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 resolve -- the president's or america's

military strength. and some signs of a not so roaring economy. retail prices are dropping. u.s. futures now pointing to more or less a mixed open. shares of eli lilly are tumbling more than 5% in the free market, failing to receive fda approval for a new rheumatoid arthritis drug. stocks are looking to bounce back after the dow and the s&p ended the holiday shortened week with the worst day in three weeks. and retail sales slowed down for a second straight month. we have geopolitical concerns and the vice president is sending north korea a message during his visit to south korea. >> while 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.

>> got the dollar today at a five month low versus the yen. people going for safety. we mentioned gold getting near within about 2 bucks almost of 1300. and empire, other things sort of adding to the fire of things -- regarding worry. >> yeah. the nervous trade is on. you see it in the bond market that treasuries are coming off the best week is since back in january. pushing yields lower. and that really has dragged groups like the banks down. even though some of the banks had good earnings, right? david, and we are expecting bank of america and goldman sachs tomorrow. >> you said exactly what i was thinking. as you often do, sara. i talked to a number of bankers who were at some of the institutions that reported numbers last week and they were disappointed to see the stock prices not go up. net interest margin is part of the key and this morning we're close on the two year and the ten as you said to recent lows. and that pressures the banks more than good earnings apparently helped those shares

which despite the very positive reaction to the election of donald trump in november have not performed well during the course of 2017. >> i think it brings up another risk which is the french election, you know, the first round of voting starts on sunday. and the polls are pretty close. the centrist who is seen as the most market and euro friendly is leading. le pen is there at 23%. and then you have the far left communist candidate who wants to nationalize the french banks. the market is closed for easter monday, but fell two-thirds of a percent on thursday. and the banks are getting hit. some of the french bonds are getting hit on this. >> yeah. crazy. the polarity of political views here in the states and increasingly in europe and in france. not to mention the erdogan referendum which is bringing turmoil to that region. >> for more on the markets and what could be another volatile

week ahead, we're joined by gabriela santos. and a portfolio manager. ed, i'll start with you, i remember you were on a few weeks ago, early april saying you were starting to reduce your risk that stocks were looking expensive and that the trump policy agenda might not come to fruition just as optimistically as investors were pricing it in. is that what we're seeing right now? >> that's right. we have continued to reduce our positions at equities and add to bonds. so we have got to the point in the multiasset portfolios that we're slightly under weight relative to benchmarks and stocks and roughly equal weight in bonds. i think it's a combination of the economic data has been a little weak. not just the first quarter but look ahead. the rebound on the consensus expects for the rest of the year is not that dramatic. on the policy front it looks like whatever reforms we do get to things like corporate taxes hay not be as dramatic as we had

hoped a few months ago. >> is that where the geopolitical risk comes in? is it the idea that the president is focused on that and not the health care and tax reform that the domestic investors would like to see? >> i think it's both. there are four main uncertainties, geopolitics in and of itself is one. the second is politics fading enthusiasm for washington, the french election as you mentioned. the third has to do with just economic growth. is this weakness we saw in the first quarter temporary, do we see a rebound the rest of the year? and the fourth i would say is fading optimism around expecting a big bounce in growth beyond this 2% pace that we have been seeing this expansion honestly. so where we shake out we'll stick around with the 2% expansion of the growth and the mature has matured and we can expect 5% a return a year. >> what are you saying that the

q1 has been a head fake on the soft side and this year is no different? >> that's probably true. over the last three years we have seen the first quarter be significantly weaker and we're talking about growth of only 1% by our estimates. >> atlanta is out today with 0.5. >> that's atlanta. so much much weaker in the first quarter. so a rebound the rest of the year, but what to what? back to the expansion pace of 2%. we're not escaping that range. >> i guess another question is, ed, with earnings season in focus is there a rebound in growth sharp enough to carry the markets that are trading at historically high valuations? >> well, we had three years where earnings were basically flat. i think we are seeing kind of rebound in this quarter. we think growth is quite good, 12%. a a lot of that driven by turn around in growth in the energy sector and to a lesser extent the financials. we think we'll have a good year for earnings overall this year, about 6 to 8% growth on the s&p

500 earnings. but that's enough to get us to the 8 to 10% return for the year. we have gotten halfway there at the peak. and so i guess that the return you get from here is positive. but not all that exciting. and given the volatility they're just inherent in stocks we think more prudence is called for. that's why we're trimming the equity positions. >> geopolitics is a tough thing to get a feel for. sometimes you think things will have a significant impact and vice versa. we can expect a continued drum beat on north korea, are we going to tune it our investors concerned by it? and sara mentioned the french elections but give me the sense as to the impact on the world's equity markets. >> when we look at the geopolitical events and we think of their impacts to the economy or to the u.s. economy specifically as well as to corporate fundamentals. oftentimes it may seem like a

very large geopolitical event, but the fundamentals is not that large. and hence we can tune it out a bit. so we think the most important thing to watch in order for the market really to continue rebounding is economic data. do we see a rebound, do we continue seeing a positive earnings story? ultimately we think we will. but it's not that exciting of an outlook in the u.s. so we're starting to look overseas more and more for that upside over the next few years. looking at europe, looking at emerging markets. >> ed, here in the states the benchmark yield, we have more people saying 2% is in our future. if that happens then it's the likelihood of 157 gets a lot greater. are you going that far? >> i haven't gone that far but we had a very low inflation print. we do see things like tightening credit conditions. we saw car sales dropping a little bit. looks like consumption growth is pretty weak in first quarter. so yes we'll probably get a rebound for that 1% pace. but i tend to think we're still

on that same kind of roughly 2% that we have been on for quite some time absent some major policy changes. so i think maybe the market's a little ahead of itself. expecting more robust growth likely for the rest of the year. >> yeah. that was growth. the question i think was treasury. >> i was asking about the ten year, but all these percentages are sort of in the same ballpark. >> well, i would -- the reason that the ten year yield has come down is because i think of that economic weakness. so it's relative to expectations is how the market trades so i think the expectations going into the year is we'd have a nice strong rebound this year and next year. get to 2.3 or 2.5% growth over the next couple of years. as those expectations are starting to drop, i think mostly because of a little disappointment on the policy agenda that's driving both yields down. i think also stock prices down. >> well, we'll leave it there. great preview of the week and month ahead.

good to see you both. as we said earlier the vice president visiting the demilitarized zone between north and south korea, comes after the failed missile launch. sherry kang joins us live. good morning. >> good morning, carl. washington's message was don't provoke, we won't be patient anymore. vice president mike pence visiting seoul saying that all options are on the table and a strategic patience with the north korea which has been the key north korea policy for many years out of washington is over. also highlighting this alliance with south korea. here is vice president mike pence. >> let me assure you under president trump's leadership, our resolve has never been stronger. our commitment to this historic alliance with the courageous people of south korea has never been stronger and with your

help, and with god's help, freedom will ever prevail on this peninsula. >> and overall it was a tense weekend here on the korean peninsula and not totally unexpected i would say. the regime was widely expected to mark kim jong un's birthday, kim i. there was a whole military parade that went on for two years, showing off its military missile collection i would say. and of course there was that missile test, yet another one, just 11 days since the last one. yes, it failed. but it's certainly the idea of going ahead with it, especially with the trump administration very much on high alert was provocative enough in the eyes of washington and also it managed to get some reaction out of u.s. president donald trump, tweeting over the weekend, quote, our military is building

and rapidly becoming stronger than ever. frankly, we have no choice. now, i wonder what the second sentence means. it's very interesting. certainly not ruling out the military measure in all of this. although, a lot of north korea watchers that i have been speaking to recently seemed to agree, that for now economic and diplomatic measures will proceed for now before it has to come to that. carl? >> thank you very much for that. the vice president has a busy few days as he makes his way around that part of the world. when we come back the fda handing eli lilly a set back that's taken a toll on the stock. and ahead, billionaire investor jeff greene on everything from where he's putting his money and the white house. look at the premarket. the major indices are down. we're back in a minute.

