live from new york where business never sleeps, this is "squawk box." >> good morning, everybody. welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. prem will be making a statement at 6:15 eastern time outside of downing street. it's unusual that the subject of the statement has not been released yet. the outdoor location is usually reserved for major announcements. there is speculation that may could cause a snap general election. it's been effecting the markets. the pound just reversing course. it's lower against the dollar. been watching what's happening in the european equities this morning as well. as you look right now, you'll see first the u.s. futures are indicated lower after strong day yesterday. the dow futures down about 55 points. in europe, you do see some weakness there as well.

the cac is off by 1.3% as we approach those elections. the initial elections in france. the ftse ahead of the announcement is down by just over 1.1%. the dax is also down about 0.6%. we will continue to watch this and bring you that news that is coming in less than 15 minutes time. >> couple big stories we're watching this morning. the s&p 500 is coming off the best day since march. that's thanks in part to comments the treasury secretary, steven mnuchin made about tax reform. mnuchin telling the financial times it's highly aggressive to not realistic for a new tax bill to reach the president's desk by august. mnuchin putting part of the blame on the healthcare debate. the treasury secretary says he expects tax reform to happen sometime this year. he also said the administration has not ruled out a border adjustment tax but there may be other ways to raise the trillion dollars without one. vice president mike pence is

in japan today. the second stop on his ten-day asia tour. talks expected to focus largely on trade. at a news conference pence said he hopes the economic dialogue will open the door to u.s. goods and infrastructure investment. >> the president and i are confident that we can find new ways to expand our economic ties in japan in different sectors and different industries. american and japanese businesses have much to offer each other by working together. we can ensure our two nations economic leadership grows even stronger in the years ahead to the benefit of all of our people. >> we should note pence reassured shinzo abe that the u.s. considers its alliance with japan a cornerstone of security. we have more on trade talks with japan at the bottom of the hour. president trump will sign an executive order today. the white house is calling it the buy american and hire american order which we will talk about in a minute. for more on that executive order

we'll get over to eamon javers in washington. good morning. >> good morning. i'm in washington, but the president is not going to be here for very long today. he's heading out to wisconsin, to the headquarters of snap-on where he will sign these executive orders. a complicated set of orders, but reaffirms the president's buy american and hire american standards. important changes here coming, they say, to the h1b visa program that many technology companies use to hire sophisticated high-end workers. but it's been criticized to hire people to undercut american salaries. the order will require the homeland security department, labor and state departments to propose new revised rules to root out what they call fraud in the immigration system. the trump administration says they want to move away from the current lottery system and get a system that grants visas for the highest paid and highest skilled workers.

the idea is that you wouldn't be able to use this for outsourcing firms and the like if you had to demonstrate the visas were going to the highest paid employees. on the buy american rules, that's a regulation that's been in place for a long time. the trump administration wants to have the agencies conduct reviews to root out what they say are loopholes in those regulations, buying american products by the united states government. the commerce secretary will advise the president of the united states on how to close those loopholes, and they will reaffirm the mult emelted and p standards for steel. and also we're expecting to see they're going to signal they want to review a lot of the waivers and loopholes that have been granted as part of american international trade agreements on buy american. they think those waivers have been granted to extensively. they want to roll back that process. already this morning the president of the united states has been up and tweeting about all of this. here's what he said on

immigration just this morning. the president tweeting the weak illegal immigration policies of the obama administration allowed bad ms-13 gangs to form in cities across the u.s. we're removing them fast. the white house officials who briefed us on this last night say all of this is going to be popular with both democrats and republicans. they say this is one thing that labor has been asking for for a long time. they have not gotten it from either party. they say the trump administration is prepared to deliver today. >> okay. eamon javers in washington, talk to you soon. dow component, that's right. united health, a dow component out with quarterly numbers. earnings of $2.37 a share. 20 cents above estimates. revenues also beat wall street forecasts, they raised their full-year outlook. they expect profit of $9.65 to $9.85 a share compared to the current consensus of $9.51.

that's a nice, nice gainer in the pre-market. the previous close -- the all-time high was 1.67. >> let's listen in now to british prime minister theresa may. they are seeking a snap election. >> despite predictions of immediate financial and economic danger, since the referendum we have seen consumer confidence remain high. record numbers of jobs, and economic growth that has exceeded all expectations. we have also delivered on the mandate that we were handed by the referendum result. britain is leaving the european union and there can be no turning back. as we look to the future, the government has the right plan for negotiating our new relationship with europe. we want a deep and special partnership between a strong and

successful european union and a united kingdom that is free to chart its own way in the world. that means we will regain control of our own money, our own laws, our own borders. we will be free to strike trade deals with old friends and new partners all around the world. this is the right approach. it is in the national interest. but the other political parties oppose it. at this moment of enormous national significance there should be unity here in westminster. but instead there is division. the country is coming together, but westminster is not. in recent weeks labour have threatened to vote against the final agreement we reached with the european union. the liberal democrats have said they want to g the business of government to a standstill.

the scottish national party say they will vote against the legislation that repeals britain's membership of the european union. unelected members of the house of lords have vowed to fight us every step of the way. our opponents believe because the government's majority is so small that our resolve will weaken and that they can force us to change course. they are wrong. they underestimate our determination to get the job done. i'm not prepared to let them endanger the security of millions of working people across the country. because what they are doing jeopardizes the work we must do to prepare for brexit at home. it weakens the government's negotiating position in europe. if we do not hold a general leak shun now, their political game playing will continue.

the negotiations with the european union will reach the most difficult stage in the run up to the next scheduled election. division in westminster will risk our ability to make a success of brexit, and it will cause damaging uncertainty and instability to the country. so we need a general election, we need one now. because we have at this moment a one-off chance to get this done while the european union agrees its negotiating position and before the detailed talks begin. i have only recently and reluctantly come to this conclusion. since i became prime minister, i have said there should be no election until 2020, but now the only way to guarantee stability for the years ahead is to hold this election and seek your support for the decisions i must

take. so tomorrow i will move a motion in the house of commons calling for a general election to be held on the 8th of june. that motion as set out by the fixed term parliament act will require a two-thirds majority of the house of commons. so i have a simple challenge to the opposition parties, you have criticized the government's vision for brexit, you have challenged our objectives, you have threatened to block the legislation we put before parliament, this is your moment to show you mean it, to show you are not opposing the government for the sake of it, to show that you do not treat politics as a game. let us tomorrow vote for an election, let us put forward our plans for brexit and our alternative programs for government, and then let the people decide. the decision facing the country will be all about leadership.

a choice between strong and stable leadership in the national interest, with me as your prime minister. or weak and unstable coalition government led by jeremy corbyn, propped up by the liberal democrats who want to reopen the divisions of the referendum and the snp. every vote for the conservatives will make it harder for only signals politicians who want to stop me from getting the job done. every vote for the conservatives will make me stronger when i negotiate for britain with the prime ministers, presidents and chancellors of the european union. every vote for the conservatives will mean we can stick to our plan for a stronger britain and take the right long-term decisions for a more secure future. it was with reluctance that i decided the country needs this election. but it is with strong conviction that i say it's necessary to secure the strong and stable

leadership the country needs to see us through brexit and beyond. so tomorrow let the house of commons vote for an election. let everybody put forward their proposals for brexit and their programs for government. let us remove the risk of uncertainty and instability and continue to give the country the strong and stable leadership it demands. >> there we have prime minister theresa may talking a bit here. wilfred frost has more on the prime minister's statement. my first thought, i don't think that we've copyrighted our constitution in the way we do things here. if you would like to borrow it so that you can do things here -- we don't have the ability to just, hey, we're not sure about what we did last time. let's -- i think we'll have another snap election. i know it's scheduled for 2020,

but let's have one in june. you want to borrow the right way to do things? >> are some wonderful things about your written constitution, that has its strengths and weaknesses. one of them being flexibility. you can frame it either way. let me bring you the headlines. she was not framing it as let's have another foet like lavote l year. she said we need a general election, we need one now. she pitched it for making the negotiations she will have to make coming up. she has to introduce a bill in parliament. there is the pound. it fell initially on the uncertainty of what would be in this statement and has rallied since, up slightly on the day. let me go through some of the reasoning why she called this election. this is a poll that came out from yesterday, taken over the 12th to 13th of april. it shows an historic lead for a serving conservative government, 44% conservatives, 23% labour.

over 20-point lead. that's massive in the british political system. the same poll asked who would you vote for prime minister who would you want for prime minister? theresa may sitting on 50%, well ahead of labour's leader german corbyn. she did say the conservatives now represent executing on brexit, so perhaps the risk she might not be factoring in is that significant voters come back and back one of the other parties if they articulate that point of view. we did have an election in richmond in 2016 that played out that way, the liberal democrats took a formerly conservative seat. by no meanscertain what this result will be.

the pound ending up higher opt news once the statement had been made. >> that wasn't bad, your own feelings about brexit, you were ability to keep out of that discussion. that's what i was worried about. it's going to happen. i'm sorry. i know that worries you, but this is part of the process -- this isn't backing down. this is bolstering the case to do that. >> absolutely. that's how she's framing it and calling for a bigger mandate to deliver on -- >> i'm sorry. >> joe, i'd like to think my views on brexit have never been revealed. but you seem to think you know them. >> joe does a good job of hiding his feelings on these things. >> very hard to tell. >> thank you, wilfred frost. you're a very tall man. >> it's true. it's true. i can't hide that. that's undeniable. >> trying to give the news as i see it.

