapchat. that's a pretty good feather in your cap. >> gentleman, and jerry is doubling down on mic so we're excited. >> very cool. >> thank you. >> thanks for having me. >> coming up, former white house chief of staff bill daley joins us to talk trade, china and president trump's leadership style and mohamed el-erian tells us how the weak march jobs report could impact the fed's rate hikes.

brian, i just need to know if the customer app will be live monday. can we at least analyze customer traffic? can we push the offer online? brian, i just had a quick question. brian? brian... legacy technology can handcuff any company. but "yes" is here. you're saying the new app will go live monday?! yeah. with help from hpe, we can finally work the way we want to. with the right mix of hybrid it, everything computes. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.

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stocks looking to kick off the holiday shortened week in the green. we're setting you up with the trading day straight ahead. plus, washington watch. we're going to get a round of

what investors are going to be watching from the beltway. former white house chief of staff bill daley is going to join us in just a couple of minutes. then later former new hampshire governor john sununu is going to talk foreign policy and a possible shake-up in the white house as "squawk box" begins right now. ♪ live from the beating heart of business, new york city. this is "squawk box." >> good morning and welcome back to "squawk box" here on cnbc live from the nasdaq marketsite i'm andrew ross sorkin. >> you are. >> and look at you. >> look at you. >> handsome -- >> wow. i've dreamt of this. and i aspire. but actually i'm not. i'm joe kernen. andrew ross sorkin just did that bang-up job on the cold open. >> cold. >> standing over there. >> i'm melissa lee is also here today.

becky is off. and here's some of the things going on. snapchat is reportedly on the hunt for its next ceo. "the wall street journal" reports that the company has tired an executive search firm to identify possible successors. the current ceo irene rosenfeld, however there's no indication rosenfeld is being forced out. she has recently said that she has no current plans to leave. and two stories this morning involving google, a labor department investigation said that the alphabet unit has systematically paid female employees less than their male counterparts. google has denied that there is a gender-based pay gap. google is offering to invest about $880 million in south korea's lg display to ensure that it has a steady supply of smartphone screens. for the next generation of its pixel smartphone. and resort operator intrawest

resort is being taken private. it's being bought for about $1.5 million and the buyout price of $23.75 was less than where intrawest actually closed on friday. but the stock has soared over the past three months since it was first reported that i was exploring sales. in m&a news today, swift and knight transportation are merging. it was just announced moments ago. swift will own 20% of the company. this is the largest deal in the trucking business since xpo bought conway for $3 billion in 2015. you see that huge pop in swift shares up by almost 11%. tesla denying reports that it plans to open a factory in china. china. the report initially appeared in a local newspaper in guangdong province, but in an e-mail to cnbc a representative from tesla said the company's committed to the chinese market, but the

rumored plans to open a factory aren't true. in separate news, piper today upgrading tesla from neutral to overweight. increasing its price target from 223. to 368. so keep in mind that piper had a price target of 223 -- >> and a neutral rating. during the run that tesla has seen. and now the second did >> yeah. take that -- >> you never -- >> turn over a new leaf? you know. forget the past. this is what i think now. they could still be right. >> conviction. got to have some conviction. now to wall street's agenda. fed chair janet yellen who is speaking this afternoon at the university of michigan. then on wednesday you've got to look for march import prices. thursday, we have weekly jobs plans and march ppi even though the markets are closed on friday. still economic data coming out. march retail sales, cpi and

april consumer sentiment. and then earnings season getting under way. can't believe it's already starting up all over again. that happens on thursday with q1 results. we're going to hear from jpmorgan, citigroup and wells fargo. that's all going to happen before the opening bell. and of course we'll bring you those numbers and instant analysis right here on "squawk box." first to washington for the buzz from the beltway. kayla shaush joins us with more on what investors need to watch. >> melissa, with congress on recess the white house now has two weeks to regroup to refine priorities and settle west wing infighting before the administration hits that important 100-day mark which interestingly comes just after a deadline to keep the government funded. today the white house will chalk up a win. it will cross one agenda item off the list, swearing in neil gorsuch as the 101st associate justice of the u.s. supreme court. there are also reports that the white house might be investigating potentially placing duties on countries that dump their products into the u.s. but again, foreign policy will

become the center of attention as secretary of state rex tillerson meets g7 leaders today before russia's foreign minister wednesday. this comes as the u.s. steps up criticism on russia over supporting bashar al assad. on "meet the press" u.n. ambassador nikki haley again voiced the need for a regime change. >> in no way do we look at peace happening in that area with the iranian influence. in no way do we see peace in that area with russia covering up for assad. in no way do we see peace in that area with assad as the head of the syrian government. and we have to make sure that we're pushing that process. >> north korea has said u.s. air strikes in syria justify its nuclear program, just days after china's president xi and president trump agreed on denuclearizing the region. a spokesman for the north korean foreign ministry saying this. quote, our tremendous military muscle with a nuclear force as its pivot serves as a treasured sword of justice capable of

foiling the u.s. shameless high-handed, and arbitrary practice. amid all this, the white house will reportedly reassign its deputy national security adviser to be singapore's ambassador. that's a position requiring senate confirmation, and according to "the washington post," the average time it has taken for a nominee to get confirmed is north of three weeks. joe? >> three weeks. will be nice. you know. think about those ambassadorships, kayla. you know. you know what, the one i think we'd all want, rome, right? italy. >> you said that you want rome before. >> i don't think i could ever get rome. >> why? do you speak italian, joe? >> no. no, i don't. i like italian food. a lot. and -- >> is speaking italian a requirement? >> it would help to be the ambassador. to be the ambassador to france you'd speak french, right? right, kayla? i think, otherwise people will talk behind your back. you know. >> it would seem so. although i did see one reporter for the washington examiner said

that her sources have said one of the reasons that the white house is interested in mcfarland who is the deputy national security adviser for singapore is she was previously a fox news contributor. she's very media savvy and there's a lot of english media in singapore. >> interesting. so she could be a very public face for the nrgs over in asia. >> i set my sights on, you know, i don't think i could get italy. so i like malta. have you been to malta? you been to malta, kayla? beautiful. >> i've not been to malta. >> no? small. i think i -- easier to manage. you know, not quite as much going on. but -- >> and the big online gaming, and gambling industry, do you know anything about that, joe? >> yeah, no. that might be a problem. >> okay. okay. we'll keep thinking. >> let me think -- let me think, because it has to be a whole country? maybe i ought to go for -- >> a principality or something? >> andorra? >> andorra. that's an idea. all right. thank you, kayla.

probably not going to happen for me anyway. but, we'll probably be there. chinese president xi jinping and president trump concluded their first in-person meeting striking a friendly tone. avoiding political gaffes as far as we know. and even agreeing to tackle some trade imbalances, but soon after the meeting ended, chinese state media scolded trump for the military action in syria. here to discuss former congress secretary, white house chief of staff william daley. we were talking earlier, bill, in fact, thanks for coming on. you ever seen a news cycle that's this short? i mean -- i was going to ask you about something else, until ten minutes ago, then i figure i better ask you this, since all this happened. just in the last three weeks. your head spins doesn't it, so much is going on? >> yes, it's really remarkable. the truth is really been almost 100 days now and it's a pace that it's hard to imagine could be kept up for four years. if it is, i guess it would be good for cable. but it will be very stressful

for the american people, the people of the world, really incredible how fast things come. the chinese summit was supposed to be a major event around economic issues, and the president's campaign, obviously was all around that. and then it totally gets overshadowed by the syrian dropping of 50 tomahawks on an air base. >> and it would be nice if they had that effect the economic discussions about trade, and dumping, and tariffs, and everything. but, at the same time, it highlighted the syrian problem highlighted what we're dealing with with north korea with the chinese president sitting across -- go ahead. >> but out of that meeting, it sure didn't seem that it was anything different than most first meetings, nice dinner. nice discussion. we're going to get to something in 100 days maybe on trade. and remember, this president's core is about the economic issues.