when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected. that's the power of and. so how old do you want uhh, i was thinking around 70. alright, and before that? you mean after that? no, i'm talking before that. do you have things you want to do before you retire? oh yeah sure... ok, like what? but i thought we were supposed to be talking about investing for retirement? we're absolutely doing that. but there's no law you can't make the most of today. what do you want to do? i'd really like to run with the bulls. wow.

yea. hope you're fast. i am. get a portfolio that works for you now and as your needs change. investment management services from td ameritrade.

shares of ealy lilly.

let's go up town to meg tur rel for the latest. >> this is surprise negative decision on friday. this is a arthritis pill that was being developed by eli lilly and the fda declined to approve the drug and they told eli lilly and incyte they need more information on the dosing of the drug. they disagree with the agency's conclusions but this shirting both companies' stocks today. lilly is down 5% and people were expecting this to get approved. this is a giant indication, arthritis affects many people. a lot of drugs are on the market with a $16 billion drug. and that stock really getting a bit of a boost today as perhaps this competition getting pushed out.

also companies like pfizer have oral drugs on the market. the other drugs are injectable. so other drugs here from johnson & johnson and amgen. you are seeing impacts to regeneron and sanify which have win awaiting fda approval as well. this is a big market. people expected this drug to get approved on friday. now analysts are downgrading lilly and incyte. it could be a year or two to get the existing day to resubmit. it is already approved in europe which is a big surprise. >> a lot has written about the changing face of the fda in the midst of this transition to the new white house. does this particular chapter inform that narrative at all? >> it's a really great question, carl. i have been trying to think of

myself. scott gottlieb is the nominated commissioner and he's expected to be approved. one of the things -- requiring companies to public complete response letters. these rejections from the fda. we don't know if that's a something he'll push through. but companies aren't required to publish that information and share why drugs get rejected. so that could be very interesting. of course he is charged by the president with trying to expedite drug approvals so depends on why this drug really got rejected here. whether this particular thing could be changed. >> all right. well, the stock reaction is there nonetheless, insooitd is down 10%. thank you. david has breaking news. >> yeah, i want to share that with everybody. klaus kleinfeld is stepping down as the ceo of ar connick. they have been involved in the proxy fight with large shareholder elliott management.

i think it's expected to take place may 16th. elliott had been waging a significant war against mr. kleinfeld. i'm looking through the press release here. what i can tell you is mr. kleinfeld they say stepped down as chair and ceo by mutual agreement after the board learned that without consultation with or authorization by the board, he had sent a letter directly to a senior officer at elliott management that the board determined showed poor judgment. they say this decision was not made. that is effectively to ask for his resignation it would appear. in response to the proxy fight the criticisms of the strategy, leadership and performance and not in many any way related to the financials or records of the company. clearly, requiring a bit more reporting it would seem to look into this. given that the board had remained steadfastly it would appear behind the leadership of mr. kleinfeld, which of course was under strong criticism from

elliott which claimed that arconic was significantly underperforming and would benefit from new management and frankly, a refresh to a certain extent of the board, despite the fact they put a few board members on there previously. it is interesting on thursday -- not friday, thursday elliott had come out with a somewhat complicated but criticism of what appeared to have been a decision by mr. kleinfeld to trigger a potential change of control provision in an agreement with the trustee. actually an employee trust. but by doing that. it created a $500 million liability for the shareholders that did not need to take place. i did reporting on this on thursday, back of the back and forth typically that goes on in these kind of proxy fights but that was interesting. in light of this resignation

now, i want to take a look and try to understand a bit more here. big surprise coming as it does just a few weeks prior to the annual meeting and arconic had been feeling good about their ability to perhaps continue to have not just mr. kleinfeld, but all the board members in their seats -- remain in their seats and elliott telling me quite a few times that is not going to the case. they thought quite strongly about their own approach. and the proxy advisers coming to their side. we'll see. now you have got the big change they wanted. >> stock's moving up on the news here in the premarket. i bet jim cramer wishes he here. he knows klaus kleinfeld pretty well and i think it's worth mentioning the background. arconic was built out of the split with alcoa and the more finished goods product. and the stock had been doing not too poorly. right?

since the spinoff is one reason that i think kleinfeld who came on this show to defend himself against elliot and -- >> february 1st. >> he was pointing to that fact and he was feeling good about it. >> it raises questions about what this letter might have said to elliott that he sent directly. trying to go around the process, have a real conversation on the side of -- >> unclear. we can speculate. i'm going to try and -- you know, make a few phone calls and give people a more concrete idea of what exactly was in the letter. but again, that's the key here. the board learning without consultation or authorization he had sent a letter directly to elliott, not clear what that was in or why it showed poor judgment other than of course not having received the authorization of the board itself. but this is a big surprise. it might have been the case perhaps if they looked like they were going to lose and there was going to be some sort of a settlement you would have seen some changes. but he was steadfast in his

rebuttals against the arguments being made by elliott which essentially came down to the management of the company and what they claimed were simply costs that are far in xess of what they need -- in excess of what they needed to be to put a sim million information on a more complex process. >> we'll watch them at the open. we have retail and m&a buzz that involves walmart. take another look at the premarket. the opening bell is seven minutes away. minutes away. various: (shouting) heigh!

ho! ( ♪ ) it's off to work we go! woman: on the gulf coast, new exxonmobil projects are expected to create over 45,000 jobs. and each job created by the energy industry supports two others in the community. altogether, the industry supports over 9 million jobs nationwide. these are jobs that natural gas is helping make happen, all while reducing america's emissions. energy lives here. it's a performance machine. of engineering... all while reducing america's emissions. with this degree of intelligence... 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 at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

let's[ whimpers ] dog. find ping-pong. find your awesome with the xfinity x1 voice remote. that's amazing! keep your eye on arconic as klaus kleinfeld is out by mutual agreement. meanwhile, the markets are wrestling with fallout from north korea over the weekend.

earnings season kicking off to a new degree, netflix and united tonight. the opening bell in a couple of minutes. minutes.

the power of the nasdaq market. the power of 100 of the world's top companies. the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio at powershares.com/qqq. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc. containing this information. read it carefully. 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... ...and four times less than vanguard. what's next, no minimums? ...no minimums. schwab has lowered the cost of investing again. introducing the lowest cost index funds in the industry with no minimums. i bet they're calling about the schwab news. schwab. a modern approach to wealth management. ♪ predictable. the comfort in knowing where things are headed. because as we live longer... and markets continue to rise and fall... predictable is one thing you need in retirement to help protect what you've earned and ensure it lasts. introducing brighthouse financial. a new company established by metlife to specialize in annuities & life insurance. talk to your advisor about a brighter financial future. the opening bell is brought

to you by brighthouse financial, established by metlife. ♪ >> you're watching cnbc's "squawk on the street" live from the financial capital in the world. the opening bell in a minute. i hope you had a good long weekend. we heard from arconic, klaus kleinfeld stepping down by mutual agreement. the vice president remains in south korea. earnings season is going to kick off to a new degree. netflix tonight. some big banks tomorrow. and then the data, after the cpi. today it's empire. none of it especially impressive in the last couple -- >> a little disappointing. i think on the retail sales miss, the investors are assuming that the first quarter will be weak and there will be a rebound. i think that's why earnings are so important. what kind of signals we're going to get from corporate of america, that big spike in consumer confidence, so-called soft data is it going to really translate into better revenue

growth? earnings growth is set to be 9%. that would be the best since 2011. and a big portion as we have heard is energy having better comps from this time last year. so we'll be watching the retailers. and some of the big consumer names like netflix starting today. >> that's the opening bell. s&p at the bottom of your screen. at the big board today, celebrating its 40th anniversary communities and schools empowering at risk students to stay in school. over the nasdaq, ny tech day, a one day expo created specifically for new york city based tech start-ups. we know there are more and more of them all the time. we'll watch arconic at the open, david. >> yeah, the stock as you said, carl, going to be up. looked like it would be up about 5% a few minutes ago prior to the open. of course the news this morning is very much unexpectedly the company parts with its ceo. klaus kleinfeld, powerful leader of this company, a man who presided over the split of

arconic from alcoa. running the faster growing arconic. coming under pressure from elliott management, which owns over 9 plus percent of the stock, or currently does, involved in a nasty proxy fight that put pressure on the board of directors. a board that included some previous nominees of elliott's. but seemed to be staying together and seemed to be cohesive it would appear -- previously that they were sticking with their man, mr. kleinfeld. and what we get from the press release this morning is this one line that i have yet to really fully be able to learn exactly what went -- what happened. but they say he stepped down by mutual agreement after the board learned that without consultation with or their awe authorization, mr. kleinfeld had sent a letter directly to the senior person at elliott management. they say that showed poor judgment and that apparently was enough to spell the end of his

tenure immediately at arconic. certainly this has been an intense period for this board of directors. you can say that you're all together, but they have been speaking to their investors. they have been under a lot of pressure. it's hard to judge exactly what is or what is not a typically fireable offense, but in the opinion of this board this was it. >> you mentioned he was here on february, on "squawk on the street." he talked to you about how he'd fight this. we have a piece of sound from the interview. >> the board and the management have had intense dialogue with elliott and they have spent countless hours to go through each one of those assertions and to -- and has looked at them. as you have seen yesterday the board came out with a very clear statement that they have looked at everything. they stand behind this and they stand behind me.