thanks. >> we'll see wilf throughout the morning. we'll talk about earnings. let's get reaction to the broader markets. joining us is steve parker, head of the thematic equity, and joe tanneus. guys, let's react to what we just saw with theresa may. what do you think about this move? does it have a broader impact on the markets? we saw things reverse for the pond. there's weakness in the equity markets. >> we had a busy election calendar already, so let's add one more. i think the markets reacting as tamely as they have tells you that investors are starting to look through to the fundamentals and not allowing some of the political noise to cause knee-jerk reactions. we have to remember here, and last year taught us an important lesson, the political news can cause shrtd markort-term market

but we have to focus on the long-term. >> joe, there was a note that mark grant wrote over the weekend that struck a chord with me. he didn't think that a lot of the political turmoil would carry out with the brexit or with the elections in the united states. he was right on that he has a different feeling about what's happening in europe. part of that is the potential for what happens in france. but it's broader than just the elections. it's if italy chooses to leave, if greece gets thrown out of the eu. he's much more concerned about what's happening in europe now on a broader base. where do you come down on that? >> gri with a lot of those statements. the issue here, this momentum, this anti establishment movement that you've seen take hold across the west, all eyes are focused on this french election. the big difference between this french election and brexit, union within the monetary union itself. we're talking about potentially

leaving the euro. while the odds of that are still quite low, that creates an element of uncertainty. we remember what happened with greece a few years back. a small state threatening to leave the currency bloc, bringing into question the entire project. i think we have volatility ahead of us. >> we've had people tell us you could be seeing the end of the eu for five, six, seven years at this point. it raises a lot of uncertainty in the area. this is a trade that seems to be one that almost every group of guests that we have come on says europe looks like a better place than the u.s. to invest now. >> it's interesting. we share that view now. when we talk to our clients, we lay out the fundamental case around the improving economy, the move higher in terms of inflation, improvement in the commodity markets. all of these things are good for europe, but then there's the yes but. the yes but are the french

elections. my view is that if we get past this, we do get a more market friendly outcome, and it's not clear exactly where we're headed. all the polls seem to indicain that's where we are headed that could unleash the demand we're seeing for european markets. european stocks that have not been there in years past. >> when we look back at the u.s. equity picture, we look like we lost a bit of the momentum over the last couple of weeks. yesterday markets ended up over 185 points for the dow. it was a strong turnaround. what's driving things now? >> i think a lot has to do with expectations of tax reform. we had mnuchin come on and make a statement that tax reform is likely to take place at some point this year. these hopes have been building -- >> you looked at that and saw the glass half full, not empty.

it may not be august, but it will happen. >> the devil is in the details. but when all is said and done, you will get some fiscal stimulus. >> if i had asked you this question two, three months ago if it was done in august, you would have said what? >> i don't know about august. i do think something will get done. there is risk it carries over to 2018, but we believe you will get some type of ftax reform. that tailwind will help economic growth in the u.s. it will help earnings, which we've seen the beginning of first quarter earnings. that will help propole equity markets further. >> thank you both for being here today. coming up, we have much more reaction to the british prime minister's announcement calling for elections in june. also shares in netflix moving higher after the company posted an earnings beat. subscriber numbers and current quarter guidance missed expectations.

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welcome back to "squawk box." netflix posting an earnings beat but added fewer subscribers than expected. guidance missed expectations as well. netflix says it expects subscriber growth to pick up in q2. joining us now is rob sanderson, managing director and senior research analyst from mkm partners. do you look at this as a buying opportunity? do you look at this as a true miss and something you worry about? >> i think it's just an inline quarter. when they guided from their fourth quarter results, they characterized q1 as being the softest of the year. they thought they pulled forward demand, strong q4. so set the stage for a squishy quarter. that's what we got. they guided for better q2. what do you think the issue was with the missed subscriber number?

>> just like they laid out. a weak content slate. the year over year konl pacompan content. there was no pulls in the first quarter. the q2 lines up with a lot of those things in the second quarter. just the timing of the content releases. >> can i make an argument that some are planned and some are not. "making a murderer" was not on their list of things they expected to be a hit at the time it became one because of the buzz it generated. >> no, they are surprise hits, they are expected hits. on the last day of the quarter they launched "13 reasons why" far and away the smash hit currently. that will end up being a q2 subscriber draw, even though it was a q1 launch. so they come in sometimes unexpected. sometimes expected. that's the nature of the programming business. >> do you think they're spending

too much on content? it's a conversation we had just yesterday. they're spending 5 billion to $6 billion, hbo is creating $2 billion. can you create that many great programs? >> i think you can. the amount of supply continues to expand. the amount of talent drawn into the television world these days is unprecedented. they're sourcing great ideas from all over the world. their content budget is a clear competitive mode that they're trying to extend. they see opportunity for several hundred million subscribers around the world because of that programming budget. >> reed hastings had a great line yesterday. he was asked who he thinks his biggest competitors are you're thinking he might say amazon or hbo, his answer was my competition is sleep. maybe that's what we should consider our competition at "squawk." >> i was going to tweet that yesterday. >> when i'm on tv? >> when you co-anchor, usually

sleep wins. >> sometimes i want to sleep when joe is talking. >> that's what i just said. the way you said it was better. >> just reversing it for those still sleeping and can't figure it out. rob, hope uhelp us. how many of these guys can win the game, can people have a netflix subscription, hulu subscription, amazon subscription, or will there be clear winners or losers? >> when you look at the programming word, there's a clear precedent for many, many outlets for programming. how many channels do you have on your cable lineup today? that's just a subset of the total opportunity for home entertainment. i think that's what he's talk about is com tition for time and viewi competition for time and viewing hours.

i'm not worried about the space getting too crowded. >> rob, thank you. joe will wake up now. coming up, handicapping the french and now the uk elections. analysis from blackrock next. and quarterly results from bank of america and john john expected in the next few minutes. we'll bring you results and the reaction. here's yesterday's winners and losers. a wint weaer emeency... annoce soon,nsurance mpanwon'pay fomage at is,they can help pve damages f happening he fst place. at cogzant, we're turning thsf oclaimo one cused onventn predictive alytic..helpg thet the thingshat matter most. g.

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you're watching "squawk box" live from the nasdaq market site in times square. good tuesday morning. a quick look at u.s. equity futures at this hour. i wonder if there's going to be an impact from the comments that theresa may made about a snap election. the dow looks like it's off about 45 points. nasdaq off about 1 poi8-points. s&p 500 off by 8 points. british prime minister theresa may making a surprise announcement calling for snap elections. >> i have just chaired a meeting of the cabinet where we agreed that the government should call a general election to be held on the 8th of june. i want to explain the reasons for that decision. what will happen next, and the choice facing the british people when you come to vote in this

election. >> the pound turned negative before the announcement and has since rebounded. let's look at stocks in europe at this hour. looking right now at a bit of a red picture. the cac down the most. the ftse -- both of them down about the same amount. >> we had already been preparing for the french elections, now we have these new elections in the uk to worry about. i still can't believe you can just decide we'll have an election. what if we did that here? what if we had one and say we want another one. we all know when it will be, 2020. >> we constantly feel like we're in the election cycle as it is. >> that's the house. how does june 8th sound? joining us reaction -- no way to run a country. joining us is the chief multi asset strategist from blackrock. the news business is funny. you were ready to talk france. >> yep. >> ready to talk france.

this is the freshest and the breaking news, i guess. sort of just to consolidate her power, i think to move forward with the referendum? >> three main reasons, one is to consolidate power shaech. she has no opposition basically. now is the good time to do it and get the majority. two, get a popular mandate. she didn't have a popular mandate until now. it's possible she is thinking in talking with counterparts, it will be better to have a strong mandate. and three, it would be awkward to hold an election at time the brexit formally kicks in. now she will have a mandate that runs through the transition period. that makes sense for the continuity of the process. >> we saw the polls before brexit that were wrong. do we know for sure she wouldn't be doing this if she wasn't confident in getting the mandate

right. >> yeah. >> they were confident last time around. >> but people were -- last time you -- we missed -- we misunderestimated the populist viewpoint. >> we did. >> now i'm wondering -- i don't think we're underestimating it this time either. i don't think it suddenly switched. though some people in britain would argue there's buyers remorse after brexit. people would argue here, that if the election were -- the same mainstream media that said he couldn't win, are saying now if it were held again he wouldn't win again. i don't think the pendulum has swung back yet. there's still brexit. >> >> there's no going back. people on the continent are entertaining hopes they will turn back, but no. the campaign is what kind of brexit are we getting? a hard brexit or something closer to maybe the norway model where it's more of a close partnership. >> okay. let's talk france then as well.

the late effort thing i heard is th latest thing i heard is 33% of french voters have not made up their mind yet. isn't the consensus that le pen could win? >> i think there's a potential for surprise. that had been the consensus for the last three months, that le pen would win the first round and lose the second round. the reality now, is that there's four candidates that are all within the margin of error to each other. that is because, as you said, about 30% of voters have not fully made up their mind. so she could win the first round or she could not be in the second round at all. this is even a possibility at this stage. that is completely unprecedented in the french system, that creates uncertainty. i don't think there's any consensus now in terms of what we will see. >> so anything goes. >> anything goes, pretty much,

among these four candidates. >> even the communist might win? >> he's not a communist -- >> far-left. >> far-left candidate supported by communists, but he's getting huge momentum. you can see this in the official polls but also on social media, this candidate, melenchon, that we're talking about, he's getting supporters from across the political spectrum, and he's clearly managed to tap into a sentiment that the others did not address. what wou >> what would happen if he won? what would the market reaction be? >> i think it would not be pretty. it would be a huge surprise. he literally came out of nowhere. nobody was paying attention until two weeks ago. secondly because liz program his program is incompatible with eu membership asthma routi marine program, and he is

anti-capitalist, anti-corporate. >> is the most pro capitalist candidate between le pen and the far-left candidate, macron is more mainstream, more conventional? should we greet -- if we -- if we like the markets and like the private sector, should we be hoping for him? >> i think either macron or fillon are mainstream pro market candidates. >> what was hollande? >> hollande was trying to carry the socialist party with him. he was personally probably promarket but elected on a platform that finances the enemy and that kind of stuff. so he had a hard time carrying the socialist party with him. now they're rebelling. >> what's the biggest election for markets here? >> between uk and france? >> yes. >> i would say absolutely france. the uk is about how wide a majority theresa may will get. that's the only question.