his core of his campaign is about trade issues. his toughness on china with rhetoric. out of this meeting seems to be the sort of normal meeting, at least the first one, between chinese and u.s. and we're going to continue to talk about this. we're going to have more dialogue. we're going to set up another conference. and so, i think it's unfortunate, obviously, my opinion, the president's economic agenda, that it got so overshadowed by the syrian situation. whether foreign policy takes over, it's not about the economy. i don't think this president does real well if his administration suddenly, and it's the problem with the job, that he tried to do is try to control an agenda. foreign policy oftentimes trumps -- trumps the economic issues. and this president's strength, at least in his campaign, and what he tries to get back to, is his belief that he has some

magic sauce around -- >> well the move on syria, and you know the 59 tomahawks, the people that pushed back the hardest against that were a lot of the people that were the biggest trump supporters. most people on your side of the aisle, bill, almost, i don't know if they breathed a sigh of relief, but, you know, how long have chemical weapons been, was it 1945 or something, if nobody's going to take a stand against that, it's been pointed out by a lot of people, including richard haass, that if you don't lead, you're the united states, and you don't lead, then there's a vacuum. so i mean -- >> oh, there's no question. >> you supported this? >> sure. the actions of assad were so over the top, with the chemical weapons that the president had to do something. the question is, was it just a punch in the nose or whether there's now a long-term strategy. i don't believe that this is a big change in strategy.

assad played the wrong card, quite frankly, with the chemical weapons, for a whole host of reasons, obviously. first because of the terrible nature of them. and the killing of innocent civilians but the fact of the matter is the president's whole campaign and his philosophy has been don't get involved. he was against president obama doing anything in 2013 when there was a question of the red line. he thought he should have done something but he didn't think we should do any more than we should get out of all these engagements. so there's a conflict, obviously, going on between reality, in campaigns, and rhetoric from a campaign. but no, there's no question he did the right thing by sending a message. now the question is, is there a different strategy for the administration from past administrations. around syria, and does this raise the game in getting involved more in the middle east, and in syria, and that remains to be seen.

interacting a lot with secretary tillerson this week. and then see whether the president follows this up, and the administration follows it up with a real strategy. >> bill, does this change the dynamic at all around some of the policy and legislation? you used to talk so much about with you before, whether it be tax, infrastructure, the repeal of obamacare, in terms of democrats, or at least some democrats now being more supportive, at least, of the president's move from syria, and whether that goodwill, if there is any goodwill, translates elsewhere? >> i don't see that. i mean, look i think it's very hard to think that the u.s. should not have responded to those chemical weapons. but you can't one day, like what happened when the repeal of obamacare, replacement failed, blame the democrats and then turn around and say okay now i want to work with you, even though i just called you all sorts of names and think you're all bad and think you're going to pick off one or two to make some coalition. the problem with that sort of

strategy is people do have long memories and they don't like to be, quite frankly, called all sorts of names, attacked and then turn around and say you've got to solve my problems here with my own president. very difficult >> all right, bill daley, thank you. >> great, joe. >> okay, see you. >> thanks, guys. >> coming up, markets right after the break. and later oil striking after air strikes in syria. the conflict there could disrupt other producers in the region. an oil outlook is straight ahead. you're watching "squawk box" on cnbc. cnbc.

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because we should fit into your life, not the other way around. go to xfinity.com/myaccount a mixed jobs report on friday and military action in syria fresh on the minds of investors. let's take a look at how futures are setting up on this monday morning. green arrows across the board with the dow looking up about 13 at the open. joining us david joyce, and john solstice chief investment officer at oppenheimer investment management. david i'll kick it off with you in terms of seeing the market action last week, and basically the lack of reaction really to some pretty big events, including the announcement that the fed's going to shrink the balance sheet, attacks on syria,

we've been pretty resilient. how do you interpret that action and reaction? >> well, we have been resilient. we're only about 2% off the all-time highs of the s&p 500. i think that tells me that the market is saying, okay, look, we wish we got some faster action or a little more daylight on the potential for tax reform, and stimulus spending, but we're willing to wait. but, in the meantime, i think the market is going to have to see stronger earnings, and i think you're going to have to see stronger economic data to support those earnings until we get some policy initiatives. that could take up to six months. so what this tells me is the market is resilient, it's hanging in there. if we do get some good news on the earnings front this market can edge a little bit higher. >> in terms of earnings, john, obviously everybody focus on the bank earnings this week. you know it's funny in the fourth quarter not many ceos talk about trump unless it was in context of regulations that would directly or taxation that would directly impact those

companies. everybody said oh, we're going to have greater business, we're going to see this many durable orders. do we need to hear that they're still optimistic on these earnings conference calls? because we need to have the pass to break between the optimism of where we are in order to keep it going? >> melissa, i think what really happened if we look at the action of last week, it showed that the market is more realistic than many had thought. and part of it is, that the stimulus package, the reduction of regulation, the fed's actions all are likely in a more extended mode. everything will happen at a slower pace. and i think the market knew that. we were off the opinion that the rally that happened after the election and what happened so far this year in terms of positive movement on the action of the market was mostly realistic based on economic recovery. that had already been baked in. months and months ago. even before the election that was part of the process of what

the fed has been doing for years and the economy's expansion appears quite sustainable. even at a moderate pace. so i think what to look for with the baupnks, they're going to lk for some better stories coming from the banks, continued improvement, but related to the next interest margins, i think that's still quite a few months out. it's really seen an improvement there. >> flattening -- >> yeah, i think so far, there's disappointment there but i think that's already priced in. >> yeah. david, how are you recommending investors position themselves ahead of earnings? because it does seem that even though we have seen outperform for the first portion of the full amount of data we have, we haven't necessarily seen investors embrace equities if you take a look at the fund flows. interesting fund flows for the first quarter $34.5 billion went into u.s. stock funds. bond funds had $112 billion in the first quarter. so while you're saying the markets are resilient.

people aren't necessarily embracing that in terms of their risk profile. >> no, they're not. and we're at odds with what the fund flows have suggested. we are still of the view that equity markets, both domestically and globally, are going to outperform fixed income. and we still watch some of the cyclical trades in the u.s. including financials. technology. and energy. we think interest rates are going to back up a little bit, maybe you'll see some flattening in the yield curve and the ten-year gets up to about 275 over the next six months. we're not looking for big returns from the fixed income market. in fact in the high yield space we've gotten a little bit concerned that we've seen a lack of discipline there. and spreads have gotten to the point where we don't think there's as much value. so we've taken a little bit of our exposure off of the domestic high yield market. so, clearly we're at odds with where the fund flows are. >> real quick, you want to weigh in on the bank stocks, did you

see derek holmes' comments? >> yes, i sure did. >> what do you make of that and what do you think the chance that we actually return to an age -- he's talking about the modified, or not i think what traditionalists think about. >> andrew i think it would have to be a modified version because globalization and technology have changed the landscape since the dissolution of the breaking of the glass siegel. countries around the world their larger banks often supported by national entities. in our case it's the private sector. we've got to think glass siegel if it's something if it comes back will be in the new age so to speak. >> john, thank you. david, our thanks to tu, as well. coming up, when we return, sergio garcia claiming a long-awaited majors title. we have details after the break. looked great in that green blazer. and later, oil prices and geopolitics.

the short report in just a minute. but "squawk box" will be right back in just a moment. ♪

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welcome back. it was awesome yesterday. thrilling finish yesterday at the masters. 18 holes weren't enough to decide things between sergio garcia, and justin rose. so they went to a sudden death playoff. rose missed his putt for par so that gave garcia two shots to win. he only needed one. a lot happened, though. on the first time they played the 18th hole in regulation. sergio had about a five-foot putt that he thought would go left and it just went straight as could be. and i thought justin rose was going to sink his putt, too, on the first time around. it didn't break quite enough. it was first major title in 18 years for sergio. he's only 37. he won the green jacket. and jumped to the sixth spot in career earnings with $46.3 million. that's just on the course. you can imagine these guys make a lot more. tiger woods still on top with $110. all top five in earnings have won major titles. and now sergio joins them. rickie fowler and jordan spieth looked like they were going to

give it a run but it just didn't happen for them yesterday. but it was a great -- i didn't miss, obviously didn't miss a minute of it. had it -- had it taped and then watched it so i can skip a few commercials. but i was still up till like 9:00. and not looking at my phone. that would have ruined it. >> did you look at twitter? >> coming up crude realities, check where oil prices are going. and later bannon and priebus in the hot seats. former new hampshire governor and white house chief of staff jan sununu joins us to discuss a possible shake-up in the white house. equity futures, positive across the board. e board. it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving erage. it's about achieving goals.rack the benchmarks. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average?

