good morning, everybody. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin. joe is out today. joining us for the hour is todd gordon, he's the fouvndzer of tradi tradinganalysis.com also a cnbc contributor. good to have you here. >> thank you very much. let's take a look at monday equity futures after the holiday shortened week last week. as we come back, looks like the bulls are making modest advances. the dow futures indicated up by 15 points. s&p, less than a point, nasdaq up over just five points. overnight in asia, chinese gdp grew to 6.9%. that was the fastest pace since 2015. stocks in shanghai were down 0.75%. the kospi up by 0.5%.

markets in hong kong, united kingdom, germany and france all closed for easter monday. if you want to take a look at crude oil. down by 44 cents. wti looking like it's trading at 52.74. if you take a look at the currency markets, the florida is down. dollar/yen at 108.28. the yield for the ten-year sitting at 2.205%. >> a lot of things on the economic agenda today to think about in addition to geopolitics and whether you're willing to get $10,000 to get bump on a department that flight. today, the national association of home builders puts us its survey. tomorrow and then wednesday, we've got the feds, facebook followed by the survey on

friday. friday, existing home sales. as for earning, here's what turns out. nine dow compovnent and 63 s&p 500 companies reporting this week. netflix out for the day. goldman sachs, morgan stanley. other big names, united health, j & j, ibm, travelers, verizon and ge. also president trump set to fill a key post. randy quarles is expected to be named the fed's vice chair. quarles runs an investment firm in utah but was a top treasury department official under president george bush. created by and overseeing the u.s. banks. former fed governor dan tarullo has been the acting chair.

some on wall street did not like dan tarullo thinks he was too tough on it. >> putting quarles there, it's not like you're putting somebody who disapproves of the agency or any rules at all. it's probably a different way to enforce some of those rules. >> right. >> but not somebody who is going to throw out every rule and say we're starting from scratch. >> right. >> like putti ting gruden in che of the epa. >> right. >> that was one of those things, dan tarullo knew where he stood. also by the way, the other news in politico this morning, richard kwad dry is going to be pushed down. >> go the easy way or the hard way. he said that he didn't make it quite as definitive, at least

the reporting goes that he doesn't make it quite as definitive because it sounded like he wants to run for governor of ohio. >> nice way out? >> well, although they're worried about making it much easier for him to run if they give him a lot of publicity by forcing him out, it sounds like. here is the story that we've been watching for over a week at this point. united making a policy change. this is change is aimed to try and prevent incidents like the one that happened this week when a passenger david dao was forcibly moved to make room for a crew member. united is saying that crew members will have to check in 60 minutes prior to departure to make sure that incidents like this don't happen again. however, i don't believe it takes this long for a public change when somebody like delta

doing what they should be doing in this situation, too. i've been so fired up about this story. >> you have? >> you've been on vacation. >> i've been on vacation. >> delta is changes its policy about bumping passengers off flights. the agency now authorized to offer $2,000 for voluntary boardings up from $800. in some case, delta has authorized agents up to $10,0000 for being bumped. although they have the rules about the higher amounts including authorization from supervisors. we talked just to explain this, the $1350 cap is not really a cap, it's a legal limit for the most the government requires the airs to pay -- >> before you involuntary -- >> if you're involuntary temporarily pushed -- no, if you're involuntarily pushed awe

the plain, not voluntary. they could offer you $5,000 or amex points. >> the airline is overbooked. united has been particularly bad about overbooking they say they need to do that to make sure they're profitable with people showing up. they're terrible about overbooking. even if you look at chris christie laying out the case that united controls 70% of the takeoffs from newark so you're bound in these situations. united should be doing what dealt 25 is doing. delta just took the steps that united should have taken based on what they saw happen in another airline. if you can go ahead and convince people if they want to get off the flight, great. same story. if your entire message is that you're going to say okay, my fix is now that if we're bumping you, we need to do it 60 minutes before hand so you never get on the plane -- >> and not on the plane -- >> but you're still

involuntarily bumping people, if you offer $10,000, trust me, you will get people voluntarily giving up their seats. >> but those employees and those airline pilots don't get on that flight how many other people are going to be delayed? >> it doesn't matter. pay for it. it's your problem for overbooking. as opposed to be dragging people -- don't be kicking them off. >> here's my question. this was our dinner table discussion over the weekend, several dinners actually, how much does united have to pay the doctor to settle the case in advance, such that the public effectively turns against the doctor for not taking the money? >> the stories are piling up on united. >> right. >> they dug into it with oscar

munoz saying this is a belligerent passenger. i would have been belligerent, too. >> is it $10 mr1$10 million, $2 million -- >> i woke up the night that the ceo put out the statement i was so mad. i was up from 3:00 to 5:00 in the morning just fuming about this. that's insane that you're blaming the passenger in this situation. >> at what point does -- if an authority asks you to do something, whether it's security and they ask me to move -- >> it's not security. i want you off the flight because i need it for my employees. >> for the united employee, was it an air marshal or some deputyized agent -- >> he was belligerent because they made him belligerent. i mean, it's so bad. the customer service. >> hold on, i want your number. we all talked over the weekend, what's your number? this is going to become the issue because for united right now, they want to end this. they need to end this.

>> they have done everything not to end this. the ceo's response is what set this off the deep end. >> i'm not the ceo -- >> i was on a united flight coming back on saturday. you know what i read, oscar munoz letter to the public that was already out there printed before this incident happened about how we fly the friendly skies, blah, blah, blah. by the way, i stuck by united when they kicked the girls off for wearing the leggings because they were supposed to be following the rules. the idea that this is a belligerent passenger, it's not your employees fault. it's your stupid regulations that you still have not changed on this one. >> or the married couple i believe going to costa rica. this is just the latest. they got booted off for going economy plus. >> this is not the united employees who are at fault. this is the united regulations that were followed. they followed the guidelines.

delta has just come up with a very reasonable change, an at kerrati alteration saying if it's a bad situation, you can offer up to $2,000 and with an agent, 10,000. videotaping this, it's a horrific situation. every step of the way, they compounded. if they asks for $10 mr10 milli for it. if he asks for $20 million, go for it. he was stupid -- >> our argument at the dinner table is 30. 30. i think he'll get 10 to 15 in court. in court, a jury would give him 10 to 15. >> ask for 30, they'll give him 25? >> if you offer 30 and you don't take it then you look like -- enough united for now. >> sorry, had to get that off my chest. some breaking news last night, vice president mike pence

visiting the demilitarized zone between north and south korea. he said that any use of nuclear weapons by north korea will be met with an overwhelming response. cnbc's shachery kang joining us from north korea. >> reporter: talking about the strategics with north korea so far. that's when the key with the north korea policy with the previous administration in washington declaring that it's over. this comes after north korea fired yet another missile on sunday. yes, it failed, exploding seconds after the launch, but certainly succeeded in terms of getting the globe attention, and also getting u.s. president donald trump's tweets over the weekend. and one interesting tweet over the weekend coming from u.s. president donald trump was that emphasized china's role in all of this. talking about why would i call

china a currency manipulator if they're working with us on the north korea problem. we will see what happens. i think emphasis on china's role in all of this is what sets the trump administration north korea policy from other administrations in the u.s. in the past. and here is a vice president mike pence talking about how he's confident now that beijing will help out. take a listen. >> now, what issues like that remain, the president and i have great confidence that china will properly deal with north korea. but as president trump made clear just a few short days ago, if china is unable to deal with north korea, the united states and our allies will. >> reporter: and this emphasis, of course, comes out of this understanding or belief that washington does need beijing's help in putting pyongyang in

check. here is national security adviser to the trump administration mcmaster speaking on abc's "this week". take a listen. >> we're going to rely on our allies like we always do. but we're also going to have to rely on chinese leadership. north korea is very vulnerable to pressure from the chinese. 80% of north korea's trade comes from china. all of their energy requirements are fulfilled by china. >> reporter: and i think it's sad, we've been seeing interesting reports or responses out of beijing in the last few days or so since the summit between the leaders of the united states and china in mar-a-lago, florida. suspended flights, the only existing one between beijing and pyongyang by air china. and also return something coal imports from north korea back to north korea. and also suspended some tourism packages, basically blocking chinese tourism to north korea.

so, was there some kind of a big deal between the two leaders in florida? that is the question. and how far is beijing willing to go and how well will kim jong-un take all of this is the question, guys. >> thank you very much. in the meantime, we're going to talk moore about this week's top political stories which so many are watching. eamon javers. >> heading into this week, gary cohen, the head of economic council for trump petrae. he's say guy that worked for goldman sachs. and emerging as one of the top figures in the administration for 2017. a big reuters profile out for him yesterday. take a look at some of gary cohn's fingerprints. others are down, and the signal

that he's open to keeping janet yellen on at the federal reserve. that appears to be at the behest. and something that you just heard it plays into the g geopolitical situation as well. a couple other changes that gary cohn has had his stamp on, with abandoning ideas from the campaign trail. and politico is reporting as you guys mentioned earlier in the broadcast that gary cohn pushed to hold off on firing the head of the consumer protection bureau. and who subpoena, who is down, clearly cohn one of those who is up. down would be steve bannon.

and also up, jared kushner, that's the president's son-in-law who you see in that picture. jared kushner is somebody as a ascendent in the picture here as well and he was mocked on "saturday night live," although "saturday night live" does have insbiegt wigh insight. >> of course, jared played by jimmy fallon. >> with the jacket and sunglasses on there. >> and steve bannon there was the skeleton there. when it comes to tax issue or tax reform now thinking about health care reform all over again. i know he keeps intimating that he thinks health care reform is something that's happening first. i thought it was off the table,

on the table, where is it on the table right now? >> to be honest with you i was off last week so i don't have up to the minute reporting on this clearly, this is an administration that doesn't want to completely let health care go. one of the essentials is that obamacare was a disaster. they fought on the first go around on this. the question are these dynamics that block the deal and removable object. is there some deal they can cut that could allow them to say that they've repealed obamacare. that is very difficult politics as they found out the first time around. they don't seem to be able to totally walk away from it. it's not clear where all of that is going. >> eamon javers, great to see you, my friend. let's get to the markets this monday morning. the dow and s&p 500 coming off their first trading day in three weeks. joining us now the head of short term investment opportunities at

ubs management. and also the portfolio manager at fed rated. and the cnbc contributor. todd, where do you think we stand right now, just in terms of the momentum, and what the most likely path is from here. >> sure, i think the sentiment has clearly shifted, i move to one long holding, the rest is very defensive. it's been that way for a couple weeks now. as you guys know i'm a short-term trader. i can change that in a dime. we were having a nice discussion in the green room become for now, sigh thinow sh now, i think there's way too many macro fees. with gold up, gold down. that's been the case in the last couple weeks but in the last couple months even through plate 2016. the one technical thing i'll throw out to you we just lost the moving day average which is basically a two-month average

price. we have done that two times since 2016. that equates to a 63-day period of consolidation. we're only in day three. we just lost the 50-day after the extended period of time. i think for the next coming of months. >> do you agree with that? >> most likely, yes. very positive macro globally. but the politics are ugly. i think when you juxtapose this, you end up in the scenario he just described. >> so a little more hesitant, not leading so much with your trade? >> well, you can pick up the downside if traders are moving on both side. i think defense cash. bombs are moving up. >> does that mean that earnings are going to be lousy? i think earnings are better than we thought or is that a black swan drive? >> i don't think that's the drive here. i think it's all about trump,

the first 100 days there's so much built into that rally. all of a sudden, the challenges of -- reality is hitting him, yeah. >> steve what do you think. i think it's interesting when you go back to the beginning of the year there's so many optimism around the trump agenda. euphoria turns into rallieealit. we've gotten that. we've reached the point where markets are getting interesting again. >> meaning, you think it's time for a buy? >> yeah, earning season, we had a good start with the earnings season. we do think health care is going to come back on the agenda. we think that's to pay for instead of the bat. and following an overall scenario. we think that some of the blues in late march and early april could turn to optimism starting against once congress returns from their recess. >> i know you have the opinion that there are better opportunities in other places.