transis abo france is about the future of europe. will it help strengthen it or get on a path of leaving europe. >> the uk started that path. they were the first domino. >> i wouldn't think of it as a domino. france is a founding member. the uk was late to the party, always a bit on the periphery. i think it would have profoundly different impact. >> turkey? >> turkey seems to have decided that it will no longer court eu membership. >> they can't -- can you imagine turkey without the death penalty? if they joined the eu, there's no death penalty. >> it's clear after this referendum and the rhetoric since then that the president decided that that was no longer a priority for him. and frankly i think it will -- it's sad from many respects because turkey was the one shining example of sort of muslim democracy. and now that seems to be going the other way. from the standpoint of europe,

it might simplify the domestic political debate in a lot of countries. a lot polititicians were never thrilled about turkey joining. >> what do you think of morgan freeman as the voice of turkish airlines? have you thought about that at all? >> no. >> every time i see him on that ad for turkish airlines, it's owned by the government. >> that doesn't narrow down the number of commercial voiceovers that he does. >> i know, but -- >> he must do a couple dozen, doesn't he? >> i'm suggesting the politics. the politics of turkish airways and turkey becoming more complicated. >> you hear his voice, you go that sounds familiar who is that? the voice of god. i believe that's god. works well. thank you. i'm the only one who thought about this. >> yeah. when we return, big data comes to big government. steve ballmer joins us to launch usa facts, a new venture

designed to make the government's operations more transparent. then congressman darrell issa will join us to talk government waste. and later, olympian michael phelps will join us to talk about something close to his heart, water. he will tell us why conservation is important for consumers and businesses as we approach earth day. stay tuned, you're watching "squawk box" on cnbc. n we push the offer online? ian, iust da ick questi. le technoly n handcuffnyompany. yore sing thnew apre. ll go li monday?! yeah.elp frompe, wn finall t wwant to. with theig m of hybr it, everything computes. with theig m of hybr it, e power of a low votili investinprch. e power of smart b wer your client's pofolio with powershares. befonvesting, consider the fund's

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welcome back. johnson & johnson just out with its earnings, came in with an adjusted earnings of 1.83 a share. better than 1.77. company is giving guidance for the full year saying it expects to earn between $7 and $7.15 a share. the street's estimate is at the low end of that, $7.04. you can look and see johnson & johnson shares are up by 19 rents to 125.91. they talked about first quarter medical device sales, 6.29 billion. cardiovascular sales. worldwide farm suipharmaceutica of 8 been the 2 billio.2 billio.

>> for the year raising revenue guidance to 75.4 to 76.1. i think that the street right now is at 74.8. >> yeah. >> even though there's a couple hundred -- a bit shy, as you can see there. what is that? hundred? i need scientific notation. 100 million or so shy. raising for the full-year. you never know. lumpy. quarter by quarter, you try to figure it out. you close a deal later or something. for the full-year, looks good. the stock is -- what's it doing? up 19 cents. right now time for the executive edge. vice president mike pence and commerce secretary wilbur ross are in japan. u.s. cattlemen are hoping for a trade deal to increase beef

export exports. >> the boef industry was one of the big winners in the transpacific partnership. they want any new deal to be at least as good. japan is one of the biggest international markets for u.s. beef. they pay premium prices for cuts that we don't really eat. kelly sullivan runs santa rosa ranch, one of the largest producers in texas. it's been in her family for over 100 years. she says the export business adds about $300 to the value of every cow. >> my father likes to say we sell everything but the moo. there's nothing lost in a beef cow. and that is really the benefit that we have. that's where our market lies. >> under tpp, japan would have cut tariffs on u.s. beef from 40% to just 9%. the national cattleman's beef association said those lower rates could boost the 1.5 billion theres of beef that we

export to japan. without trade we can't eat all that beef at home. we need to be ability to mole t. japan has proven to be a great particular ket for market for us. >> vice president pence said he expects the dialogue started today will end in a new trade agreement with japan. both sides say they want concrete results soon. i will say this, it's clear for the beef industry that the steaks are high. >> got me with that one. >> i had to do it. >> very good. we like it. that was sizzling. >> oh. >> bank of america is up on this, 41 cents a share as the company reported 6 cents ahead of expectations. refr knew i revenue is also ahead. the estimate was 21.6, it's at 22.2. the stock is now up 1.3%. i think wilf will have more on this. coming up, when we return,

breaking down the government's operations like a business. that's the goal of steve ballmer's new project, usa facts. the former microsoft ceo will join us to launch the new venture at the top of the hour. as we head to a break, look at what's happening in european markets right now. whens llings... ...that's hearrougho the connected businessorld. at network securitlp protbuss, from the lge fancial maets tohe smalles transaio ssing cyber-attks in near re time and aumaticay deploying coteee epine rlofusiness nnecteanecd. th'the por of and.loying coteee

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bank of america just out with quarterly results. wilford frost joins us now with more. you've got a busy morning. >> i do, indeed, andrew. let's get into these bank of america numbers. a decent beat. receive knew $22.48 billion, expected to be $21.6. eps 41 cents expected to be 35. let's break down the reasons for this. very interesting comparisons to the banks that reported on friday. pnc and jpmorgan did well on net interest income and guidance where as wells fargo and citi didn't. bank of america have done well. they hit net interest income of $11.1 billion. an increase of $5% based on the guidance they gave during the quarter we were looking for about 10.8, 10.9. that's a beat and shows that interest rate sensitivity is working. something that happened for jpmorgan and pnc.

less so for wells fargo and city. secondly, in a similar fashion to jpmorgan and citi opposing wells fargo was global market performance. this is a big beat. trading up 23%. fixed income up nearly 30%. up 29%, and equities also up a high single digit number 7%. that is pretty impressive. so they've done well in the areas that jpmorgan did well on friday and in terms of net interest income and trading. let's also look at the loan growth number, because this is somewhere where they've been articulating their position of responsible growth very often. and indeed, their loan growth number has come in lower than jpmorgan. jpmorgan's core loan growth number was 9%. the comparable number for bank of america is the average loan growth at 6%. so just below which has been a trend throughout 2016 and in the first -- in the q4 numbers we had three months ago. similarly on that note, jpmorgan had a slight tick up in net chargeoffs in terms of provisions against loans.

bank of america's declined 13% to $934 million. tallies with that slightly lower loan growth number. of course the rhetoric on friday on all the calls was that credit was at historic lows and wasn't a concern either way. but that coming through in bank of america's nun beurres that the loan growth a bit lower, the net chargeoffs also a bit lower. decent beat across the board. up a quarter of a percent, not a huge move -- sorry 1.3% it's moved better and that comes off gains in the share price yesterday as well along with all the banks. guys? >> okay, wilford frost. we appreciate it. thank you, sir. other earnings to tell you about. shares of united airlines trading higher, follows better than expected quarterly results. the airline posting earnings of 41 cents a share, that compares to 38 cents on revenue of $8.42 billion. despite beating first quarter expectations united didn't take a victory lap following that incident last week in which a passenger was forcibly removed from the plane. in the press release ceo oscar munoz issuing another apology

saying it is obvious from recent experiences that we need to do a much better job serving our customers. this incident has been a humbling experience and i take full responsibility. this will prove to be a watershed moment for the company. investors will be listening for any more comments regarding last week's incident, any impact it may have on bookings when the firm holds its earnings call that happens today at 10:30 a.m. eastern time. the company is also put a self-imposed deadline of april 30th. so this month. and i think we'll probably hear earlier about some significant changes in policies beyond the ones that they've talked about thus far. >> that's going to be the big issue. >> right. >> because so far delta has reacted more quickly to this crisis than united has by authorizing gate agents to spend up to $10,000 almost, or authorizing some of the supervisors to spend almost $10,000 to look for volunteers to get off the plane. >> i don't know, but from the conversations i've had i think you're going to see a meaningful change in the process, the policies, how they -- how they remunerate people, potentially

whether they bump people at all. what involuntary and voluntary, how it all even works. >> it's a quick solution. if you raise the price enough you can get people to volunteer to get off the plane. money works. >> their crews need to be in certain places, and they need to use their own airlines to get the crew places. i mean, it would be nice if they had -- like maybe access to at least a smaller aircraft, if they absolutely need a crew to be somewhere, you can't assume you're kicking off your own passengers. they're using their own -- their own -- >> but the airplane -- >> we could talk about this for hours. >> how do you relocate your crew where you need them to be without using your own airline? maybe they need a little plane -- >> the cost of that is too expensive. >> it's cheaper to pay people to get off. by the way, tell me you wouldn't have had offers at $5,000. >> i know. there is a number. then you get people like andrew who are going to know how much they need it, and he'll be at $50,000, $60,000. >> nope!