>> arconic, is the best performer. up 8.5%. >> the focus of elliott's onslaught was really back to costs and back to the fact that they simply claimed that this company could be run with better margins. with more focus on expense. despite as you pointed out what has not been bad performance. >> since november split. >> since the split. they believe it could be better and that versus the peer group it was still not near what it could achieve. you know, not that large a company, of course. remember, in terms of overall market cap. but they're now going to be actively involved certainly continue to be active. i have called elliott. i haven't heard back from them to get their thoughts to a certain extent on what's going on here. the company itself is going to be now searching for a new ceo. david hess who is a current board member will be the interim ceo. they say he has decades of experience in leading aerospace and industrial businesses.

and pat russo, the lead director, has been appointed interim chair of the board. she once ran lucent for many years and has been on plenty of boards but they're actively looking for a replacement. >> yeah. one more bite here from klaus. i believe this is from the same february 1 appearance here with us, here at post 9. take a listen. >> we build our corporation to be successful. i'm very happy and we have had many conversations about the skepticism -- i'm happy it's doing so well. shareholder of alcoa has had 22% of the gain since the separation. should of arconic having come in -- shareholder of arconic has come in and made 19%. >> he was fired up that day, i remember that. viewers taking bets as to how long it will take cramer to call in. jim has been watching this story for a long time. >> and obviously knows mr. kleinfeld very well. and yeah, jim and i both were e-mailing over the weekend about some of the latest developments

involving that $500 million payment potentially that was triggered. elliott would say by mr. kleinfeld that didn't need to be. unclear whether that had any real ramifications here or how that may or may not have figured into any of this. but i want to get back sort of on the phone and see what we can understand. but the market is speaking here. and the expectation that somebody's going to come in and perhaps do a better job. >> it's lifting the whole group. industrials are the best performing group on the s&p right now. it's not just arconic. you see caterpillar, copper prices are on the rise. you did get the chinese gdp numbers in last night. 6.9% growth. that was better than economists were looking for. got backed up by the other data. a story that we have been continuing to tell here, a better global economy. not just that optimism in the u.s. that we see in competent surveys. but better numbers out of china and europe now. >> caterpillar is the best

performing dow component. getting back about half what we lost on thursday. mcdonald's is another dow component in the green. wells takes it to outperform. arguing their refranchising is at a reflection point and they'll have mobile ordering and pay at any rival. >> they looked at the technology of burger king and wendy's and jack in the box i didn't realize that they were so far ahead, the mobile ordering, key yoss -- kiosks they put in the stores. within the fast food group they're set to take share. >> i wanted to get to m&a related news developments that occurred either late last night or prior to the long weekend. money gram, in fact, did a story on them last week, they have received that higher offer that many had anticipated might be coming from ant financial.

they did it prior to the board of moneygram deeming that other offer from euronet as higher as is typical in these kind of things. what might not have been expected is that it was 18 bucks. so they go from what had been $13.25 to $18 a share. far in excess of course of that $15.20 offer from euronet and perhaps making this simply out of the reach of the -- of euronet in terms of the financial capability. euronet, a lot of the strategy has not been based on having the higher offer previously in the market that they have been beaten by with ant financial, but also raising serious national security concerns in the hopes that sifius and the review of this deal will come back with a negative review and put euronet in the position to complete the deal. will they compete on price,

unclear. no word from them this morning. from the perspective of ant financial, hey, we're paying a multiple in line of where western union is and in speaking to doug feagin who runs their international operations, that there's still a lot of upside in this business and that a significant cost savings are within reach as well. so they're justifying that 18 bucks certainly the hope is that it will far -- that it will simply outlast and outpace any ability of euronet to come back with anything. they continue to say they're not concerned by that national security review. and they make the point that euronet is as much of a foreign company as they are, given that most of the employees are in eastern europe. >> who wins the bidding war? >> ant financials has unlimited financials. jack mott can say we want to own this thing. this is the first day we'll see

alere trading on the news they settled 56 goes to 51. that is certainly a victory for alere. remember, these two companies had been embroiled in quite a fight. it was scheduled to go to trial not too soon. they have gotten some rulings that alere is viewed as being favorable to it. in fact, it was right coming to the settlement talks it would seem with great strength in terms of saying there was no material adverse change here. abbott. but abbott did at least buy themselves a good amount of time in which to complete the deal. complete it they will. and at a price that is well above where at least some shareholders of alere given the move up in the stock price. again, there have been some favorable rulings that led people to believe that perhaps they had a very strong hand going into that trial which will no longer take place. they get the deal done. $5 was the reduction in price so roughly 10%. >> on the other one i'm watching, netflix having a strong showing ahead of its report after the bell today. united airlines will be

reporting. netflix has had a pretty good run-up of 9% over the last three months and investors are looking for a little over 5 million new subscribers for the new quarter. most come from international which is where the growth has been. you know, netflix a pretty volatile mover on the earnings numbers. it's an expectations game too and looks like expectations are rising into this report. >> this past week, looking at s&p names that have the most volatility around the earnings. if netflix is not one, they're number two or three. in terms of stocks that react wildly to numbers after the bell. united as well. the shares not changed much, but they did change the policy of removing passengers to move crew around the country. for their flight operations, ending a long standing practice. and the journal takes a deep dive today at how their culture of gate agents afraid to break

rules, bend rules. >> years in the making. >> ended up costing them in customer service. >> they got made fun of on "saturday night live" along with pepsi. be interesting to see how oscar munoz frames it to investors. the stock lost 2%, and it won't have an impact on business, but it had bad press. and a lot had to do with his original response. >> dow is up 56. let's go to bob pisani. >> good morning. nice positive open to the markets. not much going on overseas. that's because everybody is closed. europe and hong kong is closed, australia is closed. look at the sectors here. banks started positive, just turned negative. that's been a problem all month. by and large, what we like to call the reflation trade,

materials, and tech modestly to the upside. health down is for the month now. it's fallen back here. speaking of the banks, earnings are light here. we got m&t bank. this is one of the big northeast banks. they're a big retail operation overall. that's slowly sinking down along with the other banks this month as interest rates have dropped. but they beat -- they did have better tax benefits but notably they had higher net interest income. this is a positive development that we have been seeing for a number of the banks overall. you see that's up nicely after being in a down trend for a while. so it's early right now, but we have five banks reporting so far. i think the key here couple points here, most are surprising to the upside on higher revenue. the one exception is wells fargo there. commercial lending was a real issue going into the earnings report. generally commercial lender is weaker in the fourth quarter, but not as bad as feared. that's a surprise. rates trending lower have been a

big issue and credit remains fairly benign. a few comments about the auto issue, auto sales and lending. but credit has remained benign. i would say this is a positive start for the bank earnings. he's move on and talk about the other things. the first half of april is over. well, we have had a tough time of it because a lot of the sectors are to the downside. i want to note here financials are down, tech is down here. i expect that to turn around in the second half of the year as the tax selling ends there. financials, this is a seasonably typical thing. most of the time financials and tech are down in april but not as much as in. financials are weak because of the interest rate situation. let's move back to the ipo situation. we had a big week for ipo, six of them. it was going to be a quiet week, only one up. but four companies filed terms either on friday or this morning.