>> that's right. >> but mark grant had a really interesting note this week when he kind of laid out the days against europe. he's very concerned about the vote in france, what happens there. and if there are other countries that might split away from the eu. >> yes, barring the french rule which is rule running, the polls are basically saying it's not le pen, it's melenchon. that's truly extreme. away from that there is more value there and if the macro scenario across the world improves europe is well placed to benefit from that. yes, with opportunity comes risk. so it will be more volatile it usually is. >> his concern was not only the french election, he took a look at greece where he thinks greece will either choose to leave or be forced out. if you have italy decide to make a decision like that, then the

entire eu splinters then you're talking about serious problems cropping up all over the place. >> this situation becomes much worse if growth is worse. if growth is better, people are happy. people don't vote for these parties -- you know, people are saying something. across the world, when they vote for parties like this, they're contesting. >> that's a very strong focus, though. it's shown up in a lot of elections. >> that's true. >> from the market's perspective, the underperformance of the european stock market is dramatic. so this is very much a valued pickup play that's dependent on a lot of fundamental forces f l falling in place. >> one you have to was that is japan. japan keeps falling but the earnings picture in japan is really very positive. that's why the reality, with the

way the market is trading is very conflicting. >> with the inflationary pressures, you can't ignore that no? >> well, the same story. the risk aversion is driving the yen up. >> right. >> guys, we'll leave it there. thank you for coming in. todd is with us for the rest of the hour. coming up, earnings alert. netflix set to report right after the closing bell. we take a look at the original content and whether it's going to transcribe into stronger growth. "squawk box" continues in just a moment.

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♪ early risers in times square hanging out with the "squawk" gang. joining us the senior median internet analyst. he's going to tell us what to watch for ahead of the company's first quarter report. what's going on? >> what's going on? >> what's going to happen here? >> we have proprietary research

that shows that app data is going to be strong. particularly in market where is netflix has been for at least three years. >> hold on. i got to stop you when you have proprietary data. where are you getting the data from? >> we work with a third party. it's a loose proxy. but basically what you're seeing netflix is doing more and more of its marketing, more of its sign-ons coming from the apple store and those are attractive. >> does that mean they're giving up more than a third. sub? >> it can mean that. we don't know if it's a full third. it can be beneficial to netflix and other providers. we're struggling to get a hand on how things are going in the short term, we feel cough accident with international subscriber growth. the real story for netflix is the long-term story. this is the market leader. the world is moving to internet

video. you see that by all of the moves by the media companies. netflix is by far in terms of viewership and terms of usage, right? the big worry on the competition side is of course, jeff bezos and amazon. i figured you'd ask me about that. >> you can answer before i ask you. >> okay. my view on that is that the market, the svod, subscription video market is big enough to support both of these agreements. >> $6 billion in content? >> yes, in the median term, amazon is building up the cost of condent in the near term. you've got this arms race actually in the near term hurting the netflix free cash flow. >> do you think they're spending too much on each program? or they're buying too much content that they can't surface to their subscribers given that you go on to netflix and there's so much original content?

>> yeah. >> you can't even find half of it. >> yeah. i would say two things. i'd say first they need a broader row of content to hit a customer's individual taste, right? that's one. and the second thing is they can't afford to do it because as they scale dramatically they can amortize that cost over so many subscribers. >> here's my question, why do you think this is a short-term problem have, the arms race between amazon and netflix? >> it's a fair question. i do think amazon is all in. i don't think they'll screw that up. it's a situation where it's a longer term arms race. but i think over time, even in the situation where you have a higher -- you have two major bidders in terms of content. as you get from 100 million subscribers to 200 million subscribers that you'll still benefit. >> you're talking about this as

a two-person race, what do you think about hbo? and the cost? >> hbo -- >> it's a smaller player? >> well, how much does netflix spend on content a year, do you know? >> 5, $6 billion and netflix is spending about $3. >> but it's about to be acquired by at&t. >> does at&t use its capital to get into this battle? >> i'm not convinced that at&t is going to increase programming investment levels. i don't know. >> what about like comcast, i'm just trying to think of all of the traditional players? >> okay, the traditional players' view, they're ensconced and invested in the meekia ecosystem you see it time and time again zbloel th--

>> they don't want to can balan cannibalize the growth? >> exactly. >> how long do public investors allow netflix to liver at razor th in an environment where amazon obviously is playing a completely different game? and the guy says i need my margin -- >> hold on. first the premise of the question, because in the u.s., netflix generates on a fully loaded operating basis almost 25% margin. the problem is you're seeing the overall number which includes international. >> it's called looking at the business. >> right. but what margin does amazon operate at? amazon is operating at razor, razor-thin markets, too. >> yes, but they're in the cloud business as far as i'm concerned. >> but they're amazon media, do you think they're at a fat profit margin?

no shot. >> no, they're losing money. >> you got to look forward to five or ten years, the cable grid, the way people are watching tv are really changing. people want to watch it over apps. >> you think it's about $3 billion -- just to put a point on it, you think these two big players can both continue to do this and both be winners because they're going to quill all of the traditional players and win all of their subscribers, a much big number of subscribers? >> like i said before, i definitely think there's enough viewing hours to support these big players. all of the growth is in internet video. >> by the way, i've got to make this point. look at what the other internet and tech platforms are doing. mark zuckerberg said video is the number one priority. >> play the takeover game with me for a second. >> you love this -- >> i love this. i always thought disney should

buy netflix and allows them to effectively piggyback off of netflix to get to espn, the consumer if they want to. and apple -- >> you also said apple is going to buy disney -- >> apple may one day buy disney. i'd like disney to buy netflix. >> have disney buy netflix, that's a $6$60 billion for them. >> i think there's a financial aspect there. i think they have looked at it by strategy. but apple and netflix makes sense. i'm frustrated that the apple board has been very conservative in management when it comes to getting into it. >> and what about facebook? or google. >> i don't necessarily -- i don't see facebook getting into it as much.

because think facebook is more about as supporting video. >> the deep last five quarters what do you think, do you like them? >> he always likes his company. >> they're playing us out -- anthony, thank you. we appreciate it. when we come back, the u.s. air strike on syria putting a damper on the relationship between russia and the united states. we will take a closer look at the fallout that never happened and what it could mean for your money. right now, though, as we head to break take a look at last week's s&p 500 winners and losers. ♪ hey ron! they're finally taking down that schwab billboard. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity...

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welcome back to "squawk box," everyone. the trump administration weighing options in russia after senior white house officials accused the kremlin of trying to cover up last week's syrian chemical attack. let's bring in the policy director and fellow at the foreign policy initiative. david, thanks for being with us today. >> my pleasure, becky. >> so, where do we stand with russia at this point? what is our relationship versus where it was, say, a year ago? >> well, it's just as bad as a year ago, perhaps worse. the most interesting thing is where we are vis-a-vis two months ago. now with donald trump in the white house, now we have trump and his secretary of state saying we've hit a low point. i think there may have been a measure of optimism in the kremlin for once when the americans talked about making things better, they're going to follow through. but now i think they must be questioning after all of this

talk that trump is going to have a better respected relationship, suddenly, the missiles are flying over the most important allies in the middle east. >> wait a minute, let's back that up a little bit. >> sure. >> you say that russians were hopeful that things would be better. wouldn't the russians have to come to the table and behave in order to get together at this point? >> well, they didn't seem to be needing much to get indicationings from donald trump there's a famous interview where they say hey, some putin a killer, and well, america is not so worse either. >> when assad steps out and used chemical weapons against his own people, when he gassed them, the russians kind of backed him up on that and tried to say the same thing. that it has not been using these weapons. there's evidence that points to the contrary. so what does donald trump do other than reassess with that information? >> well, i think, you know, it's sort of looking a little bit like the cold war where you have

two different versions of reality. with sort of the press conference with tillerson and his russian counterpart saying this we think this is all fictional. where the democrats and republicans are trumping his critics. >> what do you think the real facts junior. >> no, i think the evidence is extremely strong for whether there was a chemical attack, whether it's the rapid proliferation of first hand videos from people on the ground. i have confidence in the community even though donald trump was casti aspersions on te credibility. that is this a gas attack. >> which gets us back to where we stand with the russians society, syria in particular, to nato to the middle east to all of these different places. where is the road ahead, where does it lead us, best case

scenario. >> sure, if my view, best case scenario, the administration realizes that assad is big part of the problem. the line has been isis first, in response to questions after this attack people saying are you changing anything, is there new strategy? every one of the officials saying we're still focused on isis but this is abouis chemica weapons. the previous administration realized this even though they were hesitant and timid on syria. the mentality makes sunni arabs in syria believe that isis is the least worst of the options they're favoring. or al qaeda. that's a big conversation of what people aren't paying attention to. al qaeda has had a tremendous resurgence. even while isis is being hit by american forces on both sides of the border with iraq. al qaeda is entrenching itself in the population even after a way of a setback. >> david can i ask you a

economic question. how much money do you think we'll be spending on the next coming of years on these issues that we're talking about here? >> well, one of the biggest questions there is a defense budget. so what does this mean for that? trump has promised a substantial buildup. but right now, we're heading towards a potential government shut down april 28th, a continuing resolution with budget levels continues from the previous year with no change. that can actually be bad for the military because they move things around from account to account. so if they can't get things around to an account, they get cut. trump said he's rebuilding the military and even said it's begun. the fact is, it hasn't begun. we need to get a supplemental budget. and then move on to the 50 plus billion even then isn't going to be in that time because of the

sequestration of the obama rare. ann winblad is joining us. >> and joe crowley weighing in. later, uber opening up its books for the very first time. revealing its revenue growth outpaces losses. ed lee breaks that down on "squawk box" right here on cnbc. kevin, meet your father. kevin kevin kevin kevin kevin kevin kevin kevin kevin kevin trusted advice for life. kevin, how's your mom? life well planned. see what a raymond james financial advisor can do for you. excuse me, are you aware of what's happening right now?

