>> this song is appropriate? number one this week. >> very appropriate given the united news. yes. about being sorry. >> oh. >> are you sorry? >> i thought you were talking about the other line, i love your body, which i didn't understand at all. good morning. welcome to "squawk box." >> yes. yes. >> live from the nasdaq market site in sometimes squarements. >> too late to say you're sorry. >> i'm michelle caruso-cabrera with andrew ross sorkin. joe and becky is off today. >> that is one of the other lines. >> yes. >> joining us for this hour, joe terranova. >> never to late to say you're sorry. >> never too late? >> we'll talk about that. >> let me tell you something, yes. >> unless you're united. >> i bet women and men have different answers to that question. chief alternative strategist from virtue investment partners, joe is also a fast money trader.

t overnight in asia, it was a mixed session. japan was lower, maybe due to strength in the yen it was off by 1%. the hang seng higher by 1 %. south korea was higher as well. europe positive as well, but not by much. look at crude oil, wti, i just saw 52 -- 53.71. higher by a half percent. brent at 56.65, nat dgas above bucks. . here . >> here's what's going on this morning. gold prices jumped more than 1.5% during yesterday's session, bringing the year-to-date gain above 10%. look at this hour right now. we'll show you what's going on. you know, it's up. it continues to rise. >> looks like it's close to a

one-year high. >> continues to speak to what's happening. >> that's also on the concerns of ten-year treasury, moving back below 2.30. gold tends to perform well in a deflationary environment. which most investors don't understand. >> i don't understand that, but it's supposed to be an inflation hedge. >> it's the reserve currency in a deflating world. i think the big story is oil. oil saved the s&p over the last couple of days. the market is so reliable on technicals, and oil coming back the last week or so, saved the tape. the tape yesterday morning looked ugly. that's because such a large component of the s&p 500 are oil related stocks? >> not necessarily that it's a large weighting, but it's the concerns and ramifications of lower oil pricing. this time last year we were worried about energy loans, bank

earnings. >> we just showed the ten-year. it's a mystery why it keeps moving lower. why is the curve flattening? >> capital. >> are people worried about oil? >> capital flows. when you have some rate structure that you do in europe. >> it's negative over there -- >> looks appealing. on today's economic agenda, march import prices s released 8:30 a.m. eastern. followed by the monthly federal budget statement at 2:00 p.m. dallas fed president, rob kaplan speaking at 10:00 a.m. eastern. delta air lines reports before the open. we'll talk about united. however fascinating story in the "wall street journal" about the different approaches that delta takes to bumping passengers and that united takes. which is to say delta bumps many more passengers, remarkably more, but they do so voluntarily because they give much better

benefits. not just vouchers for seats, but gift certificates on american express, bloomingdale's. >> it proves a point we've raised, why didn't united let price clear the market? there are conflicting reports whether they offered 800 or 1,000 in vouchers, keep raising the price until someone raises their hand. >> it was obviously handled completely wrong. to your point it highlights some of the other carriers, in particular the niche carriers, alaska, jetblue. jetblue over the last five days is higher, they're overbooking policy is much different. >> they don't overbook. >> no, no. apparently on jetblue, up until last year they didn't overbook. now they overbook. >> but the policy is a little different than what we saw on united. but i think it highlights some other air carriers. >> we'll come back to this. there's some docs which shows

united filed some docs with the government when they were trying to get deals passed suggesting they wouldn't overbook. we have another plot thickening in geo ppoliticsgeopolitics. secretary of state is ril rex tillerson is meeting in moscow with his counterpart. tillerson says he is looking forward to open, candid and frank exchanges so we can better define the u.s./russian relat n relationship. lavrov saying the u.s. air strike in syria were violations of the law. an update in a couple minutes. president trump and chinese president xi jinping discussed the situation in north korea on a telephone call last night. china's state broadcaster reported that xi stressed

resolutions should be achieved by peaceful means. this conversation comes less than a week after the two met in florida. yesterday trump tweeted i explained to the president of china that a trade deal with the u.s. will be far better if they solve the north korea problem. and north korea is looking for trouble. if china decides to help that would be great. if not, we'll solve the problem without them. usa. >> okay. and back to the united pr crisis we've been talking so much about, united co oscar munoz offering another public apology after a passenger was dragged off that flight on sunday night to make room for airline staff the you have seen it now. munoz saying "like you, i can't to be disturbed by what happened on this flight and i deeply apologize to the customer forcibly removed and to all cust mr.

customers aboard. no one should be mistreated this way. i want you to know we will work on taking full responsibility and will work to make it right. on monday he sent a letter to unitedd employees calling the passenger belligerent and uncooperative. it's all complicated. >> the reaction from the passengers is amazing. you can see how horrified they are. >> finally, real quick n a separate development, lawmakers are deplannedi inin inin ining answers. since this video surfaced monday, shares have fallen about 0.8%.

and there's two things that we wanted to mention here. i said it yesterday. given the competitive dynamic or lack of competitive dynamic on so many routes in the united states and around the world, it's hard to imagine if you were sitting on expedia or kayak or however you're traveling these days, if a flight goes there and united is there at the right time, the price is right, it's not like you'll take -- >> if there's no other choice. >> oftentimes there's no other choice to match whatever your actual needs are. i'm not sure there's a huge hit, a real meaningful hit. am i wrong on that? >> i think in the near-term, it does, as i said before, takes you to the other carriers. i think the flows of capital that were coming into the airlines -- united was not trading well prior to this any way. united had been struggling. if you're an investment manager, and you're right now allocating capital to the airline sector, you're going to look into other places as this unfolds.

you wanted the pa the facts. you want the details. ultimately they may be fined. you'll see the stock go from 70 to 85 over the next year. >> oscar munoz, is he going to pass? is he going to live to fight another day? is he not long for -- >> what an interesting reversal. he -- before this, he was viewed as someone who stepped in and rescued united. now he's in a situation, obviously, where he's on his heels, on the defensive. they did not handle the public relations component of this properly. they'll have to defend the story here. >> i think at this point he can recover, but you have to get it right from here. >> economic theoretical question. steve liesman asked it yesterday during commercial break. if the seat is so valuable after all, should we be paying more? >> it's like when at a concert they don't charge enough -- high enough price for the tickets, and the scalpers make all the money. if there are so many overbooked

seats, you didn't charge enough to get on this plane in the first place. so you left revenue on the table, now you have to give up more to bump passengers. >> that, but i think steve's point was also, if it's so -- it's so much more valuablvaluabf it costs so much to get off the plane, would you be willing to pay more to get on the plane? >> i don't understand the question. >> meaning if you pay $400 to go on the plane, is the ticket worth $400 to get off the plane unless somebody gives you $8,000? you're trying to get to that meeting tomorrow or back to your family. you put a $400 value on it, because that's whoever will charge you. but you won't get off the plane unless they -- in many cases -- we say what's your number? sometimes it might be $5,000. >> it depends. are you going on vacation or going to a meeting that may make or break your life.

>> if it's a meeting that may make or break your life, maybe the seat is worth more than $400. >> here's what i don't understand. what other industry can say a contract isn't a contract. you and i agree that i will sell you x for y, but i can change my mind at any time for any reason under any circumstances whatsoever. ridiculous. that's only because the regulatory body allowed that. >> do you think it leads to a passenger bill of rights? >> yes, let congress get involved that will make things even better. give me a break. >> a couple of hearings? >> they'll yell at a lot of people. that will solve everything. >> i bet right now some airline comes out in the next 60 days with a policy that says we don't bump -- >> we don't overbook. >> bump or overbook. the question is -- here's the real economic question is that a competitive advantage in an environment where there's not

that much competition. we have other things to talk about. hopefully you guys were enjoying that. earnings season kicking off this week. joining us to talk expectations and the other big katdalli alca the market, the chief investment officer for insight investment mark, and darrell kroenke from wells fargo. joseph is our guest host this morning. does anyone call you joseph? >> we had this conversation. joseph is fine. no joey. >> what was that show with joey on? >> scott wapner calls me joyy occasionally. >> "friends." >> friends with joey. should we talk policpolicy -- ws waging the dog.

>> going back to the united thing, we should ebay the seat. >> ebay the seats? >> no, i didn isn't that what they try to achieve? >> dynamic pricing. >> so we hahave sillerto tiller moscow, calls with the chinese, earnings are coming. how do you feel about the markets? if we look back, we saw that monetary policy for many years was market beta, and we're in a shift now. two components driving the shift are geopolitics, trump and the policies around what may or may not happen andamentals that are stabilizing. >> when you say policy, is it uncertainty that we may end up in some kind of situation with north korea, russia, syria, et cetera, or is it that we thought this was a noninterventionist

president and he's looking far more interventionist and that is the uncertainty? we're not sure who we got here. >> it's an unknown unknown. we are sending the armada into syria, but we can't really know. i would put that in the tail risk category. the tacks, trade and tweets have begun to evolve on taxes. i think in our view it could be more tax cuts as opposed to tax reform. >> say that again? tax cut as opposed to tax reform? what does that mean? >> something along the lines of what reagan did in '80s. cut the tax rates, say we're square on economics for a ten-year trade. >> call it a day. >> then work on tax reform. tax reform is complex stuff. we saw that play out, the

complexities play out in the healthcare act. >> i want to get to our other guest here. weigh in here. >> i think earnings will be really good this quarter. talking probably 9% growth. best first quarter since 2011. first double digit quarter in six, seven years. earnings growth, if it beats expectations. earnings are getting narrower. only three, four industries are driving the earnings growth. three or four are negative for the quarter. the real story for earnings outside of the geopolitics conversation is revenue growth. 10 of the 11 skt 1 sectors wil positive revenue growth. and growth is expected to grow 7% for this quarter which we have not seen in years. when is the last time we've seen 7% revenue growth. >> you're looking for the market to do what? going in -- the market has not really moved. >> that's right. it's been very flat. you get a layer below that, some

of the signs, the reads around gold prices -- >> what you said about earnings does that cause a breakout? >> no, i think a lot of that is priced in. it's a good quarter, a good sign, because you are getting that, that will spill through to cap capex, but the reality is we think the market will be out over skis here. a dollar's worth of cash here today will play into the coming months. you're walking into kind of the seasonally weak part of the equity markets now. >> you told me earnings will do great, and now we're walking into the weak part of the season. >> sell in may, go away. >> earnings are priced in. >> earnings are priced in the market is always forward looking. in two weeks i get the first look at q1 gdp, which will be 1 and some people think weaker than that, unless you get a pick up in q2, the real data point is friday's retail sales number. that will be big to see how well

the consumer is continuing to spend. it's important. there's a lot in flux now going on. >> he's in flux, you're bullish, but sort of not. >> moderately bullish. >> and you're proposing the airlines use ebay. coming up, secretary of state rex tillerson is in moscow. he's meeting with russian officials about the sear yab civil wa civil war. that wasn't the original agenda. a programming susie welch has an interview with bill belichiichick tomorrow at 1:00 on "power lunch." "power lunch." hi, i'm mindy kearns. it's great to finally meet you.