so big developments going on. here's a couple of them. china rapid finance, will probably be trading next week down here at the new york stock exchange. this is a chinese company. peer to peer microlending. and we have the biggest exhibition company in the united states going public next week. emerald exhibitions. 15.5 billion shares. that's here at the new york stock exchange. floor and decor one of the hard surface flooring retailers, they're going public next week. $8.8 million. 16 to $18. and the data management platform, looking to go public next week as well. that's down here at the new york stock exchange. and then the very broad group of companies, david, looking to go public. we have a number of them still floating out there. i don't have the terms, frontier airlines out there. david, the biggest month of the year so far for ipos. so finally we're starting to see

some real action. the next week or two, seven, eight, nine are coming in a single week. dow's up 60 points. back to you. >> not the cruellest month, april. at least for ipos. let's talk a little dish. the incentive option, broadcast spectrum concluded and we recently learned what all the buyers paid and who spent the most. and what was most interesting leads us back to asking that question of dish and its controlling shareholder charlie ergann what are they doing? they spent about $6.2 billion buying spectrum in the latest auction. that puts them in the number two position, but was the most unexpected of the results. t-mobile was number one. but many people knew going in that they would be very aggressive bidders and for example, verizon had no interest, they didn't buy anything. there's a look at comcast, our parent company, to put it in

perspective. but with this purchase, dish not only levers up the balance sheet to five times which is pretty high although to be fair they generate a good amount of cash from the old satellite business which it can pay down that debt fairly rapidly, but it raises the question yet again that's getting plenty of analysts busy and many investors what are they going to do with all the spectrum? remember, they have a lot from other means and other auctions and other swaps and other purchases that they have done in the past. putting them in a position where believe it or not, they actually own as much spectrum as t-mobile or verizon. but all of theirs is unused. it's a different bandwidth. doesn't mean it's as strong as spectrum to have, but nonetheless it gives you a sense at least as to how much we're talking about. m&a previously a lot of people have thought, well, he's going to try to sell the company. if there's interest -- would

verizon be interested, t-mobile, i don't know. it's worth noting that of the 486 licenses dish acquired 301 were reserve blocks. so that means for six years, those licenses can't even be transferred to a potential acquirer. why would you want to buy them if you can't get ahold of the lie senses for six years? of course, there are buildout provisions that dish will be bumping up against from spectrum. meaning it has to get started. it hasn't yet. that will require a lot of money. is there a partner in the wings that it will work? we can come up with some names and speculate. we'll see. but the mystery continues. but interestingly the value of the spectrum overall does appear to be going up. you can see dish this morning is down as perhaps some wonder what the ultimate plan is here and how they're going to go about using this spectrum, building it out, leasing it, selling it, which seems unlikely.

but again, did want to mention that auction. one other point here on the 27th of april, those anti-collusion rules that prevented potential bidders for auction about deals end. so there's an expectation that you'll start to get some conversations about wireless consolidation. the one that we have heard most often about is a possibility at least is sprint. even though that would have significant antitrust concerns, one final point here if dish really did build out and create a fourth wireless network operator that would represent competition that allow a sprint/t moe deal to take place. we'll have more i'm sure, a lot more speculation. maybe charlie will come on and talk to us, help us clear things up. >> that's how you book guests? >> i try. i try. e-mail and i reach out to them via the airwaves, sara. now i'm reaching out to rick santelli for some insight on the

bonds. tell me about the bonds. >> thanks, david. absolutely. you know, if you look up there right now you see a 222 on tens. keep in mind that on wednesday we settled at 224 and on thursday 224. closed friday. so we have a couple of violations. if you open the chart up to november 1st, that's the last time we were at these levels but it's very fascinating to look at how this is playing out. especially considering geopolitics, the nervousness of those issues in front of the three day weekend where traders are unable to tweak positions. many thought this violation of the 2.25 to 2.27 level would snap back if it wasn't meant to be. see no snap back even with equities in positive territory. on the spread, if you look at tens minus 2s hovering above 100 it's been driven more than the long end than the short end on the flattening which goes hand in hand with the notion that the message being sent by treasury is among a lot of different

channels. one of them that may be growing is that growth in this country may have anticipated a hop over the next several plus quarters. but maybe that's wearing a bit thin. now, if we look at december 1st to the 2015 start to tens you can see this crown that we have put on top of the market above that 2.27 level was really borne out by the settlement of 2015. so as we trade below it many traders are cognizant to see if it wears away at some of the kevlar coating that has been on the equity markets. finally, intraday dollar index only down a bit, but growing almost a half a cent now. on year to date chart very revealing. we're down a percent. above 100. carl back to you. >> thank you very much, rick santel santelli. we'll stay on top of arconic, klaus kleinfeld stepped down as

the ceo. back in a minute. back in a minu. at fidelity, trades are now just $4.95.

we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. and at $4.95, you can trade with a clear advantage. 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. [and her new business: i do, to jeanetgo. jeanette was excellent at marrying people. but had trouble getting paid. not a good time, jeanette. even worse. now i'm uncomfortable. but here's the good news, jeanette got quickbooks. send that invoice, jeanette. looks like they viewed it. and, ta-da! paid twice as fast.

oh, she's an efficient officiant. way to grow, jeanette. new. get paid twice as fast for free. visit quickbooks-dot-com. it's a very simple procedure, mr. diaz. we're just going to make one small incision here, then we're gonna go in and remove your '67 corvette. my vette!? it's just a gall bladder! you don't have.. aflac! paying you cash, so you might have to sell that sweet little muscle machine just to cover your rent. more funny juice. but my papa gave me...that...car. what do you wish you had? aflac. ohh, i love doing that. health can change, but the life you love doesn't have to. keep your lifestyle healthy with- aflac! retail sales fell in march,

second straight monthly decline but consumer confidence is at a ten year high. steve liesman is looking at this disconnect. >> it was a not so good friday when it came to economic reports and this highlights a big split when what we have surging soft data like consumer confidence and weak hard data. well, first of all, inflation. the headline number down 0.3%. if core number down 0.1%. year over year just at 2% now. retail coming in down 0.2. expectations was for a rise. and february, down 0.3%. all of that combined to reduce the outlook yet again for first quarter gdp, it's been a slow drip downward. here's the rapid -- preliminary, we'll have more on this later. we have six economists in the number but it's 0.8. first time below 1%. fourth quarter actual, 2.1. so big come down from the fourth

quarter. this is who is where and you can see at the top of the list action economics. barclay's and moody's at 1.8. the atlanta fed just half a point. as we go to zero here. this is not the first time we have had this kind of split between the hard and the soft data. here are some notable times here. you can see right after 1990, that's the first circled area there. you had surging consumer spending. and decline and very, very low confidence. again, back after 9/11 you had a real decline in consumer confidence. but spending was pretty good by consumers and there we are again. you can see in your right circle there. very low consumer confidence -- high consumer confidence, but low consumer spending. complicating the situation for the fed and investigators is that first quarter data has been notoriously weak as we chronicled in a series of stories so the fed can look beyond the weak data and stay on track for the june rate hike.

but investors bid down the probability of that hike to around 50% now. back to you. >> another factor we were discussing steve, i wonder your thoughts on this. does the soft data, the confidence boost from consumers and at the boardroom level show up in earnings? or do earnings correlate more with the hard economic data. >> there's a lot of things that the companies can do to make their nurjs -- numbers, they can cut costs and raise the numbers. more importantly you want to see that ceo confidence show up in investment. we haven't quite seen that yet. there's a little firming in the capital spending there. but we want to see it surge along with the confidence data we are getting from the ceos. >> yeah. one more reason to pay attention closely to earnings this week as we go -- >> good point. >> steve, thanks so much. when we come back a lot more on klaus kleinfeld stepping down as ceo of arconic. also ahead, jeff greene with the dow up 75. the dow up 75.

hey. pass please. i'm here to fix the elevator. nothing's wrong with the elevator. right. but you want to fix it. right. so who sent you? new guy. what new guy? watson. my analysis of sensor and maintenance data indicates elevator 3 will malfunction in 2 days. there you go. you still need a pass.