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tipping off with steve ballmer the former microsoft ceo and owner of the l.a. clippers is here to talk government spending, tech in the business of basketball. a special one hour event is straight ahead. plus earnings from goldman sachs. dow component. yeah. another one. out in just minutes. we're going to break down the numbers. and other market moving news. and the president's push to buy american and hire american. he'll visit wisconsin today touting his plan. details straight ahead as the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box."

good morning, 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 joe kernen. we have a special guest here on set we're going to get to him in just a moment, steve ballmer. dow futures down by about 22 points. that is actually improvement from where we started the morning an hour ago. s&p futures down by 5. the nasdaq down by 13. part of the reason for this turnaround is the breaking news that was just out in the last hour. british prime minister theresa may calling for a snap election. a general election that would be june 8th. let's get to rowan marks he's been following these developments this morning. the markets were initially down but have rebounded. what can you tell us? >> yeah, that's right, becky. we saw that sterling slide very dramatically about an hour ago. now better than the last two months, starting price against the dollar.

what's interesting this has been a complete surprise to all here in westminster, london. the conservative prime minister theresa may riding very high in recent polls, really though two questions. why decide to have this election? and why to decide to have it now? let's have a listen to why she's so confident about britain's situation right now. >> despite predictions of immediate financial and economic danger, since the referendum we have seen consumer confidence remain high. record numbers of jobs, and economic growth that is exceeded all expectations. we have also delivered on the mandates that we were handed by the referendum result. britain is leaving the european union, and there can be no turning back. >> so, you know, nine months now after the election, the conservative prime minister theresa may saying essentially, brexit's not been the disaster many people expected. as for why they're calling for the election now six weeks from

today, because they think they have such a commanding lead over the main opposition the labor party here in the uk they're going to win by a landslide. right now they have 330 mps in a parliament of 650. they want a better mandate when it comes to negotiating brexit and they will require two-thirds majority tomorrow in parliament in order to pass this idea of having an election on june 8th. one of the things that theresa may's been talking about is why she decided herself to make the decision right now. >> i vb only recently, and reluctantly come to this conclusion. since i became prime minister i have said that there should be no election in 2020. but now i have concluded that the only way to guarantee certainty and stability for the years ahead is to hold this election and seek your support for the decisions i must take. >> now, joe, the conservative opponents, labor and their leadership, have welcomed this announcement. they've essentially said they

welcome this election on june 8th. it's a chance for people across the uk to decide on the future when it comes to brexit in particular. one of the other main opponents, the liberal democrats here saying if you want to save the idea of britain in the single market you should vote against the conservative majority. that will be something we'll see playing out over the course of election in the next few weeks. >> willem, thank you for that report. and now to totally confuse viewers we're going to go to your doppelganger, wilford frost. bank of america just a few moments ago. wilford, pointed that out? not everybody on tv in britain looks the same, do they? i mean, you put the accent together, and it's just very confusing for all of us at a certain age, i guess. >> also all of us on british television also have a name beginning with w-i-l. so you know, there we go. you're absolutely right, joe >> very much. >> i apologize to our viewers for confusing everyone. you want me to hit bank of america? >> i don't know. i thought you were going to talk about theresa may -- no no. see this is the problem.

yeah, please, wil. >> bank of america numbers. we broke them already. just to recap. eps of 35 cents. sorry excuse me 41 cents beating estimate of 35. revenue slightly ahead as well. as i already mentioned two clear areas of this beat, which we saw in individual bank stocks on friday but not across the board. trading very strong, particularly fixed income up a huge amount 29% and also net interest income at 11.1 billion was slightly ahead. so that interest rate sensitivity playing through for bank of america. if you were looking for a slight negative you'd probably point to the expenses, which increased to $14. -- story, expenses were flat at $14.8 billion. they had been looking to continue to reduce their expense bill. morgan stanley's estimate was $14.6. looking for a decline it was instead flat overall. so that's a slight disappointment. but otherwise you can see the stock up 1%. we are looking ahead to goldman sachs. they report in about 35, 40

minutes time. the strong performance in trading and investment banking from both bank of america and the likes of j.p. and citi both well for goldman sachs and morgan stanley tomorrow. the other thing i'll be looking into is their so-called investment and lending business. it was on an absolute tear last quarter and does suggest a slight change in tone and balance for goldman sachs in terms of the business they do. if that continues to grow at quite such the same rate, it will continue that trend of them moving slightly away from the core investment banking and doing a little bit more of that mezzanine lending. so we'll look for goldman sachs in about 40 minutes. guys? >> all right, wil, thank you very much. let's get you caught up on some other headlines this morning. it has been a pretty busy morning for corporate earnings. johnson & johnson earning $1.83 on adjusted basis. that was six cents better than the street was expecting. the revenue did fall a little bit below the street's forecast but as you can see the stock is down by just about $1.12 right now. 124.60. also another dow component united health grouch.

the health insurer beat estimates by 20 cents with quarterly profit of $2.37 a share. revenue also beat the street's forecast and united health raised its full-year outlook as a result. that dow component is up by 2%, a gain of $3.42. president trump's going to be signing an executive order today designed to promote the hiring of americans. it recommends changes to a temporary visa program the h-1b visa program used to bring workers from overseas to the u.s. he'll be signing the bill with a visit to toolmaker snap-on. and treasury secretary steven mnuchin is still expecting tax reform to be enacted this year but the original goal of trying to get it done by august was a little bit aggressive and has been pushed back by the debate over health care reform. >> okay. imagine if the federal government treated citizens like public companies do. shareholders. that's the idea behind a new site launching today that paints a data driven portrait of america. former microsoft ceo steve ballmer is here to start something called usa facts.

he's founder and he's also the owner, of course, of the l.a. clippers, and you're launching this this morning. and it's a fascinating project. i got to write about it. we talked a lot about it in the past. tell us what it is. >> well, when i retired from microsoft and started getting involved more philanthropically one of the big questions, at least in what we focus in on is, is the sort of lot of disadvantaged kids, government provides a lot of the spending. so i wanted to learn more about this topic, i'm a numbers guy. where's the money come from, blah, blah, blah. and i started searching around. things were hard to find. then i got even a broad interest. what percentage of the government money goes into these topics? and i said, where the heck is the 10-k? i ought to be just able to read a 10-k. that's what i used to do on our competitors when i ran microsoft. no such document really exists. at least not the way i'd want to see it, where is where does the money come from, where does the money go, and what kind of outcomes does government get?

so almost three years ago we started on this endeavor. >> so how many people -- tell us what's in it, and how many people have been working on it, and what can we learn? >> well, we decided to take, again, a public company point of view. so we created an annual report, this is a little annual report summary, if you will, shareholder letter. >> right. >> we have a detailed annual report. this thing is about 50 pages. the short form is about -- the long form is about 300 pages. and then we created a real 10-k. we used the 10-k format. 10-k section headings, and that is our first pass. we have a lot more work to do on the annual report. on the 10-k. more data, deeper data. that's not very current in some regards. because some of the sum arization done by government is two or three years old. but we're using only government numbers on the theory that says government should run itself by government numbers. just like a private company runs

on the basis of the numbers it has about its business. >> i can't believe this is the first time somebody's done this. >> there are things out on the internet but there's nothing that was as comprehensive, and gave as much context. part of the problem with, i'd say today's political dialogue is people snatch at one number out of the air. and not put it in either historical context, or the context of other numbers. there is a 10-k written by the treasury department. it's got no outcomes, focuses ohm onle federal government. but we borrowed liberally from some of their writing in our 10-k. >> biggest surprise to you. >> i'd say the biggest surprise, first, was how hard it was to find these things. >> you mean to put all the data in one place? >> yeah. i mean there's data bases all over but i would have thought more of it would be summarized some place. the other biggest surprise, probably, was looking at the employment data for government employees. of 133 million people employed in america, 23.2 million work for government in some form.

there are not that many quote bureaucrats, unquote, but the number one employment sector of government, almost 11 million, education. professors, people who take care of buildings, k-12 teachers. by far the overwhelming percentage of government employees. >> steve, does anyone earn a bonus based on performance? >> well, that's a good question. the truth is, not that i found. i didn't find any bonus-based performance. >> you bring -- budget under time. you do something well, your students get, you know, score better than the national average, you get this? is that occurred to anyone in government? >> in some of the contracting you'll find that. defense contracting. >> you do? >> have some performance contracts. my wife and i have been studying what has been done now for performance based contracting. in the social service sector. not just did you process so many kids, but are the kids getting healthier. you didn't just put people in

jail, but when they came out, they didn't go back to jail. their recidivism was low. but some of that kind of contracting is going on. >> it seems like if you're going to get paid the same, whether you're good at what you do, or whether you're not, you're going to have the type of performance that we typically see, or at least we think that we see in a lot of it. >> i'm not going to argue with you that there's a place for performance-based work. that's the way we ran microsoft. >> -- some accountability. >> are there things in here, now that you've seen the numbers, talking about accountability, where you say to yourself, okay, this is just obviously not being done as efficiently or as well as it should be? if you're an investor, a shareholder in this company called the u.s. of a. you look at this information, if you're an activist investor you'd want to call up the ceo, maybe donald trump, and say, we could do better and here's where we could do better? >> well, doing better, of course, is normative thing. let me give you an example.

something like 9% of bridges in america are structurally deficient. and we've been spending an increasing percentage -- an increasing dollar per capita on bridges. now, some people might say pretty good performance. and that number is down from 27% or so in 1980. >> 27% of? >> bridges were structurally deficient in '80, it's down under 9%. and we've been increasing. now some people might say, hey, i'm a mom with my baby in the car. 9% is still too high. >> right. >> but things are getting better. the question is, are they getting better fast enough for the amount of money? because everything's budget constrained in this world. >> are there areas you think that it's clear as day now that the numbers you have them and you could lay them out where things are getting worse? materially worse? >> i would say in general things are getting better. at least in my perspective. >> right. >> i do think, and this relates to some of the philanthropic stuff we do, there are kids who, by virtue of where they're born, are trapped in poverty. if they're born, if parents are

in the bottom 20%, then they have a 50% chance of staying in the bottom 20%, that doesn't seem okay to me, and i don't think that's getting any better. >> and the other question i was going to ask is, you make the point that you realized at some point that so many of these nonprofits that you support actually are supported by the government. or supported by taxpayers. >> yeah, we'll find that most, at least in the social service world, many of the nonprofits we support are as much as 80%, 85% government funded. and i don't think we found one that's less than 50% or so government funded. there are a couple. but i'm giving you the basic structure. >> right. >> and that's because what they're doing is essentially tapping in to what we call in the report, aid to the disadvantaged money. and serving kids in need. whether it's subsidized preschool, whether it's medicaid dollars being used for behavioral and social and emotional health. >> right. >> those kinds of things are a big deal here. >> go ahead.