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we've got some breaking news on wells fargo and its former coo john stumpf as the much anticipated independent board review is released and wilford frost joins us with more on that. >> former wells fargo chairman and ceo john stumpf has acknowledged that he made significant mistakes and helped to create the culture that resulted in sales practice abuse. a review by the independent directors of the board chaired by stephen sanger has deemed it necessary to claim back an additional $28 million of pay

from stumpf after he already agreed to forego $41 million when he resigned in october last year. he was made aware of the systemic nature of the sales practice issues from 2012. but was first aware of specific cases as early as 2002. yet he did not initiate any follow-up investigation or inquiry until 2015. one of the main accusations leveled his way was his inability to criticize the former head of the community bank who he once praised as being the best banker in america. the review singles out tolstedt for far more criticism than anyone else. the report says tolstedt resisted change to the community bank sales model even when confronted with evidence that it led to low quality sales and improper sales practices. instead she reinforced the high pressure sales culture. it adds that by 2015, many board members believed she would intentionally understating the problem, which she had helped to create. thus, tolstedt is being terminated retro actively for

cause and giving up an additional $47 million of pay, having already foregone $19 million in september last year. as cnbc first reported on march the 16th. this makes total clawbacks the biggest in financial services history. meanwhile, current ceo tim sloan is given a pass. the report says his direct involvement with the sales practice issue was limited until he came president and coo in november 2015 at which point carrie tolstedt began reporting directly to him instead of stumpf and sloan soon decided to end her tenure. the report is less critical of the board than executives suggesting that at times board members believed that they were misinformed by various presentations they received. that said there are some stern recommendations for the board. although this comes in stark contrast to report on friday from institutional shareholder services that recommended shareholders vote against the re-election of 12 of 15 wells

board members at the upcoming annual general meeting, include chairman steve sanger who oversaw today's report. sanger will join me for an exclusive interview today at 11:00 a.m. eastern time. andrew? >> okay, wil. thank you for that. i think we are still marvelling here when you said tim sloan gets a pass. and i would love to hear more about that during your interview in terms of what it is that he knew, given that he's now running this institution. clearly he did make some steps, i guess, in 2015 that perhaps stumpf would not. but nonetheless you think he was in and around the hoop. >> listen, i think that comes down to when he became president and coo according to this review and prior to that when he was head of the wholesale bank and before that cfo. the reports of this nature didn't come direct to him. it's pretty clear that he had heard of some of these misgivings, albeit, it was not his role to particularly react to them. i mean on that of course i'll

also be pushing the chairman steve sanger about why the board is not given quite such a harsh rap as some other executives. just on that note let me dive into it, because there are some examples about the board in terms of why they weren't given such stark criticism. they say prior to 2014, the sales practice issue was not flagged as noteworthy risks to the board. and in 2015, they were told the situation was improving, indeed there were two presentations to the board during that time where they felt that the board was actively misinformed. the conclusion being that they didn't have the full data until 2016. so definitely fair to say that the likes of john stumpff and carrie tolstedt in particular taking the focus of the rap of this review. >> who is in charge of informing the board and who made a decision that it wasn't noteworthy blip on the screen for the board to pay attention to? and who gave the board the inaccurate aggregate data? >> in thames of the particular reports, there was one in may 2015 to the risk committee and another in october 2015 to the

full board, where they were supposedly misinformed. and there's definitely criticism towards carrie tolstedt for that in terms of the structure and this relates to what you're asking melissa, the structure of this bank, let me give you some examples here, that overall they're saying a culture of strong deference to management within the lines of business existed, in particular a mantra which stemmed from john stumpff of run it like you own it. now the chief risk officer of the whole bank, according to this report, only had limited authority with respect to the community bank where, of course, all the problems were taking place. and just to dive further into that, one individual claudia russ anderson who was also terminated for cause, she was community bank group risk officer, and it says the report that she ran interference for tolstedt. again just showing that this very large bank with a very decentralized structure meant that information didn't get up to the board in a manner that would have been satisfactory,

and one has to say, if the board is given clearance here, and carrie tolstedt is given heavy criticism, the only person between those two was john stum stumpf, therefore by implication facing criticism though not terminated for cause like carrie tolstedt was. >> wil, we appreciate it. look forward to that interview at 11:00 this morning. we're going to talk energy. syria not an energy player but its proximity to major oil producers means the unrest could spill over to others in the region. joining us is editor and founder of the shark report. did i explain that properly, steven? >> oh, absolutely. we're talking about syria. a country that the eia ranks as the 66th largest producer, up there with poland and the ivory coast. so, obviously this is an insignificant player. but, as any real estate agent will tell you this is a bullish head line because of location, location, location. so we have the united states, which now is responsible for

about 15% of the world's energy production, now dropping bombs in an area on a country whose puppet master in tehran and moscow are none too pleased. so when we had russia, iran, iraq, saudi arabia, so forth, we're talking about bombs being dropped in a region of the world that accounts for about 60% of the world's energy production. so clearly this is a potential black swan, something that is very difficult to try to sell against. >> okay. so play that -- but play that out. sort of walk us through the permutations if you will and how you then handicap them. >> so absolutely. so let's go back to opec. right? so we have the opec surprise announcement in november, and in between november, december, january, wall street went all-in on higher oil prices. they made the wrong bet, because oil prices, while we did get above $50 a barrel, we count of yo yoed in between 50, $55 a barrel. wall street took unwarranted risk, risk about $12 on the

upside to every $1 on the downside. and hence in february and most of march the market fell or the bottom fell out from the market, we got down into mid 40s. now we're at a point of the year when you expect oil prices to strengthen. we're coming out of the turnaround season. so here in north america we've already added 900,000 barrels a day of demand to the market. we're going to add another 600,000 barrels a day by the time we get into july as refineries start to ramp up for the summer season. from a demand perspective we certainly have a bullish trend that began at the end of march, and i would suspect it's going to continue into the driving season. 33 some you add to that the fundamental real demand coming into the market, and now the potential, i do think it is remote, but it is the potential that we could see a greater conflict arising from this, and that, of course, is going to have the market on edge, and probably will invite our friends on wall street to jump in again to take bets on higher oil

prices. now, on the other side we have production. of course, oil rigs here in north america have doubled since spring. we're now looking at production at the highest level since january of 2016. and according to the eia, by the end of this year, production in the united states will once again be challenging the modern-day record of about 9.4 million barrels a day. >> so bolt up line it for us. what do you do about it? >> so, right now we've been bullish since the mid high 40s on our daily report. i do suspect we're going to stay up around here. i do not think we're going to get much before the mid $50 range in the spot market in new york. sol certainly right in that middle area, so i do expect the markets to remain firm in that $50 to $55 range. not outside of an untoward event, a black sworn, again, syria, blowing up and really cutting off supply. cannot see prices going much higher than the mid 50s. and then certainly once we get through into the third quarter, when the demand season begins to

ebb, then i would expect to the see prices migrate back down into the mid $40 range. so i like oil, buying in the mid 40s, selling in the mid $50s. >> okay, stephen. appreciate it. great to see you, sir. >> thank you. >> thank you. >> thank you. coming up, former new hampshire governor and white house chief of staff john h. sununu joins us after the break. and later in the program, allianz chief economic adviser mohamed el-erian joins us with his latest take on the economy, the fed and much more. i think that she's a very nice girl... you never got the brakes looked at? oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically.