♪ good monday morning.

welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber. the market took back some of the losses on thursday. we see gold come off of the highs and yields coming off the lows. >> our road map begins with vice president mike pence sending a warning to north korea following a failed missile launch. we'll get a live report for you from the boardroom. united unveiled a new policy in reaction to last week's passenger removal. we have details. plus, arconic ceo klaus kleinfeld is out after a big push from act havist investor elliott manage. exclusive details on the departure straight ahead. but let's start with this literally we have going on. the dow is up 75 points. the market is shrugging off big geopolitical concerns and plus it's a big week for earnings ahead of the french election. joining us is the quantitative strategist at wells fargo. and welcome to you both.

we saw the japanese yen stronger, gold at november highs and thought it was going to be another sort of risk off nervous day but looks like stocks are climbing this wall of worry. are you surprised? >> you know, we're not. it's really interesting because you know as rates come down, what happens is basically stocks start to become a better and better alternative. as we approach that ten year i think people are surprised at how low rates have come down. that does tend to act as a little of a boost for companies who need to borrow. we can do more on the buy back side. low rates can be very good for corporations. >> so let's talk about what some of those concerns were in the market that led to the biggest jump for treasuries last week since january, brian. geopolitical concerns, how do you explain to clients what the economic and market impact will be on this escalation with north korea and the middle east? >> it's a great question. you know, i think most clients are discounting to an extent, at

least the clients that i talked to are discounting the geopolitical concerns. i think they're more focused on u.s. politics. certainly there is some concern abroad but i think there is a general sense of calm that things will work themselves out, so i haven't -- i haven't detected any panic among clients that i talked to about the international scene just yet. i think they're more concerned about u.s. policy and where u.s. policy is heading. >> i noticed, brian, the headline in the journal tuesday was security tops trade and for all of those conversations we had where people were worried about a trade war, you're saying it doesn't mean that people are actually worried about a real war. >> not yet. look, we have a new administration. and we don't have a long track record yet so people are trying to figure out what the administration -- how the administration is going to react to international situations. how it is going to try and mold

international situations. i think there is a degree of comfort with the president's team in place. he has some senior people at the defense department and the state department as well with broad international experience, so i think there's a level of comfort there on even if they don't know mr. trump yet at the presidential level. so-so far, so good. but i think people are still taking a bit of a wait and see attitude. >> how do you think of the risks coming from overseas, geopolitics, all colliding here this week with earnings? >> you know, it still feels like the market is complacent. look at the volatility index or the fact there are only a couple of -- and you don't want to quite be there. this would be a great time to

rise a bit of dry powder in case something plays out in the way you don't quite expect. >> what sort of allocation should you have to some of the safety trades? i mentioned treasury, gold's pretty popular, the japanese yen. what do you recommend? >> two of our favorite places to put money to work, one is reits. especially on the u.s. side. we think real estate will continue to do well. we don't think rates will go up in the quick fashion. as you have seen, they have come back down. we think the fundamentals around real estate look really good and on the flip side, the intermediate part of the fixed income curve still actually looks pretty well. that's where you can pick up a little bit of income without taking on too much risk. again, those interest payments keep coming in month after month. these are two places to emphasize right now, they're both interrelated. we think that growth will firm but not too quickly to make rates go up too fast. >> as far as u.s. policy goes, i read a piece that looked at what

michael core bat of citi not a question of if but when we get tax reform and infrastructure, but the piece argued that's a contrarian trade. do you think that's true? >> you know, our base line the whole time on tax reform has been that it's going to be an event for the latter part of 2016 into 2018. there's no magic cutoff at january 1. i have been kind of perplexed that people started to panic when it became clear that midyear tax reform was probably unattainable. so i have concerns about tax reform. because i don't think there's a coherent message coming out of the administration yet. the congress, republicans on the hill, are not on the same page yet. so there's some confusion about what republicans are going to do. that raises some concerns with me about how tax reform will play out. at the end of the day though, i do think that the default position, the default outcome will be some modest cuts in tax

rates. some small cleaning up of the tax code. not a big comprehensive bill because i think the country is too politically divided to do comprehensive. but i think we'll see some modest cuts in tax rates. and some cleaning up of the tax code and i think the market will react positively to that. i think they're just a little concerned that it's taking longer than expected. but i think that expectation was unrealistic. >> well, does health care reform have to happen first as the president has most recently suggested? >> i think for budget optics it helps, but i think they -- when they come back, they are going to probably realize that health care is a bridge too far. that there is not a consensus among republicans about how to change the affordable care act. and at that point they will move on. i expect. and head for tax reform. not that tax reform is easy. that the lack of health care will -- health care bill will

complicate matters. it doesn't close the door to doing tax reform. it i just makes it harder. >> we will see. gentlemen, thank you. brian gardner, washington research analyst and now all 11 s&p sectors higher. >> yeah. meanwhile, the vice president visiting the demilitarized zone between north korea and south korea warning north korea over the nuclear tests saying they would do well not to test the president's resolve or the strength of the u.s. armed forces. chery kang joins us live now. >> thank you very much, carl. so spring tends to be high tide for north korea tensions. but i think what's different this time three factors. one, south korea is without a leader with the election due next month and north korea seems to be making some progress when it comes to the missile technology. yes, sunday is the missile test that seems to have failed,

exploding some seconds after the launch. but there's that consensus among north korea watchers that there is that significant progress and three, most importantly, the trump factor. so washington's message via vice president mike pence visiting south korea over the weekend was do not provoke, we won't be patient anymore, basically saying the key to north korea policy that's been in place for years in washington. strategic patience with north korea is over. and again, calling on china to do more in all of this. take a listen. >> now, while 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 a few short days ago, if china is unable to deal with north korea the united states and our allies will. >> and i thought one of the most

interesting reactions out of u.s. president trump in one of his tweets over the weekend why would i call china a currency manipulator if they're working with us on the north korea problem? we ellewill see what happens. it makes us question if there was a big deal on north korea between the two leaders out of mar-a-lago, florida, earlier this month. and i think we have been seeing some interesting moves by beijing do over the last few days. suspending some tourism packages to north korea. suspending the only air route between beijing and pyongyang and returning coal imports back to north korea. the question is how will kim jong un take all this? guys? >> all right. thank you very much. reporting from the border on south korea. let's move on now to the unexpected story from this morning.

involving klaus kleinfeld, the former ceo of arconic. mr. kleinfeld this morning dismissed by his board of directors at the company. apparently for sending a letter to elliott management, a large shareholder of arconic. 13.2% shareholder of the company. this morning, very unexpectedly we learned by mutual consent, mr. kleinfeld has stepped down after the board learned that without consultation or authorization by the board, he had sent a letter directly to the senior officer of elliott management and in the board's determination this exhibited poor judgment on mr. kleinfeld's part. that at least in their -- again, their opinion was a fireable offense. if we can call it that. this is an unexpected development in what has become a certainly hard fought battle between mr. kleinfeld and that 13.2% shareholder in the form of

elliott management which is set to culminate in the annual meeting i believe on may 16th in which elliott is going after a number of board seats and wants significant changes at the company to take place as well. of course one of them was mr. kleinfeld leaving so it's unclear at this point what this will mean to that battle. elliott has not returned my calls for comment at this point. or to try to understand exactly what were the contents of this letter that led the board to act in this way. one can imagine under -- in periods like this where a battle has been going on for some time the board is under a good amount of pressure and perhaps that can at least give a sense as to why they'd take the actions that they did. without knowing what the contents of the letter were, it's hard to come to any conclusions as to why mr. kleinfeld exhibited the bad judgment that the board said he did. taking over for him will be david hess. he only joined the board very