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time now for "executive edge" president trump following up on a promise from democrats to restore the ex-im bank. and now joining us with more. >> good morning, andrew. the president has been all over the issue, first he opposed the ex-im bank and then supported it and one of the banks biggest critics to lead it. scott garrett is a congressman from new jersey call the freedom bank part of crony capitalism

while he was office. trump nominated a more moderate to the board, spencer bachus was chairman of the house services committee. both sides of the aisle already angry about this move. on the right, representative just justin amash from michigan tweeted xm corporate bank is stealing. and nominates garrett is what democrat steny hoyer called the ultimate form of sabotage. and one of the most vocal advocates said she has refer nations about the nominee. without a full board the bank cannot make loans larger than $10 million. sony and caterpillar have fought to keep this bank alive. guys there could be fireworks when the nominees face the senate. >> thank you so much this morning. when we come back on "squawk box," a record-breaking box

office debut. we have the numbers from the latest "fast & furious" next. right now, though, as we head to break, a quick check of what's happening in equity futures. things looking higher. dow up by 15 points. s&p up by 15 point. and nasdaq up by 6 points. "squawk box" will be right back. ♪ stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker. that's the power of an

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welcome back to "squawk box," everybody. check this out. the latest installment in the fast and the furious franchise zoomed to the top of the box office this weekend, bringing in an estimated $532.5 million worldwide. that's projected to be the biggest global opening of all time. just ahead of the star wars, the force awakens. the fast and the furious, which was called "the fate of the furious "was produced by comcast universal pictures. it made $100 million in north america. down from some of the previous movies in the franchise but more than made up for that outside the united states and canada where it brought in $432

million. that includes $190 million in china. this is the first movie in the furious series to open on the same weekend in china as the rest of the world. and, yeah, about $100 million over the expected take-in total. >> i would like to selfishly promote a new film that just came out over the weekend with richard gere called "norman," which you have to go see. it's about a fixer in new york city. a banker in new york city. but if you go see it and you wait until the very end, there's a cameo from a reporter -- >> you? >> that you may know. >> you're kidding me. >> it's sold out in every theater that was in this weekend. it's a sony classics picture. sort of a woody allen style film done by a good friend of mine who is a director. >> what question did you ask? >> i reported on something. from the "squawk" set, no less. >> wow! >> so maybe next weekend i think it's in wider release. >> that's one more thing that you get a residual payment for, isn't it? >> i might have done it for free. joe is a friend. in the meantime, apple has

secured a permit to test autonomous vehicles in california. the permit authorizes test drives for three vehicles, all 2015 lexus crossover suvs. permission to test self-driving cars doesn't mean apple is building a car. the test could be for software or hardware. apple has recruited dozens of auto experts in recent years. now time for some parting shots from our guest. do you have a parting shot ready to go for us? todd gordon's been here, of course. >> yeah. >> you may have an invitation back on friday given you told us -- tell the public what you just told us during the commercial break so we can hold you to account. >> if i return on friday, in either case whether the market was higher or lower from today i'm going to receive a "b" according to andrew ross sorkin. >> no you won't deserve a beating. you said it was going to go down. >> i think the market is in for some sears volatility. >> serious volatility. 5% over/under. 5% lower -- >> that's going to be a pretty big move.

>> i think we're going to see serious volatility. these macro markets have been warning signs coming in '17. the uptrend has been lost. i think europe has come back. but that stock market, those stock markets in europe have a long way to go. i'm concerned, i think we have our hands full on the geopolitical front. we're dealing with syria, russia, china, north korea. i think -- >> a lot of potential black swans that if nothing happens, let's say not even this week or the next if we kind of make it through some of these concerns, then what? >> i really, i think the financials need it to really. the earnings were not that bad. jpmorgan was solid, wells fargo was not good but overall i think financials started off earnings season well and financials are some of the worst performers. small caps are dropping. financials are dropping. i've gone to a defensive posture. i think there's asymmetric risk. if i'm wrong i think i'll be wrong for "x" on the upside. but if i'm right i think i'll be right for 1.5 or 2-x on the downside. >> we kind of don't want you to be right. >> i want to be wrong.

i don't want to see the stock market -- >> we'll hold you to it and see you back here hopefully on friday. todd, thank you for joining us. >> thank you, guys. >> when we come back this morning, wilt is standing over here waiting to come right on. plus a read on technology stocks from the "squawk" market master ann winblad. she's going to join us son the "squawk" set. right now, take a look at the 10-year yield. still sitting just at about 2.2%. 2.213. "squawk box" will be right back. . the power of iovative thinkiki. the wer of 1 t t world's top companies. thpower aetf. thwe qqq. the thinng wput in, clients get out. power yourlient's portfoli at powershares.com/qqq. before investing, consider the fund's investment objtives, risks, charges and expenses.

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tensions mounting over north korea. investors are in a wait and see mode as the white house weighs

all options. we have the details straight ahead. tech talk with ann winblad. a look at the names that could be market movers. we've got her picks coming up. and pedal to the metal. the fate of the furious roars past "baby boss." the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york city. this is "squawk box." ♪ >> a little fast and furious for you this morning. good morning and welcome back to "squawk box" right here on cnbc. we're live at the nasdaq marketsite in times square. richard bernstein our own fast and furious, ceo of bernstein advisers. take a look at futures after what was a three-day weekend and lots to chew on. geopolitically and otherwise. dow looks like it will open up higher shrugging off some of the

geopolitical news of the weekend. up about 16 points. nasdaq looks to open higher as well about five points, and the s&p 500 looking to open marginally higher as well. today the first chance investors will have to react to friday's economic data released when the u.s. markets were closed. march retail sales were down 0.2%. the second straight monthly decline. with consumer price index fell 0.3%. retail is getting hammered across the board, guys. don't know if you saw that number. 89,000 people have lost their jobs in retail just this year. that's more than the entire coal industry. somebody making that poingt over the weekend. also one of today's early losers is drugmaker eli lilly. the fda declined to approve lilly's new rheumatoid arthritis drug saying it needed more data to determine appropriate dosages that could delay market debut for a year or more. and we'll be joined in just a little bit to talk about that. that stock down 5% in the premarket. also a redone deal. abbott labs will officially go

ahead with its deal to buy ahere but now at a lower price than previously offered. the deal worth about $5.3 billion or 51 per share compared to $5.8 billion. abbott had tried to back out of the deal because of concerns about the accuracy of alere's financial data. they did say over the past few years was inaccurate and they will be restated as soon as possible. >> meantime, president trump plans to nominate a vocal critic of the u.s. eximbank to leave the agency. the white house announced friday he will nominate former republican congressman scott garrett to serve as president of the bank which helps overseas buyers get financing to buy u.s. exports. garrett voted against renewing the bank's charter while in congress calling it corporate welfare. president trump reversed his stance on the exim bank telling the wj he believes it helps u.s. companies gain business. and president trump set to fill a key post at the federal reserve.

according to "the wall street journal" randy quarles is expected to be named chair for supervision. he was a top department official under president george w. bush. the position, which requires senate confirmation was created by the dodd-frank law to oversee big u.s. banks. president obama never nominated anyone to the job. former head governor dan terrello had been the acting vice chair. this is significant for the banks, not least his stance, which is thought to be pragmatic on looking at the regulations but just to get to the stage of a nomination and approval will be significant to fill that post. >> how do you think it's going to change the dynamic in terms of what he does? we're talking about the stress test in the last hour for example. >> i think we need to learn more about him, specifically and "the wall street journal" reporting today that he's probably not someone that ideologically wants to tear up dodd-frank but is someone that wants to take a pragmatic approach. sort of middle ground approach. the most significant thing is we will get that position filled and again a reminder that once he gets senate approval, if he gets it, that there's a lot that someone in this position can do

without the need for various laws to pass congress. clearly we're not talking about a rollback of dodd-frank which would require legal changes but there are simple changes that can be done by tone and leadership at the top. that's something the banks have been looking to fill. >> since you're hanging out with us can you weigh in on the news about richard cordray at politico, out of the consumer protection bureau? >> clearly this is something that's been on the agenda for awhile. straight away after the administration it looked like his days were numbered and over the past couple of months feel started to realize it's a harder thing to change than people expected. if it does come about i think it will be a surprise and significant but i don't think we're talking about significant change to the cfpb anymore. that's something that's harder for the administration to tackle and probably something that would just cost too much political capital for them to do. because the democrats would be very heavily against it. >> okay. we're going to continue this conversation. markets kwr s grappling with gl conflict and after the three-day weekend markets looking to open

slightly higher. joining us equity strategist and managing director of jefferies, rich bernstein ceo of richard bernstein advisers our guest for the hour. why is it? this is the thing i can't figure out about all the geopolitical risks out there, it used to be when you heard an announcement about a bomb going off that the markets took that very seriously. >> yeah. >> and usually it would drop somewhat meaningfully. >> right. >> we seem to shrug this stuff off as if it's nothing. are we right now or were we right before? >> i think you know, honestly, we've started seeing volatility come back to the market. we had a nice little jump last week on volatility. i 24i that continues here. we're finding out the world is a dangerous place, and that probably shouldn't be shrugging it off. i think the bigger thing is that the economic news has been a little bit more mixed. we've seen, you know, gdp forecasts come down. we've seen retail sales nums beur numbers as we talked about

before being a little bit weaker. this is going to be a big test with the earnings season on what we're going to be able to come up with. i think what we found out, though, is that u.s. companies have been pretty resill yept. in being able to put up pretty good earnings numbers regardless of, you know, sort of the economic environment. i think for my small caps, though, that presents a problem when the economy is not growing nearly as quickly as sort of the multiples. >> for the last eight years we talked about uncertainty. i would argue potentially today is more uncertain than it was in many years. >> well. >> am i wrong to say that? >> well, there's real uncertainty and perceived uncertainty. >> right. >> real uncertainty is bombs are going off and people are testing -- >> yeah. but if you go back seven, eight years ago we're talking about people perceived that the world was coming to an end but perhaps things were getting better. >> right. >> today i think people are a little more realistic about the prospects for the economy and the prospects for the global economy. but you do have the uncertainty going on whether it's north korea or whether it's syria, or whatever it is. >> does that factor in to your

thinking, though? >> i would argue, i think i disagree a little bit with steven here. i would argue it's a distraction. >> distraction? >> it ultimately, what you want to look at is fundamental. assuming that we're not going to have some kind of major war. let's just make that assumption for a second. rational heads will prevail here. but, if it's -- if it's a bombing here or bombing there, bombing there, that's actually been going on for a long time. the question is how much of a fanfare did it all get. but, the underlying, what steven said i think is very important. u.s. profit fundamentals, forget economic fundamentals for a second, profit fundamentals remain quite healthy and, in fact, i would argue getting healthier. and i think that's what investors should really be focusing on. not the geopolitical issues that are -- >> what about the policy implications of things being passed or not legislatively in washington and how much that weighs one way or the other on any of this? >> not to hog the camera, but when -- >> don't worry. we know air time is oxygen.

we understand. >> when becky was interviewing steve munnuchin, i was here tha day. you asked me a question, i said the most important thing he said is they wanted tax reform done by august. and if it wasn't going to happen, the market was going to have trouble with that. because what they were doing was setting expectations that there was going to be additional fiscal stimulus in one form or another, that was going to happen reasonably soon. and with a republican congress, a republican senate, republican in the white house, the markets assumed that that was going to be reasonably easy to get that done. i think even they assumed it was going to be reasonably easy to get it done. that's clearly not what's going on right now. and i think that's why you're seeing the volatility in the marketplace. >> well i think it's also the fact that, you know, you were planning on it, and actually performance for the market. >> absolutely. >> in the fourth quarter really reflected the fact that it was going to get done in 2017. and you have elevated valuations here. and so you have some of the good

earnings growth sort of priced in, especially as we get down cap where small cap was up 11% or whatever it was in the fourth quarter. >> right. >> it's really priced into the stocks. and now it's more of a show-me situation. so we do have to see policies start to lead here. and we really need to get better information. >> is there still a premium built into the market that some of this policy stuff happens? >> certainly a lot smaller -- >> or are we growing into it now? >> it's a little smaller than it was. to some extent earnings are going to grow into this. that's definitely happening. look, if nothing gets done, we're back where we were. so the argument i would make is, that with earnings improving we won't go back where we were in the stock market. but you can't expect a major, major advance to occur here. although i just want to reiterate. fundamentals are still improving. it's not like we're looking at a bear market. i think that's a big difference. >> steven what's your view on the renal nal banks at the moment. friday's earnings will be interesting. >> right. >> won't be on the eps line but the only share price that performed was emc