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president trump's approaching his 100th day in office. some reports suggest a shake-up could be coming. among his top white house staff. joining us now john sununu former new hampshire governor, former cheevief of staff to president george h.w. bush, 41. good to see you, governor. >> i'm well, thank you. >> we're closing in on 100 days. more chaotic in this administration? less chaotic about what to expect? what do you think of what you've seen? >> i think in reality, in

reality not much different than i expected in terms of reporting they've been reporting it more chaotic than it is. i actually think they've been pretty much better than a lot of people are giving him credit. the one place i do fault them is in the nomination process. i really think they got to ramp that up. they can bring some people in to help them sort this out and get the reluctant people that are still in the departments and agencies out of there and get their own people in. i think that's, to me, the most important thing that has not gone well. >> in looking at the -- let's say the big three. let's say priebus, bannon, and jared kushner. do you have inside info? or do you just -- is your opinion going to be sort of like ours as to what's really going on there? you talk to people? >> i do talk to a couple of those guys. but, i think intrigue in the white house is always exaggerated. and i don't think it's a good time for a change to take place. i think the president would make a mistake if he decided to make a change amongst those three.

they've got to get momentum and you can't have new people coming in and trying to restart this thing. the biggest problem they've had is getting used to the political process. you know, one thing people don't recognize is that the legislative timetable has grown and grown and grown over the years. and trying to do things as quickly as they thought they had to do them, for example, on the health care bill, they had trouble dealing with the reality that almost half the committees in the house have jurisdiction over pieces of that. and i think they were overwhelmed by both learning how to deal in the white house, learning how to deal with the press, and trying to move this giant process of legislation. i think they've got a handle on how big that problem is now. they should be tackling issues that they can get some bipartisan support on, and get used to the process with something easier than just having started with the health care bill.

>> when you've got -- i'm wondering whether it's a benefit. you know, and again this is just narrative from the media, but you know the narrative on steve bannon, he wants to, you know, take the administrative state and just rip it apart, and populism which helped the president get elected. you've got him on one side. a much more pragmatic guy like reince priebus as chief of staff. you know they probably have differences. then you've got the jerry cone, jared kushner. if those, all those personalities are trying to tell the president what to do who do you think is going to win out eventually? >> if this was the obama administration the liberal press would be praising him for having selected a team of rivals. >> diversity. >> diversity. but look the hardest part for these guys to deal with, and it's showing up in this -- in these news stories on turmoil

inside there is the fact that there's a magnification factor in the white house for every piece of trivia. the example i always like to use is i remind people that when my boss said he didn't like broccoli, we had front page stories on broccoli for three days and i had to go out and fix an agricultural crisis that resulted from that, in skra. california. >> does make you kind of -- it can make you gasy, like broccoli -- >> cruciferous vegetables. >> do you know this? >> i don't. >> sure you do. >> brussel sprouts. i'm not big on it either. >> brussel sprouts, they're broiled. >> yeah, yeah, yeah. >> do you think -- >> go ahead. >> do you think priebus, who takes the blame for health care in the way that that was handled? is it paul ryan, reince priebus? bannon supposedly went to the freedom caucus and said you guys you have no choice, the president, you have to do this, and they said, excuse me? so i mean i just wonder, you

know, where does that lie? who gets blamed? where's the finger point? >> i think everybody had a little problem with it. i think the shock was which they should not have been shocked at is sometimes it's friends that stick it to you in legislation. we saw that when i was chief of staff with the conservative crowd unwinding what was a much better budget package, and then lettinging the democrats take control. conservatives sometimes forget that when they abandon the process on republicans, that the only way to get stuff through is to create coalition and coalition makes a more liberal package. i think it's self-defeating and they got to figure out a way to get back in the game in a constructive way and put together a serious health care package but that's got to come after tax reform now or at least tax reform process has to keep moving and perhaps they can start looking at some of the other issues that they can get bipartisan support on so they

create a relationship in the process. >> so, jared kushner, the president's son-in-law, and steve bannon, supposedly met to, you know, i don't know, make up, kiss and make up, whatever. you -- is he here? >> no, i'm here. >> i thought i lost you. so when you look, though, at mr. bannon's ideology and mr. kushner's, i don't know either one of them very well, but when you look at that never the twain shall meet? or can these two have a working relationship? because you could make the point that they are polar opposites. >> well, on philosophy, i have heard stories that they have different views on issues. but they've got to come to a resolution on the differences to seven the president. they're there to serve the president. and frankly, it sometimes doesn't make a difference if two key people like that have different opinions, they make a presentation to the president, and the president's the

tiebreaker. and he's got to understand that he has to give guidance as to where he wants these issues to come together. they're both pretty smart guys. they're both pretty talented guys. they've been in the tough part of the world, in their private sector occupations. they know that everything is not always rosy. but they've got to come together and serve the president in a constructive way and he has to help out by giving them direction as to where he wants this stuff to end up. >> governor, which side -- who's got the right view of the world at the moment, though, in terms of -- >> the white view? i don't know what that means. >> in terms of those two individuals. you have steve bannon who loves his book the fourth turning, was not happy with the reaction, for example, in syria, thinks that conservatives will ultimately abandon the president if he goes down that path. and then you have other -- then you have jared kushner on the other end, who's clearly pushing for a more moderate policy, but

then you have bannon saying if you go towards the moderate the democrats are never going to go with you anyway so you mile as well stick with the conservatives. that's the debate here. >> look, i think it's always important to stay close to the people that brought you to where you are. newfound friends from the opposition are, at the very best short-term. and at the very worst, long-term, and undermine you behind the scenes. so i think there is some reality, and sanity to trying to stick with the folks that brought you there. i'm not sure that the conservatives that brought donald trump there, for example, really oppose what he did in syria. i think syria was a very important thing for the president to do. i think it was important for the united states in re-establishing its priorities around the world. people underestimate what we lost over eight years. we had eight years of feckless leadership. a lack of leadership. the world was panicking, to a

great extent, that the failure of the united states to help stabilize direction, and to point in a unifying way to our allies as to what our agenda was, really had disturbed people. and i think with what the president did, at least it's a start. what he did in syria was to re-establish the fact that the united states was going to play internationally, and really recognized the responsibility of being the superpower in the game. >> so who's going to do tax reform? who would you -- who would you get to -- some people think that's for the markets, for the economy, for momentum, for the people that elected donald trump, that that is the holy grail. that's the thing that they can't screw up. who would you have spearhead that if nobody knows who's in charge? >> frankly, the way they get that thing put together is to get your economic team to write an outline of what they think would be best for the economy, short-term, midterm and long-term. and it's the economy -- economic

team that ought to be giving jared and steve bannon and reince the guidance for these three guys to come together, then go to the president, let him pick what he wants, and then push that through congress. >> good idea. so the guys that know what they're doing should write it and figure out what to do and then you give it to the other three to work out how to implement it. >> exactly. >> all right, governor. thank you. appreciate your time today. >> thank you. coming up, we'll have some stocks to watch. futures right now, green across the board all of a sudden. up 4 on the s&p. almost 20 on the dow. up 8 on the nasdaq. "squawk box" will be right back. . the power of 100 of the world's top companies. the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio at powershares.com/qqq. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus

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>> >> let's take a look at some stocks to watch this morning. home builder lennar is taking a one time charge against earnings. it says it now appears litigation from the 2008 case will result in the payment at the high end of its prior expectations. the case involved whether or not lennar was required to purchase property in maryland. that stock not moving in the premarket on this. hilton has lagged its pierce in stock performance but has a number of positive catalysts ahead. and spicemaker mccormick reportedly considering a bid for brands being shopped by britain including french's mustard according to the telegraph nup which says mccormick would face competition. former assistant secretary

of state p.j. crowley is going to join us to talk syria, china and the president's foreign policy moves. then geopolitics and the fed. mohamed el-erian, chief economic adviser at allianz is going to share his latest outlook. be live monday. e custl can we at least analyze customer traffic? can we push the offer online? brian, i just had a quick question. brian? brian... legacy technology can handcuff any company. but "yes" is here. you're saying the new app will go live monday?! yeah. with help from hpe, we can finally work the way we want to. with the right mix of hybrid it, everything computes.