short time ago. he replaced martin sew rel as a director. he has a background at space, ex-pratt and whitney and they'll continue to -- to begin the process of looking for mr. kleinfeld's replacement. it was only a couple of months ago when this campaign began by elliott when we had mr. kleinfeld on as a guest of the show. at the time, he said the board was fully behind him. >> these assertions were not new. the board as well as management have had intense dialogue with elliott and has spent countless hours to go through each one of the assertions and to -- and they have looked at them and as you have seen yesterday, the board came out with a clear statement that they have looked at everything and they stand behind this strategy and they stand behind me. >> on the 13th of april, elliott had said that arconic ceo and/or

the board they suggested had trigled a $500 million -- triggered a $500 million liability should they elect the four nominees to the board. this was a change in the control provision. somewhat in a trust that's meant for employees but it has the effect of adding $500 million bill potentially to arconic shareholders if in fact elliott was successful in putting its directors on the board. unclear whether this had any impact or any significance at all in the current developments, guys. but certainly kind of stunning really. that mr. kleinfeld is out. >> wow, this definitely -- we were not expecting this one. at least not today. >> no. when we come back, netflix is going to gear up to report earnings tonight after the bell. we'll talk about that. united policy changing taking action after the removal last

week. and we'll check in with jeff greene and doing business in the trump era. the dow is up 85. the dow is up . 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? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab. tbut with lightning fast shifts instant. and dynamic track-tuned suspension, what the road demands, the gs delivers. experience high performance through high technology, in the lexus gs 350 and gs turbo.

experience amazing.

netflix getting ready to report earnings tonight after the bell. julia boorstin has more on what they may say. >> hey, carl, the subscriber growth and the projected subscriber growth that's always in focus in netflix's earnings growth. they forecast it would add

5.2 million streaming subscribers. this 1.5 million fewer than the company added in the year ago quarter when the service launched in more new markets. earnings per share are expected to grow to 57 cents and while revenue is expected to grow 35% to $2.6 billion. with high hopes for new shows including "13 reasons why" and returning hits like "orange is the new black" the investigators will be watching carefully for the company's guidance on second quarter subscriber additions, especially concerns about slowing growth with the u.s. market becoming increasingly saturated. investors will be watching for more insight from reed hastings, one from impact from competition from amazon and hbo, as well as new live streaming from alphabet's youtube to commentary on how the new rivals amazon in particular, will drive up the

costs beyond the $6 billion that the company is committed to spending. and three, with the trump administration looking to open the door to more cable consolidation, we'll have to see if hastings weighs in there. >> see what happens tonight. thank you very much. julia boorstin. for more on netflix tonight, let's bring in william power from over in robert w. baird and company. good to have you back. >> great to be here. >> the guessing game subs can be. so you have done some proprietary work to see which way they're going directionally. what did you find out? >> it was interesting and it surprised us. we are cautious into the print and in large part on the subscriber growth. we have done a survey every year and it suggested looking at the first quarter that penetration in the u.s. held relatively flat sequ sequenti sequentially. we think that creates some risk to the u.s. numbers. at the end of the day, they're

more focused on the international. given the high expectations on that front that makes us a bit more cautious into the corner. >> now in the u.s., what could that be about? you point to a lack of a giant hit show in the quarter or is it about continued in roads being made by the likes of amazon or something else? >> yeah, you know, i think it's largely driven by the fact that i think it is increasingly hit driven. you know, you look back last year in the first quarter. it was still benefiting from the coattails from making a murderer. it had "house of cards" which falls in the second quarter. more hits a year ago than this year. the reality you look at the first quarter, they had "iron fist" which is probably okay. i think on the whole, you can't point to the huge hit relative to the year raeg -- ago in the fourth quarter. look to the competition it will only increase.

>> julia brought up the cost factor. $6 billion is what they're set to spend on content. like these new exciting series this year. how high does that rise from -- are we expected to get any sort of guidance on that? does it get up to $7 billion? >> well, they have set the guidance for this year. so i'm not sure it will change as you look at 2017. but i think, you know, generally speaking, yes, it probably does continue to rise year over year. you know, the real key then is continuing to drive that top line leverage because the costs become relatively more fixed. that's what raises some of the concerns in the u.s., if the growth starts to slow on the top line do you get the same leverage that you expected. but look, that's one of the longer term running concerns the free cash flow burn due to that cash spent. >> we kicked around the analysts last week from rbc who played with the idea of apple and disney tying up. but i mean, even though we discounted it at the time i wonder if you have done any work on how netflix would be affected

by some mega m&a in the space. >> well, you know, that's a good question. look, to the degree that it increases competition and firepower from some of their competitors, sure, that's a risk factor. we have done some of our work there and of course covered apple. that's a stock that you know that we have liked and we continue to recommend and we'd wonder whether even apple could look at the netflix on the other side of the things. we thought that probably -- you know, didn't make sense. but look it's an evolving space. a lot happening. we have to see how the cards unfold on the m&a front. >> will, appreciate your guidance as always. closing bell is going to have live coverage of earnings from netflix and united continental. that's at 4:00 p.m. after last week's controversy of united removing a passenger from one of the plane

it overshadowed the stock today. and we'll give you all the details. details. let's go, she's a dog.

[ whimpers ] find ping-pong. okay, let's go. find your awesome with the xfinity x1 voice remote. that's amazing!

shares of united are on the rise, gaining about a percent this morning. the airline set to report earnings after the bell. meantime, the company made a policy change in an attempt to prevent more incidents like this from last week when a passeng passenger -- you have seen the video was forcibly removed to make room for crew members so now traveling crew have to check in 60 minutes prior to departure. for more on this we joined by former office depot ceo steving of lund. how would you rank your preliminary thoughts here and in your study and your experience seeing bad corporate behavior and blunders, how would you rank this united one? >> well, this has been a disastrous week from the pr standpoint. first of course with the well publicized dr. dao event and then they had the scorpion dropping from the overhead bin and yesterday they escorted

another couple on their way from utah to central america to get married, they took them off the flight in houston arguably incorrectly. and then they took three chances to try to explain its. it's been terrible. but look, underneath all of it, they can change these policies and they have done the right thing by changing them. but there's training involved here. you know, they merged from continental, with united. then they have republic which runs the united express lines so they have three different versions of people involved here. and at its core, you have to teach them to work with judgment. not just by the book. and if people were allowed to make these calls and make the right customer decisions with judgment, i think there would be better outcomes. >> how should oscar munoz the ceo who you mentioned has apologized a number of times for this publicly, frame it, for investors today on the earnings call? >> well, oscar was brought in from the board to resolve this situation. he's a good guy. he had a medical set back as we

all know, and that put him behind. but ultimately he's got to apologize. he has to explain it to the investors and he's got to take accountable. he has and he will, he's a good guy. but when you're trying to get this through 60 or 100,000 people it takes a lot of time. this isn't a one month or a one year. this is a multiyear effort that they have got to go through. you know, southwest was famous for its fun. you know, from the days that carried through, but it was the judgment delegated to the employee to make the customer satisfied. they have to come back to this. in an era where, you know, you're on camera. you're on stage. disney calls it being on stage and they train their people for that. in the social media environment we're on stage every day and every customer facing person needs to be trained in that regard. >> so ultimately, do you expect this to have any sort of material impact on united's business? >> well, yes. because it does -- you know,

rattle confidence of investors. it does rattle -- >> steve, actually, hold your thought because we want to go out to the president who's just started speaking from the white house. easter egg roll. >> we will be stronger and bigger and better as a nation than ever before. we're right on track, you see what's happening and we are right on track. so thank you, everybody, for being here. we're going to do cards for soldiers in a little bit. melania and barron and myself we're going to sign some great cards for the troops. we look forward to. that then we're going to come out and join you and enjoy your company for a roll -- a great easter egg roll. i don't know if we'll be successful but a lot of people down there will be successful. i have seen those kids and they're highly, highly competitive. that i can tell you. i just want to thank first lady melania trump.