>> what do you do with this now that you know this? how does that change how you invest philanthropically? >> well, again, i started on this for philanthropic interest. and it tells me a lot about the fact that medicaid dollars are kind of the bottom line when it comes to helping disadvantaged kids. and education dollars. and if you can't get those dollars to work harder, then you have a problem. so that from my philanthropic hat. when i got started on all of this, of course, i then developed a broader viewpoint. and what we're trying to do now is help create at least a foundation for a more fact-based discussion of what's going on with government in our country. adjectives are far apart. huge, small, that kind of partisan language. but 10 and 11. those are harder to say are huge and small and relative to each other. and we hope to be able to ground some of the discussion. this is really starting point. we need more data. i think what we'll try to do,

maybe, is frame up an opportunity to have somebody on the right and somebody on the left debate some of these topics. but having to be strictly accountable to the real number -- >> are there numbers -- >> -- try to change some of these stuff and the materials you can use for civics classes and the like. >> are there numbers that you think have been cherry picked in the political domain that now when you look at them in black and white you say, okay, i see that they were cherry picked, and i thought one thing and now i think something very different? >> yes. >> okay. >> let's -- it's a classic. but let's talk about foreign affairs and foreign aid. $40 billion roughly. $5.4 trillion of government spending. if you do the math, i think that winds up being about 0.1%. and if you look at where our foreign aid is going, it goes primarily -- or not primarily, there is an a large amount of that large percentage that goes in to israel, egypt, afghanistan, iraq. it's not in all measures going to poorer countries.

a lot of it is going to allies in places where there's a lot of military and political strife. >> well steve ballmer. you're going to be sticking around. >> i am. >> we can talk about the second screen a lot now or at least i've been talking about it recently. you can hang out on the second screen. usafacts.org is the address. >> or @usafact. >> on twitter. >> as a twitter shareholder. >> those data nerds can check it out and we're going to come back with steve in just a little bit. >> as andrew mentioned we'll have more from steve ballmer coming up after the break. let's take a look at the futures and see where things stand this morning. futures have come all the way back. dow futures down only by less than 6 points right now. we were down by about 60 points earlier this morning. on the concern about what theresa may may have said. we know that she's announced a snap election as a result, we saw markets pick up quite a bit after that. we've also seen some better than expected results. dow components that have been helping that out.

s&p futures down by 4. the nasdaq down by 11. and if you check out the ten-year note the yield right now stands at 2.237%. stay tuned. you are watching "squawk box" here on cnbc. th we're gonnao innd rebladdeour '67 coet. my!? it'a you don've.. afla paou cash, so o u migh ha to sellha sweet tte e stn've.. afla over yr rent. more funny juice sweet ttbut my papgavefla over yr me...that...r. whato you shou had? afla ohh, i lovdoing that. health c change, but theif you love doesn't he to. ohh, ikeep youlistylealwith- afla

welcome back, everybody. turning back to our special guest this hour, former microsoft ceo and usa facts founder steve ballmer. and steve, we want to talk to you about technology, about so many things that are happening in that arena. looking at microsoft shares, with stocks up above $65 today, it's been on quite a tear. i was digging through numbers trying to figure out how much you owned of microsoft, because i thought you were one of the biggest shareholders, and yet in the top five listings of individuals you're not there. you are one of the biggest shareholders, aren't you? >> yes, i am. but as a private citizen, not a mutual fund, not an insider. my share ownership is my privileged little data. >> so, how do you feel watching shares of microsoft do so well? >> i'm delighted. what's not to be delighted about? of course you really only care about the share, you know the price of the share of stock on the day you're going to sell it. and i hold right now, and i'm still nonetheless delighted to see the price of stocks that

high. >> will you say how much you own or give us any rough estimate? i saw bill gates and his ownership is i think something around 2.3% of the shares outstanding. >> yeah, it's north of that. it would be north of that. you know, i did make some adjustments last year, particularly as we focus in on our philanthropic work but it's certainly north of that number. >> i would hope so. >> oh, joe! >> such a good number. i mean when it comes -- it really. it's awesome. and it's, you know, it's a great country. and it's awesome. >> what do you think about what's happening at microsoft these days? because people are talking about how it's one of the top three when it comes to cloud. where do you see the future of microsoft and where do you stand on that? >> yeah. no, i think the company is well positioned. on the other hand, a lot of work to do. i think that on the cloud side, with office 365, and azure, the company's got a real shot. but not a birth rite.

they're going to have to push really hard with azure versus amazon web services. on the client side of the world i think the work that they're doing with the microsoft surface, hardware, devices, is really good. but again, good competition from apple, and the like. >> you think more these days about amazon and amazon web services? or do you think more about google? in terms of the competition. >> i would say as a share owner. >> right. >> i think more about amazon. and amazon web services. in the kind of day-to-day, and yet the latent threat to office 365 really still exists from google. and that's an important stronghold for microsoft. with amazon web services, azure is the challenger. it has only one way to go. which is up. with office 365, there's more downside than upside. and that's a google risk. >> when you look at what's happened let's say over the last year or two, what have you been most pleased with at the company? >> well, i actually, the thing

i've been most pleased is the progress in the surface product line and what's going on with xbox now with so-called scorpio release. that will come out. i think the hardware's progressed nicely. that would be one. and second would be the march forward of office 365. >> do you talk about sacha at all? >> i do. i send feedback. there's some things we learned doing usa facts because we want to do better visualization. we're built on the azure stack. in terms of what's going on with the nba we're taking a look at what does it mean to do interactive media and where does virtual and augmented reality. sure i'll fire off essentially product feedback to him. and, for the balmer group, our little entity as a user if we're seeing something that doesn't seem right to us in skype or one of the other products, i'll drop him a note. >> twitter. what do you think? is there a way to fix it at this point? >> i think the answer to that question is yes.

i think twitter was overrated. this is a stock issue now. how a company is doing is not always directly related to its stock price. believe me i know that. >> you're a stock owner. what price did you buy in it? >> at a higher price than it is today. >> okay. so -- >> just to be brutally honest. >> and -- but you think it's fixable at this price? >> yeah, i think there's upside to this price. absolutely i think there is. >> and if jack dorsey called you and said tell me what to do, run it, what would you tell him? >> the first thing i'd tell him to do is probably ignore his short-term stock price because at the end of the day what they have to do is worry about the product innovation, and they have to worry about the ease of use in marketing. those are two things i've been consistent about, and they have to worry about the cost structure. because there's high cost structure has many bad problems, including confusion and chaos. which is worth more than the economic impact. as those things get better, i think people will recognize it

and the stock will show upsides. and i'd remain open to offers if they come in. >> okay. we're going to continue this conversation with steve. i want to find out whether you think microsoft should own it and whether what you think of snap these days as evan spiegel, the next facebook or the next twitter. coming up we're going to go inside the business of basketball with steve ballmer, his l.a. clippers are hosting the utah jazz tonight in the nba playoffs and he plans to get there. from here to there. today we're going to talk about technology and how it's a game changer on and off the hard court. time now for today's aflac trivia question.

now the answer to today's aflac trivia question -- good morning, welcome back to "squawk box" right here on cnbc. we're live at the nasdaq marketsite in times square. among the stories that are front and center at this hour, amid

this morning's flood of corporate earnings, we're getting some key economic reports. about an hour from now we're going to get march data on housing starts. then at 9:15 eastern time we get last month's industrial production numbers. also harley-davidson shares are under some pressure this morning. the company did beat estimates by three cents with profit at $1.05 per share. but revenue was below forecast and profit fell by more than 25% from a year ago. hurt by a drop in motorcycle shipments. that stock now down about 4% in the premarket. also, a legal fight taking place in the vacuum cleaning industry. i-robot, maker of the roomba. who's got a roomba? suing competitor hoover and stanley black and decker. i-robot says its rivals are using its patented technology without permission to make their own autonomous vacuums. i've always wanted to get one of these things. you buy them like at sharper image or something, right? but i've never done it. nobody wants to take me up on that. that's okay. >> you don't do any housework,

do you? >> occasionally. occasionally i step in. >> you take out the garbage? >> yes, actually. >> i'm a garbage guy. >> but not a vacuum -- >> but -- some people are ocd. >> i used to love to vacuum. >> the lines. >> i love the lines in the carpet. >> there are people -- >> ballmer doesn't know what we're talking about. >> i love looking at them. >> in the coming weeks insurers must decide whether to participate in the 2018 aca exchanges as the government decides whether to keep funding subsidies that make participation more attractive for low income enrollees. kayla tausche joins us now with more on the battle brewing over health care. kayla i think there's a piece today in the "journal," insurers delaying decisions because they don't know really what it's going to look like in 2018. actually later this year. >> yeah. in states delaying the deadlines, joe, for those insurers have to turn in their rates for next year because it's not just whether these companies will participate. it's how much they'll have to raise those prices on affordable

care act plans to actually make it worth their while. insurance executives and lobbyists to that end will meet today with the white house's administrator for medicaid and medicare and plan to press her on the cost sharing reductions. those are the payments you just mentioned. it's roughly $7 billion that hhs reimburses insurers to shoulder some costs for lower and middle income enrollees. america's health insurance plans which is the industry's lobby wrote the president last week saying quote the most critical action to help stabilize the individual market for 2017, and 2018, is to remove uncertainty about continued funding for the so-called csrs. the white house is paying the subsidies while a lawsuit is outstanding. but has until may 22nd to decide how it plans to resolve the issue. in the meantime, the uncertainty has caused some states like kentucky and new hampshire to delay deadlines for next year's rates to be due, but pricing for plans in california, connecticut, maryland, and oregon, are due on may 1st. that's in just a matter of days.