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earnings season kicks off. first up, financials. we're going to tell you what to expect when the big banks roll out results. >> merger monday. trucking giant swift and knight transportation combining in a deal worth $5 billion. >> plus a major masters moment, sergio garcia wins the green jacket in a sudden death playoff. >> and after so many years, once and for all for sergio! >> the final hour of "squawk box" begins right now. ♪ >> live from the most powerful city in the world, new york. this is "squawk box." good morning and welcome back to "squawk box" here on cnbc. live from the nasdaq marketsite i'm joe kernen along with andrew ross sorkin and melissa lee. becky quick is off today. the futures recently turned positive. continue to be that way.

up four on the s&p. 22 on the dow jones. up over 8 on the nasdaq. treasury yields are still in that 2.3, to 2.4 range that we've seen. 2.38 today on the ten-year. >> okay, among the stories that are front and center at this hour, deal news swift and knight transportation merging in a stock swap to combine two of the largest u.s. trucking companies. swift will own 54% of the new company, at about $22 a share. that's a 10% premium to friday's closing price. this is the largest deal in the trucking business since xpo bought conway for $3 billion back in 2015. and mondolez looking for a new ceo. the snacks giant has hired a firm to identify upon successors to irene rosenfeld. there's no indication that rosenfeld is being forced out and she has recently said that she has no current plans to

leave. so, a little bit complicated in terms of the idea that she's not being forced out, and yet they're looking. also, good friend of "squawk box" is heading to the white house. president trump will nominate kevin hassett as chairman of the council of economic advisers. hassett who previously served as senior economist at the federal reserve will need to be confirmed by the senate. you know him well from so many of our jobs fridays, and so many of the debates we've had. >> stocks to watch, wells fargo taking further action against executives after its failed tactic scandal. the board will scale back more pay from john stumpf and $37 million from carrie tolstedt. stephen sanger will sit down with wilford fork today at 11:00 eastern time. intrawest is being bought for $1.5 billion. the buyout price is less than where intrawest closed on friday

but the stock has soared over the past three months since it was first reported that intrawest was exploring a sale. >> now let's talk some politics. president trump considering his next steps on both syria and china and secretary of state rex tillerson taking his first diplomatic trip to russia this week. joining us now to talk about all of it, p.j. crowley former assistant secretary of state during the obama administration. good morning to you. he's also the author of "red line: american foreign policy in a time of fractured politics and failing states." let's first talk about syria, president trump's reaction, and what you think should come next. >> well i think it was the right thing to do. it re-established some boundaries in terms of the conflict in syria. but it doesn't necessarily change the reality -- the sad reality on the ground. nor do i think it represents a fundamental change in u.s. policy. you know, president trump expressed great skepticism, you know, during the campaign about getting more deeply involved in

syria beyond the defeat of the islamic state. i think the administration is going to go back to focusing on defeating the islamic state, and every indication is in the months ahead that will be accomplished. >> what's your read on some of the comments that rex tillerson made ahead of this big trip to russia this week? >> well, he's got an important conversation, at least with sergey lavrov the foreign minister. maybe he'll meet with president putin. i think it's going to be an uncomfo uncomfortable, an unpleasant conversation. this will add to the long list of perceived grievances that vladimir putin has about the united states. if i'm encouraged about anything, it's that, you know, secretary tillerson, once again, expressed great skepticism that we're going to be able to have a constructive relationship with russia. we're not. the lone holdout i think of that point of view is probably still the president. >> and as we sort of go around the globe here, how does this all relate to china? given the meeting that just took

place last week at mar-a-lago? >> well, it was overshadowed by the strikes in syria. we haven't heard a great deal about what they accomplished. i think an early meeting was very, very important. you know, on the one hand this is probably the most important bilateral relationship the united states has, you know, with any country in the world. it's also one of the most complex. there's always going to be points of friction. north korea is first and foremost among those. i think it was important for the leaders to meet. they probably established some sort of a comfort level. but there's no indication that there was a, you know, fundamental change, you know, of views regarding, you know, economics or north korea or the south china sea. >> p.j., are you any more optimistic that the secretary of state will be able to actually smooth things over with russia, given his, what is perceived to be friendly relationship with russia? i mean he's really going to put to a test, right, that order of friendship that he got in 2013. is there any advantage that he'll have in terms of

navigating this for the u.s.? >> i mean they know him well. but the reality is that the areas of common interest between the united states and russia are shrinking. you know the areas of friction, and outright disagreement, whether we're talking about ukraine, whether we're talking about, you know, what russia did during the 2016 campaign. what russia may still be doing in terms of trying to undermine the elections in europe. and of course we don't agree on what to do about syria. you know, russia has -- and iran have been responsible for the survival of bashar al assad, and notwithstanding secretary tillerson's comments yesterday that russia should change its point of view, after six years of this civil war, that's not likely. >> p.j., just play out best/worst case scenario in syria at this point. >> well, i think syria remains a bad scenario. but the reality is that notwithstanding -- you know our message to syria was, you can't use chemical weapons.

i think there's still some work to do there in terms of trying to figure out what -- whether syria failed to give up all of its chemical weapons. and if so, if they still have some stocks what to do about those. >> you think this attack then worked in any way? you think we'll see him use, if there are still chemical weapons there, see him use them again, and soon? >> well, i think that he paid a price, by the same token they had aircraft take off from that same base -- >> people don't think that the price was exacted, if you will. >> i mean, i think it was important for the united states to do that. that said, it doesn't change the reality on the ground. bashar al assad -- >> by the way, should it be done more? meaning people look -- some people look at that attack as ineffective. >> well, i think people will say, you know, there's a contrast between what obama did not do in 2013, what trump did do in 2017. you know, but the same bad choices that confronted obama in 2013 still confront trump in 2017.

i mean i think we should look at are there other ways to help the syrian opposition. the moderate opposition. but the reality is that you've got to, you know a complex mix of opposition groups in id lib province, including al qaeda, including the islamic state, including the moderate opposition. there's still no guarantee if you gave additional weapons to the opposition they wouldn't end up in the hands of other people that we fundamentally oppose in the country. so i think that it's not going to change the underlying dynamic. you know, assad with russia's help and iran's help will continue to attack the opposition. the united states will continue to defeat the islamic state. but the reality is, on -- you know there's nothing that changes on the ground that yet lends itself to a political negotiation. >> so when the secretary of state said that russia was either complicit or incompetent in -- in enforcing the agreements that syria get rid of its chemical weapons, would you agree with those statements?

and do you feel like that forces russia's hand to some degree in terms of doing something or saying something? >> well, russia was absolutely complicit. the secretary is right. >> okay. >> but they are committed, you know, i mean there's a divide here. iran is committed to assad's survival. russia's committed to the survival of the syrian government. but we're not yet at a point, you know, where i think there's going to be a political negotiation. but nonetheless, the fact that the, you know, at least elements within the trump administration are now opposed to assad, that's a change from their rhetoric even a week ago. but, russia's going to continue to support assad, and assad is going to be a reality in syria for the foreseeable future. >> okay. we're going to leave the conversation there. p.j., thank you for helping us try to sort through this. >> a pleasure, guys. >> you bet, thanks. a lot still ahead on "squawk box." up next it's a big week for bank earnings. jpmorgan, citigroup, wells fargo all out results.

talk to an analyst about what to expect. plus we'll get you set for the shortened trading week ahead. allianz chief economic adviser mohamed el-erian will join us at 8:30 eastern time. later president trump on the world stage from syria to north korea to china. we'll talk to brookings senior fellow michael o'hanlon about what comes next. stay tuned you're watching "squawk box" on cnbc. ♪ for decades, investors have used a 60/40 stock and bond model, with little in alternatives. yet alternatives can tap opportunities that traditional assets can't. and even though they're called alternatives, they're actually designed to help meet very traditional goals. that's why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. translation? goodbye 60/40, hello 50/30/20. ♪ we cut the price of trades to give investors even more value.