she's really worked hard on this. she has been working on this for a long time to make it perfect and we wanted to keep it just right. so i wanted to just ask her to speak. but before she speaks i want to congratulate her on this wonderful, wonderful day we're going to have a lot of people. a lot of people and they're going to have a great time. so melania, thank you very much. and barron, thank you very much for being here. thank you very much. [ applause ] first lady, melania trump. thank you, everybody. >> thank you. welcome to the white house. this is the first time that my husband and i hosting this wonderful tradition. and it's great that you are all with us today. i hope you have a great time with many activities. i want to thank military band, all the staff and volunteers who

worked tirelessly to ensure that you have memorable experience. i want to thank all the military with us today and -- and all military in this great nation and service men and servicewomen. all around the world who are keeping us safe. as we renew this tradition, thank you for joining us. on behalf of the president and barron, we wish you a great fun and beautiful days coming ahead of us. and happy easter. thank you. god bless. >> happy easter and have a great, great time. have a great day. thank you, folks. thank you very much.

i'm -- >> that's the president -- live shot for the ages right there with the first lady, barron trump and the easter bunny. the white house easter egg roll. something that not everyone was convinced was actually going to happen during the transition, but of course they have made -- of course the president continues to find things with this, with the showdown with north korea over the weekend, assad and putin just days ago. rasmussen has approval back at 50%. so the president -- even tweeting today about the media and democrats and the congressional raise in georgia -- race in georgia. >> he did sound an optimistic note, maybe in the spirit of the event. where 21,000 people are expected to attend which is as many news publications mentioned down from the 35,000 people that attended michelle obama's hosting of the easter egg roll in 2016. sean spicer did say that 18,000 eggs had been ordered.

i like how "the washington post" put it. it is expected to test the hosting chops of first lady melania trump who we just heard from. we don't hear from very regularly. so the president and the first lady welcoming everyone there to the white house for the easter egg roll. >> his day is not over. he meets with rex tillerson at 1:30 today. serious business continues as well. do we still have steve oddland? >> i think so. >> i'm still with you. >> i'm sorry to cut you off for the president there. from the easter egg roll. we were getting your thoughts on united and the scandal and just trying to figure out what the business impact of all of that is likely to be and how long it's likely to last. >> well, i do think that it's -- it's going to last with investors until, you know they see some sign that this is under control. but clearly with consumers they have done some damage. they have got to win the consumers back. when everybody has a camera that

they can carry with them realtime and access to social media, i think everybody needs to -- who is in the customer facing business needs to train their people to plan that they're on stage every single day and they need to take action that is consistent with that. but that takes a lot of time and a lot of training and, you know, they have used up some goodwill here. they need to earn that back from the customers. >> what would you say about some of the reactions of the other airlines? delta is willing to pay up to nearly $10,000 to get someone to give up a seat. that's a new one. american promises it will never bump a passenger once a passenger is seated and so does united. right calls? >> of course. the other airlines need to come at this. there aren't that many airlines left and unfortunately, for the consumer there's not a lot of choices. so, you know, this is why i think to some extent united is protected at least from the earnings standpoint in this thing. but a reputational issue like this is something that's a stain

that goes on. i think the other airlines are trying, but they have to be careful too. because they're not pure and they make mistakes every single day. i think delta held back for a while because they had some issues as well. anyway, it comes back to training people to be able to act. not just with a rules based approach, but with the principals based approach so people can arbitrate a situation with the customer effectively. >> well, see if we learn any more on the policies in the earnings call tonight. thank you, steve. former office depot ceo and contributor. let's get over to sue herera for the news update. >> hi, good morning. an international observer mission in ankara said that the turn kitsch constitutional -- turkish constitutional referendum fell short. the voters gave sweeping new powers to erdogan who called it historic for that nation. south korean prosecutors

indicted park when which who was stripped of power in march. clashes broke out in palestinians and security forces as palestinians marked prisoners day. they have launched a hunger strike to demand better prison conditions. unfortunately more traffic problems in atlanta this morning. a tractor-trailer carrying a toxic chemical overturned spilling out on the interstate. it caused the officials to shut down the interstates 75 and 85 until mid-morning and it was quite a mess. and it almost seems to be at rush hour. that's the news update this hour. carl, back to you. >> sue, thank you very much. when we come back, jeff greene is with us. we'll talk about what he's investing in in this age of trump. and a nice gain to start the week, a busy one, up 90 points. stay witmemr. parker.

when a critical patiis far from the hospital, the hospal must come to the patient. stat&tetwork ilpingarker first reonrs coececwith mical teams in ar real time... stay with me, mrparker. ..aving time wn it matters most stay with me, mrs. parker. ..that's the power of and. most oh h h john,'m coectingur brains so we n are our amazing trading g owledge. but why don'you just go to thinrswim's chat rooms ere you can she stratees, ideas, eveactual trades with mart professials do to thnds of other traders?oms i know. brain told my brain befo youold my face. m, blueber p into the knowlge of other traderon thinkorswim.

u.s. markets shrugging off the weekend's geopolitical tensions this morning as earning season gets under way. investors are monitoring global tensions and any prospective from the trump tax and trade agenda. for more, we're joined by billionaire investor jeff greene, founder of the greene institute. good to have you back. good morning. >> good morning, carl. >> we have been talking a lot today and last couple of weeks about how the market has a lot more chop than it did right after the election. uncertainties, pivots. do you see a big market narrative being written right now and is it changing? >> well, i never totally understood this whole idea of animal spirptds being unleash -- spirits being unleashed in the first place. as a real estate investor, the inaction of anything in washington when there was no fiscal policy, nothing getting done, meant that the only game in town was the fed and the fed

meant zero interest rates and $4 trillion on the balance sheet over the last seven or eight years and that unleashes jungle animal spirits. as an investor, i look and if somebody said to me, what would you like, would you like your tax rate cut from 39 to 32% or deal with a borrow -- instead of borrow at 6% than at 2%, guess which one most people would choose. i think we have been involved in the insane animal spirits and now washington says they're getting things done and that can slow the economy down because it will cause the interest rates to go up. >> so you believe after a couple of years where we were promised a series of rate hikes we were lucky to get one, you think this year is different? >> i don't -- you know, if you look at what we have done, we have had so many years of highly stimulative monetary policy what do we have to show for its? 1 to 2% growth. i don't see how -- where we'll get this growth that's going to

cause rates to go up. i think rates are going to move very slowly. >> i wanted to ask you about your background, where you right now, i think in palm beach. are you still a member of mar-a-lago and have you been hanging out there recently? >> yeah. >> spending time with the president. >> yeah, i had dinner there friday night. it was packed. >> were you in when president xi jinping was there? >> no, no. i wasn't there that night. no, not that night. >> what can tell us about guest access to president trump when he's at his winter white house? >> well, i mean, you know, friday night i went there for dinner. he was having dinner with some friends. he was behind a velvet rope. but he walked around afterwards and said hello to people he knows. i think donald trump has been at mar-a-lago for a long time. he's very comfortable there. i understand why he wants to be there on the -- especially on the holiday weekends with his family and friends. and i think it's great that he can -- -- he gets a chance to

unwind. here he is monday morning, back to business at the white house. >> back to business at the easter egg roll. >> well, yeah, i was over at the golf course having lunch last saturday. i was just taking my son after a little league game with some friends. he was there. we talked for a little while. he took a picture with my 5-year-old. donald trump -- president trump is a very gracious guy. when i watched him just now at the white house -- as i was thinking this is not much unlike what he's always had at mar-a-lago. if you remember at mar-a-lago, the trumps always put on big easter egg hunts. they always put on ginger bread castle -- making a gingerbread house with the kids around the holiday times, and christmas and hanukkah. so the trumps are used to entertaining and doing what they're doing there. they're very comfortable in that role. and he's a very gracious guy. >> what about policies, jeff? what -- do you still talk to him? i know you had planned to talk about automation and technology jobs and really emphasizing the

education which you're involved with. i know, at the greene school. >> well, personally, i don't agree with some of the ideas that are coming out of washington. i mean, i'm a democrat. i really believe that we have to focus on education, a safety net, the environment. i think that just -- that that cutting taxes ask not going to do the trick. i think some of the ideas like eliminating the estate tax for people like me will do zero to stimulate the economy. it will enrage those who are already angry in the rust belt more than they are now. so you know, i did not talk policy with him. when i see president trump truthfully it's just usually a few minutes to just chat on some things. i have seen him four or five times since he's been president, but we haven't -- i love the opportunity to get invited to the white house and share some of my thoughts with him. >> all right, jeff, so brass tacks. given the narrative you have drawn out about your view on the