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. welcome back to "squawk box." rex tillerson meeting with his counterpart in russia. bill neely has the latest from moscow.

bill, can you hear us? >> he can't hear us. i thought there was a delay. maybe not. we'll come back to him. >> let's talk about russia and secretary tillerson's visit that is going on right now let's bring in michael ruben from the american enterprise institute. good to have you here. >> good to be here. >> one of the questions with tillerson heading to russia is whether or not he would meet with vladimir putin. there was a question of whether or not the russians would cancel the trip altogether. they didn't. that was considered a good sign. now in the last 20 minutes or so, the kremlin spokesman said it is still possible that putin will meet with tillerson during his visit later on today what do we take from that? >> at this point, the kremlin was looking at tillerson's

predecessor like charlie brown kicking the football down the road, the unilateral air strikes in syria have left the kremlin perplexed so this meeting is important. so they'll have lavrov meet with tillerson, but i suspect they'll negotiate far more seriously than in the past because they're afraid of the alternative, what president trump might do. >> negotiation to what? we're back to talking about how it is assad can be removed from power. is that what they're negotiating? >> the interesting thing about our strike on the syrian air base, it was very, very calibrated, very deliberate and limited. it wasn't a decapitation strike. so i think the russians read into that commonalty with the united states, that there's a fear of creating a vacuum because if bashar al assad goes and goes quickly, the islamic state might be the prime winner.

they might be talking about, hey, look, we understand this can't happen again with the chemical weapons, and that bashar al assad is an embarra embarrassment. but are there any other generals that could keep syria's pro-russia tilt but have less blood on their hands, be less destabilizing? we'll have quiet conversations about that. dofrnlgt we have an answer about that? i've seen the russian foreign minister when he has spoken in the united states, they basically say better the devil you know than the devil you don't know. after assad, then what? who will be in charge? you have a civil war with al qaeda on one side and what are supposed to be less extremist elements on the other side. do you want another libya? do you want another chaotic state that we don't know who is in charge? that's their argument. is there an option post-assad? >> i fully agree with you. the definition of moderate in

syr syria, dealing with cannibalism, then you know it's gone too far. it's not a question of the devil you know, the devil you don't, if you are dealing with assad's inner circle. bashar al assad can't bring stability. we wouldn't be in this situation if bashar al assad dent allow the situation to descend like this. before president obama begant air strikes in syria in the first place, the only air force flying over syria was bashar al assad. he never once bombed raqqah, he was just dumping before rel bombomb barrel bombs and increasing the instability. >> what do you make of president trump's conversation with president xi jinping last night. it looks like we had a force

call as a result of the tweet. i hate to get into process. does it look like they are being forced to react far more than they would have otherwise because of president trump? >> absolutely that's the case. russia is to syria what china is to north korea. it's going bab ck to the clinto administration, to try to inst.tiinst incentivize china. >> has it worked to now? >> it wasn't worked before. the chinese demanded that north korea bring back their coal ships, because china is getting deeply worried and embarrassed by what kim jong-un will drag them into. >> are they going to do something about it? when you talk about coal, twice they said they wouldn't buy up

coal, then they bought up all they could. >> you're right. i am a historian, i get paid to predict the past and get it right half the time, but i see an analogy here to 1976 at the end of ford's administration with operation paul bunyan, we mobilize the carrier strike group and an air wing in an effort to get to north korea to come to heel. they did. for the last two decades we've been incentivizing north korea bad behavior. whenever they bluster, we give them hundreds of millions, if not billions of dollars, it doesn't work. president trump is trying a different approach. >> ultimately we have not seen movement in the markets, though we did see some concern in the volatility indexes. are we going to war over anything any time soon? >> our plan is not to. it's a dangerous situation. the russians have not had their naval presence so active since even during the cold war.

so we're in a takious situatie situation. >> that's good for $20 in gold. michael ruben, thank you very much. >> thank you. >> we think we have the shot from moscow up and running again. bill neely is back and has the latest on secretary sillert til meeting with sergey lavrov. >> it's been about two mehours since they began, and it started with what sounded like a dressing down by sergey lavrov. he said we heard a lot of ambiguous and contradictory ideas from washington. we've seen troubling actions in syria, meaning the air strikes. it's fundamentally important these actions don't happen again in the future. he said it's also important for us to understand the real interests of the united states. in other words, sergey lavrov

looking for clarity from america. is it assad must good, or not? rex tillerson gave a much shorter reply. we can hear a few of rex tillerson's words now. let's take a listen. >> our meetings today come at an important moment in the relationship. so that we can further clarify areas of common objectives, areas of common interest even when the tactical approaches may be different. >> even when our tactical approaches might be different. that word is important. i think he's not going in there with an ultimatum or a demand to the russians, give up your support for syria's president assad, but he'll say exactly, okay, we understand your position in the middle east, you're allied to iran and assad, and hezbollah. but strategically in the world is that the wisest place for you to be? does that get you anywhere with the sunni arab world?

i think rex tillerson will not go in with an ultimatum. the talks have been going on for a couple hours. they'll have a working lunch. andrew and michelle? appreciate it. thank you very much. i'm sure we'll hear a lot more from you today. when we return, the new york auto show underway this morning. phil lebeau goes behind the wheel with the head of maserati global next. later, the budget battle in washington, john harwood's interview with mick mulvaney. as we go to break, a look at yesterday's s&p 500's winners and losers. the greatest population shift in human history is happening before our eyes.

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welcome back. you're watching "squawk box," live from the nasdaq market site in times square. ♪ >> look at sun this morning. finally. welcome back. we've had -- the weather has been so tough. the u.s. equity futures. we'll see whether they're giving us a bit of green. sort of a little sunny morning in the market. sort of. dow looks like it would open up about 9 points higher. nasdaq, 3 1/2 points. s&p up about a point higher. the ten-year yield, at 2.303.

>> when i looked yesterday, the spread between the two and the ten-year was the tightest since the election. it's the flattest it's been. somebody is worried about something. >> the bond gondds? >> you and i were talking about this before, the risk in the market is a technical risk. we know the economic conditions, we know what's going on with o geopoliti geopolitics, it's a technical risk. everybody is looking for when the correction will unfold. the market no, in consolidation range. all this quantitative trading. >> are the computers smart enough to exit together? >> they will. everybody sees the same thing. all hedge funds moving to quantitative strategies, everybody looks at the same thing. >> let's talk cars. >> the new york international auto show is getting yuntd wund. phil lebeau is there.

good morning,i phil. >> good morning. let me bring in reid. for you guys, the levonta is the hot vehicle right now. >> it is we were talking about sports analyses, it's important to skating where the puck is going, not where it's been. the puck is heading towards suvs. this vehicle that we talk about is a maserati first. all of the great engines, great sound, great driving dynamics that somebody would expect out of a maserati, ferrari engine dressed up in an suv package with the functionality of an suv. >> for the luxury brands, is the suv crassovossover, is that abo half the portfolio? maybe not for maserati, but like all the market people who want a bigger vehicle, is that a statement? >> for sure after of the volume globally will head towards suvs.

even for maserati. in our 102-year history, this is our first suv. it will be close this year to 50% of our total sales. >> you had strong growth not only here in the yits but worldwide. this has been part of sergio r marchione's vision of growing the brand. people have always heard and known of maserati, but it's no longer a boutique brand. >> there's a familiarity that wasn't there. if you think about maserati, globally five years ago, we sold about 6,500 units. last year, 42,000. this year should be closer to 60,000 units. we're not out to win sales crowns. it's about building great cars that provide a great experience to consumers. if we can stay true to that, the sales will follow. >> is the wealth effect, what we're seeing with the stock market and the economy, is that what's driving the luxury market now?

>> it plays into a wheelhouse like maserati. when you look at where the stock market is at, real estate that has covkov recovered and a tren towards experience. we're out to provide an experience. when you get behind the wheel, press that red button and hear the engine roar, it's more engaging. >> you've been with fiat chrysler for more than 20 years. you've seen the good days and bad days. are we getting too worried about the overall market? not just luxky, but ovurluxury,. >> i think there was overreaction about the state of the industry. when you look at the mass market in the united states. retail sales are flat year over year, trading around the 17 million mark. fleet sales are down 9%. and a lot of that has to do with fca organization. we have deliberately pulled back

in sales to lower margin rental. but when i look at the underlying fundamentals, interest rates, consumer tentment, stock market, housing market, credit availability, things are good. >> the head of maserati joining us here at the new york auto show. we say it every year, new york is about luxury and in particular luxury suvs. that's why for maserati this is an important show. >> thank you very much. coming up, president trump meeting with nato secretary-general today. we'll talk to the former u.s. ambassador to nato, kurt volcker. and then later, retired general wesley clark joins us to talk russia, syria and the trump administration. he served as nato's supreme allied commander. you're watching "squawk box" on cnbc.

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the middle of a budget battle. john harwood sat down with nick

mull v mulvaney. >> you used to be in the shutdown caucus. you have a potential shutdown in the end of april. are agencies preparing for a shutdown. >> i don't think we sent out the instructions yet. i.s dnon't see the need to. we said if y'all can figure out a way to do this, let's do this together. shutdown is never a desired e d. >> what are the chances of this happening? >> it is not likely. if the three parts of government can't agree, that's when it happens. it's happened 17 times between 1976 and 1994. those lapses in funding used to be fairly typical. >> do you think it's not that big a deal? >> i think it depends. i think the government, if you measure in terms of the dollars out the door, about 83% of the

government stays open in a government shutdown. social security checks go out. military still exists. fbi chases bad guys. >> do you still believe that government can prioritize payments on the debt? you'll have to raise the debt limit later this year. >> i have not seen anything that changes my opinion about prior you prioritization. we'll raise the debt ceiling but part and parcel of a larger thing of trying to solve and resolve debt problems. >> that means entitlement reforms, right? >> it may. there's a lot of entitlement reform other than how old you have to be to get your social security benefits. >> what's remarkable about this, usually in recent history, administrations have gone for no shutdown, very strong push in that direction, clean debt limit increases. mick mulvaney has indicated there's more casual attitude from the trump administration and a desire to use those

moments to push for some of the policies they want on deficit reduction. it will be interesting to see how that plays out. >> realistically, john, that's a hell of a blunt instrument to use. >> yes, it is. >> what do you think is possible in terms of what they could get for it if it's a negotiating ploy, dare i say? >> in terms of the shutdown at the end of this month, the administration asked for $18 billion in 2017 cuts on top of the big budget cuts they're seeking for 2018. i suspect those are going to be ignored on capitol hill. but the house is looking for direction from the administration on how hard to push for those trump priorities. let's say that they sideline those priorities and extend government funding at the end of april and avoid a shutdown. no certainty of that. the freedom caucus is pressing hard. democrats say extend the funding directly. you get to the debt limit later

in the year, mulvaney is saying we'll use the debt limit to drive some sort of entitlement reform. one thing we talked about was social security disabilities, which mick mulvaney says has become a permanent unemployment program. that's one of those programs that benefits a lot of trump voters. the idea they're going to use the debt limit which they need as the executive branch for their own leverage point, it's a fascinating shift from what the obama administration approach used to be. >> john, good morning. it's joe. do you get the sense that the trump administration is attempting to tackle too much here in the first 100 days and they would be better served to focus on singular policy issues? >> well, they're definitely tackling more than they can pull off. so their original goal was obamacare repeal and replaced by easter. that's not happening. and secondly, they were going to

do tax reform by august. neither of those things is going to happen. so, they're continuing to work on health reform. there does not appear to be any deal in sight. mulvaney told me the white house will be much more policy assertive in the wake of healthcare. that means it will slow down tax reform. why? because the house has got a tax bill that's ready to begin getting marked up sun, but miook mulvaney said we will have our own tax plan soon. they tried to jam a whole lot of stuff quickly, which will be difficult, especially without much of their team in place. it will take longer. if they can get healthcare -- if they can get tax reform before the 2018 election that will be a huge accomplishment in itself. >> john harwood, always great to see you. thank you, sir. coming up, earnings season

kicking off tomorrow with reports from three of the world's biggest banks. we'll tell you what to expect next. as we head to break, take a quick check of what's happening in european markets right now. "squawk" rueturns in a moment. really want to be there... but you can't. (cheering) at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready. because we're helping leading companies lead with digital.