>> i'm overweight on the smaller banks. i think you've got more upside with them. obviously it's not going to be a straight line like we saw in the fourth quarter where they're up 30%. i think roes have been so suppressed that a little bit of good news here you'll start to get to revalue these companies and move up their valuation. we could see m&a activity really start to pick up. we don't need whatever, 6,000, 7,000 banks in the u.s. who can see consolidation. so with that i think, you know, for a 12-month time horizon i really do like financials. >> richard, on the flip side the big banks where we had citi, wells and jpmorgan all on the eps line, some quite significantly but share prices declined. does that show you how much is priced in? >> i think to some extent a couple things are going on. the financials are improving but they're right in the forefront in terms of the cyclicalty of the economy, how much improve mant are we going to see. people don't like to think this way and bank presidents, they're very, very deep cyclical stocks. and people forget that. and so if you think that the --

profitability is going to slow as we go through 2017 into 2018, they're right in the forefront, and that's why i think you're seeing that volatility right now. >> would you guys buy stuff in europe right now? everybody seems to think europe is on sale. not everybody. but -- >> our firm -- our firm viewpoint is that, yes, we like europe a little bit better than we do the u.s. because we are seeing ax acceleration and valuations are still pretty cheap. >> the fact that everybody -- >> those valuations are cheap for a reason. >> absolutely. >> and you could be looking at not just the french election. you could look at a situation where greece, either decides to pull out of the eu or get pushed out where italy same thing, decides to pull out of the eu. and if one more country pulse out then that brings up all kinds of questions and look out below for the banks. >> absolutely. right now, the earnings numbers and the revision trends have been better. the economic news has been a little bit better. and they really have lagged more

of the u.s. markets. so it's sort of that catch-up trade around that. >> worth finding out on that becky that the main french banks down about 7% in the last two weeks coming up to the french election. they've been the biggest movers compared to europe. ahead of the election. >> mark grant said this weekend he wouldn't touch anything in europe at this point because there's too much at risk. >> well, i would just say if you're looking for earnings oomph, i don't know if that's a good word to use. the oomph is in emerging markets right now. if you look at emerging markets -- >> which emerging markets? >> in general. you don't have to be that picky. the earnings fundamentals are much better. i'm not sure i would run to turkey these days but in general emerging markets are the earnings power is much, much greater right now. >> we've got to leave the conversation there. steven, thank you. >> thank you. >> richard bernstein is staying. you get to keep the middle name even though joseph is not here today. in the meantime coming up when we return what to do about north korea. that's the question the white house weighing options after its allies -- with its allies after last week's failed missile

launch. we're going to discuss the global implications right after the break. and after a record run, the nasdaq suffering its first three-day losing streak of 2017. we've got tech investor and stock picker ann winblad. she's going to come and help us sort through all of this when "squawk" returns in just a moment. e*trade's powerful trading tools, give you access to in-depth analysis, and a team of experienced traders ready to help if you need it. it's like having the power of a trading floor, wherever you are. it's your trade. e*trade

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welcome back. the u.s. continuing to pressure china to help control north

korean dictator kim jong-un. satellite images show north korea is ready for another nuclear bomb test. joining us with more dennis wilder former senior director for east asian affairs at the national security council. good morning to you. thanks very much for joining us. we talk so often about president trump wanting to work with china on dealing with north korea. specifically what is it that china can do that can exert pressure on north korea? >> actually, china has a lot more options than people think it does. if you look at the parade yesterday, or on saturday, in pyongyang, what do you see? you actually see in that parade transporters that the chinese provided to the north koreans for their logging industry. that's just one indicator of the kinds of equipment that the chinese continue to give the north koreans, that, frankly, aids and abets the north koreans in what they're doing. the chinese give them the jet fuel for their fighter aircraft.

the chinese give them all their oil, in fact. the chinese could put more pressure on the north koreans and president trump is saying, china needs to make a strategic decision now. it can no longer engage in strategic patience with the north koreans. it's clear it's time to tell the north korean elite that they must take a different direction. >> and, dennis, how likely is kim jong-un and his administration to respond? clearly the main issue on the table is his nuclear weapons. it doesn't seem like he's likely to give them up. but you disagree. >> i disagree, because i think we ask the wrong question. we ask will kim give up his weapons? actually, it's the north korean elite that we need to send our message to. after all, the north koreans have the 125th economy in the world. south koreans have the 11th largest economy. south korea has a $2 trillion economy. i can't believe that north koreans don't want to live more like their south korean

brothers. and my question to the north korean elite is, how long are you going to put up with this? >> it's not like he was elected, dennis. >> he's not. but he also needs all of those people in his elite to keep his government going. this is not a government that operates without diplomats, without business people. if the north korean elite puts pressure on him, i think the man is more interested in survival than he is in nuclear weapons. >> although, you know, there's stories that have been out there about how he fed one of his uncles to the dogs and things. if that's the case, you've got to think that he rules all of them with a culture of fear, too. >> absolutely. and what he did in the airport in kl is an absolute example of this. vx-nerve gas. can you imagine -- >> half brother. >> and he killed his half brother. he killed his uncle. he's used quad-4 aaa guns to kill people. but that's a man who is insecure. a man who is secure doesn't need to kill everybody around him who

might be a potential threat. to me, that's a sign that he's actually a lot weaker than people want to think he is. >> dennis, lots of question marks about what actually their military capability is at the moment. what's your reading on it? and sort of the size of damage that they can inflict, and what distance from their bases? >> well, the north koreans, first of all, on the conventional side, have about 10,000 artillery pieces up along the border of the dmz with south korea. they could launch a devastating attack on seoul, the 10 million people who live in seoul could come under attack within minutes. we have the united states has 130,000 american citizens who live in south korea. so we take this seriously. i'm not diminishing even the conventional threat. on the nuclear side, the north koreans are not yet capability of striking the united states with a long-range missile with a nuclear tip on it. that's a good thing. because that means we have time

to work this issue with the chinese to then put pressure on the north korean elite. >> how much time? >> i think we have about four years. i don't think we have longer than that. but i think that it will take them about four years. >> meaning that before four years before they can just have these weapons? >> i mean before they have a fully functioning weapon in the field. now, one thing about the parade that you have to remember, a lot of what was seen in the parade were dummy missiles. a lot of what you saw out there has never been tested, is not developed yet and we know this quite well. >> just to put a fine point on it, when this missile failed, you think it failed because it didn't work, not because of all sorts of speculation out there that somehow we were doing something that we don't -- that hasn't been reported yet? >> well, you're going to have to ask the pentagon that question. from my point of view it could easily be that this is a new

technology, it's called a cold launch technology, which is hard to do. it's probably the same missile they're trying to build for their submarine. and this kind of missile launch is difficult. so i'm not surprised to see some failures. >> what is our capability to prevent, through electromagnetic warfare, if you will, one of these missiles going off? >> again, i think that you'd better ask the pentagon. i'm just not going to get into that question. it's -- it's a question that i think others need to deal with. >> dennis, throughout we're always focused on what china can do to help the u.s. and it's allies in dealing with north korea. should there be a further question of what russia could do? should this be on the bargaining -- something on the discussion table between the u.s. and russia? in the past the soviet union, at least, had close ties to north korea, but less so now. >> oh, absolutely. this is an east asian problem,

this is a northeast asian problem. there are a lot of countries that can get involved. for example you ask what countries could do. well one thing you could do is stop air coreo from playing to different capitals. there are many countries that allow north korean shipping to come through their ports. without really looking at what's on board those ships. so i think there's plenty for the international community to remember that the russians are part of the six-party talks process. so i think there are -- there's a role for russia. there's a role for china. there's a role for south korea, japan, australia, many countries in the region need to be involved in this. >> dennis, thank you very much for joining us this morning. dennis wilder. still to come here on "squawk box," ann winblad talks tech with us. we'll cover it all. but up next, a record-setting weekend for "the fate of the furious." the rundown of the big winners at the box office straight

ahead. go to protect your vehicle? i'm on it. ♪ ♪ ♪ weathertech. made right, in america

♪

the latest installment of the "fast and the furious" franchise zoomed to the top of the box office this weekend bringing in an estimated, are you ready for it, $532.5 million worldwide. over half a billion dollars that's projected to be the biggest global opening of all time, just ahead of the "star wars: the force awakens." "the fate of the furious" produced by comcast universal pictures made about $100 million in north korea and $432 million outside of the u.s. and canada. that includes about $190 million in china. it's the first movie in the furious series to open on the same weekend in china as the rest of the world. when we come back this morning, we have some tech stocks for your portfolio. and then, eli lilly dealt a blow on friday after a drug to battle rheumatoid arthritis is rejected by the fda. we have the details and what it means for the company, as well as for consumers. that is straight ahead. as we head to a break, u.s.

equity futures been in the green all morning. dow futures up by just over 17 points. s&p futures just a point, the nasdaq up by 4. "squawk box" will be right back. t anything. even a "truck-cicle." [second man] how you doing? [ice cracking] [second man] ah,ah, ah. oh no! [first man] saves us some drilling. [burke] and we covered it, february fourteenth, twenty-fifteen. talk to farmers. we know a thing or two because we've seen a thing or two. ♪ we are farmers. bum-pa-dum, bum-bum-bum-bum ♪

good morning and welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in times square. among the stories front and center. the latest reading on home builder sentiment at 10:00 eastern time. economists think monthly index from the national association of home builders fell slightly this month. however last month's reading was the highest in nearly twelve years. don't look for fiat chrysler to be involved in any merge yo deals soon. that's according to the ceo who told the annual meeting the automaker will focus on a business plan. he's championed the idea of auto industry deals and tried to engage in talks with gm over the last couple of years but seemingly backing away from that. down 1% this morning. two high profile earnings

reports set for release after today's closing bell, netflix and united continental will be out with their quarterly numbers. united is in the news for reasons beyond its evgs and investors will be interested in further comments about the recent incident involving forced removal of one of its passengers on one of its flights over a week ago. we're still talking about it. >> and we will continue. in the meantime we're going to talk technology. the nasdaq coming off its first three-day losing streak this year. joining us right now with her top stock picks and much more is ann winblad. she is the co-founder of hummer winblad venture partners and ann, thank you for being here in studio with us today. >> thanks for having me. >> i wanted to start with the stocks that i know is not one that you're -- with a company that i know is not one that you're invested in, uber, because it had some news out over the weekend where they talked about their numbers for 2016. it's always been really hard to try and figure out what's going on there. they now came out with these numbers where they say bookings doubled to $20 billion in gross bookings. net revenue was $6.5 billion. which i still don't understand how you have 20 billion in

bookings but only $6.5 billion in revenue but the net losses were $2.8 billion. most of the press write-ups treated this as pretty good news because the net losses were slowing, in terms of how big they were, relative to what they're booking. but i still look at this and try and figure out how this makes sense as an investment. what do you think? >> well it's great that they're disclosing numbers so there's something to look at. which means they're probably preparing in the future to be a public company. so it's better to have those numbers, dissect them now, than the moment you go on the exchange. it's really hard to understand what they mean by bookings and revenue. because they may mean gross bookings, and net revenue. if you're a enterprise company and you have 12 million in bookings, on an annualized basis you can only recognize revenue per month, so that would be $1 million of revenue. but they don't have subscribers so i don't know what that is. it may be that the revenue is net of cost to drivers.

but without seeing it's really hard to know. >> do you look as this as one of the great transfers of wealth to us as consumers. in terms of the losses that they seem to be taking on virtually every ride? >> it's really hard to see in those numbers how they get to profitability. and i do think that public investors like to see growth. so we'll see how the revenue is growing, which they're saying it's growing a lot. but investors ultimately want to see a real business that's sustainable. and does have some profitability over time. they haven't given us that time line. >> more complicated question. is it a criminal -- is uber a criminal enterprise? is uber a criminal enterprise? no i ask it, given the reports we hear almost regularly over the past month about all sorts of activities that could be described as fraudulent in terms of not just dealing with consumers, but how they dealt with competitors and whether you think some smart a.g. out there wants to make a name for himself is going to arrest somebody?