economy, your view on trump in the white house is there an obvious trade you have got into recently you would like to share? >> i mean, i'm in more cash than i have ever been in my life, because i'm uneasy about where the economy is today. if you look at where we are on the cycle, forget who the president -- whether it's hillary clinton or donald trump. we have had many years of peak auto sales, they should be dropping -- fl -- three years n. if americans bought 55 million cars, how many will need cars? cars are lasting for 10 or 20 years now. so the auto industry seems mature. housing i hear people are bullish on housing talking about how we need -- we have been producing i think 1 to 1.1 million homes. i'm not sure we need that many homes because people aren't getting the upward mobility they used to have to buy the homes so i think the housing market is very mature. i have friends whose kids get out of college. they go out and if they have the

money they'll lend them. they give them the down payment because rates are so low because because everyone who wants to get into real estate has gotten into real estate. i think the economy is mature. i think we'll have a slowdown down to 0% growth more than 4% growth. i still maintain a lot of the core positions. but you know i have definitely cut back on my equities, by about 50% over the last year. >> wow. and when you say cash at the highest level, how much is that? what percentage would you say? >> i mean, i have -- when i say cash i mean that's money sitting in treasuries earning half a percent. it's probably of my liquid assets 15%. but i have lots of other assets that are in a very other relative liquid assets. i have, you know, munies that i bought for instance. like new york dormitory bonds that i bought and got 5% on when the market was crashing. i have held on to them even though they're only making me now, you know, 1 or 2% because i

know they're very safe, very liquid. so i think now it's time to be cautious. everything in the world is at an all-time peak. real estate, stocks, bond, art. is there more room above or below us? i think there's more room below us. >> sounds like you'll be patient if things come in, jeff. we look forward to talking to you over the coming weeks and months. good to see you. >> always good to talk to you. >> jeff greene. well, marriott ceo sorensen conceding that president trump's travel ban is having an impact on the hotel industry. bookings from mexico and the middle east are taking a hit. susan lee has more on that story. >> yes, they are. that's right, david. putting a number to something we kind of already knew, that the travel ban is keeping travelers away from the u.s. which might be a bearish sign for the u.s. hotel industry.

marriott the stock has rallied some 25%. since the election. other travel names like expeedz ya, priceline and carnival have rallied some double digits so far this year. but the two executive orders signed by the president which were subsequently blocked by district courts have already sent the message to global travelers to maybe look elsewhere. bookings to the u.s. are down in virtually every market according to booking app hopper. tourism economics predicts 4.3 million fewer tourists to the u.s. which translates to over $7 billion in lost revenue this year. so at a time when the u.s. hotels industry is reeling from the travel bans they are also fighting competition from disrupter airbnb. a battle of words today to tell you about. this is after "the new york times" got ahold of the minutes from the industry meeting last november and clearly outlining their goals for this year to get more governmental and local and state and federal on their side

limiting airbnb and airbnb called the industry a hotel cartel intent on short sheeting the middle class and the hypocrisy is unbelievable. not mincing their words there. back to you. >> all right, interesting color on the travel agency. on the travel industry. susan li, thank you. as we go to break, look at shares of eli lilly on the move. off the lows but still down more than 4%. the fda says it wants additional clinical data to determine the appropriate dosages for the new rheumatoid arthritis drug. "squawk on the street" will be back with the dow still up 90 points. points.

the tesla shares are on a tear, so why does one trader say it's time to short the stock? find out on trading nation. more "squawk on the street" coming up. coming up.

dow is up 88 points.

let's send it out to cme group in chicago. rick santelli. good morning. >> thank you. i would like to welcome my first guest of the week, andy brenner. thank you for taking the time. >> good to see you buddy. always a pleasure. >> on one hand we have rates dipping below a significant level. lowest rates on a closing basis since november. equities drifting but holding. we have geopolitics, growth issues, federal reserve, what is going on with rates and how will that affect stocks, andy? >> rick, rates you had a very large short base at the beginning of the year and that's pretty much been covered. and then as you started moving down toward 232, 233 and 10 years, people were underinvested in rates and with all of the geopolitical stuff going on, people felt with the fed raising rates that they didn't have to be long or they could stay underweight. that hasn't worked out very

well. we've seen fear out there. fear of europe. fear of geopolitical whether it be north korea, china, russia, syria. pick one. they're all out there. we've seen a little bit more of a move to 22.22 to 2.23 where w are. we moved below that 227 that we were looking for at the beginning of the year. >> now, andy, when it comes to geopolitics, i'm one of these believers that it's important and we need to monitor what's going on in syria, north korea, our relationship dealing with some of those issues with china. but usually those are short lived. the politics end of it, what may go on with french elections, how that could affect italy, and of course the eurozone in its entirety, is that more of a lasting issue in your opinion? >> absolutely, rick. if you were going to try to pick a black swan, which in theory if you pick a black swan it's not a black swan, this is it.

let me give you a scenario. the election is on sunday. you could have the left winger and right winger as the two candidates and then all of a sudden, you know, france is talking about leaving the eurozone. i don't care if france leaves the eurozone but italy would be the next one up. italy is getting hurt by its lack of -- it's inability to work within the eurozone currency. i think that could be a big surprise and the market doesn't have any of that built in. >> watch france but italy is the real potential game changer. how do all of those issues and their effects of pushing rates a bit lower, will they ultimately take kevlar coating and put it back in equities in your opinion? >> obviously we're up today. you know, the trump time line is really getting pushed back. i mean, he's now talking about he needs to have health care in order to get the tax plan. you know, he's now talking about the last quarter of the year.

so if you're a businessman and you don't know what the tax plan is going to look like, you're not going to make those decisions. i think equities would get gravity. 5%, 10% correction at most. this is classic sell in may and come back when you see the tax plan. >> excellent. thank you. i have a funny feeling the word retro a retroactive will be popular out of congress in the next couple months. have a great day. back to you. >> thank you, rick. also following this story for you. retail giant walmart continuing to grow its e-commerce arm in talks to find bonobos. does this one make sense? >> if this were last year, i would have been surprised about the report that walmart is in final stages of acquiring bonobos. but mark lore has been showing his appetite for acquiring online retailers as of late.

it will be lore's fourth accusatia acquisiti acquisition. averaging one a month so far this year. all $75 million purchases or less. now, they have agreed on a price. it hasn't yet been reported. and the deal is in the final due diligence stages. based on the revenues, it would likely go for more than walmart's other recent e-commerce buys. walmart hasn't responded to our request for comment. last week when i spoke to lore on the phone before this report came out, i asked what miss plan was for these e-commerce companies and it provides walmart access to brands and customers we don't currently have and give us expertise of those that work at these companies. merchants and relationships they have with manufacturers and product content from descriptions to reviews. so far the sites also remain

mostly independent. they're not integrated into walmart's brand. they operate like wholly owned subsidiaries. >> it certainly would be a big bet on men who don't like to shop at the store as we've been talking about all morning. thanks. sticking with walmart and amazon, when we come back, chaim of katzman is with us. dow up triple digits to 20,554. stay with us.

♪ to err is human. to anticipate is lexus. experience the lexus rx with advanced safety standard. experience amazing.

welcome back to "squawk on the street." markets are higher for the first time in four sessions and right now energy stocks are sticking at least right now to the near flat side of things. they just moved to positive territory in the last few minutes or so hovering near break even. some of the more laggering stocks including devon energy and tesoro. shares of chesapeake energy weighing on the sector despite a rise in natural gas prices. crude oil lower through the morning session. under pressure from rising

output. oil rigs are up. energy down 8% in the s&p. shares chesapeake down more than 18% year-to-date. so certainly a sector to watch in today's trade. for the tech side of things, let's head over to "squawk alley" for the start of their show. >> thank you very much. good morning. it's 10:00 a.m. at walmart headquarters in arkansas. 11:00 a.m. on wall street. and "squawk alley" is live. ♪