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"squawk" returns in a moment.

welcome back to "squawk box" i'm andrew ross sorkin along with michellecaruso-cabrera.

joining us for the rest of the show. welcome, frost. >> good to be here. >> thank you for coming in. >> always a pleasure. always great to be here. >> and in particular you can help us through some of the bank earnings stuff to get us prepped up. because three of the biggest banks are set to report first quarter tomorrow. joining us is vice president of equity research at rafferty capital. help us through this. what are you looking for, sir? >> well, you generally look at three areas. the first one is, are they moving loans? because that's the product that they're selling. and in the first quarter it doesn't look like they moved loans. in other words there's been weakness in commercial industrial loans. weakness in auto lending. there's weakness in certain aspects of commercial real estate. so, on the loan side you shouldn't be getting a very good number. >> you make any distinctions between those three banks, by the way? >> not really. >> no. across the board. okay. >> yeah, and banking is a big business that has many, many

different names. jpmorgan, wells fargo, et cetera. all right the second thing you're looking at is the quality of the loans. in other words, are loan quality very good? or is it starting to erode? and i think it's pretty clear that loan quality is eroding, and you can see specific areas where that's happening. autos are particularly bad. you know, there's a weakness clearly in the shopping center area. you know, the multifamily area is somewhat weak, and you know, we're even going to see weakness in continuing in home equity. all right then the third thing you look at is what is the interest rate environment going to be, and that's very positive. in other words, we've had, you know, these two interest rate increases, you know, in a very short period, and basically that's going to improve the margins of the banks, and it's going to pick up the net interest income. the net net of it is you should see roughly flat numbers for the industry, you know, in the quarter. >> dick, as you mentioned, of course loans have been soft

really since the election but really the last couple of months. investors want to get a feeling for the reasons behind that, and one of the offsets is the debt issuance from corporate has been a lot higher. so, is that a reason to think that this lower loan growth isn't actually so much of a bother? >> well, no, if you're a firm like goldman sachs or morgan stanley, or jpmorgan it's not so much of a bother. but it's a big bother if you're a regional bank because you're not getting a loan. you're not getting the business. but anyway, i mean, in the auto sector it's not corporate activity that's causing the weakness, it's the, you know, the car market has peaked. and the underwriting activity in that sector has been extraordinarily poor. in the commercial real estate sector, you're well aware of what's happening in the shopping center market, the mall market. and you know, we've built too many multifamily units, it would appear. i think there's going to be weakness showing up there. energy is what is slowing down the commercial industrial

sector. because essentially, you know, we talk about the price of oil doing this, that or the other thing, but one thing that was happening when energy prices was higher, it was a lot of capital activity in sinking new wells and building out, you know, facilities. so the net effect is there are specific reasons for why you know, loan volume is slow. and it's, you know, capital markets activities is not the whole reason. >> generally speaking, coming into earnings are you long or short of the banks, and which is your top pick? >> well, i think that you should be getting out of banks right here. i think very treacherous area to invest in, because the theories behind why people are investing i'm going to say are simply chako. basically, what's happening now is that the yield on the 10-year goes down, which means that the value of the assets of the banks go up, bank stocks go down. if the yield on the 10-year goes up, which means that the value of bank assets go down, bank

stocks go up. so in essence we're dealing in an area in which everybody's got some crazy theory that bank stocks are not really company but bond market surrogates and that theory is incorrect. so the net effect is, people who bought these stocks for the wrong reasons. and having bought them for the wrong reasons, they put everybody at risk. sand i think therefore that you're going to have to wait until the fall before you're going to make any money in bank stocks. what is my favorite? i still think jpmorgan is one of the best companies that the united states ever created under jamie dimon so i'd say that's a pretty good stock to look at. >> we're going to leave it there. ki dick bove, always great to see you and hear your perspectives. thank you. unique. >> thank you. >> you 'nique. >> dick always has a unique view of the world. >> his argument is very much on the value interest rates have on the value of bank equity as opposed to say the margin impact. which you mentioned will be improving with a rate hike. >> i think the big thing for

financial earnings are going to be commercial mortgages and what we have witnessed as it relates to retail, goldman sachs has been talking about the cmbs index which is down 6% so i think that's going to be the big thing to look at. >> joe, it's been great having you here. >> great to be here. >> thanks for getting up early. joe terranova has been with us for the past hour. coming up next we're going to talk russia with the former u.s. ambassador to nato kurt volcker. and the ceo of porsche will join us live from the u.s. auto show. stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker.

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president trump and chinese president xi speak by phone about north korea while secretary of state tillerson arrives in moscow. the markets taking notice. also former u.s. ambassador to nato kurt volcker is going to join us to discuss all the market reaction and what you should be doing with your portfolio during these tense times. strategist mike ryan and deutsche global's chief economist josh fineman is going to join us. plus more fallout from united. the senate commerce committee seeking answers to exactly what happened on that plane. details straight ahead. plus should you boycott the company? jenkins is going to be here to explain it as the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box." good morning. welcome back to "squawk box" here on cnbc.

live from the nasdaq marketsite in times square, i'm wilford frost along with andrew ross sorkin and michelle caruso-cabrera. rex tillerson in the moscow j. t tillerson is meeting with sergey lavrov. tillerson says he's looking forward to open, candid and frank exchanges so he can better define the u.s. relationship with russia's lavrov, saying the u.s. airstrikes in syria were a violation of law, and that he wants to know the real intentions of the white house. that, of course, what lavrov has been saying. more on that meeting and today's meeting between the president and nato's secretary-general at the white house later today in just a minute. meantime, march import prices will be released a8:30 a.m. eastern time. that's followed by the monthly federal budget statement at 2:00 p.m. and delta airlines reports earnings this morning. we'll get reaction to the numbers and talk more about the fallout at united in just a bit.

speaking of united, ceo oscar munoz offering another apology after a passenger was dragged off a pilot sunday night to make room for airline staff. lawmakers are demanding answers. the senate commerce committee sending a letter to united's ceo asking for a full account of the incident by the end of next week. shares have fallen about 0.8%. >> since we haven't talked about it. if you had a choice between united or delta would you shift your allegiance? >> not immediately. i mean, generally speaking i listen to your debate in the car on the way here, and of course all of cnbc's coverage of it. the thing that i find astonishing with all of the american airlines is, is that you can be bumped at all for having paid for a ticket. even in europe, on a cheap budget airline, easyjet -- >> not allowed, right? >> if you've paid for your seat, you can pay for a lower level of seat and that means you get the last seat and you might sit over there when your family's further away, you can't be removed if you've paid for your seat. and even at the gate, even on

the plane. and i find that extraordinary. >> astounding that you think you have a contract. i've paid for this, and yet you can't -- see i think it's regulatory capture. i think that they have so controlled the regulators, that they have allowed this to transpire. it's ridiculous. >> but again to your point earlier in the show, do they really make enough extra profit from having the ability to bump people or the offsetting issue does for their pr and their brand image? i think this week is really bringing that back to the fore. either way i do think the service, in a u.s. airline versus international airlines is very lacking. >> here's the economic question. if you saw some of these numbers in the "journal" this morning between voluntary and involuntary -- people getting bumped. >> right. >> it's something on the order for delta and united like 70,000 people a year, in some cases their paying off 62,000 people each year to get off the plane. if you announced a policy of no bumping. >> mm-hmm. >> how much of -- you know, how

much is that actually worth to you? >> i want to point out an earnings alert. delta just as we speak has beat on the bottom line 77 cents versus 75 cents top line was in line. you can see the stock is higher by 1.5% in premarket trade. to finish your thought go ahead. >> well no that -- >> that's the thought. >> that is the thought. >> the point of that article is that delta allows price to clear the market in a much more efficient way than united. they offer more money when they had this big crisis last week. they offered cash essentially, gift cards to different retailers, at much higher levels so people were far more willing to give up their seat. here, there are conflicting reports was it 800, 1,000 bucks but clearly they didn't go high enough. >> but the debate of this, once he was removed it was appalling how physical that was. and once we saw the video, it was poor how united management reacted, and the pr. but the real thing that would have driven me mad is if they said would you like to take one of these options and get off the

plane and the answer was no, that should have been the end of it. >> right. >> kind of ridiculous to enforce -- if they messed with their schedule so much that a pilot's not in the right place they've got to pay to get him there. >> right. >> that's what i think -- >> and one more pr question. do you think united should have said, this is completely unacceptable, and you know whose fault this? the police. the pliolice are the ones who actually dragged this gentleman off. we do not agree with the policy how they did this. we think it's terrible. could have they said look we have this policy, we're going to revisit this policy because we we don't know if it's a good policy but we're in particular disturbed about how this was approached. >> no. it would be like they're shifting blame. >> you have to take it on yourself? >> even from a pr standpoint i think the law enforcement have rules to carry out. particularly in an airport where safety is a concern. i don't think it was -- it seemed brutal but they might have had their reasons. the other takeaway is whenever you're in a confrontation with u.s. law enforcement, particularly at an airport, they

are right. even if the whole argument leading up to it -- >> even if they're wrong, they're right. >> you just go with it. >> not that i have ever had a confrontation with american law enforcement. >> i doubt it. no. president trump will meet with nato secretary-general stoltenberg at the white house today. on the agenda how to strengthen national and international security. this as tensions rise between the u.s., and russia over actions in syria. kayla tausche joins us now with more on today's agenda for the white house. kayla? >> well, michelle that meeting will take place this afternoon. it will take up the bulk of the president's schedule today. between the president and the secretary-general of nato remember this is an alliance that president trump has questioned multiple times before. chastising members for not paying enough, and on the campaign trail last year, calling it obsolete. >> ask me about nato i said it's obsolete. and you know what? i'm the first one. guys that study nato, and good people, but they study nato, and they say, i don't believe it,

what he just said, i never thought of that. they study it. >> his criticism centered on the idea members were not meeting the stated goal of spending 2% of each country's gdp on defense spending. that was a goalpost that nato set for 2024. in the last year the group actually saw a sharp reversal of defense spending after years of that figure's declining, non-u.s. nato members actually increased defense expense by about 3.5%. most still fall below that 2% benchmark. but nato officials have cited isis and russia as the cause for the increase declining to say whether some had any cause in that. secretary-general stoltenberg in his nato bio is praised for the high contributions of norway during his years there, but even it is 1.5%. president trump in a meeting with angela merkel last month said that they had a tough talk about nato and germany's role but he ultimately voiced his support. >> i reiterated to chancellor merkel my strong support for

nato, as well as the need for our nato allies to pay their fair share for the cost of defense. >> and going a step further yesterday the president acted to expand nato, including the tiny balkan nation of montenegro. that was a move that was widely opposed by russia. secretary tillerson today meets with russia's foreign minister sergey lavrov. russian media have been describing u.s.' nato policy in europe as hawkish. nato for its part has described u.s.' involvement in syria as completely born by the actions that syria themselves took. we'll see the tenor that that discussion between the president and the head of nato takes today. >> okay. kayla, thank you for that. we're going to continue this conversation right now. joining us now is former u.s. ambassador to nato, kurt volker. please, good morning to you. weigh in on what you think should happen today. >> i think this is a great opportunity for the president to meet with the secretary-general.