>> you mean stealing some of the map software? >> they're stealing software. they're putting out fake -- pretending there's fake consumers out there -- >> regulators -- >> to get lyft to pick up people that don't exist. they're potentially hacking or using all sorts of different technology to prevent regulators from being able to find out where they are. i mean these are things that, i imagine, somebody's going to have something to say about at some point. >> well, you would expect that a company that depends upon having a good brand and trust as one of their key tenets of doing business, that this would be damaging to both the brand and that trust relationship with all consume consumers. it probably plays well to lyft, and you know, other contenders, at the same time, you know, i take an uber. >> i do too. >> i think the culture is terrible with that company. and it's -- it's really amazing

that people want to work there. >> in terms of the reports of how they treat women, the engineer who wrote the big blog about why she left the company. that's what you're referring to? >> yeah, people are voting with their feet. and that's what happens with a company like that. if you have a bad culture. and overall, a good company in silicon valley depends upon having great talent. it won't be those numbers that wreck the company or any of these other antics, it will be their inability to attract great talent. >> what about the government structure more broadly. clearly it's getting a lot of attention but it's not rare in silicon valley. facebook and snap have gotten away with maintaining almost all of the voting rights. is that something you stay away from? >> we do mind it. we shy away from it and it's not the type of voting agreement that our investments have i think people are looking backwards now on facebook and say well it worked there so far,

therefore let's let other companies get away with it. but i think it's a really bad structure. i think it doesn't allow the board of directors to have complete governance and the job of the board is to hire or fire the ceo. and you know, you effectively create a dictatorship. >> is that why you think snap is a vulnerable company? that's what you said in the interview beforehand that you think snap is vulnerable. >> i think snap is in an exciting space. but it's very competitive. and it could be transient. all the things that attract people to snap, whenever you have a consumer software company, which i think snap is, not a enterprise company, you rarely get an apple, and you frequently get a company that sort of loses attention from consumers over time. snap really is a very tight set of customers. age, demographic, type of user. how many of you use snap?

>> i did for a little bit. then i got bored of it. >> well, you're aging out of snap. >> we do it to monitor our kids. >> exactly. >> what you just said is very interesting, though, because i mean maybe dating myself a little bit here but are we sort of reliving the hype of the 1980s specialty retail companies? if you remember, you know, all these companies, malls were the greatest thing, and there were all these companies that came public, and they're all gone, because it was the whim of the teenager or the whim of the shopper, the whim of the consumer and they found something better and they're all now gone. is that kind of what's going on here with the snaps, and the -- and everything else? >> well in commerce space, amazon won everything. they won big. >> mm-hmm. >> and they have a lot of specialty commerce there. so specialty commercial didn't -- wasn't a bad idea. the timing was pretty bad because we didn't really have the internet as a platform. >> right. >> and our job as venture capitalists is to be exuberant about the future. we try to tone it down. >> right. >> we've learned that overexuberance is a really bad

thing. >> yeah. >> but commerce and specialty commerce turns out to be great. and many companies survive. priceline is -- >> no but i'm talking about the '80s. way back. >> i don't remember the '80s. >> the charming shops -- >> she wasn't around in the '80s. >> that's what i said i'm dating myself. >> amazon's valuation today justified? >> i believe so. i mean, amazon is a one of a kind company. it's not a singular product company. it continues to march into new spaces. the, you know, they have tons of people there working on artificial intelligence and machine learning, which is the big, hot new space of technology that changes everything. they certainly know how to operate commerce. they created the modern cloud with amazon web services and that is a rapidly growing and very profitable business. >> can i ask you about the euro

as my cloud guru there's now only effectively three cloud providers in the united states, microsoft, google, amazon. that's the whole game. >> those are the top three. >> top three. but they're really the only players long-term, maybe alibaba in china. there's sort of a bubbling up in washington of conversations about whether these businesses will ultimately need to be regulated. people talk about too big to fail with the banks. there's only three providers that are effectively providing the back end utility for all of the internet, at some point does washington wake up and say there's something going on? and donald trump used to talk, by the way, about amazon as a company that he -- not that he worried about, but he thinks may need regulation at some point. >> i think there's always a tendency when someone completely dominates a segment, that amazon is probably more vulnerable there in the commerce space and cloud space. the cloud is still pretty nascent. if you look at enterprises, they are just getting to the cloud. and microsoft is the big winner here because of amazon's success.

and google is a big winner because of microsoft and amazon. and ibm has a business here because of the three of them. >> right. >> so i think we're very, very arely there. sew if you look at anybody trying to attempt regulation, it would certainly be, you know, because of the commerce space where amazon is extraordinarily dominant. >> very quickly, you spoke a lot about amazon but that is one of your three favorite picks along with microsoft, and alphabet. and the reasons i guess partially because of the cloud. other reasons you like those other two companies? >> i like the enterprise. and the enterprise software segment, while not glamorous, and while not easy to talk about, because you can't talk about snap glasses or you know putting cats on your faces or anything like that, this year there will be about $351 billion spept on enterprise software and that's up 5.5% from last year and accelerating in growth. so, 2018 is over 7% growth. and this is a space that is on

fire. if you look at major companies, enterprises that are not software companies. everyone is sort of looking like a software company. companies are in this transformation or die mode, and it's been a very, very big on software companies and that's why i like google, and microsoft, and amazon, and i like a lot of other enterprise software companies, as well. >> great. >> but i think it's a space to watch. we have -- we have new ingredients, also adding to the space, which i've mentioned machine learning and artificial intelligence. so this is a space that's very dynamic, and very much part of the fabric of every single major industry. >> great. ann, it is always a pleasure seeing you. thank you for joining us today. >> thank you. >> thanks. >> okay, coming up when we return, eli lilly stock just after a 52-week high but down sharply in the premarket. we're going to show it to you right there after a promising pill to detroit rheumatoid arthritis was rejected by the fda.

meg tirrell is going to be with us to talk about what it means for the company. later, new york congressman joe crowley is going to join us. he's chairman of the democratic caucus to talk about what's ahead on capitol hill including tax reform and health care. "squawk box" returns in just a moment. excuse me, are you aware of what's happening right now? we' facing 20 billion security events every da ddos campaigns, ware, malware attacks... actually, we just handled all the priority threa. you did th? weid that. really. we analyzed millions of artles and reports. we can identify threats 50% faster. you can tt? we can do that. then do that. can do thatat. wean do that.

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wake up, everybody. it's monday morning. welcome back to "squawk box." let's take a look at the futures as we get ready for this new trading week. they've been picking up steam. i've been saying that they've been in the green all morning. wil corrected me. apparently they were in the red in the very early, early hours before we started. >> slightly in the red in about the "a" block as well. started to flirt with green and they've extended since you guys came on air. >> they've been pushing up ever since then. the dow futures indicated up by about 46 points. s&p futures up by 4. the nasdaq up by 10. >> meantime eli lilly's latest

drug for rheumatoid arthritis rejected by the fda. meg tirrell joins us with why and what it means going forward. >> good morning. this is stocks of eli lilly and its partner incyte pretty hard this morning because people expected approval of this drug on friday. so getting that surprise rejection from the fda, driving eli lilly down 5.6%, incyte down about 12%. these guys are partners on this drug. the fda essentially saying in its complete response letter that it needs more data on dosing, and safety of this drug. now we don't have a ton of details about what that will require and whether a new study is needed or whether they'll be able to come back fairly quickly. the company saying that they disagree with the agency's conclusions. this is a really, really big market. rheumatoid arthritis is an autoimmune inflammatory condition that affects 1.3 million americans. and there are already a lot of drug on the market for this indication. so analysts this morning are saying there are not just implications for eli lilly and incyte but also pfizer which has an oral pill already on the

market. however not catching up to these real giants in the class. so implications all across that class, and also for companies developing another experimental drug which also was delayed, and the fda expected to have a decision in the second quarter. a lot of stocks to watch this morning on this decision. and one of the things here is we don't know why exactly it got rejected. the rejection letters from the fda aren't public. >> is it a rejection letter or go back and look for more information, and come back to us again? i was confused when i read through some of that. >> it's called a complete response letter and a lot of arguments happen around are they actually rejections? it means they are declining to approve the drug at this moment. companies don't have to public the rejection letters or complete response letters from the fda. that's something that scott gottlieb, nominee for fda commissioner said in the past he wants companies to do. we as journalists want that information. >> more transparency. so you understand why how big of

a hurdle it is. >> exactly. you're seeing a couple downgrades this morning for incyte and lilly because people are expecting somewhat of a delay, maybe a year, maybe two years and this could have been a billion dollar drug in the next four years. so -- >> if there are already so many of these rheumatoid arthritis treatments out there how much there's so much demand for a new one? >> it's an amazing market and something i want to dig more into. this drug is a pill. the other drugs especially humira are injections or confusions. there were some safety concerns. >> richard where are you on health care at the moment? >> health care is always conceived to be kind of a sexy growth story. but the reality is it's a defensive sector. your profitability is heating up. the overall sector not individual companies but the kroefr all sector tends to underperform as profits heat up. what's happened recently, we've seen people be scared of profits. we've seen the health care sector do very well. perfectly normal. that's right on cue. >> sound like a doctor. perfectly normal. >> meg, thank you very much. >> thank you. when we come back, we have

some other stocks to watch ahead of the opening bell on wall street. plus in the next hour congressman joe crowley. he is a member of the house ways and means committee. we're going to talk politician and issues that matter to your money. what can you expect from tax reform. what can you expect from health care reform. and later the future of uber. what's ahead for the $60 billion raid hailing service in light of some of the pr problems the company's experienced recently and in light of the numbers they just put out this weekend. "squawk box" will be right back. you always pay

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welcome back to "squawk box." let's take a look at some stocks to watch this morning. mcdonald's upgraded to outperform from market perform at wells fargo. bank saying mcdonald's will see market share gains from its move into mobile ordering and that profit margins are improving. also take a look at money gram international. it got an improved takeover offer over the weekend from alibaba affiliate ant financial. the latest bid worth $1.2 billion. the money transfer service originally agreed to a deal but another money transfer company came in with a higher bid. the takeover deal also involving a share of fidelity and guaranty has reportedly fallen apart reuters reporting that the firms proposed acquisition by anbang

insurance company won't happen because of a failure to obtain regulatory approval. there's a fascinating story, i wonder where fidelity guarantee got this. now in a new insurance product that companies are buying, to effectively hedge against deals that fall apart because of regulatory issues, especially when a chinese company is trying to buy a u.s. company, you effectively can buy insurance so that the fee, the breakup fee gets paid by the insurance company. >> like merger default? >> like a merger default insurance, right. >> interesting. >> so. >> interesting. >> we were going to talk about united and delta but they took the stories away. >> we can still talk about it. >> so i'm going to talk about that right now with our guest host. richard bernstein. richard, the united story continues. the company saying that they are addressing this by saying, any time they're going to kick you out of your seats on the flight they have to do it at least 60 minutes before you board the flight by putting their employees there. delta came out and looks like a

good response with the way they're coming to this saying they're upping the amount they can pay passengers so that they will volunteer to get off the plane. >> right. >> i know airlines are not your area of expertise but i think this drags a huge spotlight on the entire industry of airlines. >> right. >> just by the bad behavior of united and by not responding appropriately. >> let me tell you, when i was at merrill lynch i travelled an amazing amount all over the world. and i saw a lot of these things in action. not somebody getting beaten up on the plane and getting dragged off. but you know, people are ultimately economic animals. and i've seen cases where they overbook planes and they just keep raising and raising and raising the fee. >> eventually -- >> and eventually somebody steps forward. somebody eventually does. so, you know, you think about the publicity and everything involved. >> and the potential for regulators getting involved. >> and the lawsuits and everything else, you know, why not pay an extra $500 to get somebody off the plane. >> i think delta took the right tack by saying yeah we're going to authorize people to pay up to almost $10,000.