and oliver wyman survey found half of exchange participants said it was still too early to determine prices for 2018 but the rest of the respondents said they would be raising prices with most planning increases 10% to 20%. cancelling the csr payments would force insurers to raise prices sharply, as president trump previously said he expected to happen this year. >> you're going to have explosive premium increases. and your deductibles are so high people don't even get to use them. it's imploding and soon will explode. and it's not going to be pretty. >> there are questions on the hill as to what congress can do once it comes back from recess, joe, next week. whether there could be something that is included in the spending bill that's due on april 28th. but, despite the optimism that something could get done on health care in the next few weeks, i think insurers are trying to shore up as much certainty as possible and are not really getting it in the meantime.

>> yep. i don't know where we are, either. we're back to trying to figure it out for tax reform now. i don't know. stay tuned, kayla. coming up we're going to have the business of basketball with steve ballmer. and the futures at this hour. the losses, the dow -- united health care is beefing up health insurers sharply higher. that's helping the dow. we'll be right back. a w volatility investing approach. the power of smart beta. power your client's porto th powershares. befonvesting, consider the fund's investment objecves, risks, chaes andenses. call 80083-0903 for the prospectus coaini this informatio readt fully. distributed by invesco distbutors inc.

listen up, everybody, goldman just out with its earnings. looks like the company earned $5.15 a share. street was looking for $5.31 a share. it also looks like the revenue is a little light. we're still waiting to read the release to make sure those numbers are apples to apples. but the revenue number is $8.03 billion. the street had been anticipating $8.4 billion. as you can see, that stock is down by about 1.4%. we'll continue to dig through these numbers. we'll have much more reaction to goldman sachs. plus, much more from steve ballmer. he's our special guest this hour. "squawk box" will be right back.

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do not take xarelto® if you have an artifial hear valve or abnormal bleeding. mecal dental befoproceduresed and before startin xao® aboutnyondions, such as kiey, liver, leedproblems. you've got to learn all you can... ..o help protect yourselfromanp. lk to your docr there's more to know. before we went to break goldman sachs reported results, and now at one point i looked down the stock was down about $5. the same way that united healthcare, a high priced stock was helping the dow, goldman sachs now hurting the dow futures. and just noticed dow futures are now down more than 30 points

again. hopefully we have a quick chart to take a look. that's goldman sachs. down about four points. here's the dow futures right now down 35 again. we had pared it to down three or four. on united health. care and j&j and some other numbers. get to wilford frost who has more on the numbers. wilford, revenue were light, too, right? >> joe, this is a big miss. revenue $8.03 billion. we were expecting $8.8. eps was 5.15. we were expecting 5.31. we've got the fixed income commodities and currencies so-called fic, fixed income area, essentially flat year-on-year compared to the first quarter. that first quarter last year, of course, was so disappointing. across market revenues. they are flat year-on-year compare that to jpmorgan. 17% growth year-on-year. bank of america, 29% growth

year-on-year within the fixed income portfolio. goldman sachs flat, really missing out in terms of the equity business. we were expecting that to be sort of flat. we got jpmorgan low single digit growth. we got bank of america 7% growth. all of this in equities. goldman sachs meantime down 6%. so the trading revenue is where the clear miss is. particularly fixed income. also on equities if we just go through the other areas the investment bank $1.7 billion in revenue. we were looking for $1.77 or $1.75. so that's basically in line. the investment and lending business, which i mentioned earlier, came in at $1.46. again, just below what we were looking for. but clearly trading is the big area. it's worth a big portion of their earnings overall and it was a big miss. so eps coming in at $5.15 versus forecast $5.31. the stock down 4.1%. >> maybe gary cohn was the brains behind this operation.

i don't know. lloyd, what's -- mrs. gary. would gary -- >> joe we should add one of the reasons we didn't see the likes of citi and jpmorgan perform better on friday is that this is a more cyclical part of the business, not structural. so, you do get quarter on quarter sort of outliers in trading. that is the nature of the beast. >> well, if you don't have -- you're not going to play with me? if you don't have the right guy making the trading decisions, maybe you don't do as well. >> yeah, i just want to -- this could be a cyclical thing. the bank of america quarterly earnings, the call just started. >> i'm just needling lloyd, to be honest with you. >> okay. >> i'm sure that would really, if he thought -- he thought gary cohn was actually the coo or whatever, president. the nba, we're going to talk that now. postseason getting under way this week. 16 teams competing for the championship. l.a. clippers owner, former microsoft ceo steve ballmer joins us. i was just checking out my probabilities. the clippers, they have 100%

chance to make the postseason. >> that's true. >> we've already started the darn thing, joe! >> no flies on that. >> that's my headline. and i think 51% chance to advance, i guess, is also, that's i mean my cbs app has really given me some good stuff here, right? who do you like -- i know you like the clippers. do you -- you think there's a chance to do that? or are you realistic? or how -- >> we've got a team that could take it all. we really do. if we play right, if we play fast, if we play with the right spirit, we have a team that could take it all. now, you know, the oddsmakers pick other guys ahead of us. but i think we're everybody -- we're the guy everybody doesn't want to play. we've got three absolute superstars. chris paul, blake griffin d'andre jordan. nobody really wants to -- wants to play us. on the other hand, there are teams that are favored, and that's not our problem. our problem is to go out there and win a ball game tonight. >> i try to figure out the state

of different sports. and with baseball, i don't know what they need to do. i understand how local markets work. and if i were living in cincinnati, i'd be watching the reds every night. but for me to watch an out of just any two teams happen to play one of 162 games, there would have to be nothing else on anywhere else for me to watch that. and as a basketball fan, i'm just going to tell you that the nba does not represent the same thing to me as the final four. i don't know why. i mean, i was glued to those games. is there a way to make it must-see-tv that they're not doing right? that you're not doing right now? >> yeah. i think if you look at the nba playoffs, which is really the equivalent to the final four. >> so it gets -- >> the regular season i'll bet you watch many fewer ncaa games than you would nba games. >> no. >> okay. then you -- then you're an anomaly. >> but i'm not a knicks fan. >> then you're an anomaly. when you get to the playoffs you

get a lot of viewership. you really do between tnt and espn and abc they do a really good job of getting viewership. the one thing about the final four is the games are just all played in a very tight window. you know, we'll have games on almost every night of the week through the playoff season. not true for the final four. you know it's thursday. friday, saturday, sunday. for a few weeks. >> is that the model? >> is that the model? >> is that a better model? >> no, i don't think it's a better model. it's not a better model in our sport where you're playing seven-game series that are just, you know, physical battles. i mean, the amount of wear and tear, you know, you need a little bit more than a day off sometimes to play nba basketball. it really is a whole different level. the college game is great, but if you want to see talent and physicality -- >> but what about defense? >> what about defense? >> yeah. >> you watch the defense in the nba playoffs? >> that's why -- shot clock, maybe it's the shot clock.

seems like running it always just seems like they run down and then they -- >> well some teams play better fast. we play better fast. the jazz, they play a show game. they try to shoot late in the clock. we try to absolute early in the clock. >> what do you make of valuations in professional sports, given the conversation we have all the time about the future of espn, the struggles that they're having both with ratings and what that will mean to carriage fees, what it will mean to regional carriage fees for regional networks. that involve sports? >> well, i'd say two things. number one is, we the teams own nonsubstitutable rights. whoever carries us, if you're a fan of the, clippers, or the knicks, or whoever it is, you're going to want to see us, whether we're on espn, or some place else. >> but you look at what's spn's done and say they've overpaid? i mean, investors might suggest they've overpaid and next time these deals come up, the numbers may not be as attractive. >> well, i certainly wouldn't

say espn overpaid for basketball. and i mean that genuinely. but, it is important to think about what it would mean, not saying it will go there, what would it mean some day if the leagues or the teams were going directly. and that certainly happens in some sports already today. >> what sports are you talking about the nfl? >> no, no, in what is it, is it wwe. >> right. >> wrestling. >> has a direct -- >> just had the -- >> has a direct connection. if that winds up being the way to go, what you'll wind up paying is a little bit more than you would for your cable package, but you're buying exactly what you want. you want the clippers. you want the knicks. or you want the whole nba. whatever it is. so i think the economics, you know, can be good. for the teams going forward. when you talk about valuations. now valuations are not p/e based in the basketball business. i certainly didn't pay, you know, a wonderful p/e for the clippers. it's a combination of, you know,

sort of scarce merchandise and a little bit on earnings. and i think i kind of set the market a little bit when i bought the clips. >> right. >> sports valuations seemed to go up pretty quickly after i made my purchase. >> i might like the nba more if i was sitting where you sit. i think i might really like -- >> and an owner's fee? >> if you're sitting where i sit, you don't like it. if you're not just full of adrenaline the whole game. then you're comatose. >> i think i'd like it, too. i think i would, too. but i don't sit where you sit. unless you invite me. >> when we come back we're going to wrap up our special hour with former microsoft ceo, owner of the l.a. clippers steve ballmer. check out the futures this morning. you'll see that the dow futures are down 36 points. goldman sachs disappointing with its latest earnings. we'll have more when we come back in just a moment. also, more on british prime minister theresa may's call for an early election. yeah, i just saved a whole lot of money by switching to geico. huh. we should take a closer look at geico...