we're about six weeks away from a nato summit meeting that the president will be going to. so it's a chance for him publicly to say what secretary of state tillerson and mattis have said about support for nato. it's a chance for him toll reiterate again the importance of nato countries increasing their defense spending. and it's important to talk about necessary reform and restructuring at nato, as well. 42 just like you talked about here domestically. he wants to see nato do more about counterterrorism. like to see nato help more in syria. would like to see nato do more on cyber. and also to reiterate that nato's got to be strong in europe where russia has been invading its neighbors like ukraine and georgia. >> ambassador, very quickly in the space of about the last week, the president's potential to clash with russia has, of course, increased. would that lead him to reassess the value of nato, which, of course, in the past he's been fairly critical of? and clearly nato plays a massive role, particularly in eastern europe on offsetting russia's

potential aggression? >> i think we've already seen throughout the course of his presidency difference from the campaign. that the tone and the approach toward nato has changed. vice president pence led a large u.s. tell giegs munich in february. he reiterated strong support for nato. the same from tillerson, from mattis. from kelly. though it is a strong u.s. support for nato. but what they are saying is no different, really, than what other administrations have said before them. nato allies have got to spend more on defense. they've got to pull more of their share. and nato has to deal with modern threats and challenges such as terrorism, not just the old soviet threat that's gone. and the way that russia is prepting challenges, nato europe of today. >> yeah, all through the campaign when the president talked about it and then of course he was just a candidate but there was all this frustration. we talk about nato as if it's europe. but nato was the united states from what everybody could tell. >> exactly. >> it was all our weaponry. and it was their continent that russia could roll across if they

wanted to. we've got a moat. so has europe increased its spending on its self-defense because of russia or because president trump finally said enough? >> it started before president trump was elected. in 2014, the nato leaders got together at a summit in wales and reiterated for the umpteenth time that they were going to reach 2% of gdp as a target for defense spending by country. they've never done that before -- they've never reached it before. they promised it many times. since that time, some of them have, indeed, begun to increase defense spending. the baltic states, estonia is there, lithuania and latvia is on its way. germany has begun to increase, uk has begun to increase. others have not. trump has now increased the emphasis on this. he's raised the temperature, raised the spotlight on this and i think countries are starting to look at how can we actually all get on track to get there.

largely, because they agree with what they see as a growing russian challenge. >> ambassador, president putin would, of course, love to see nato weakened or dare i say it even disbanded. is it possible that whether in the short-term or the medium-term president trump would use the u.s.' commitment to nato as a bargaining chip to achieve other ames he has with the russian state, be it in the middle east or elsewhere, to try and, you know, offset the two? >> well, i don't think that there are tradeoffs to be had. a strong europe that is secure, democratic and prosperous is a u.s. interest as much as it is an interest of all those countries there. it builds a better environment. and it's not threatening russia or anyone else. it's not as if anyone's going to attack russia. so, that is one u.s. interest. another u.s. interest is peace and stability in the middle east, stopping these refugee flows coming out of syria and ending terrorism. those are not things that we can

trade one or the other. okay we agree to be less secure because we want to end terrorism in syria. it doesn't make any sense. >> i think a lot of people forget because one of the reasons nato was created i think ultimately the u.s. had a personal interest in the idea that if a war was going to be fought they would prefer it to be fought on the european continent and not on the u.s. continent. so if we can come to the -- if we can say we're going to come to the defense of europe, that keeps the war over there. do i have that history correct? and keep it short and sweet because i want to move on to north korea. >> right. but that's old history. >> right. >> i think what's more relevant today is deterring any aggression from any quarter. if you're strong enough together as an alliance it 28 countries banded together, 29 with montenegro. no one is going to attack it. >> before we get to north korea can i ask one larger question. i don't know if you saw, the piece in "the washington post" yesterday that i think appeared maybe in the physical paper this morning, headline trump promised an unpredictable foreign policy. to allies it looks incoherent.

and that's, to me, sort of larger question that hangs over all of this. do you think that's accurate? >> i don't. i think it's a headline that wants to be a little bit feisty. what's happening, though, is you see a political dynamic here of trump being very outspoken, choosing very colorful language, connecting with his voting base. but when you look at what u.s. policy has been during the course of this administration, whether it's about nato, about russia, about ukraine, about the european union, about the middle east, about syria or about north korea, it has been pretty consistent with u.s. foreign policy over a long period of time. >> now, can we move on to north korea? can this situation be solved? you've seen what's happened in the last 24 hours, a phone call with xi jinping. are the chinese going to actually come on board and take more authority over the situation with north korea? and then try to get something done when it comes to the nuclear weapons? >> well, i'd phrase it a little differently but the bottom line is yes. i think that china has its own

interests in making sure that north korea does not go too far in threatening nuclear use. i think that the north korean behavior over the past six months or so has been or outrageous than even by north korean standards it is way out there. i think that it's causing the u.s. to act very prudently putting more military capability in place, exercising and we would love to see china do more and i think china sees it in its own interests now to throttle down a bit on north korea. hopefully that will have some effect. the real question is whether north korea will listen to anybody. >> all right. okay. ambassador, we appreciate your time and perspective. >> thank you. >> at some point we have to talk about these comments that trump made in "the new york post" about bannon and kushner and how that relates to foreign policy and just about everything else. >> so much. >> we'll bring you those comments. in the meantime, geopolitical tension keeping the markets on edge yesterday. take a look at the futures right now. dow looks like it would open up

about 4 points higher, nasdaq up about two points, the s&p virtually flat. we will talk investment ideas when we return. later "the wall street journal's" holman jenkins is going to join us. why he says donald trump voters can make america great again by boycotting united. we'll talk about that. for decades, investors have used a 60/40 stock and bond model,

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sfle >> welcome back to "squawk box." take a look at shares of delta. the airline rising on better than expected q1 earnings. revenues roughly in line and in earnings released, delta ceo mentioned double digit operations -- double din it operating margins. strong improvements in customer satisfaction. a little irony right there as we talk about the united situation and progress on international expansion with the closing of the aero mexico transaction. you can see delta is higher by 2.5%. >> analysts going to discuss delta in about an hour. for now let's check in on the broader markets at this hour. futures pointing a little bit lower. mixed at this stage. we're up about ten basis points an hour or so ago. european markets have lost their steam as well. europe now looking about flat with a mixed picture.

joining us to discuss markets, chief investment strategist at ubs and joshua fineman chief economist at deutsche asset management. let's start with you, josh, if we may and talk about the broader economic picture. jobs numbers was a little bit mixed but otherwise consumer confidence much better. >> absolutely. the sentiment data has been almost off the charts. both business sentiment and consumer sentiment. there's a bit of a dichotomy because some of the hard data, spending data, production data, the gdp, have been on the softer side. how that's going to shake out, hard to say. i suspect we're going to see them narrowing between the two of them. some of the hard data coming up and meeting somewhere in between. >> mike in terms of companies we get some hard data from them over the coming weeks starting with the banks tomorrow in terms of earnings. what level of earnings growth is priced in for this quarter? because markets have come back a bit. does that mean that the expectations are now a little bit easier to beat? >> i think so. first of all i think what we're looking for in terms of

corporate profitability this is going to be the best quarter that we've seen in a number of years. we're going to see the earnings reaxcceleration reacceleration, and last year's going to continue into the first quarter. we're looking for earnings to be up about 12% in the first quarter. even when you exclude the energy sector, still going to be up about 8%. i think what you're seeing here is that the earnings dynamic is going to continue to be what's going to drive the market higher. >> can banks sort of re-ignite the fire that was behind them? >> i heard one of your early guests talk about he's a little more skeptical about the financial service industry. our view is that the dynamic for improving macro back it drop and somewhat higher interest rates is a pretty good mix for bank profitability. we continue to look for a better outlook for financial services. >> josh across the industry. outside of the bank's perspective in terms of what it means for the economy we've seen growth pretty soft since the election. what do you think is behind that? >> i think some of it is still residual seasonality. we've had this pattern where the first quarter looks softer than the rest of the year. so i think some of it, that is going on.

the other thing is i think sentiment's gotten a little ahead of itself. businesses and consumers suddenly got super optimistic, after the election. some of it is on anticipation of policy change. i think, you know, we're going to get some of that. but i think people will probably need to scale back some of those more grandiose expectations. >> you said earnings are going to look good. does that translate into higher stock prices? >> no i think it's going to translate into higher stock prices. let's go back to something josh said a moment ago we had the seasonal issue. the first quarter's been a period in which we're certainly going to see some concerns about whether the economy can sustain and gain traction from here. if we go back since the beginning of the financial hub, since the beginning of the recovery the average first quarter growth has been about 1%, the other three quarters about 2.5%. we're expecting that growth will continue to move higher over the course of this year and therefore i think what you're going to see is that markets continue to move higher. >> and earnings are enough to offset uncertainty out of washington if they don't achieve at least some of what they promise? >> i think so. there was some expectations coming in to this year about what was possible in washington. i think we've had a reassessment

of what's more like probable now in washington. in my opinion, what we will get is some movement on tax reform. we'll probably get some regulatory relief even if it's just administrative relief. i think that mix is going to be enough for equity markets. >> are earnings driving the bus? that would be a big shift compared to what it was for years it was the fed. then it was trump, and now -- >> we need earnings to kind of carry the ball, i agree. and i think there is a good chance that that will happen. the other thing is i think from the stock market perspective, if people look out and sort of can't see a recession, you know, if they see that the economy is likely going to continue to grow. >> right. >> maybe moderately but they can't see the end of the cycle, i think that's, you know -- >> but we're talking about multiple expansion story? >> they have that. >> we've kind of already have that. i'm not sure i would necessarily bank on that. >> josh and mike, thank you both very much. >> thank you. >> okay. still to come, the results of the latest cnbc all-america survey. find out how americans are feeling about president trump and his approach to the economy. here's a hint. it's not as pretty as these fireworks. "squawk box" returns in just a moment.

with the results of that survey.

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coming up, phil lebeau and the ceo of porsche north america live from the new york auto show. we'll get the company's outlook for the high end car market. and then "the wall street journa journal"'s holman jenkins joins us to discuss the fallout for united airlines. the company stock and boycotting the company moving forward. "squawk box" will be right back. f 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.

good morning and welcome back to "squawk box" here on cnbc. we are live from the nasdaq marketsite in times square. among the stories front and center. election results coming in overnight. republican ron estes has won a special election to replace mike pompeo. president trump picked pompeo to be director of the cia. it was the first congressional election since the november presidential election. also new this morning, the uk's daily mail says it has agreed to pay damages and costs to first lady melania trump. the amount was not disclosed. at issue an article which said she provided services beyond

simply modeling. the daily mail's newspaper and website have agreed to publish a retraction and apology to the first lady. activist investor value act capital plans to return more than $1 billion to investors last month. in a letter to investors last week seen by cnbc the hedge fund cites concerns that company valuations are expense but value act still sees opportunity. the company gand 6% during the first quarter. >> okay walmart offering pickup discounts to u.s. shoppers on items they order online then you got to go pick them up in the store. the retailer is going to plan to use technology pioneered by jet.com which walmart acquired last year to circulate savings. eligible items are be noted on the company's website and will not include third party products sold on the marketplace. the change coming as the retailer looks to close that gap with rival amazon.com the head of walmart's e-commerce operations telling reuters he expectsed change to boost transactions online and improve customer traffic in stores. >> all right. the ceo of united airlines

making another attempt at an apology as outrage builds about a passenger being draled off a flight. the senate commerce committee sending the airline a letter late yesterday asking the company to provide them with a quote, full accounting of the incident, by april 20th. the stock losing altitude since the incident, although it's higher by 59 cents. this morning's business world column in "the wall street journal," holman jenkins makes the case for boycotting united. he's a "wall street journal" editorial board member and editorial writer. we have already concluded that they should have let price clear the market holman. why boycott them? >> you know, there was something uniquely contemptuous about the way they treated their customers in this business. you know, you come in, you take your seat and then you're told you have to get out of it because we really have somebody they'd rather have sitting there. and you're right, the easy way to do with that is simply to pay the people enough money to get them to voluntarily give up their seats. that's what they should have done. anything else, forcibly removing