>> just keep going. you'll eventually get somebody. and this is a normal auction process and they should just do it i think. >> would you buy united though? the one thing that's been fascinating about this, the stock's only fallen about 2%. >> that has shocked me. >> we talked about it being an oligopoly. there's part of me that thinks this is a great buying opportunity. >> it would be a great buying opportunity if the stock was down. it didn't go down. >> but now the question is whether it's sort of artificially marginally -- by the way it did lose a couple hundred million dollars. >> it would have been a lot people to pay people $10,000 to get off the plane. >> i'm not a industry analyst. we don't buy individual stocks but i will say if united is smart they'll start discounting their tick eds. so when you get on your travel website and you look and you want to go from new york to miami or something, wherever you want to go, you're going to find that united is cheaper. again, people are economic animals. they'll be -- >> it would have been cheaper to pay somebody $10,000 to get off the flight. >> it would have been. >> but we've been discussing

this, last week the argument was if you're sitting on kayak or expedia or whatever your service is. and you need to go at 8:00 in the morning from newark, guess what? you're going on united whether you like it or not. >> right. >> you are. that's just the -- >> the reality of the moment. >> but i think the reality is you have potentially tempted regulators to come in and place more strict rules on you because there is so much passenger outrage at this. if you fly, you know, it's a pain. and it's not all the carrier's fault. a lot of this is because of security lines you have to deal with before you even get to the gate. i understand all of that. but having flown a couple of times last week you understand why people get so upset and you understand why you feel like you are not being treated as a customer. you're being treated as cattle. >> i think one of the great ironies, and i'm not even sure i was told this by somebody else, so this is kind of hearsay. i was told the ceo of united about two or three weeks before this incident occurred actually won communicator of the year. >> he did. >> he did. >> no pr. >> pr? >> he was on the cover of a pr magazine. >> that's just too ironic. just too good for words, right?

>> richard we loved having you here. thank you. oh, wait. yeah, this is it. bye-bye. >> this is it. >> you're done. >> got better things to do. he's moving on. >> still to come here on "squawk box," congressman joe crowley talks health care and tax reform and as we go to break check out futures in the green. the dow expected to open up by over 50 points now following about a percent of declines last week. the nasdaq was down 1.5%. we're back in a couple minutes. . dear predictable, there's no other way to say this. . it's over. i've found a permanent escape from monotony. together, we are perfectly balanced, our senses awake, our hearts racing as one. i know this is sudden, but they say: if you love something...

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the north korea threat. the vice president visits the demilitarized zone after a failed missile launch. >> now while issues like that remain, the president and i have great confidence that china will properly deal with north korea. >> what it means for the markets. plus a live report from the border straight ahead. filling the fed. the trump administration set to name a former treasury official to a key post. >> plus a race to the top. the fate of the furious zooms past box office records. >> take the wheel. >> what? >> we'll tell you why the film might have china to thank as 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, everybody. welcome back to "squawk box" here on cnbc. we are live from the nasdaq marketsite in times square. i'm becky quick along with andrew ross sorkin and wilford frost. joe is out today. we're fired up about a lot of stuff and we're going to talk about it in just a moment. in the meantime check out the futures. they continue to build this morning. dow futures now indicated up by about 58 points. s&p futures indicated to open up by almost 6 points and the nasdaq up by about 15 points. if you check out what's been happening in the bond market, treasury yields continuing to be under some pressure with the yield in the ten year note today sitting at 2.223%. >> among the top stories that we're looking at, shares of eli lilly under a lot of pressure. the fda declined to approve lily's new rheumatoid arthritis drug saying it needed new

information. apple now has secured a permit to test autonomous vehicles in california. the permit authorizes test vehicles for three types of vehicles all 2015 lexus crossover suvs. her mission to test self-driving cars doesn't necessarily mean apple is building a car. the test could be for software or hardware. and then on the economic agenda we're going to get the latest readings of home builder sentiment. that comes at 10:00 a.m. eastern time, from the national association of home builders fell slightly this month from market year. walmart is reportedly in advanced talks to by bonoos. they are, as andrew just side an online men's apparel retailer a. the two sides have agreed on a price and transaction is in the due diligence stage. walmart down a little bit in the premarket today. abbott labs will go ahead with

its deal to buy alere but a lower price than previously offered. the deal is worth $5.3 billion compared to original deal at $5.8 billion. abbott had tried to back out of the deal because of concerns about the accuracy of alere's financial data. alere did say this morning that financial data over the past few years had been inaccurate and they will be restated as soon as possible. abbott down a little bit in the premarket, alere bouncing nicely 16%. vice president mike pence visiting the demilitarized zone between north and south korea. this comes after a failed missile launch over the weekend. sherry kaine joins us live from the south korean border and this is something we've been watching very closely. i'm sure that the launch was not anything that wasn't related to this visit by the vice president. >> well, exactly. the timing was very interesting. as vice president mike pence was en route to south korea, becky,

north korean leader kim jong-un decided to push the button for the missile test. yet another one, just eleven days after -- since the last missile test. yes, it failed, exploding just some seconds after. and we've seen some failures in recent weeks, but you've got to keep chesting in order to advance its technology. and also there was a military parade, and it was sort of like a showcase of the missile technology collection. it was two hours long. revealing some three new types of intercontinental ballistic missiles. yes, there are some experts who say that maybe they're empty inside and maybe they're not something to work with. but, assuming that they are good to go or they're something that they're working on, certainly the target audience is very clear. it's not about japan. it's not about south korea. if we're trying to show off long range missiles, it's -- it's the

trump administration, it's the washington, and i think some of the north korea watchers that i spoke to out of seoul today seem to agree that yes, they are trying to get that message out. yes, we are capable of reaching the u.s. territory, and attacking it. but i think for now, they're going to likely stick to short range or midrange missiles, sort of stick to mini provocations, shall we say, in order to see, buy time, and in order to see how far washington, as well as beijing, are willing to go in terms of putting pyongyang in check. guys? >> chery thank you for that. in the meantime we're going to talk more about president trump's response to north korea threat. in this week's other political headlines joining us right now, new york congressman joe crowley, chairman of the democratic caucus. good morning to you. >> good morning. >> what do you make of the news about everything that took place on friday, and then everything that took place on saturday in north korea? >> well, i think it's further evidence as to why we need our friends to do more now than

ever. we have an opportunity to shake the hand of prime minister of germany we should do that. these are our friends, our allies. it's more than them. this is an issue that affects not only europe, and asia and us, it's the world. the entire world together. and obviously the chinese, the president's apparently done a fairly good job in terms of talking to the chinese at this point. no commitment that they'll help beyond, you know, expressing simpatico with us but we need to see some real steps taken to demilitarize and really, i think, to address the issue of nuclear weapons with -- >> what do you know about the failed launch that north korea took place on saturday? there's been some speculation that it failed on its own, and there's been some other speculation that maybe we had a hand in it. >> i know we've had that hand in it before when it came to iran. >> right. >> for instance, and work with our israeli allies. i don't know, quite frankly. i know no more than you do in terms of watching the news, and

being a little bit surprised by the failure. given the hype and everything around the celebration of a father and grandfather of the present leader of north korea. so it's, you know, it -- the concern i think now about the testing of a sixth nuclear test has people a bit unsettled, as well. >> congressman, obviously things are always uncertain in the world. but it feels a little more like it these days with what's happened not only with north korea, but also with syria. that they're poisoning assad's poisoning of some of his citizens and our turning around and bombing it. the markets are watching this, too, trying to figure out what to make of all of it. were you in favor of the president's move to drop bombs on syria? >> i think like most americans from my reaction point of view it felt that it was an appropriate response for a human catastrophe. but at the same time, it lacks an overall policy, or dogma, or doctrine, about what lies ahead

for us in terms of involvement in syria. not the one-off and just kind of walk away after that. it kind of increases our level of involvement. and it's not like the president syrian government walks away and says that didn't happen or the russians or anyone else, quite frankly. so i do think it's really called upon the president, and his administration, to really come out with a real plan as to how to move forward with syria. >> markets are watching -- >> including refugees. >> the markets are watching two things. they're watching all of these geopolitical issues that are happening. and then also trying to figure out what's happening on the policy front here in the united states. you sit on the house ways and means committee. the two major bills that we've been waiting to see what happens, one would have to be what happens with health care, the other would be tax reform. do you think that we'll get tax reform by the end of the year? that we've kind of pushed back the august -- >> we've already dealt with the issue of health care for the most part. although -- >> you think it's gone? >> well, you know, the only thing that will change it right now is whether this

administration supports the present law. and if they don't, if they willfully underfund it or block the funding of fair distribution portion of it, that would have a incredibly negative effect on health care delivery in the united states. hospitals will suffer. patients will suffer. the american people will suffer. democrats, republicans alike. and if that's the avenue the president wants to move down -- >> is that the avenue you think he's going to go down? >> it's apparently seems to be. he's threatening to withhold $7 billion of funding. >> the freedom caucus has come back and said maybe they'd put another bill on the table. is there any likelihood that a bill that could appease the freedom caucus and the more moderates -- >> not likely. not likely. certainly would not appease democrats. >> so there's no help from the democrats? >> well, democrats have consistently said our response to this is, let the law that's in place work. >> right. >> help it. let's amend it, let's improve the act. let's not try to rip it away from the american people. >> take your own politics out of

it just for a second and given the fault lines that you understand about washington, within the republican party, within the democratic party, what do you think the true chances are that we get some form of tax reform, take the health care piece away, by the end of the year. >> you know, i will try to do that as best i can, because as difficult as people think health care reform is, and was, or is, tax reform is just as, if not, more difficult. and somehow that this is an easier issue and move to something easier, that's really not the case here. very complicated. and i think there are issues that democrats and republicans agree on. and it's very similar to the language you heard back in '86. these are generational bills. the system rate today is overly complicated. it's unfair. it actually promotes growth overseas as opposed to the united states. and those are issues that need to be addressed. >> does that sort of skepticism of getting something done by the year end apply to a simple tax cut as opposed to broader tax

reform? >> there's been talk about that, a candy bill so to speak, do something that's very easy. i think in terms of bringing down the overall rates which they're talking about, they're talking about doing in a revenue neutral way but not necessarily in a distributional way. if the rich are going to pay less and who's going to make up for that in the revenue neutral bill. if it's the poor and middle-class we're going to have some issues. >> something we touched on in the top in terms of president trump's policy actions. has he got a mandate for that in your eyes? >> in terms of the foreign policy? >> in terms of stepping up his action, whether missile strikes or sending fleets. >> i don't know necessarily the president's mandate as much as it is the mandate of the united states as the world superpower. that we have some responsibilities, and as i said before, this is why coalitions matter. it matters now with these types of situations more than anything else. so it is as much the president's mandate, as much as the mandate of the united states. the president's rejected that type of involvement in the past and said we should not go in to

syria, and yet, he went into syria. he's kind of turned -- and look some of the stuff -- >> again, this is -- >> i may be happy about. >> some of these things have been because circumstances have changed. you may have said not going into syria until you see assad use chemical, sarin gas. >> i'm not necessarily, as i said, i didn't necessarily disagree with the first step. it's the overall lack of an overall policy that i'm not aware of, unless someone else was aware of one, i'm not. >> congressman before we let you go, we've been talking about united all morning. >> yeah. >> weigh in on this. is anybody in washington meaningfully talking about legislation or new rules about how passengers are bumped or not? >> you know, it's interesting. the last time we really dealt in a big way with airlines was in post-9/11 where we actually gave them a pass for the most part. the american taxpayer took on responsibility for the victims of 9/11. i do think that the way people are being treated more and more

by airlines, they're monopolies almost. they have just too much power. smaller seats. look at me. i mean i can barely fit in the economy class to begin with. it's getting worse and worse. you know, lack of attention. lack of service on the airplane. >> i mean it does -- wil and i were talking about that. you feel like you're not a customer, you're cattle. >> yeah, you do. >> and in a way -- >> up there -- >> it is an oligopoly. if you look chris christie just sent a letter last week to washington asking for help at newark airport because united has 70% of the slots there. so, if that's not some sort of an oligopoly i'm not sure what is. >> becky, what i think, it's about you know, freedom of the skies. democratization of the skies. it's cheaper to fly now than probably, you know, arguably depending, but more people have opportunity to fly than they certainly did when we were growing up as kids. our grandparents went to ireland, we were all at the airport to see them off and welcome them home. >> do you think there's going to be bipartisan government action on an issue that relates to all of this?