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welcome back to "squawk box." want to get back to our guest host this morning. steve ballmer is here with a big announcement. announcing usafacts.org. your new project online to look at different data sets, put all the government numbers together in one place. i don't know if we should tell the public this. the site's doing so well that it's down. >> it's getting hammered. >> you're the tech guy. >> we've got our tech team working hard. we're in beta. >> you're in beta. >> you know, the notion of scaling up is important. we're not using microsoft-type

developers. we're using people who are very good developers, but don't come from the same kind of scale background. that folks would at microsoft. >> being pinged all over. >> usafacts.org. and if people are really dying to see something right now. preview.usafacts.org is also up. >> see. >> the back door to get in. >> one of the questions we had mentioned, earlier in the hour, was i had mentioned evan spiegel from snap and we were talking about twitter, you're an investor in twitter. do you look at snap and say to yourself, this may be challenged like twitter? or you say this is the next facebook? >> as a 61-year-old male, i'm not an expert at snap. i don't live the snap life. my kids do. that's sort of a classic thing. so it's hard for me to assess. facebook has become a complete juggernaut. >> right. >> and i get being a juggernaut. because microsoft is a juggernaut. juggernauts have certain ability to move into adjacent territory and put real pressure on the

small up and comer. what i expect a lot of that pressure on facebook from snap? yeah i would. >> what do you think of apple these days? >> apple -- >> talking about juggernauts. >> apple is a highly profitable company. as a ceo i value profit. i think that's what you're supposed to do for your shareholders. so i think you could say they're doing a very good job. >> you're being compared to tim cook and tim cook's been compared to you. >> i take that as a compliment. >> in terms of someone who has come in after a founder, how hard is that? >> it is hard. because there's a luster to being the founder, and the technical visionary. and neither tim nor i will get that luster. on the other hand, the business does have to be run well. new products need to be invented. founders don't last forever. i think we did some really good work. we started xbox on my tenure at surface, azure, office 365. everybody -- everything anybody talks about today in terms of the future of microsoft, we started when i was ceo. >> okay.

steve ballmer, we appreciate your being here. it's been great. usafacts.org will be up and running soon enough. >> yeah, absolutely. >> thanks for being here. >> thank you all. >> we've still got a big hour to come. congressman darrell issa of california is going to be joining us to talk government spending and respond to some of what steve ballmer was just talking about this past hour about getting numbers and real facts. plus, olympian michael phelps joins us. he's teamed up with colgate-palmolive to make waves in water conservation as we head towards earth day. and then the f.t. reporting the controversial border tax won't survive. we'll talk about the future of tax reform with american action forum president douglas holt eken. "squawk box" will be right back. ♪ predictable. the comfort in knowing where things are headed.

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breaking news. british prime minister theresa may calls for a snap election. >> i have concluded that the only way to guarantee certainty and stability for the years ahead is to hold this election and seek your support for the decisions i must take. >> the global market impact is straight ahead. "squawk box" newsmaker former microsoft ceo steve ballmer wants business to meet government. >> what we're trying to do now is help create at least a

foundation for a more fact-based discussion of what's going on with government in our country. >> we're going to talk to congressman darrell issa about tackling spending. plus making waves. olympian michael phelps taking on water conservation one drop at a time. he joins us on set 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. and welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in times square i'm joe kernen along with becky quick and andrew ross sorkin. the futures right now, last time i looked down about 35. now down 58. 59 on the dow. goldman sachs missing on the bottom. line and the top line hurting the dow. although united healthcare is helping the dow.

s&p down 5 and the nasdaq down more than 10. breaking new this morning. british prime minister theresa may calling for an early election to be held in june. will willem marx joins us right now. >> this has been a big surprise for a lot of people in westminster. a lot of people asking why decide to do this now. theresa may gave some answers to that earlier. >> i have only recently and reluctantly come to this conclusion. since i became prime minister i have said that there should be no election until 2020. but now i have concluded that the only way to guarantee certainty and stability for the years ahead is to hold this election and seek your support for the decisions i must take. >> now the prime minister and members of her party saying this is a good time for her to seek potentially a stronger mandate when it comes to negotiating through brexit over the years ahead. there is a bit of fiscal

opportunism, her party riding very high in some polls over the weekend. she's more than 20% ahead of the labor opposition here. they've, however, welcomed this election. they hope that they can fight against the conservatives led by theresa may in this election. the third party here in the uk, the liberal democrats, essentially the anti-brexit party they're talking about keeping the uk in the single market, something that theresa may said she's willing to give up entirely. >> willem, we watch stocks initially kind of sell up on the expectation of this and pick up a little bit of ground after the announcement actually came out. but now i just see the ftse is down by 1.8%. a little more uncertainty introduced back in? >> yeah, as if there wasn't enough already here we've got the french election next month. we've got, of course, the german elections later in the summer, as well. these elections will be june the 8th. so six weeks over the course of those six weeks, we're going to see a lot of arguments about brexit. this would essentially become the brexit election. but it's going to be a very interesting one with the main opposition party quite divided

in terms of their decisions on how to take a stance on that issue. >> i think joe's right. this is uncertainty that is going to give us a bit of a turn. willem we appreciate your time this morning. we'll talk to you again soon. folks it's been a busy morning for earnings here. bank of america posting earnings of 41 cents a share. that was a six cent beat. revenue also topping expectations. we'll bring you the details later this hour. that stock is up by almost 1%. goldman sachs posting a top line and bottom line miss. earnings per share came in at $5.15. that was 16 cents below expectations. goldman announcing that it will raise its dividend to 75 cents a share. that's a gain of ten cents but still the stock is under pressure from that surprise miss. not something that happens very often at goldman sachs. that stock is down by 3.4%. that, in turn, as joe mentioned, has dragged down the dow as well. we saw a reversal after getting all the way back to the flat-line this morning. dow futures now down by almost 60 points. the s&p futures off by 4.5 and

the nasdaq down by 10. dow component johnson & johnson earning $1.83 a share for the first quarter. that was six cents above estimates but the revenues did fall below the street's forecast and that's also adding some pressure to the dow as that stock is down 1%. and another dow component, united health group beat estimates by 20 cents with quarterly profit of $2.37 a share. revenue was also above the street's forecast. and united health raised its full-year outlook so that it's helping the dow to the tune of 1.7%. >> former microsoft ceo steve ballmer launching a new initiative today, usa facts promoting more transparency in government spending. he joined us in the last hour. >> where the heck is the 10-k? no such document really exists, at least not the way i'd want to see it. which is where's the money go -- where's the money come from? where does the money go? and what kind of outcomes does government get? so about almost three years ago we started on this enzephyr. >> talk more about streamlining spending, joining us right now

is congressman darrell issa. he sits on the committee on oversight and government reform. good morning to you, congressman. >> good morning. and this is a good news morning with steve ballmer's further announcement. >> it is. i don't know, have you had a chance to play with it at all? >> you know, i looked at it, and to be honest, it -- it's a continuation of a number of efforts, so i think the difference with steve is, his willingness to put the necessary dollars behind it. >> and when you look through the numbers broadly speaking, whether it's on his site or elsewhere, right now where is the low-hanging fruit, if you think we're spending too much? >> you know, the low-hanging fruit really isn't going to be one occurrence. a lot of people look for that $10 billion, half trillion dollar item and they're always talking about closing departments, and programs. but the reality is, years ago, for example, they discovered that, and this will tell you how many years ago, that the federal government was paying more for an ibm selectric than the state

of california. it's really the vast databases that now, by law, under the data act are required to be machine searchable that are going to cause people to be able to ask questions, use advanced search and logic to look for anomalies, to look for any time, for example, a vendor who's been discharged now those same individuals have formed a new company and may be ripping off the government to find redundancy, for example. president trump has ordered a study to look for the same programs occurring in cabinet position after cabinet position. and so the fact that steve's organization and the open gov foundation and a lot of the other data organizations are going to be able to search all the data, all the financial data, particularly, in xprl format so they're able to compare let's say spending

anywhere with spending everywhere is going to give us an opportunity. and that's what you would do at a microsoft, that's what you'd do at caterpillar corporation. that's what you'd do in the corporations that are worried about saving every penny and not wasting, versus the government that often doesn't know where they spend money. >> congressman, one of the things just looking through the data myself over the past couple of days, ultimately, if you really do want to take a chunk out of it, if you really do want to reduce spending you have to touch entitlements and that of course has been a third rail, and a rail that president trump has not wanted to touch. is that something that you think has to be addressed? >> it is. but remember, there's two parts to entitlement. there's entitlement, the actual benefits to people. and you know, toning down some of the expectations in social security, or medicare, medicaid, and so on, is going to be difficult. there's no question at all. and usually it's a long-term. it's something where you make changes that are going to affect people 20 or 30 years out.