people from their seats, not just this one guy, but the three others who didn't put up a physical resistance, that's just so insulting to customers. why would any business think they can get away with that. and what's wrong with us as a country that we let them do that. >> holman i'll tell you why they can get away with it. you can get away with it because there's not that much competition in the marketplace. you say boycott united. you'll say this is a rich person's problem. 44 you're going to fly to aspen, there's very few ways from new york to get there. you pretty much have to take united. >> that's right. we might have -- >> by the way, dozens of other examples. >> that's why i like this. i want americans to show that they're willing to make a little bit of a sacrifice in support of their principles and finally, this example in some ways is god-sent. it gives us a chance for this country to get up off its back and say we're going to, for people to get off their backs and say we're going to take some control of our destiny and push back. >> to andrew's question, milton friedman said one of the key

roles of the federal government, one of only four that he permitted was to enforce competition. did we allow too much consolidation in this industry? >> you know the numbers don't really show it yet. you know, i wrote columns saying the only reason we're getting this consolidation is because the airline unions wanted it and that's why obama was delivering. but the airlines are making money. they're not making money hand over fist. they're not making unrealistically -- >> but they're not going bankrupt like they used to. >> the industry has to be able to generate a profit. >> would you be against us changing the law to prevent overbooking or kicking people off the planes? look, by your own newspaper suggesting that in some cases these airlines are voluntarily or involuntarily pushing something like 70,000 to 80,000 people a year off the plane. >> i don't want congress to get involved. i don't want lawyers to get involved. i want the public to get involved. >> but for some reason -- but for some reason, from a competitive standpoint, you haven't seen an airline come out, at least yet, and say, from a marketing perspective, and --

that we're not ever going to pish you off and you're going to come to our -- you're going to use us rather than somebody else. and the reason is because there's not enough competition. >> overbooking is a legitimate business practice and the only thing they did wrong here was not pay people enough to make it worth their while to get out of their seat. >> when it comes to regulation. right. make sure i understand this. steve liesman and i have been having this conversation. they limit how much you can pay. there's not a floor. regulators have a ceiling. four times the cost of the ticket. right? i mean -- >> is there a true ceiling? i'm not sure that's the case. >> go read that article. >> it's a free market economy. you can transact at whatever price two parties agree on. i don't see why -- >> yesterday they said they were following the law that there is a limit. and when we pressed him why does that exist. he said we don't want auctions taking place at the counter. >> no, no, no, no. i know what you're talking about. it's not -- if you forcibly bump somebody off you have to give

them four times the amount. >> oh. there's a minimum. >> there's a minimum. >> no, that's the max. up to -- >> no. if they involuntarily kick you off the plane, they have to give you four times -- >> up to a certain amount. >> four times the price of the ticket. >> we all agree united was in the wrong. what about the law enforcement officers? did they make the problem worse than it should have been? >> i don't see why copps should be called on to enforce a bad united policy. these passengers weren't doing anything illegal. they simply took their seats on the plane. united should have found a way to get them off voluntarily. i don't think it's the job of the police to come and enforce united's bad overbooking policy. if i were a cop i would have taken one look at the situation and say i want nothing to do with this. >> so you're oscar munoz, what do you do now? >> the whole point is i hope it moves beyond him and beyond united and becomes symbolic for people to stop being so complace complacent. this is a country where we don't leave home, we don't leave our hometown if we can't find a job. we don't start new businesses anymore.

i want to see some animal spirit moving from not just in the stock market but impact our personal behavior and how we conduct our lives, and show some initiative. that's what i really would like to see in this boycott. >> what are you supposed to do if you're supposed to travel to a place that there is no -- >> no other way to get there? >> if there's no other alternative buy a ticket on united. there's lots of other alternatives. >> if you have five stopovers along the way there's lots of competition. >> united can always lower its prices. the airline is not going to go out of business. but the boycott would be an important social moment, i think. that's what i really am interested in here. >> holman thanks so much. always good to have you on. holman jenkins of "the wall street journal" editorial board. next -- >> we are going to join phil lebeau i believe in a moment. but we might have a problem with the line there. but we're going to see a porsche coming up. >> yes. >> let's go to the new york international auto show. where the collection has been made. phil lebeau joins us with a special guest.

phil? >> hey, thanks, guys. i'm here with paul zoellner the president and ceo of porsche in north america. you've got a couple of gorgeous models here that you guys are showing for the first time. let's talk about the 9/11 and then i want to talk about the pan american sport car us mo. the 91 1 continues to be the halo that you're able to innovate in different ways and continue to bring that customer in, correct? >> oh, absolutely. we are really spreading the range of the 911 from the top notch racetrack going car to something where you just enter the brand and you enjoy that on the everyday drive. >> the stick shift. >> yeah. >> you have made that an option here. are you a little bit surprised at how much interest there is in somebody saying yeah, yeah, yeah, i just don't want the dual clutch, i want the stick shift. >> we're not surprised. because we're listening to the customers. we said we want stick shift even though rationally speaking it doesn't make sense. but they want to get engaged with their cars to a greater extent. that's why they need the stick shift. >> you talk about irrational. some people will look at the new

car us mow and say wait a second, is that a wagon? we're not calling it a wagon. i know you're not calling it a wagon. but this is popular, the lines on this vehicle, very popular in europe. do you think there's a niche here in the u.s. for it? >> well, we're certainly hoping for that. i think this car is the face in the crowd when it comes driving a sedan. and rationally speaking, no, that's not the driver for buying decision. but the design, the innovation, the whole brand image that comes with the car in a niche, yeah i think we can be successful with that car. >> why does this design, while it has a market in europe has been slow to take off amongst the luxury brands here in the u.s.? >> well the u.s. certainly is driven by bigger cars. people like to elevate themselves. they like trucks. they like pickups. they like suvs. so i think generally speaking, the sedan segment has suffered. and as well, of course, the wagons. but there's always a niche for somebody. and we think we are the ones.

>> we're not calling it a wagon. >> no! of course not. thank you for that. >> you just announced last night, for the brand overall worldwide a record first quarter. you're up what about 4% i believe here in the u.s. year over year. any concerns that luxury market, because there's so many more entries, particularly when you're looking at the crossovers, that it's starting to get a little crowded there and a little bit tougher to find that customer? >> i think competition, yes, of course, there's always competition. if i look at the overall economy in this country, we have low interest rates. we have reasonable fuel prices. we have lower unemployment. all factors point towards a stable economy for 2017. especially for the luxury segment. we're up 4%, so we are confident that we can add another chapter to our success story this year. >> claus zellmer. we're not calling it a wagon. >> thank you very much for that. >> guys, back to you. >> no. >> okay phil lebeau. thank you so much. phil, you're going to have to

come in here at some point. because we're having lots of united debate going on right now. >> and there is a maximum. $1350. >> we're going to talk about this. i may need your help a little bit later. i know you're on the auto beat right this second but you're also mr. airline. so, hang out. when we come back to you in just a little bit. coming up, we're going to talk about the results from the cnbc all-america survey. steve liesman is here. he's going to join us in just a moment to look at how investors are feeling about the president's handling of the economy, and a lot more. meantime, check out futures at this hour. you're looking at red arrows across the board. dow looks like it will open off about four points, nasdaq down two points, subpoena 500 off two points. points. hey. pass please. i'm here to fix the elevator. nothing's wrong with the elevator. right. but you want to fix it. right. so who sent you? new guy. what new guy? watson. my analysis of sensor and maintenance data

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united airlines chief executive is speaking to abc news this morning. oscar munoz is saying that this will never happen again. he is saying that in cases like this in the future, they are not going to use the police to remove individuals from flights.

and also saying that he is not going to resign over the passenger removal. calling the issue a system failure. once again, that's in an interview going on with abc news. >> the never happen again part is that applying to the police usage? or the fact that they will continue to potentially bump people off -- >> we're not watching. >> just to put a fine point on two things. >> nax mum. >> yes. michelle is correct. the government requires that if you are forcibly pushed off a plane, police or otherwise, they pay you the max they have to pay you is $1350. i believe they want to be generous, they can do whatever they want. but as we just discussed, if they're kicking 70,000 people off a plane every year, and say each one is worth $1,000. it's $7 million. it's not really $7 million because most of them don't use the vouchers -- >> they never get up that high. it's like $600, $800. >> a million dollars of leakage here or there?

>> but they dollars -- >> the fallout it's probably still worth their while maintaining this practice. >> i go back to the original point of regulatory capture. why would there be a max? because the airlines absolutely don't want to deal with the potential. they want to be able to say, just like we have an airline -- >> you could also describe as a minimum again if they want to be generous they could do whatever they want. they probably -- >> a former airline executive saying oh, that's the law. we follow the law. >> okay. liesman is here. >> moving on, exactly. liesman is with us because he has an exclusive survey result of the cnbc all-america economic survey. steve? >> thanks very much, wilford. 804 americans polled around the country, all income groups, all regions, and the news is not necessarily good for president trump. but it is very interesting, i'm going to show you this in two parts. first the approval rating, 39%. this survey conducted last week. margin of err are 3.5%.

48% disapprove. that's the honeymoon, folks. he had been polling in the 30s before he was president. and so now he's ten points higher than he was -- than he was as a candidate right now. maybe the good news there is that he's not much-he's much higher than the democrats in the 30s. he's higher than paul ryan. he's higher than nancy pelosi. higher than the republican party. but still, as you'll see in the next graphic, very low three months into his presidency. the net negative here has not been seen before. we went all the way back to ronald reagan, looked at the net positive versus negative here. and he is minus 9. the only of the past six presidents to be net negative in the first three months of his presidency. all of those initial polls. but the amazing part about this, and i mean truly amazing, is the optimism inspired by president trump. we have take a look here, look at the red line. the red line is our sense of

will the economy get better. some of the highest numbers we have seen in the ten years of this poll's existence. people are very optimistic. and then look at the current conditions of the economy. the 40% are so saying the economy is good or excellent right now, the highest in our survey history. we went and dug further. >> mm-hmm. >> and people's optimism is linked directly to donald trump. 67% of those who say the economy will get better say it's because of the coming policies of the president. and yet, inside of all this, approval ratings just 39%. i will point out, it is higher when we ask about his handling of the economy, which is more like 44%. >> but did you break it down between democrats and republicans? >> we did. it is mostly and largely buoyed by republican optimism. independents are about even. and democrats are very negative. >> approval rating among republicans? >> it's in the low 80s, about

83% i want to say. which is okay. but it's independents that are sort of negative on him. they're negative something like 30 to 50, something like that with 20 undecided. >> was the stock market a consideration in this? >> it is. it's something we ask about. it's something we report later in the day, wilford. but since you asked the question -- >> i can't wait. >> record high optimism about this being a good time to invest. >> because the reason i want to bring that back -- >> mom and pop have gone bullish. >> bring up the -- >> wow. >> right? >> wow. >> but to come back to that if we bring up the chart in terms of economic optimism you said it's almost as high as it's ever been in ten years. the last time it was this high was just before 2007. so that's a little -- >> making no claim that current optimism leads to or does not lead to future prosperity. the point being this is how people feel now, and they feel this way despite a very low level of approval for the president. >> was this before or after the missile strike? >> it was before. it was before. ended on friday. we've seen a little bump but not a lot in the gallup survey so far. >> improved --

>> might have improved a bit. >> did you ask what -- how they handicap any of these policies? >> yes. we did. >> we did. >> and they think what? >> well, put it this way, in terms of their belief. >> yeah. >> in his promises, and his ability to deliver, it's not a lot different from other presidents. >> uh-huh. >> so i've got -- i'll find you the figure if you guys talk amongst yourselves, i've got to wade through here. but down in the low 40s. >> you see where i'm going with this. which is to say that if -- if -- >> you got to wait, andrew. >> if you're skeptical about whether these policy changes happen or at least happen on the timetable that they've been pledged or promised, it gets hard to square up this view of the world. >> people are upbeat, and look, i've been doing this for a very long time. and let me quote bill mcadoo. we have a republican and democratic pollster on this. bill is the famous republican pollster who sort of oversees all of this. we work with michael roberts,

and his company. bill said polling's not interesting until it is. so things roll along and americans are depressed and all of a sudden since the election of president trump they're economically optimistic. and this is -- >> the data on the market you're bringing later, can we that against the actual market return? >> it doesn't work either way. mom and pop, they sat out the whole bull market -- >> mom and pop usually right or wrong? >> it's -- >> as a leading indicator -- >> put it this way, they're no better than some -- >> we've got to get to some breaking news. blackberry has been awarded nearly $850 million in an arbitration claim with qualcomm. i thought they were telling you guys all this. that's why i'm interrupting and then we're going to break. thank you very much, steve. mortgage applications out earlier in the hour. a look at what's moving markets and where rates are headed next. then in the next hour reaction to delta earnings and more on the united pr nightmare straight ahead. here are the futures at this hour. that's delta which is higher by

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>> >> anyone eager to buy a home this spring probably has reasons to feel good. mortgage rates are still near historic lows. but then there's the bad news. try and find a house. diana olick joins us now from washington with a roundup of the housing market. hey, diana.