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welcome back to "squawk box." mining company bhp billiton is under pressure from elliott advisers. they want bhp to abandon its london lifting and split off its oil and gas operations into a separate company. bhp has responded by saying that the cost of these proposals would outweigh the benefits. wells fargo's board taking further action against executives after the companies sales practice scandal. this comes ahead of a big week for bank earnings. let's bring in marty mosby. great to have you with us. >> good morning. >> wells margo has traded at a slight discount to its peers. do you think that it's doing enough at this point to get this scandal behind it? even as iss is recommending that

shareholders vote against the majority of the board members? >> well, the company's done a complete investigation now. and what we're now learning, and i think validating, is the fact that you had a successful company that had an issue that was operational, that was bubbling up in one of its business units, and a take charge manager was working the problem out, and not really wanting to report it up. i think john stumpf then got brought in to that process and what we're seeing is that there was some barrier between that operational issue and the board. one of the questions earlier was what about the cfo who is now the ceo, tim sloan? when you look at it, there was such little financial impact from this issue that really isolates the cfo. because the whole kind of sarbanes oxley audit process comes up, what is going to impact financials. >> so sloan you think rightfully gets off the hook according to this independent investigation. so should the gap between what

wells fargo is trading at versus regionals, should that gap close? is it being unfairly discounted? >> well, it's not unfairly discounted. but what we would say is that as the issue is resolved, or beginning to kind of evolve into the next stages, which is the intermediation and the movement through this, that we do think that discount will begin to lessen. so we just did upgrade wells fargo on friday to strong buy. because of the relative valuation that we do think will narrow as we move through the rest of this process. >> set the stage in all of the bank earnings we're expecting in addition to wells fargo, jpmorgan, citi. i think a burning question as we're getting all these positive reads on optimism and business optimism specifically is what's going on with lending? and why is lending declining across the board? what's your take on what the banks will say about that? >> well, lending is going to be probably the soft spot that we're going to have this particular quarter.

but when you look at it, mortgage banking came off of a really heavy year last year with the refinance kicking up. a lot of that origination. that comes out as we go through the winter season. so we had that going through. the other thing that you have is that with the change of administration, think if you're managing a bank or managing a company, there's a lot of uncertainty. even though you look at this as being pro-business. you don't know where a lot of these issues are going to land. so people just aren't making those decisions yet. so if some of this uncertainty can become, you know, a little bit more clear, i think we'll start to see some of those decisions reflect what we're seeing, which is general strength in the economy at this point. >> all right. so we don't necessarily have that clear vision as to what will happen with the administration and policy to actually help businesses make those decisions. we decent have that right now. we've got a yield curve that's basically been flat since mid december. we don't necessarily have much movement on the regulatory front although we have gary cohn

talking about glass spiegel. in terms of decline that we've seen in the banks year to date do you think that is justified or would you say buy some of the banks now? because right now it doesn't -- i mean it doesn't look like there's an immediate reason to own the banks. >> right. so let's cut this into two pieces. one is, is there immediate reason to own the banks? the answer is, you know, no. except for when you start looking at why is it no. sequentially, momentum is not going to be in the earnings because there's temporary pressure that comes from seasonal factors on these banks in the first quarter. so you're not going to see that sequential improvement. however, while you mention all the things that have brought the stock prices down, we've just upgraded many of our banks because the long-term fundamentals. it's not tied to the long end of the yield curve it's the short end. we've seen the fed funds rate moving up twice since we've gone through the last two quarters. we haven't seen that incorporated into the earnings at all. once you come out of the

seasonal pressures and you look year over year, the banks are producing double digit operating eps growth. double digit revenue growth. and starting to improve possibility by full percentage point from first quarter of last year for the first time in four years. so as we make the stage like we did last year in the earnings improve and profitability improves we'll see that case for the banks come back in and owning them through the back end of the year is going to be, again, the place that we look at the relative value coming out again. >> and sun trust your favorite bank in your universe, marty? >> it is. we do think there's an immediate purpose to come in and own it. it can't beat earnings in the first quarter. because one of the things that's working is that placement and the issue of that debt for middle market companies. as interest rates came back in on the long end, one thing that business managers could decide is let's take advantage of this last opportunity hopefully to get long-term cheap funding so that's something that they will benefit from that we do think will create an earnings surprise in the first quarter.

>> marty, thanks. marty mosby. >> thanks for having us. >> we do have a programming note. don't miss wells fargo chairman stephen sanger sit down with wilford frost today. >> a major masters moment, sergio garcia wins the green jacket in the sudden death playoff. the highlights we've got them, next. stay tuned. you're watching "squawk box" right here on cnbc. re on cnbc.

welcome back to "squawk box." you've got to see this. a video posted on facebook last night. check this out. shows a passenger on a united airlines flight from chicago to louisville being forcibly removed before takeoff. you're watching it right here. and it is going viral as we speak. united spokesperson confirmed that a passenger had been taken off the flight, saying it was overbooked. and after united team had looked for a volunteer one customer refused to leave the aircraft voluntarily. clearly there weren't enough volunteers, and in this case law enforcement was asked to come to the gate. united apologized for the overbooked situation. they put that in quotes, and referred further questions about the passenger to authorities. one passenger who posted video of the incident said the flight crew asked for people to give up their seats. united employees who needed to be in louisville for another flight when there weren't enough volunteers. they were told the computer picked passengers at random to be bumped.

she said security officials threw the passenger against the arm rest before dragging him out of the plane. the man reboarded the plane after being taken off and passengers said he looked confused. a medical crew came on board to treat him. the flight was delayed about two hours. but, you know, it's one thing to ask for volunteers before people get on the plane. it's another once you're on the plane. i was once on a plane, and we've talked about this before. robert shiller, the famed robert shiller was on a plane. we were on the same plane, and they asked for volunteers, there were not enough volunteers. >> sure. >> and guess who got selected? >> robert shiller. >> mr. shiller himself. and he very nicely -- he was very nice about it. but -- >> i would be -- that's ridiculous. >> it is ridiculous to get pulled off a plane. >> does it say in the fine print of any ticket that at any moment the airline can decide you just could be booted? >> yes, i believe they can. >> the only time where like if you're in public walking through like grand central station or something, and someone is acting like that erratically, you just

keep walking. but on a plane. >> right. >> you're all there. and there's no way out. necessarily. >> look, if you have to get somewhere, and by the way, it's worse knowing that -- if it really is a united employee -- >> stock down 2.5% this morning. >> andrew in the old days you might hear anecdotal evidence of this. but now, if anything happens -- >> right. >> anywhere at any time, there's going to be a video of it. >> right. >> so suddenly it's -- i don't think it's happening more frequently and i don't think the actual instances are any more bizarre than they've ever been in the past. and on any given day with 50,000 takeoffs and landings, there's going to be some nut job on a plane somewhere that's going to be so disruptive that -- right? >> i don't know this fellow. i am not -- i would -- you can get frustrated very easily and angry. >> kind of walking back and forth. talking to himself, wasn't he? >> right. talking to himself or talking to them. >> right we don't know. >> we don't know. >> i don't want to know what's going on. >> exactly. >> you say the stock is down.

>> 2.5%. >> you think people aren't going to go on united as a function of this? >> it's bad publicity. there could be a variety of other reasons why the stock is down but you take a look at some of the other airlines and they're not trading lower this morning. delta airlines is negligent lidgebly down. >> but if you were on expedia booking a flight next week and united comes up do you say, i don't know -- >> again there could be some analyst call out there that we're not privy to at this moment in time. but the stock right now is down 2.5%. so. >> in case you missed it -- >> another reason to use teterboro. >> a thrilling finish yesterday at the masters. 37-year-old sergio garcia won his first major title after 18 years on the pro tour. but it didn't come easy. it was a sudden death playoff between garcia, and justin rose. and on the first playoff hole, rose missed his putt for par because his previous putt in regulation stayed high and this one, he played less break and it did break. so he missed it, and then that

gave garcia two shots to win. but he curled it in. it was two great approaches to 18 in both regulation, and then in the first playoff hole. check this out. an augusta green jacket found at a canadian thrift store was sold online. the augusta national golf club has confirmed its authenticity. there's not much else that was known about the jacket. it was found in toronto in 1994. no one is sure what year it is. from. and the original owner's name is cut out of it. the bidding opened at $5,000. and it sold for $139,000. no word who bought it yet. >> wow. >> and andrew, i haven't confirmed it, but there is a cincinnati company that apparently makes the jackets, and they make one for every contestant depending on who wins. >> wow. and you only get to keep it for a year though and then you have to return the jacket. >> it has to stay at augusta. >> and if you go there -- >> when you go there -- >> if you win are you automatically a member of

augusta? do you have -- >> i don't know the details. i don't know. >> anyway. coming up, market master mohamed el-erian says three things are keeping the markets resilient. he'll be here to explain. that's next. that's next. various: (shouting) heigh! ho!