>> it's certainly possible. democrats, republicans both agree that something needs to change about the flying public. >> wait a minute, that's the only thing that both sides of the aisle may agree with. >> i don't know about that. >> haven't seen the details yet, becky. >> we'll find out. yes, thank you. >> thank you. appreciate it. >> thank you. >> when we come back, pricing in global risk factors. we will talk to the head of one of europe's oldest funds about black swans on the horizon. "squawk box" will be right back. . the baby's room won't build itself. and her paw won't heal on its own. we're all working forward to something. synchrony financial can help your customers make it happen sooner. so she can plug into her dreams... and they'll have a new addition for their new addition. whatever you're working forward to, even if it's chasing squirrels, synchrony financial can help you get there.

welcome back to "squawk box," everyone. in our headlines this morning, the leader of turkey claiming victory in a narrow vote that expands his presidential powers. speaking to a crowd of supporters in istanbul overnight president erdogan said that the outcome will help turkey's economy as well as give him the tools to better fight terrorism. critics on the other side are complaining that the results were skewed. they say that the outcome deals a blow to turkey's democratic system. >> let's talk more about geopolitical risk and how it plays into market strategy. joining us now philippe jordan, president of capital fund management. capital fund is one of europe's oldest and largest quad funds philippe, good morning to you. thank you very much for joining us. >> good morning. thank you for having me. >> we want to definitely move on and talk specifically about strategies in a moment but if we

may can we start on the french election, and your view of that, and whether it's something that the market needs to be more concerned about than it is currently. >> i'm not sure if the market needs to be more concerned. certainly not in the second round. if we make it past the first round maybe i'll give you a quick primer on the system in france. we have a system where you can have multiple candidates in the first round. which plays out with the voters as a form of possible protest vote. >> mm-hmm. >> so you could have marginal folks on the first ballot that actually get air time. so right now we've got four candidates that are roughly splitting the vote from 17% to 23% depending on which candidate. which means that statistically, unfortunately, there's no clear front-runner right now in the polls. we have two candidates that have kind of like from the historical middle of the road parties. so macron which is a breakoff i'd say from the right of the left in france.

and fillon which is a traditional candidate from the right. and at the two extremes we have merechon who is a romantic old-fashioned communist, and then a far right party that's very concerned about immigrations, kind of issues. if at the end of the first ballot we end up with merechon and marie le pen that would be very concerning. >> so the chances of le pen winning are significant but not probable based on the current odds in the polls. if she did win, you're not too concerned that she could meaningfully deliver a french exit from the eurozone, is that right? >> well the next step, even if an extremist candidate did win, they have to deal fortunately with the french constitution, the french parliament, which will act as institutional breaks to any president that wants to enact a series of pieces of legislation that may be anti-constitutional or certainly not pass the parliament. >> if we move back to your hedge

fund capital fund management, one of the largest funds as we know in europe would you say that the wind is behind your sails in terms of quant strategies, traditional versus more automatic debate? >> i think technology played a role for everybody. we're sitting in a building, the nasdaq, where you don't have human beings making markets anymore but algorithms and i think technology, khup indication, engineering, has improved the investment appropriation at large for everyone. and i think quant investing is a manifestation of that. there's a very, very successful quant strategy that we all forget is quant is investing in index fund. index funds were invested over 50 years ago using systematic algorithms. and have proven to be tremendously successful in their implementation over the course of five decades. i think we're entering the

second, third generation of technology -- >> but doesn't a human being at some point have to actually make the decision that therefore all the computers are trying to figure out what the people are thinking in a weird sort of psychological way? >> you're right. >> if you take the people out of it, then what? >> there's people behind -- people have this vision of cyborgs building these algorithms, we actually have a little under 200 people that are building these algorithms, engineers, scientists, business people. also have their role to play. so it's really just people using technology as opposed to some sort of science technology that's implementing itself. >> and just quickly in terms of actual market levels at the moment, the sort of statistics you look at daily, do you think that the market is accurately pricing in the level of concern and risks that is out there? >> oh, that's always a very difficult question. i prefer it to take the position that i can't answer that question accurately, and therefore we take positions that have a risk budget embedded into

them, that will survive, realize future risk. right? so instead of say i can guess if it's appropriately priced or not, i'm going to shape my portfolio in a manner that's as regardless of the outcome, this is survivable and functional. >> philippe, thank you very much for joining us this morning. >> okay coming up when we return, delta airlines reacting to united's pr crisis, jacking up the amount you could get paid for getting bumped. we've got details on that next. it's sort of front running united in this. and then tomorrow on "squawk box," an interview you don't want to miss, former microsoft ceo steve ballmer is going to be our guest host. stay tuned you're watching "squawk box" right here on cnbc. back in a moment. ck in a moment. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering?

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back to "squawk box" this morning. united making a policy change. it's aimed at preventing an instance like the one from last week when a passenger was forcibly removed from the plane to make room for a crew member. now, commuting staff and crew members will have to check in to flights 60 minutes prior to departure. united says that will ensure such incidents don't happen again. but, it's not nearly as far as delta has gone this morning. >> right. >> with its own announcement.

we should mention united has its earnings announcement at the end of today so we may be hearing more about all of these policies. >> everyone will be focused on the call, not the numbers. >> correct. >> the question, look at united, i understand their issue was taking somebody off the plane that was already seated to put an employee on. you take a paying customer off and you put an employee on the plane. that's bad enough. now the fix is they're saying they'll do that to you, they'll bump you before you can get on the plane which is hardly much of a fix. in the meantime delta is learning from united's mistake and is really changing its policy in a significant way. now it says that when it comes to bumping passengers off flights, the company's customer service agents are authorized to offer up to $2,000 for voluntary boarding removals. so you say okay i won't get on the plane, you can pay them up to $10,000. the previous normal limit was $800. in some cases, delta has actually authorized agents to offer up to nearly $10,000 for being bumped although the airline does have a number of rules for high dollar amounts including authorization from superiors until the policy

change on friday though the maximum payoff had been capped at $1350 that they would allow people to pay. >> i still think -- >> this is the way to fix it. >> the other big defense of oscar was i think i could have said i'm horrified by what the police have done here. that we -- i'm completely disgusted -- >> no, their level of -- >> because united told them to remove the customer. >> united said -- >> nobody said drag him off the plane. i'm just saying -- >> doesn't matter. this is a fix -- no, there are two things. you don't respect your customers. >> okay. >> and then as a response even when this happens and it's brought to your attention you go back and say it was a belligerent passenger. i'd be belligerent, too -- >> more importantly they should just stop bumping. >> exactly. >> don't overbook the flights. >> huge amount of money -- >> belligerence continues here on "squawk box" this morning. >> i mean that guy -- >> "squawk box" will be right back. back. customer traffic? can we push the offer online?

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♪ welcome back to "squawk box." good morning, we're here on cnbc live at the nasdaq marketsite in times square.

a couple stories to tell you about this morning among the stories front and center. apple may be interested in bidding for toshiba's chip unit, or not. japanese broadcaster nhk reporting that apple may bid for the semiconductor but the "financial times" saying there's no evidence that apple intends to take that step. also volkswagen says it is fixed or bought back more than half the diesel vehicles that fall under its u.s. government settlement agreement. those vehicles contain software that let them emit excess pollution. vw must fix or buy back the vehicles by late 2018. and then there's china's economy which grew by 6.9% in the first quarter compared to a year earlier that's slightly better than economists had anticipated, and the fastest since the third quarter of 2015. and i also want to tell you, guys, real quick, about a news story out of "newsweek" this morning, going through the united contract that actually,

since we've been talking about united the whole time. >> i saw this. >> that says that actually once you boarded -- >> they can't kick you off. >> they can't kick you off unless you are behaving ee ratley or disorderly or they think it's a safety violation. that they can deny you boarding. >> wow. >> involuntarily but once you're on the plane, it's on you. you have to have done something nefarious or otherwise. so this gets more complicated. >> that's huge. >> the ceo munoz said that this was a belligerent passenger. he was belligerent because they were dragging him off the plane. he was not belligerent forehand. he went into the civil disobedience go limp mode. that's nicer than i would have been. >> that's a big detail. i agree. anyway we must move on. up data on friday pointed to even weaker first quarter growth than had prior than expected. steve liesman joins us. >> where were you at 8:30 on friday. were you watching the data come right off?

>> i put on a -- >> i went to my desk and acted like it was a real workday is what i did. shaved and everything. it was a not so good friday when it came to economic data. here's what you mist. cpi down 0.3%. it was forecast to rise. down 0.1. so the year over year fell to 2%. retail down 0.2. and they revised down february by a big amount down 0.3%. so, weak consumption in the first quarter. all of that combined to reduce the outlook yet again for first quarter growth. we're now below the 1% mark and raising questions about the sentiment data off the charts. off the soft data what we call it. but the hard data is weak. here's the rapid update folks. just a warning here this is only six forecasts. we usually have nine, ten, eleven, twelve but because we didn't get a response from everybody. we're tracking 0.8%. the range is 0.5 to 1.3%.

fourth quarter actual 2.1%. who is where. action economics, barclays and moody's at 0.8%. hfe at 0.7%. atlanta fed followed by many at 0.5%. the weakest on the street. the history of sentiment. let me tell you what steven stanley said. he said fundamentals remain exceedingly healthy and there's a very good reason to expect a bounceback in q2 just as was the case last year and folks the year before that. i will tell you the history of this sentiment data which is now 1.25 on the consumer confidence, there's a spotty job of forecasting real economic activity. >> does this change what the fed is likely to do? >> it changes the -- >> i think the fed it takes in all data but it's going to give more weight i think to the real economic data. aand less weight to the sentiment because of this spotty relationship between sense imand confidence. i see the probability for that

june hike teetering near 50% now. >> there's a story in the milwaukee journal sentinel picked up today by ben white in his morningny money that talks about your political leanings in terms of how your own sentiment around the economy faurs. >> yep. >> which is to say that if you were republican, under obama you had a terrible view of the economy. today you have a brilliant view of the economy. if you were a democrat under obama you thought the economy was better, than the republicans thought and today you think the whole economy is going to hell in a hand basket. >> i'm about as mad that you asked me that question that becky is about united. we've been doing this story andrew for five or six years now. our all-america survey has chronicled this notion that no single factor derms your view about the economy more than your political party. as well as your optimism. and what you found is that during the obama years, democrats were much more optimistic about the economy than republicans. and then right off the election, republicans flipped.

the reason why you have stronger overall sentiment is because democrats were not all that optimistic under obama. and republicans were very, very pessimistic. you had this huge switch. and by the way, independents are along with republicans in terms of their majority optimism. not necessarily in terms of being as optimistic as the republicans. but this notion of filtering or screening or the prism of politics, and abuse of the economy is something that we chronicle really -- >> have you measured the realty of the economy against those two prevailing views and which side is -- >> i feel like there are numbers that every side can use to back them up. the numbers -- >> but the issue is that, it goes back to what i started saying earl remember. the issue of sentiment doesn't necessarily follow -- at best sentiment is coincident with good economic data. >> but even numbers -- >> it doesn't do a good job of

forecasting. >> even hard data we say oh, the unemployment rate is down. you fight over hard data, too. >> oh, absolutely. absolutely. at least we can, well, many of us can agree on what the actual numbers are. rather than this notion of sentiment, which is so -- what's fascinated me among other things is watching over the years. and i mean 20 years, watching how much weight the market puts on sentiment. >> uh-huh. >> versus the economists who put much less weight on it. >> because it is a leading indicator. >> it's all you've got. >> it's all about leading can indicators. >> the consumer is 70% of the economy. you'll take whatever you can get in terms of knowing where it's going. the greatest example of this is sentiment plunged in the wake of 9/11. car sales and retail sales for several months after that were very, very strong. and so that was a huge disennance. >> let's bring in another voice. chris is joining us right now evercore isi's vice chairman.