>> hey, so true. mortgage rates fell to the lowest level of the year last week but weakness in refinance is still keeping the mortgage business a lot lighter. total mortgage application volume rose 1.5% on a seasonally adjusted basis last week compared to the previous week. volume was 21% lower compared to the same week one year ago. that according to the mortgage bankers association. and that's because the refinance market is so bad. interest rates fell for the third straight week but applications to refinance a home loan why unchanged for the week and are 40% lower than the same week one year ago when rates were lower. now the average contract interest rate for 30-year fixed conforming mortgages fell to 4.28% from 4.34% for borrowers who put 20% down. hope you got all that. mortgage applications to purchase a home fared better, rising 5% for the week although they're just 3% higher than the same week one year ago. purchase applications are less sensitive to weekly rate moves

despite the fed's recent rate hike mortgage rates are moving lower on global economic concerns, you name it, russia, syria, north korea investors are heading to the safety of the barkt. that pushes yields lower and mortgage rates losly follow the yield on the ten year treasury. >> they certainly do. coming up moscow says measures such as last week's missile strike on the syrian air base must not be repeated. the president meets with nato's secretary-general. we're going to talk geopolitics with retired four star general wesley clark in just a minute. u. we lacked the technology to be flexible and productive. then cdw orchestrated a collaboration solution for us. using the lenovo x1 carbon. powered by intel core processor technology. now we can access our network and work together from anywhere. hey! hey everybody. you coming back for the team building? mobility by lenovo. no? it orchestration by cdw. ♪

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geopolitics in focus. secretary of state rex tillerson meets with the russian foreign minister a live report from moscow straight ahead. the nato chief heads to the white house. former nato supreme allied commander general wesley clark is going to join us on "squawk box" on the high stake meeting coming up. plus sky high outrage. united ceo oscar munoz apologizes again after a video of a passenger being dragged off a flight goes viral. 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, welcome back to "squawk box" right here on cnbc live at the nasdaq marketsite in times square. i'm andrew ross sorkin, along with michelle caruso-cabrera and wilford frost. take a look at the futures. dow looks like it would open off about two points. nasdaq open off about three points. the 10-year we've been having lots of conversation about the 10-year, the flat yield curve. 2.302 right now. and now michelle's got the stop stories. >> what are they? shares of syngenta are rising. china has approved the acquisition of the company. shares are higher by nearly 3%. apparently chinese authorities are going to let that capital leave the country. delta airlines out. revenues roughly in line. we're going to talk to an analyst in just a few minutes. the stock was higher by more than 2%. blackberry has been awarded nearly $815 million in

arbitration with qualcomm. this has to do with royalty overpayments made to the chipmaker. last april the two companies agreed to ash straight a dispute over whether qualcomm's agreement to cap certain royalties applied to payments made by blackberry under a license agreement. a final award will be issued after a hearing next month. >> new this morning the ceo of united speaking out. this comes after outrage of course over that viral video of a passenger being forcibly removed from a flight on sunday. phil lebeau joins us with more on the latest developments. phil? >> and wil, a couple of headlines from this interview that oscar munoz did with "good morning america". if you take a look at this footage that we've been watching since early monday morning he says that he is not planning to step down in light of this controversy. he also says that united will no longer use law enforcement to remove passengers who need to be removed from planes. and that they will be making some changes to their processes. remember they said yesterday that they're going to review this and have at least some

initial announcement by april 30. . here's oscar munoz addressing what everybody was noticing from the very beginning. that this was a company that was tone deaf in terms of its initial reaction to what happened on the plane. >> my first reaction to most issues is to get the facts and circumstances. and the initial -- my initial words fell short of truly expressing what we were feeling. and that's something that i've learned from. the expression of apology, and specific to folks i mentioned before is an important part of a conversation like this. because, again, that shame and embarrassment was pretty palpable for me and for a lot of our family. >> now oscar munoz's staff says this is it, he's doing one interview. he's not doing any print interviews. that this is their apology and they want to move forward from

here. guys i'm not sure that's going to be enough. i've gotten text messages from friends who are flying today on united and they say, look, people are absolutely joking on the plane about it being the fight club in the back of the plane. that's going to die down a little bit. but, it's going to take more than just one interview, and one apology from oscar munoz. i would expect that they will see some type of a marketing campaign at some point where they realize, maybe not unusually in the next week or two. but at some point they've got to do something to improve what really is a battered reputation for united airlines. >> phil, i absolutely agree. and oscar munoz if you're watching this morning we would love to have you on the prom to talk more about this. i think this is a conversation unfortunately for united that is not going to be ending any time soon. phil, we appreciate it. we will talk to you in just a moment. joining us right now, though, to talk more about this is eric, ceo of -- also the author of the book glass jaw manifesto for

defending frazzled reputations in the age of instant scandal. you just saw that clip. was that enough to end the conversation? >> no. but crisis management is a 20-round fight and you also lose the first few rounds. there's no way you beat twitter. there's no way to beat youtube. there's no way to beat jimmy fallon. and so i think that there is this idea that someone is going to issue an apology that is so breathtakingly brilliant that it ends the whole thing. and i think that the media, and others expect far too much in these early rounds for this to accomplish. the fact is, you lose the first round, but where you resolve these crises is in the subsequent rounds. and what you're going to see going forward is what i call the crisis management casserole. there's going to be firings, apologies, lawsuits, procedural changes. and then what really resolves a lot of these crises, it's a money issue. it's a price war. if you want to go from baltimore

to albuquerque, and united has the route, and they have a better price, that's what you're going to do. so there's no correlation between how many interviews you do, and the quick resolution of something like this. >> eric, if oscar had announced this morning that united was going to be the first airline in the united states to no longer -- to have a policy of no longer bumping passengers under any circumstance, "a," what are the economics of that? and "b" would it change the dynamic here? >> probably not. because one of the things that you see in the early stages of this -- the crisis vortex is anything the company does is declared too little, too late. i mean, literally, in every crisis i see, the early stage maneuvers are declared tone deaf, too little too late, the textbook way of how not to handle a crisis. so, again, there's no way to impress people in these early rounds. >> eric, just thinking about another recent crisis, one that

i covered closely in terms of the wells fargo scandal. clearly things got a lot worse than the company thought they would in the initial days leading, of course, eventually to the scalp of the ceo and chairman at the time john stumpf. is that something you think is possible for united? is oscar munoz's place under threat? >> look, one of the first things that happens in a crisis is somebody dives in front of a camera and says the thing that has to happen here is the ceo has to resign. that's absolutely nonsense. i think the idea that in every crisis you have to sacrifice a virgin in the volcano to appease the gods is really a ridiculous thing. the truth is, is that a lot of the ceos, and the teams that are managing a crisis are the right team to stay on and resolve it. and firing people just to appease short-term anger accomplishes absolutely nothing. >> but you don't think, eric -- >> a lot of business from companies today? >> you don't think if he had come out within 24 hours and said, wow, i looked at that, and

i was horrified. i couldn't believe it happened on my airline. and i'm going to figure out why it happened on my airline and i'm going to figure out how it never happens again on my airline. you're all right to be just as horrified as i am. that would have been pretty good, wouldn't it? instead of what we got? >> it would have been better. but the thing you have to understand is, i've spent 35 years in the middle of these things. corporations in crises are like people in crises. they almost always are stunned. they do the wrong thing. they're operating with very limited information. so this is not like the movies, where there's a cool customer crisis manager, who is in a tremendous position of authority and their blood pressure doesn't -- their heart -- >> i've never seen that movie. >> i'm going to disagree with you because you have to basically be blind not to have seen that video, be horrified at it, and then tell the public how

horrified you absolutely are. >> i agree with you. but you're not -- but you're not operating in the world that i -- that i operate in, which is people are almost always bad out of the gate. that's why i said at the beginning, the first rounds of crisis management are awful. in a perfect world, he would have come out right away, he would have said this is horrible, we're mortified. but he didn't. and i think that what i get uncomfortable with is the way the media culture harps on the fact that the initial stages were bad. which i'm saying, simply accept that that's what happens. and now we move on to the subsequent stages. >> but the reason why -- this is not just about dealing with the crisis. this is about the culture of a company. and when you have the ceo of a company like this not react the way he should, it represents something much larger about how everybody approaches this. how often have you gotten on an airplane and had a terrible, terrible experience with -- >> often.

often. >> unfortunately it's all too often. why is that? >> why is that? >> in part because we have executives and ceos like this who don't seem to approach it the way you would -- a customer oriented business. >> i would make a different argument. and my argument would be the problem here is when you have a company, a industry that is a near monopoly, this is what happens. >> yes. >> you simply have a situation where it's not like you walked into a brooks brothers and somebody was rude, and you got a bad shirt, where you can go across the street to joseph a. bank. andrew, do you think the two of us could get together this afternoon and say, look, i'm so offended by what united airlines did, why don't we start eric and andrew's airline tomorrow. there's barriers to entry. we can't do it. >> we are on the same page. >> it's a monopoly. >> i've been singing this song for a long time about the airlines. yes. this part we agree on. there's not enough competition and that's why both the behavior and the attitude of customer service on airlines is so terrible.

>> they get away with this because they don't think they can get away with this stuff, historically they do get away with this stuff and that's why it happens. but what i'm saying is, is in my business, i have to be very practical. let's admit that the first two rounds were terrible, now it's time to move on to this long-term -- this long-term approach which is exactly what they're going to do, and yes, they will probably survive it. >> eric, just quick final question on wells fargo which i mentioned earlier in your opinion have they put their issues behind them? >> i think they largely have. look their stock price is stabilizing. i think that, you know, i have different standards than let's say the media on how well these crises are managed. i think that they are surviving it. and look, the call i get when a lot of these crises happen is i get a call from a reporter who bravely asks can wells fargo survive? can toyota survive? almost all of these companies do survive. they just don't survive within the short twitter cycle.

>> got it. thanks eric. good to have you on. a lot ahead here on "squawk box." coming up next, it's a busy morning in geopolitics, secretary of state rex tillerson is meeting with his counterpart in russia this morning. he might meet with putin. we're waiting to see. live report from moscow is next. and then we're going to talk to former nato supreme allied commander general wesley clark. as president trump preeps to meet with the head of nato at the white house today. later delta just out with results. we're going to talk to an analyst about the airlines' latest quarter. the stock is higher. 8:45 a.m. stay tuned you're watching "squawk box" here on cnbc. x" he. the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.

welcome back to "squawk box." rex tillerson is in russia today meeting with the russian foreign minister. chief global correspondent bill neely joins us from moscow with the latest. >> good morning, wilford. the two men have been meeting, we think, for about four hours now. they had a round the table meeting and went for a working lunch. it began late and it began with i think something almost of a lecture by sergey lavrov, the russian foreign minister, who

spoke for about five minutes to rex tillerson and said we've heard a lot of ambiguous and contrary ideas from washington. we've seen some troubling actions in syria. meaning those missile strikes. and it's fundamentally important that we don't see those actions again. and the russians are clearly looking for clarity from the united states. is it assad must go? or is it not? because they've been seeing contradictory statements in washington over the last few days and weeks and russia really isn't quite sure what america's policy is. as for rex tillerson, he replied, he said he was equally frank. let's take a listen to a couple of his words. >> our meetings today come at an important moment in the relationship so that we can further clarify areas of common objectives, areas of common interest, even when our tactical approaches may be different.