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♪ >> good morning, welcome back to "squawk box." we're right here live on cnbc at the nasdaq marketsite in times square. you just saw a shot of h&m this morning. gasoline prices are up nine cents over the past two weeks. according to the latest lundberg survey. puts the average price at $2.43 per gallon. 33 cents higher than it was just a year ago. also delta airlines coming off a rough weekend. delta continued to have problems following last week's strong storms near that atlanta hub of thirst. 120 flights were cansed yesterday. 280 delayed. delta issued an apology to passengers and offered refunds and penalty free flight changes. it does say things should be back to normal today. they're not nearly having the tough time you have to imagine

united is given the video that they just showed. also the boss baby topping the weekend box office $26.3 million. north american ticket sales. the dreamworks, 21st century fox production was also number one in its debut weekend last week, as it did last week disney's "beauty and the beast" came in second with $25 million in ticket sales. on the economic agenda, fed chair janet yellen will speak this afternoon at the university of michigan and the question is what she thinks of the disappointing friday jobs report and about reducing the fed's balance sheet, aka shrinkage. >> is that what we're calling it now? >> shrinkage of the balance sheet. >> the disappointing report dominated the conversation among economists over the weekend and all the research reports. many see that friday jobs report of just 98,000 as an outlier. remember the forecast was 175,000. take a look at three different views. the adp came in 263. the household report at 472 and that is not all, tom porslely

points out not only are claims back to all-time low levels but tax receipts as well on the year-to-date basis they say tax receipts are running 7.5% above 2016 levels. all of this means the fed is likely to look past the disappointing jobs number, focus instead on the decline of the unemployment rate down to a ten-year low and the broader measure of labor slack along with acceptable though not great wage gains. over at sgh they say what the market digests is just how much the yellen-led fed has pivoted to a quickened pace of its policy normalization strategy both with rates and soon with its qe stuffed balance sheet. here's one way of looking at the balance sheet as a perk of gdp. it's running about 24% now. it needs to get down around 6% later on so it's got a long way to go. if you calculate in a rising gdp of 2%, and get it down, you're talking about $300 billion or $400 billion a year needs to come off the balance sheet. jim bullard from st. louis over

the weekend said that he thinks 2 million is the mark rather than say 1.5 trillion. and the chance right now of that june rate hike running around 65%. >> also jumped just last week. >> it was basically unchanged. a little bit up, a little bit down. but basically the idea of june being baked in despite the support is probably the market's best sense of, you know what? we're not really thinking either we or the fed are that affected by the disappointing number. >> knowing now that the fed's going to shrink the balance sheet that may affect the timing and the pace of future hikes beyond june? is that the thinking? >> yes. that it can compensate for tightening. >> faster than slower is the way to think about it. what a lot of people are saying now is what this does is gives you a june and a september rather than a december one. because what they're going to do is perhaps pause in the rate hikes. ahead of this -- i think the thing that the market has to begin to grapple with and the fed is grappling with is this idea that they don't know how

much to calibrate a decline in the balance sheet with how much a decline in interest rates that means. $500 billion like a quarter point hike we're going to have a lot of discussion about what all that means. >> sounds treacherous. >> hmm. >> thanks, steve. let's bring in mohamed el-erian. allianz chief economic adviser. what about the number on friday, mohamed, would you think would cause the futures to increase? in terms of the probability of a rate increase? there was some positive things beneath the headlines. is that it? >> you're absolutely right, joe. i think the 98,000 miss, overstated the weakness of the jobs report. the internals were favorable. and i don't think that in any way diverts the fed from hiking twice this year with the balance of risk to more rather than less. >> yeah. so, three this year, mohamed? four? >> i think in total you get

three. we may get one more than that. the important thing is the following. we are now in the era of normalizing monetary policy. both rates and balance sheet. the fed increasingly is going to lead the market rather than follow the market. and i think that's really important. because it's going to put pressure on other central banks to figure out what they want to do in this changed paradigm. >> so, mohamed, let me just break in for a second. you seeing this sorkin, or not? >> i'm looking at this. at&t entering into definitive graemt for great path communications -- >> according to -- yeah, right. >> and an all stock deal. >> we're looking at this right now. >> let's just run through this and come back to it. >> give you a full valuation on what it means. transax is $1.6 billion. includes liabilities and amounts to be remitted to the fcc as part of the transaction. straight path shareholders will

receive $1.25 billion, $95.63 per share which will be paid using at&t stock. >> all right. we'll keep looking. >> so, mohamed, you are famous for the new normal. are we transitioning out of the new normal to the old normal, or is it transitioning to the new new normal? >> i think we are transitioning out, joe. i think the new normal has delivered the seeds of its own destruction. you cannot run sophisticated market economies at low speed for a long time without things breaking politically, economically, financially, institutionally. and we're seeing that every day. as to where we pivot, it all depends on politics and policies. we have the potential to pivot to higher growth, if the politics delivers the pro-growth policies. but if we don't, then we're

going to pivot lower. but the critical thing for investors to realize, it's become much more binary. the new normal is becoming the least likely outcome over the next two years, and we're going to pivot one way or the other depending on the politics. >> mohamed, how does the fed communicate this balance sheet reduction thing? and do we know how many billions on the balance sheet equals perhaps market volatility when it comes to reducing this $4.4 trillion behemoth? >> two things, steve. first, yes, we don't know much. and if i were them, i would have sequenced it differently. i wouldn't talk about the balance sheet right now. i would make more progress in rate normalization, and then look at the balance sheet. secondly, more generally, both the ability and the willingness of central banks to repress financial volatility is coming down. so, if you look simply at the role of central banks, they're going to be less effective in

repressing financial volatility going forward. >> so if the fed tomorrow said, we're going to let the balance sheet wind down by $300 billion. what would you do to your interest rate forecast because of that? >> yeah, i would have to look what they are. i think you want to see, is it mortgages? is it treasuries? what time line. i can't give you an answer because we really are in uncharted waters. i would simply advise to them don't rush on the balance sheet. normalize rates first and do the balance sheet as a second step. >> so you think they're making a mistake? >> yeah, i don't think you want too many moving pieces right now. there's enough moving the global economy. i don't want -- i don't think you want to put too many moving pieces. let's get out of this experimental mode. let's do it ee kwengsly, and let's learn as we -- as we go down this road. >> right now, mohammed, though, if the fed continues down this path, with both normalization, and shrinking of the balance

sheet, do you view the fed, perhaps, as maybe the biggest wild card for the markets in terms of navigating this? >> no, i don't view it as the biggest wild card for the simple reason, is that they can adapt. >> ah. >> so no it's not the biggest wild card. i think the biggest wild card, melissa, is the politics. i think that's really important here. europe, middle east, north korea, there's a lot of moving pieces there. and the second biggest wild card is the reaction of the economy to years and years of low and noninclusive growth. i wouldn't put the fed up there, because the fed will adapt. the fed is not in the business of disrupting markets. but it is in the business of stepping back on what has been an exceptional role in terms of repressing volatility. >> all right, mohamed. you been watching the reds this year? i think you probably have, haven't you? three shutouts out of six games. 4-2, first place. >> you must be in heaven,

between your reds and between the amazing masters over the weekend. you must be so happy, joe. >> i'm -- i'm -- >> can't you tell, mohamed? i'm cautiously optimistic. cautiously optimistic about the reds. i'm not sure what to think. but 4-2. how about the mets? you cautiously optimistic -- no, it's got some bolt now, doesn't he? >> yeah, i'm ready for the usual emotional roller coaster. >> the usual swoon. all right. thank you, mohamed. so, sorkin. >> yep. >> it's a $36 stock. >> yep. >> and they're paying $95.63? >> they are. here's what's going on. this is a spectrum deal. if you're at&t you want -- and we talk about 5g all the time. also driving the time warner transaction in terms of all that content they're going to put over the wireless pipe. >> by the way, straight path is halted right now. >> so you need as much spectrum as humanly possible in particular you need a particular kind of spectrum to make it happen. in this case, what's called 39

gigahertz and 28 gigahertz. need twice as many at 39 to get the same kind of broadband speed that you get at 28. 28 is more valuable. what this does is puts them on a more competitive path with sprint. which has the most spectrum at this level. >> we'll continue covering this deal. "squawk box" will be right back. . what powers the digital world. communication.