and why don't you weigh in on this conversation that we're having right now, just in terms of where the economy is, where things are headed, and how we should feel about things right now. >> well, you know, as steve pointed out, yet again, another disappointingly sluggish first quarter. it does seem that there's something in the seasonals here. it can't be a coincidence that every first quarter without fail looks a lot worse than the second half that preceded it. this has got to give some caution to the fed as it looks at its plans for rate hikes and balance sheet roll-off perhaps at the end of the year. but i will say, i think something's a little different this year. i think first of all, we can have confidence in the underlying fundamentals here in the u.s., but also there's less risk they'll be disturbed by shocks from overseas. secondly, i think the fed is indicating that right now, the burden of proof is on the data

to prevent them from moving forward with a very gradual sequence of hikes. rather than the burden of proof on the data to make them hike. i think that was the message from march and it's still relevant. >> what do you think about "the wall street journal's" interview with president trump last week where he said a lot of different things, including that he may actually reappoint janet yellen? >> i thought it was a fascinating interview. my hunch was always that in the end, trump would be a low rates guy. >> right. he said that himself. >> he's obviously said different things on this over time. but he certainly reiterated that point, you know, in the interview. it makes sense. first of all, here's a guy who's worried about the strength of the dollar. if he's just jaw boning, sooner or later markets are going to start ignoring him. but if he's linking this, if he's joining the dots to fed monetary policy and he has multiple appointments coming up, he can influence the markets on the dollar. secondly, if you have ambitious

plans, tax cuts and infrastructure spending, you're likely going to lean in favor of wanting a fed that is not going to respond by jacking up rates brutally aggressively. so i think we're learning that for all the campaign rhetoric, trump is someone who is not going to favor a very hawkish fed. he's probably going to seek a pragmatic fed. maybe a fed with more business people. more finance people, on the committee -- >> krishna, is it yellen? >> maybe. but more broadly not a hard-line hawk. sorry, steve? >> yes, first of all i want to tell everybody, your friends joel, they'll be done calculating a fudge factor for how much q1 is weaker by what it ought to be. the residual seasonality. they think it's three quarters of a point up. i want to ask krishna back to the fed her. story about randy quarles out there and him possibly being appointed by the president to fill that vice chair of supervision job.

two things about that. one is he seems to be a pragmat pragmatic, more moderate, maybe less ideological person on the first one. the second one is i think maybe people need to understand, even appointing this guy, if he was the most rabid anti-dodd-frank person he could not change the fed's dodd-frank rules and regulations overnight or even single handedly. >> so, both those points, steve, are completely right. now, certainly randy quarles i think is an adult. he's somebody who we can have confidence is going to take -- you know he's going to take a hard look at those regs. he's going to look for ways to get rid of some of the regulatory burden, to maybe ease the credit flow. but he's not an ideologue who's going to try and burn down the whole post crisis regulatory infrastructure. secondly, in terms of dodd-frank you're right a lot of this stuff is hard wired in the law. the stuff that isn't hard wired in the law takes time to review these supervisory judgments,

supervisory frameworks, rules for implementing the law. but i will say that not all the important stuff is hard wired in the law. c-car does not exist in dad frank. >> let me -- >> -- matters who's there. >> let me push back a little bit. which is that if he could propose as vice chair of supervision but it's the board of governors that has to approve all of this. so, in the absence of donald trump having the majority on the board that he will be able to appoint eventually, at least initially, he's not going to be able to get through stuff that people like janet yellen, richard -- story, stan fischer and others disagree with. >> so again i think that's absolutely right, steve. but cumulatively over the next, you know, three, four years, quite a lot can be done as the composition of the board of governors changes. as you know well, steve, trump gets three fed appointments this year, quite possibly two next year. the shape of the fed board is

going to change. and over time, the guy who's in the seat, if it is quarles, is going to have significant ability to steer the way, to shape the way, the fed implements the law of the land. >> and if you're not asleep by this discussion of banking regulations just yet, i should point out that it's even more complicated -- >> can i wake up? >> wake up now. a bunch of these things require four or five different agencies to agree with them. so it's not just getting the fed on board. now, the other thing you may want to -- here's the point. >> we're already so deep -- >> the question -- >> makes a big difference. >> let me make one point. >> too early in the morning for nap time. >> how optimistic should investors be about relief coming to the banks from regulation? that's the question that you want to know and it gets very complicated -- >> and the other -- >> for what it's worth steve my own view is that couple laively if we're patient, it's not a one

year job. cumulatively over three or four years you will see material really -- it really matters who's in there. >> that's right. >> over time, to shape how tough secar is, the liquidity rules, things like volcker rule interpretation, what's market making. over time it matters who's in that job. >> krishna, thank you for your time today. steve great to see you. >> all the best sflp >> coming up when we return the road ahead for uber. the ride sharing giant opening up its books for the first time after a streak of controversies. i'll call it worse than that. ed lee is going to join us next to talk about it. of intelligence...k about e it's a supercomputer. with this grade of protection... it's a fortress. and with this standard of luxury... it's an oasis. the 2017 e-class. it's everything you need it to be...and more. lease the e300 for $549 a month

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it's your tv, take it with you. with directv now and at&t, get the ultimate in entertainment plus unlimited data. get directv now for $10 a month when you have the new at&t unlimited plus plan. hey you've gotta see this. cno.n. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing.

find your awesome with the xfinity x1 voice remote. that was ann winblad talking about uber earlier on the show. joining us is ed lee managing editor and cnbc contributor. i said to ann on the air i said is uber a criminal enterprise. >> criminal enterprise. >> no no and it's strong language in part because there has been so many stories that have come out over the past month and a half that have dealt with software either through hacking or other means that might be -- that a prosecutor might decide is either fraudulent to the customers or to regulators. >> or that they're breaking some kind of law ultimately. if they are breaking laws, i wouldn't necessarily call them

criminal enterprise. i think there's a lot of poor management. i think there's a lot of -- >> is it -- >> cowboy ethic of let's just try -- >> culture of this institution? >> i think it's a cultural issue more than it is a systemic one in terms of set up in a sort of a criminal way. i think the bigger issue again is, the ceo controls the votes. he controls the company. so whatever kind of pr feints that you might be hearing from the company or the board is looking at a coo role to be the adult in the room kind of a thing we're going to solve the problem with sexual harassment that employees have alleged. >> right. >> he still controls the company, right? it's going to come down to him performing himself. >> straight up or down, if the board decided they did not have confidence in travis anymore, that they decided this was not going to work. >> right. >> could they push him out? >> so -- >> is there a way? is there a mechanism in which that can happen? >> the bylaws, it's unclear because we don't at least from reporting we haven't seen exactly how that mechanism works

in terms are what are ways that you could push him out or sort of lower his power. that's, again i don't think that's going to be the case. i think he is still so much in charge and in control, whatever the board ultimately represents, he's going to decide whether to follow that or not. >> it is a remarkable company and it has changed the way we all behave in terms of what it's done. >> and largely because of his vision, too. >> and their quick expansion. and their aggressive expansion. they spent a lot of money. they're losing a lot of money, of course. but there was a report out past week where we saw some of the financials. $20 billion in bookings. which netted them $6.5 billion net sales. so, that's pretty -- that's a lot of money. that's a big, big business. >> and for that to become profit you think they need to focus more on uber pool than anything else? >> the way for them to really increase or to get to real profitability is to really focus on the uber pool business. where you know, you -- a bunch of people share a ride. it's better for the driver. they make more money.

it's better for uber and it's cheaper for the consumer. it's less convenient, of course. it's not like just hailing a cab because it might take you longer to get to your destination. you have to share the ride. you might not like that personally either. but that is the future. if they're going to find real profitability that's where it's going to come from. >> real briefly though when you look at the numbers and the burn rate, do you think that they have to take out their other competitors? meaning, is this a business that can survive continued losses or will the -- will there be continued losses if a lyft exists or a get exists in at of the cities. >> for a lot of the cities, yes. that's why they're spending so much on subsidies to try to bring riders back to using uber. because a lot of the riders -- drivers they use both. they sort of toggle back and forth. see who has the most fares and they select that. in big markets if uber dominates in the big markets, they win. smaller markets, mid sized

markets they either lose or they're -- they and their competitor are losing at the same rate. >> a quick side question. the data released that instagram is overtaking snap in terms of the users of the story function. >> right. they copied the snapchat function and they have way more users. >> how big of a threat is it to snap? >> now it's real, right? we have a real ball game because right now they're driven by -- the business is driven by advertising. if you're an advertiser you always want scale. right? if it's essentially the same thing and i can hit the same number of people but at a much higher scale, that's the ball game. i think that's a real threat to snap. >> ed lee, our resident tech guru. thank you. >> any time. when we return, the fate of the furious is on track to leave record breaking blockbusters like "star wars" and "jurassic park" in the dust. " in the dustm

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welcome back, everybody. the late installment of the "fast and furious" franchise breaking records. julia boorstin has more. >> hey, becky. the fate of the furious had a record worldwide opening weekend bringing in a record

$532.5 million worldwide. the biggest take was in japan where it grossed $190 million. that's the largest three day opening of all time in the country. in the u.s. though, the film fell short of expectations, grossing about $100 million. but that's down more than 30% from the last film of the franchise which was bolstered by interest following star paul walker's death. now, this does show the ongoing success of universal's most valuable franchise which is seen increasingly as a global play and justifies the massive cost of the film which is report as much as $350 million to make and market worldwide. perhaps most importantly it maintains momentum for the next two films which are due out in 2019 and 2021. bolstered by "furious" and record breaking "beauty and the beast" the box office is up 6% this year. the number of big franchise films in the works such as the guardians of the galaxies sequel

which is out in may. >> i didn't realize there were that many in the works. >> yeah, they have to plan ahead for these. these are massive big budget films. they want on the schedule way ahead of time. >> well, if it sells, make it. still ahead, the top stories.

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welcome back to "squawk box." facebook shareholders have put out two proposals for the upcoming annual meeting. one calling for a report on the spread of fake news. the other on pay equality. the board has recommended votes against both proposals. let's get a final check of the markets on a monday morning after the three-day weekend. you will see the futures are in positive territory. they have been building all morning long. they were in negative territory when we started at 5:00 a.m. >> only just though. >> but now looks like the dow futures are up by 76 points and the s&p is up by 7 and the nasdaq up by 20. the ten year note the yield is still hovering around 2.2%. and oil prices if you want to check that out, wti was a little bit up. it's down. turned down by about six cents to 53.13. thank you for being here. >> so you think this is a risk -- a situation after the

mother of all bombs and all this stuff happens over the weekend, everyone says okay. >> last week on low volumes, you know, a percent or so declines. europe's closed today as is hong kong, asia for easter monday. low volumes outside of the u.s. today. >> thanks for hanging out. join us tomorrow. "squawk on the street" begins right now. ♪ good monday morning. welcome to "squawk on the street." i'm carl quintanilla with sara eisen and david faber here. coming off a two month lows, as earnings season kicks into the higher gear this week, most of europe is closed for the easter week. the econ data is soft. and the vice president delivering a fresh warning to north korea. not to test their res