>> listen to that word tactical, because i think, you know, rex tillerson wasn't going in there with an ultimatum, banging the table, demanding that russia drop its alliance with syria's president assad. but i think tactically, he's saying to the russians, okay, tactically you've got him, you've got iran, and you've got hezbollah in your war in syria. but really, strategically, globally, is that the kind of alliance that you want to be in? because that gets you nowhere. and for example, the sunni muslim world. so rex tillerson will be trying to see areas where the russians can be prized away, if you like, from their alliance so far with president assad. as i say, wilford, that meeting, to the best of our knowledge, it's still going on. >> bill, thank you very much for that update. and while this is going on today, president trump is also meeting with the nato chief at the white house today. joining us now is former nato supreme allied commander general

wesley clark. he's here on set. good to have you here. >> thank you. >> first, can we start with the situation in syria? >> yes. >> if assad must go, what comes afterward? >> i think the russians had some general lined up. that's what i'm told by friends in europe. he's lined up, they've told assad that assad can't hurt him. and so, he's set. so but the question is, what will make the russians force assad out. so they're not going to do this for nothing. they're going to look for some return on it. so there will be some bargaining. and they're set to do the bargaining. it will be tough bargaining with the united states. >> can you give us some idea of what -- would we have to give them crimea or something like that? >> release on crimea on the sanctions. and this is the real issue here. and it's been the issue since last summer with the administration -- trump administration when at the rnc they took out the provision in the platform about giving defensive weapons to ukraine.

so the question is, how do we trade off the middle east versus ukraine? russia wants ukraine. and putin would like as much of it as he could get and he would like it to be recognized by the west. are we willing to give up ukraine? i hope not. because they're fighting the fight for the rest of -- >> if we eased up on the sanctions i would think that tillerson would end up taking some heat, being an oil man, being oil companies that wanted to still be able to do business in russia. is he in a particularly difficult position because of his previous experience? >> no, i don't think that matters really. i think the issues is the policymaking inside the administration has really gelled it. this is a touch and feel encounter. sort of like, i'll throw an idea out there, i want to hear what you say. i'll come back to you. the -- in order to make this work, he has to say as little as possible going in, and as little as possible coming out. because you don't know if you really want to have a candid conversation, you've got to

throw some ideas out, and hear what the other side says. this is diplomacy, and it's far better to have rex tillerson talking in moscow than have a bunch of threats and bluster traded over through the newspapers, and headlines, and so forth. >> if we -- we rewind it a month going into this first administration and in the administration and -- excuse me, two administrations meeting for the first time since president trump was elected. there was such optimism that the rhetoric could be positive. in that sense, did president trump act too quickly by bombing syria? because it set back that potential relationship, where there are all sorts of other big issues you've already been mentioning where there was need for progress? >> i think rex tillerson used the word tactical there. and so i don't think the administration, or at least i don't think he, believes it's been set back permanently. this is just a bump in the road, let's say. but i think what they're going to find is, that russia has its interests. america has its interests. and however much you want to change and you think you can do

this through friendship, and having toasts and vodka or tea or whatever, really countries have their own interests. and there's a pretty strong continuity of those interests. you're bounded in. it's not like a real estate deal where you can go in and put a bid on a building and take it out. it's all interconnected. so when you ask for support from your allies for, we're going to do this new initiative, they're going to tell you no because it conflicts with other things. >> with that in mind, with president trump's meeting with the nato secretary-general today, nato of course will be impressing on the president that he cannot use ukraine or eastern europe as a bargaining chip. >> right. >> will he not? >> right. absolutely right. and they will also be impressing on the importance of nato. nato has done some interesting things. for example, nato is now arranged to purchase some big unmanned aerial reconnaissance vehicles. nato is putting billions of dollars into cybersecurity -- >> you mean europe and not the united states? because we've been spending all the money for these decades. europe is going to spend the money? >> europe is spending the money on this.

there's two different things we're talking about here with nato money. there's country's individual defense plans and every country supposedly was going to spend 2% on its own defense. and submit those plans to nato but it's its own plan. and then there's the nato joint programs where countries are assessed based on their gdp. that's going just fine. nobody's not paying for the assessment. it's just that some countries spending 2% for their own defense. >> most investors are looking at both. what is the most optimistic scenario out there and what is the black swan? what is their biggest fear? what is your most optimistic scenario out of all of this? and what is the thing you worry about the most? >> the optimistic scenario is we'll smooth this out with russia, that europe will come off its austerity program as it struggles with brexit, and start to grow and invest -- >> you want to handicap that? >> no. i want to talk about my greatest fear. >> okay. >> my greatest fear is we're

going to get messed up with something in north korea. look it's not the united states' responsibility to say to every country in the world, you can't have nuclear weapons. i mean, that's a u.n. issue. and if you treat it as the axis of evil, with north korea you're going to get a big problem. >> that hasn't worked. u.n. sanctions for more than a decade. >> yes. but i'll tell you what has worked, here's what has worked since 1949 when the soviet union exploded its first nuclear weapon, there were people then who said, we have to attack russia right away, before they get more nuclear weapons. but we didn't. because truman and eisenhower knew that emperor vepreventive nonsense. when you're looking at these countries like north korea we've deterred north korea since 1953 from taking action on the south. whether or not they get a nuclear weapon, we have to strengthen deterrence. and we have proved that we can make a strong deterrent. so we have to not get suckered

in to a game of brinksmanship with north korea. >> general, always good to have you on why the world's largest pork producer making some strides in bioscience. we'll tell you about that in just a bit. just a bit. c'mon in, pop pop! happy birthday! i survived a heart attack. i'm doing all i can to keep from having another one. and i'm taking brilinta. for people who've been hospitalized for a heart attack. i take brilinta with a baby aspirin. no more than one hundred milligrams as it affects how well it works. brilinta helps keep my platelets from sticking together and forming a clot. brilinta reduced the chance of another heart attack. or dying from one. it worked better than plavix.

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check this out. smithfield foods, yes, they're

the world's largest pork producer, they've established a separate bioscience unit to expand their role in supplying pig parts for medical issues. the ultimate goal selling pig organs for transplants into humans. routine pig/human organ transplapts are years away but new advances in science have broken down some of the barriers that made the transplants difficult. smithfield has joined a public/private tissue engineering consortium that includes abbott labs, medtronic and united therapeutic. the initiative is funded by a grant from the u.s. dpt of defense. transplants are used for people diagnosed with organ failure who have no other treatment options. >> okay. we've got to go. but it's all over twitter today and it's somewhat hilarious. on southwest there's attendant says we're going to need four passengers. then says just kidding, another southwest attendant goes on the loudspeaker and says welcome to southwest, where we beat our competitors, not our customers.

so this is going to continue, i imagine, not just on southwest but other airlines. results from cnbc's exclusive all-america survey, including parts of president trump's agenda getting the highest approval ratings. oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies lead with digital.

we're just seconds away from march import prices. futures ahead of that number are suggesting a negative open last we checked. s&p would open lower by two, dow would open lower not even. nasdaq lower by two. the 10-year t note right now is yielding 2.3 something. rick the number on import prices? >> for the month of march down 0.2 on import price that's month over month. exactly as expected. however last month february doubled from originally released up 0.2, all the way up to 0.4. take year over year perspective that number is up 4.2 following 4.8 last month. if we look at what is going on with petroleum, so let's take import prices, ex-petroleum month over month up 0.2 following an unrevised. up 0.3 export prices also tup 0.2. but that is much larger than the expectations, which were unchanged followed by a 0.3

revision -- no revisions for last month. to sum it up, you know, we're a little hot on the export side. but if we're going to be hot on something, that's the one i would actually prefer. 229 is the yield overnight outside our time zone we traded intraday as low as 2.28. as high as 2.30. 2.27 is a big area we saw in 2015 we didn't overtake that level all last year until about mid november. many technicians keeping an eye on that. dollar index hovering pretty close to unchanged. wilford, back to you. >> rick, thank you very much for that. one stock to watch today, blackberry presumed trading. shares sharply higher. the company's been awarded nearly $815 million in an orb internation with qualcomm. it's one to watch at the open. right results from cnbc's exclusive all-america economic survey are out. steve has some of the headlines earlier and he's got more of them now. >> we're going to take a look here at what americans think of

donald trump's agenda in certain areas, and then what they think the agenda ought to be. do this in two parts. first thing i want to show you is the attitudes on specific economic and other agenda items of the president. this is a big chart here but i want to start on the left there. one of the things that americans where they have strong agreement with the president and you can see on the left infrastructure spending is the number one right there. moving over, they like individual tax cuts. what you have here is you've got 80% agreement on republicans, and then you get either 40, 50 or less when it comes to independents and democrats. go to the middle there, 47% reducing business regulations and then well under the 50% threshold. what distinguishes these things right and left? places on the right are things he's done something about. those tend to rate much lower than things that are theoretical proposals. he hasn't done anything on tax cuts yet for business, anything on infrastructure. he has taken actions on climate

change. he's done the immigration ban. he's talked about the border wall. and replacing aca. those poll very poorly and one of our pollsters, republican pollsters said things poll well until he actually acts on it. it is a warning to the president to get the policy sort of more right than he's gotten it so far. because parts of his agenda poll very well. the execution seems to be lacking. now we're going to pivot and talk about what americans think their priorities should be. this is kind of like a family feud thing. what should america's top priorities be? number one keeping jobs from going overseas. number two cutting individual taxes. funding infrastructure has a lot of agreement, reducing the deficit and replacing the affordable care act ends up being number five. what i want to do is a new way of visualizing this thing. you tell me if this works. we try new things. here's the next -- >> hmm. >> you're not with me? let's work on it together. what this is the gray dot is independents. the blue dot is democrats. the red dot is republicans. >> okay. >> this shows you what their

priority is for different aspects. so apologies to folks on the radio. you can see they're keeping jobs in the u.s. is a high priority for all three groups. moving to the right pretty good agreement on cutting individual taxes. >> everybody degrees, just not as high. >> now you get into reducing the deficit over to the middle of the graphic there and you can see, very high priority for independents, a middling priority for democrats, and a low priority for republicans. you with me now? where that red dot is? now moving to the right the number one priority for republicans, repealing aca. repealing the health care -- >> way at the top. >> and then what do you see there for democrats. way at the bottom. >> the second least priority for them. and then we'll show you here for funding infrastructure, the number one topic for democrats. and a very low priority for republicans. so this shows you the spread, and it's a different way of visualizing how we get to prior grafk which is how does something get to the top? first you've got to have agreement. that's why you have keeping jobs

in the u.s. and cutting individual taxes, all three are there. and then you get the spread to the right. something can be high on the list if democrats really like it and/or republicans really like it but that masks the other side. >> it also suggestion, steve, that if lawmakers are watching, and want to sort of reflect the views of the people who voted for them, when it comes to talking about trade and tax reform, there should be an easier middle ground to find than there is for health care, and things like that where there's clear wide division between the trump agenda and what people in congress want. >> i think that's right. but the question has always been how is donald trump going to govern? is he going to comp in a compromising way? is he going to comp in a way that tries to essentially cater to his base? seems like it's been the latter from the beginning, and i don't know how well that's worked for him. this chart maybe suggests that he should try to go a little bit towards the middle. get some of those independents who, in our polling, they are truly independent. they're a group that doesn't know or is unsure in large

percentages than the rest of the population. and they're willing to go either way. for example, they're big on tax cuts and very low on things like the health care right now. you can read all about this. cnbc has the full story and results of the poll. >> i'm okay with the new graphic as long as you go through step by step. >> i wanted to visualize the differences. >> i get it. >> and you've still got the returns of the survey in terms of the stock market. >> we'll do that at 10:00. amazing results on what people think about the stock market. >> steve, thank you. coming up delta airlines out with earnings in the last hour. we're going to talk with an analyst about the company's result. probably mention united in there somewhere as well. plus the impact on the stock. ♪ 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