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welcome back to "squawk box." we do have some breaking news for you this morning. we just brought it to you but boy is it making waves. at&t acquiring straight path communications for $95.63 per share in an all-stock deal. the deal implying a premium of 204%. i'll say it again, 204% to the closing price of straight path common stock the day before straight path announced its s.e.c. settlement, and strategic al termives process and a 1 62% premium -- >> just started trading again. >> the closing stock price on a friday. boy do you have to be a happy shareholder if you bought that stock any time ahead of the friday close. >> it literally just reopened for trade. it had been halted. >> it's a spectrum story. this is a story about at&t's ambitions in 5g which is the next generation wireless

technology. which some say may allow them to go head-to-head with cable operators, to actually stream broadband content so fast to your home that you won't even need the wires. that's something that's been talked about and the rationale in part behind the transaction. his ambition to buy time warner, a deal that has not closed yet. but, of course, is on its way. and this also puts them in contention, and better competitive -- better competitive place as they play against verizon, and sprint. sprint in particular has a large piece of spectrum when it comes to 5g and next generation technology. >> sfrint, by the way, is trading higher in free market trade up about 1.4%. and sprint is seen as a spectrum play. its assets may be revalued now according to this premium put on straight path communications. so that's -- it's sort of an interesting dynamic to watch as this all plays out here.

>> you know, we've always wondered, by the way, whether -- >> 1.4%. >> there's going to be a spread of something in there. >> one quick note on the takeover speculation related to sprint. the long view has always been that sprint would try to merge with t-mobile because you'd be able to put those two together. increasingly, within the telecom world i would suggest that insiders think that actually sprint's more likely to go with a cable provider. >> yeah. >> somebody who actually -- >> like comcast or -- >> who has the pipe, and then can utilize this new spectrum. by the way, when you talk about 5g and spectrum you need the spectrum, but you also need wires. you need a lot of broadband capability in the ground to get this stuff to these points. >> mm-hmm. >> to shoot it out. >> can't believe we've all been -- you can't get decent wireless with only 4 gs, i mean -- how you going to do it with 4gs. you need 5gs. right?

eight minute abs. you're not going to get the kind of -- you need eight minutes. remember when they tried to undercut the some guy was going to come out with a video of seven minute abs. you can't. same thing. i need 5gs. i can't do this -- >> you do this joke as long as i know. >> i started with 2g. you can't get wireless with 2g. you need at least 3. >> okay. >> we got to talk politics. the implication of those politics and geopolitics on the business world. our next guest says last week's syrian missile strike is a clear path forward for president trump. joining us right now to break it down for us is michael o'hanlon. he's a senior fellow in foreign policy at the brookings institution. good morning to you. >> good morning. nice to be with you folks. >> thank you. as we try to make sense of what took place last weekend, especially as we think forward to this meeting that rex tillerson is going to be having and his trip to russia, you think it changes the dynamic how? >> well, first of all, there has been a little bit of irrational exuberance about the turning point in trump foreign policy

that this cruise missile strike may represent. i think it was a good move. but it creates a possible path forward. it's not an obvious next step. there's no obvious sequel. i don't think we're going to do another cruise missile strike this week over some other reason and the standout strikes don't change the basic dynamics of the war that's killed now half a million people. but what i'm suggesting is that now that president trump is more fully engaged in this himself, there's an opportunity to rethink fundamentals. and we heard a lot of semicontradictory comments in the last ten days from his administration, but i actually think they can be reconciled partially if we accept that assad, president assad of syria is probably not going to be displaced any time soon. but that if we strive towards autonomy, and the safe zones that trump's been talking about, in the east and the north, we can perhaps have a tolerable situation. not the best of all worlds. but a place where the sunnis and the kurds can be gradually protected, even as assad nominally holds onto power for awhile longer. so it's sort of like the iraqi

kurdistan model if you will. autonomy in the east and north. that should be our goal. and once we are articulate that and get buy-in i think it simplifies everything else. >> and when it comes to the trump doctrine how is that going to then impact russia and our relationship with russia? >> well, trump doctrine i'm hesitant to use that kind of a term. because again, you know, cruise missile strikes have been carried out by many of trump's predecessors. in fact bill clinton was sort of semifamous for them. and at times he was seen as doing cruise missile strikes because we weren't prepared to do anything else. we weren't prepared to risk casualties. that's probably true here, as well. but in terms of how we can talk to russia this week, i think you say to russia, listen, we will tolerate assad for the time being. as president. and of course, you can keep your forces in the western part of the country. but in the eastern part of the country, and the north, we've got to work towards areas where the sunnis don't have to rule -- or don't have to live under assad's direct rule any longer. they should be in a position where they can govern themselves. so we'll defeat isis.

we'll liberate raqqah. we'll bring in some traxal peacekeepers. we'll help the local sunnis develop their own local police forces. >> right. >> and then try to work in these sort of section by section parts of the country. >> and michael, we're going to have to run real section parts of the country. that's the right way to go. >> we have to run real quick, but in the sort of kushner versus bannon battle it appears that kushner has one out temporarily. in terms of the policies that you're talking about, but do you think that that could revert and bannon could -- and his policies and the way he thinks about the world can change -- not change but win the day? >> it could. but i'm focused on the anti-putin versus not pro putin, but flexible on putin camps. i'm not even sure who belongs in which camp exactly. because secretary tillerson of course has had strong words against putin this past weekend, but he's known for having done business with him in the past. does all the russia politics

prevent us from potentially opening up some new dialogues with moscow? very clear eyed not naive, but both on syria and on east european security like ukraine and georgia. i'm hopeful we can actually have some new dialogues and some new ideas, but it's going to be tough. >> michael othan lap, thank you. >> thank you. when we return, jim cramer will join us live from new york stock exchange and get his take on the stop stories. by the way, sprint shares are now higher by more than 4% on the back of that. stay tuned. stay tuned.

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let's get down to the new york stock exchange, jim cramer joins us now. and boy, lucky you loaded up on all that straight path last week, jim. huh? >> i mean, everyone was. i mean, it was a natural, right? i mean, they have 868 licenses covers the country. everyone was in on it. >> pretty crazy. 5-g would be amazing, i guess. is that what we're thinking? >> yeah. my partner, your old partner, david faber says don't think until 2020. i'm more hopeful because i keep thinking that there's just no way we'll continue to have that circle of death at this point in our careers. it's got to go away soon.

>> very hard thing to -- for laymen to understand about what spectrum is. is it endless, how much is it around, who owns it? how do we control it? it's bizarre so they acquired this. whey did they get to acquire and why not at&t before they acquired it? >> i don't know. the market cap has been growing over the last three years. it wasn't in the conversation. you know, of course what happens people said are you kidding, you rntsdz with part of the conversation. everyone was talking about it. it seems from left field and there's as much to commit spectrum as possible. but this was not what we thought was going to happen. i see dish trading up markedly. all the analysts are saying please do not speculate with dish. i would have liked to have speculated with straight path. >> jim, when does either north korea or syria actually become serious enough to derail the

indexes do you think? hopefully it doesn't, but do you think that day -- that's what you call the black swan i guess. >> yeah. the idea that russia, syria and iran are forming this kind of like nation -- it's really the axis. it's the axis of rogue behavior. i just think when you have that many in the axis, something bad could happen. >> right. i wonder and a lot of bluster on both sides. but putin didn't cancel the meeting, so that should be interesting. >> no, that's important. tillerson is going to come there and talk tougher than they have ever been talked to ever. >> right. all right, jim, thanks. see you at the top of the hour. and a programming note, don't miss wells fargo chairman stephen sanger. he will be on "squawk alley" at 11:00 a.m. eastern. 0 a.m. easte.

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making headlines, toyota says it will invest to up grade its plant in georgetown. kentucky. this is part of the broader global initiative announced last year. the investment does not include new jobs but signals a deepening commitment to the u.s. amid some threats of course made by president trump of a border tax on automakers that bet on mexico.

all right. a final check on the markets this morning. the futures have been somewhat firm all day long. you know, a lot can change. up less than 2 on the s&p now. the dow jones moderated its gains, now up just about 6 or 7 and the nasdaq up 4. >> okay. thank you. >> my pleasure. >> thank you for hanging out with us. make sure you join us tomorrow. "squawk on the street" starts right now. ♪ good monday morning. welcome to "squawk on the street" i'm carl quintanilla with jim cramer and david faber. a holiday shortened week begins and no lack of news. yellen speaks tonight, tillerson heads to russia, gorsuch sworn in. europe is pretty flat and bond yields coming off the bounce on friday. the ten year at 237. our road map begins with futures flat as we pick up the holiday shortened week. also the first week of earnings season. inve