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mplt >> welcome back to "squawk box." check out shares of blackberry. now just resumed trading. blackberry has been awarded nearly $815 million in a big arbitration case with qualcomm. that stock now up over 16.5% just this morning on that news. also a busy day of bank earnings kicking off tomorrow. wilford has the rundown of what we've got to look for. we have him in person here today. >> yes. there we go. so banks of course coming into q1 earnings with easier comps to beat year-on-year but tougher month-on-month. the main focus will be loan growth which has slowed since the election and particularly in the last two months. goldman sachs gives three

reasons for that. first economic uncertainty on policy has led to less activity in the commercial space. second, higher rates have driven less mortgage refinancing. and finally, third, a seasonal slowdown in credit cards. it's very much the corporate side that has led to growth slowdown which is explained by high yield issuance being up 80% which brings us to the investment banking predictions where debt capital issuance is the standout. equity capital issuance or ipos will be strong too but m&a could disappoint fixed income commodities still seems to be very strong. equity trading will likely be soft. volatility has been lower both in q4 and q1 last year. finally net interest margins should improve following the march rate hike, which is a timely reminder of the improving environment banks face on any medium or long-term horizon. the first numbers will see

tomorrow after jpmorgan due at 6:45 a.m. followed by wells forgo and citi at 8:00 a.m. the rest following next week. >> anchor reporter, great job. >> we had dick bove on earlier today. i think the banks trade on the yield curve basically ever since the election. right? >> yeah. >> and he says that's not how you should look at them. >> well i mean, i think he can't argue and in fact he doesn't argue when we've exchanged e-mails about the fact that the correlation has. very strong. absolutely they've been moving, most pronounced fashion in march, in fact, if you track the ten-year and the bank index in march. very tight trading. so that observation is exactly correct. he just argues that it's moving in the wrong direction, because of the influence on existing equity that banks have, and the revaluation you see when yield curves move rather than the impact on margins which is profitable. the key as well on the yield curve is not just where yields are but the shape of the yield

curve. banks want it to be steep and upward sloping because they borrow short and lend long. they need that margin. >> even though we're talking about the fed raising interest rates on the short end, long end we keep talking about it, it isn't moving very much. >> exactly. that's why it is legitimate that you saw bank share prices pull back in march. but again i think you know that was the point i'm highlighting about march. net interest margins in this quarter will be higher than last quarter and on a year-on-year basis they're going to be a lot higher. on the medium term horizon they're in a much better position than they had been. people's optimism around things like tax reform has slapped. tax reform is something as well that we shouldn't underplay particularly for the reege nap banks. because banks as a sector pay a very full rate of corporate tax. they don't even need to have the complicated aspects of tax reform. they just want to see the corporate tax rate come down and that will play through pretty strongly to their earnings. >> we're going to move to the corporate story of the morning and perhaps the week and hopefully for their case not that much longer. ceo oscar munoz offering yet

another public apology sf that passenger was dragged off that flight on sunday night to make room for airline staff. he appeared on abc news earlier this morning. >> my first reaction to most issues is to get the facts and circumstances. my initial words fell short of truly expressing what we were feeling. and that's something that i've learned from. the expression of apology, and specific to folks had mentioned before, as an important part of a conversation like this, because again, that shame and embarrassment was pretty palpable for me and for a lot of our family. >> munoz says the problem rutted from what he called a system fall your that prevented employees from using common sense in this situation. the ceo said united will not use law enforcement officers anymore to remove overbooked passengers from aircraft in the future.

delta out with quarterly results this morning. earnings beat the street while revenues were roughly in line. the stock as you can see up 2.6% this morning. joining us on the news line managing director. firstly these numbers and what it says for the general core business in airlines at the moment. the cycle looking pretty good. >> yeah, i think so. the quarter is generally in line with what we were looking for. i think the stock's mainly on the unit revenue guidance that they gave for second quarter so i think that shows that the pricing environment is starting to improve. so i think it's a positive for delta in the industry that pricing is finally headed towards positive year over year comps. >> and joe, in your recent note you're saying that you think all the airlines, investors are underweighting the value of what they're earning from credit card companies in terms of selling their air miles to the companies and that's something that investors are missing.

what's your latest take on that following today's numbers? >> nothing really new from this morning's results. but it's just an enormous opportunity. i think people struggle with it, there can be this type of disconnect for such a large company like delta or american that's as widely followed by 15 or 20 analysts like it is for there just to be a complete lack of appreciation for the fact that within the airline is a marketing company, and if investors knew it was there, they would value it much differently than they're valuing the airline. so we think that airlines are actively engaged in trying to find ways to provide better transparency over the next couple of quarters, and as that plays out there's going to be better appreciation for how airlines are making their money. >> so let's move on to united which is only down about 0.7% week-to-date following this scandal we've been talking about a lot. should the stock be down more than that based on the pr fallout they faced?

>> i don't think so. it, to be frank, it doesn't really change the way that i would go about valuing the company. i think that they're probably going to have to change their practices in terms of what they offer to customers from a reaccommodation standpoint. delta offers, you know, gift cards, instead of travel vouchers. i think united probably moves towards that. and i think they re-examined these, that the process that they take in terms of not allowing passengers in an overboarded situation to board the aircraft. but it doesn't change the way that i would value the company at this point. >> and in terms of your preference amongst the various u.s. airlines, top pick at the moment? >> yeah it's american. i think as it relates to the loyalty program, they are head and shoulders best positioned to benefit from that. but time really should be an american, southwest, alaska, they're all in a very good position to benefit. >> joe one question we were trying to figure out the

economics of bumping people. how much money do you think the airlines either lose or it costs them to bump people traditionally? we were looking today, the "journal" talking about how delta and united do it differently. >> yeah so they have to report that expense to the d.o.t. i don't have it off the top of my head. they wouldn't be overselling flights in the first place if it wasn't beneficial to them. i would imagine it's a net moneymaker for them. >> can you handle an airline like delta or united announcing that they were changing their policy completely and what that would do to the stock and the impact for investors? >> well, certainly airlines choose not to overbook. it would surprise me quite a bit if delta or united moved towards that. >> okay. so, no. >> because there's that much money in it. i'm trying to get at the math on how much money is it -- how much value there is for the airline in overbooking people?

talking millions of dollars? talking tense of millions of dollars? what are we talking about here? >> yeah, if i had a against it would be tens of millions. it's hard to say. what they try and do is, you know, make an estimate for how many people are not going to show up, and try and, you know, offset that by selling those seats. >> yeah, try and maximize -- >> jetblue is an airline that doesn't do it. but -- >> all right, thanks, joe. >> okay, thank you. >> president trump just tweeting, saying that had a very good call last night with the president of china concerning the menace of north korea. the president also weighing in on the special election in kansas tweeting, great win in kansas last night for ron estes. easily winning the congressional race against the dems who spent heavily and predicted victory. >> font phantom menace. maybe it's not a phantom. >> i don't think so. when we return jim cramer live

from the new york stock exchange. we're going to get his take on today's top stories. ories.

last week's adp employment report beat estimates. after this happens, consumer staples is the top performing sector.

welcome back. green light capital is nominating three for the board.

the liberty media and at&t broadband, green light partner sethi and william thorndike chairman of consol energy. green light filed the proxy with the s.e.c. to let gm shareholders vote on the plan to split the common stock into two classes as if phil bove wasn't busy enough. >> that's right. left's get to jim cramer. are with you david einhorn or mary ba a? >> i'm with mary because she's trying everything she can to try to change the product line. look, this is a very challenging industry. first of all, the valuations are the lowest in the s&p and the lowest in the s&p because of heavily unionized shop. you're not allow to go to mexico. this is a part of the new trump

trade that we don't talk about enough which is the sell general motors, sell ford, you can't make the rationalization moves that at least used to make labor more realistic. the sales aren't good. there's a good list in "usa today" of five reasons why the auto companies are hurting. it doesn't matter who you nominate. the dogs won't eat it. >> you want to buy or sell united? i'm thinking you might buy united. because i think they're going to be fine. >> thank you for mentioning that. i'm flying out to oregon to visit my daughter and she said, you can't fly united. the delta numbers are firmed. the stocks which have kind of languished are ready for the next leg. i think the idea that if there wasn't such a video and i thought you had the best comment. honestly when you said listen, munoz should have said we don't know what the chicago police were doing, we could have worked this out. that may have deflected a little. >> jim, you looking forward to

banks earnings tomorrow? do you think they'll disprove the sort of doubters? >> i only like them because the stocks have come down a lot. because i love your coverage of wells fargo which has been relentless and correct given the company, it was jamming people and cross selling. you have covered it well. not letting them get by and thank you for doing that. >> you're kind. been a long story. anyway we'll be -- >> stay on it. stay on it because it's one of the longest banks in the world and they made their numbers by jamming. >> they used to be the larger. they no longer are. >> the one and only jim cramer. see you in a moment on "squawk on the street." as we head to the break, you don't want to miss this. susie welch has an exclusive interview with new england patriots coach bill belichick. you can see more on "power lunch" at 1:00 p.m. eastern time. "squawk" returns in a moment.

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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. welcome back to "squawk box." we're on the crisis communications beat and uber's public relations chief leaving that company. rachel white stone's departure coming after two weeks after

others left. whetstone didn't cite a reason for her decision. but the news -- crisis communications is -- look, it's between -- you have united, you've got spicer talking about hitler, you have uber. i don't know who wins the week. but it's been a tough week if you have been in the comes business. >> yeah. dealing with all the crises. >> pepsi last week as well. >> yeah, i forgot about pepsi. >> wells fargo the last seven months. plenty to go around. >> meanwhile, lyft has raised $600 million. they have stayed out of the news despite all this. fresh round of funding which values them at $7.5 million. it came from large global investment firms. last january they raised half a billion dollars from general motors. uber worth $70 billion if you believe the numbers. >> neither really still make a

profit either. extraordinary valuations. >> been a remarkable move of money from venture capitalists and investors to us consumers because they seem to lose money. a great -- >> i pay less for uber than i do for a taxi. lowered the cost of transportation. in new york city. yeah, i love it. all right, the long something pc market is showing signs of life with global shipments increasing, yes, increasing for first time in five years. research firm idc said dell, apple all reported sales gains and hp came out with more than 13 million total shipments. a final check in on the markets. futures at this hour are pointing a little bit low. we had a tenth to 0.2% of gains but we have lost steam as the european markets have lost steam themselves. they're high, but not as much as they had been. there's the ten year treasury note just below the 2.3% level.

we have been hovering around that level and energy markets showing slight gains for oil prices 53.6. >> okay. thanks, guys. >> fun. >> pleasure. >> i think whatting out. it was fun. thanks for coming over. in the meantime, join us tomorrow. we have bill belichick. that interview. see some of that. meanwhile, "squawk on the street" joins right now. ♪ good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. the premarket is slightly weaker as the market has more north korea tensions to watch. tillerson with lavrov in russia today. now the likelihood that tax reform is contingent on another run at health care. europe is pretty steady. the ten year yield at the bottom of a five month range and oil is going for its seventh gain in a row. our road map begs