but when it comes to taking care of fraud, and waste, i'll give you an example. medicare. we have been told by the inspector general that as much as $100 billion is lost through fraud in just that program. you know, they don't say it quite this way but they used to, you know, $100 here, $100 billion there, pretty soon it's real money, that's what we're dealing with is chunks in entitlements that are so large that a 2% or 3% savings is huge these days when you consider what a large portion of our national budget they are. >> right. you know the other piece of it is the top line. the revenue piece when you look through steve ballmer's numbers you realize how important the revenue is, and then you get to the issue of taxes. and what to do about them. everybody wants lower taxes. but then you decide you need to pay for all of this stuff. where do you think tax reform really is at this point in the game? you heard what steve mnuchin recently said about corporate tax reform just yesterday. he thought it was going to come

in august. that's now been pushed back. a lot of people thought it was pushed back even before then. what do you think is realistic? >> i think realistically we have to look at what we tax. not how much we tax. the idea that there will be lower taxes with current or likely spending simply is not accurate. what is accurate is that if we -- if we slow the growth of government spending, and waste, we can eventually have lower taxes. but during the interim, going from taxing things that we want more of, and not taxing things we should want less of. an example is investment. we should not be taxing investment. if you make $100 million or $1 million or $100,000 investment, depending on the size of your company, right now what we do is we say that capital investment has to be written off over decades, rather than saying you know what? we want investment to be effectively tax free, and spending and other things to be where we put the taxes. so it's a change in policy that

will cause growth. it is, in fact, a change in spending that will allow us to have truly lower taxes. >> congressman, before we let you go, it is is tax day. your disclosure transparency guy, there's a story in "the new york times" today saying that more than a dozen republicans and of course democrats have called on president trump to release his taxes. what do you think about that? >> one of the interesting things is how many members of congress who have the same right and protections have released theirs. there's a tradition of releasing taxes and candidly i wish the president would release a summary. but that's his decision. he's protected by law. what i would like to see and going back to work on is expanding financial disclosure for everyone. that's members of congress. members of the cabinet. and the president. and i think we can do more with that. but every time somebody says they want to see his tax returns, that's probably look at how much he gives to charity. if you want to know where his investments are, and what could be a conflict of interest, look

at financial disclosures. that's why i think we need to expand that for everyone, including members of congress, who often call for disclosure, and make very little of their own. >> okay. congressman issa, we appreciate your time, your perspective, and waking up early this morning on the west coast. >> my pleasure. >> thank you. >> bank of america and goldman sachs both out with results this morning. joining us right now in the "squawk" news line is marty mosby director of bank and equity strategies. and marty the big surprise is goldman sachs, which 90% of the time beats estimates. this time it missed estimates by about 16 cents on the bottom line. what happened? >> well, we going into earnings season that goldman was the most vulnerable because of the perception that the market had. it was kind of percolating that you were going to see a lot more capital markets activities you're going to be able to see a lot of these other pieces of the puzzle, if it was tax reform or deregulation really help gold plan. what we are is a contrast

between goldman being a broker dealer that's kind of moved into being categorized as a bank, and bank of america which is a traditional commercial bank which gets a lot more benefit from higher interest rates especially on the short end of the curve. >> bank of america did say that it was an increase in net interest income in both loans and deposits that helped out. but both of these banks pointed to investment banking as a point of strength. >> well, we're seeing investment banking, again, it's going to be the debt placement. so it's not the capital markets and investors making decisions, because they're still waiting to see some clear path or direction now that we've kind of gone through the euphoria. now we're kind of looking ahead and trying to figure out what path to take. but when rates went up, and then came back down, corporations wanted to take advantage of that. so it was that part of the investment banking that did really well. which we think spils over into suntrust and keycorp which are super regional banks that have a high concentration in that business. >> so a takeaway from this would

be that you think the financials still are the ones to watch, still will be stocks that rise overall, don't read too much into the goldman miss? >> because, net interest income and what we've been waiting on for four years is the fed to begin to raise rates above zero, helping net interest margins. we're seeing that in bank of america. we've seen that in the traditional super regional banks that have already released. that's the part that got forgotten as we went to the washington policies and really focused on that being the catalyst. the last part of this recovery is replacing and recreating profitability from deposits, which as interest rates get above 1% these banks can do again. >> goldman sachs down by about $5. maybe $6 at this point. is that a stock you would buy given the dip? >> we need to see the rest of this perception kind of work its way out. goldman got ahead of itself because it was just a proxy for banking when in reality they didn't have the concentration and net interest income to ride

the wave that these other banks will. a little bit more cullback but yes we will say that this will hit a plateau here which it did last year and then build from there as we go through the wrest of the year. >> just looking at the chart, see were seeing stocks at $2.20. you're not necessarily saying don't buy here? >> exactly. no. this is a short-term phenomena. when you look at three out of four businesses, goldman is growing double digits so investment banking is growing, investment lending is growing, investment management is growing. so the only delta that you're looking at is when does the capital markets, those investors come back to play. like i said, a clearer path of what's going on with some of these policies, you'll see that part of the business kick back in again. so, this isn't a business that's not working. it's just not benefiting from the things that these other banks are being able to enjoy. >> all right. marty, thanks for your time today. >> thank you. coming up, mr. phelps is in the house. >> awesome. >> good morning, mr. phelps. your mission, if you choose to accept it, is to save a lot of

water. michael phelps, not jim phelps, the most decorated olympian of all time, may be out of the water but he's jumping back in for a good cause. he's going to explain. next. hey, the future, what her problem? apparently, i kept her up l night. she said the futur freaks her out. hocome no one likes me, jim? intel does! just thinkf everything intes doing right now with artifial intelligence. and pretty soon ai is going to lp executives like her see trends to stay aheaof her competition. no more sleepless nits. - we're going to be iends! - i'm sorry about this. don't be embarrassed of me, jim. i'm gettincited about this! we know the future. we're going to be friends! because we're building it. ♪ ♪

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♪ population and economic growth have put significant stresses on the earth's water resources. our next guest is championing the water conservation effort. joining us now on set, michael phelps. he's the most decorated olympian in history. and if you don't know that, i don't know, you're -- you've been rip van winkle or something. and a global ambassador for colgate save the water program. colgate makes sense. you make sense. colgate, i don't know if people realize this, there is a colgate product in two-thirds of the households in this world. and i think they said there's not a single colgate product that doesn't involve the use of water in one way or another. consumer water. >> it's crazy like you think about when you brush your teeth. if you brush your teeth for two minutes on average. >> right. >> if you leave the water running, you're wasting almost four gallons of water. >> right. >> at that one time. so it's like we have all these people that are doing it, and

leaving the water running, we're just -- we're wasting so much useful water and drinking water that other people could use. so it's -- that's one thing that we're really trying to do. and now with me being a dad, you know, my son can't brush his teeth yet, but when he does, it's the first thing we're going to teach him. just to try to conserve as much water as we can. >> and it's not just the consumer use of water, either. it's used in almost every manufacturing process, industrial processes. we don't realize how much water is needed -- it's probably the most important substance on the planet. >> oh, of course. >> by a long shot. >> for me like obviously i've spent a lot of time in water. and i used to live on the water. so it's, you know, it's something that's very important that we all need. and every drop really does count. so we're trying to get ahead. and hopefully we can help save some water, and get everybody on board. >> you turning it off when you brush? >> i do. i do. and it's, like the more you think about it, and it's like i'll hear it like sometimes

whether it's like you have a friend that leaves it on or something, you hear it, and you're like dude, come on, it's not that hard. just turn it off. >> do you wet the brush first and then put the pooth paste on? >> tooth paste and then wet. >> there's a lot of people that do it backwards. >> it's a thing. >> i do both. i don't think you need to do both. but i have found myself -- >> it seemed implicit to me to turn it off because you don't need it running while you're -- right? details. >> yeah. >> now the shower sometimes, you know -- i might be messing up there a little bit. right? leaving that on to get it hot? >> yeah, when you turn it on, and it's like -- that's something that even we notice now. like my wife and i will notice now, it's like, because we'll turn it on, and you know i might go into the closet and grab something and then come back out and get in. instead of just getting right in. because you are wasting water. so it's, you know, now we're constantly aware of if there's water running here or there, and trying to conserve it. because it is true, every drop

really, truly counts. >> does this extend the flushing habits? >> i don't know. i don't know that part. >> we need two buttons. we need a button, a bigger button and a small button. >> a small flush and a big flush? >> how do you decide to get behind certain projects and certain sponsors? i imagine everybody and their brother is coming after you to get involved in their particular project. >> there's a lot of stuff that we have going on. and i've done it my whole career where i've only been a part of companies that i agree with. and that i already use. so if you look at everything throughout my career, it's something that i've already used, or have loved, and makes sense for me. you know, so i think for me, it's never really about a company throwing this at you and saying, i want you to do this. if i don't agree with it, i'm not doing it. and that's my agent and i have done that our whole career and that's what we'll continue to do. >> where are you now in terms of the next olympics? where are we? >> still on the sidelines.

i'm not swimming. >> you're absolutely not? >> no. there's no point. you know for me, you know, nicole and i are able to build a family now, and just move on. and you know, five olympics has been great. still don't understand 23 and 28 but one day i will. >> -- when was the last time you swam a mile? >> last week. >> you did? >> for the hell of it? >> i debt in randomly. i'll probably get in once or twice a week. but it's 1,000 to 2,000 and that's it. >> were you outside? >> yes. it's nice being outside. >> it's different, isn't it? >> it's like, you know, i always joke with my coach last year why didn't we move down and swim outdoors earlier? >> right. >> because like, you know, for us, like we're spoiled where we see sun every day, and there's a blue sky, and it's better mentally. so i think it's something that i definitely miss, and i still enjoy now though. >> you are probably one of the most competitive people i've ever seen. at the last olympics where you

can just freeze everything and everybody out? how do you just shut that off? >> i mean i'm competitive but i'm also competitive in different things. obviously swimming was something that my competitive side really came out in. and you know, i think the biggest thing for me now is trying to transition into being outside of the water. and i think, you know, for me, i'm more prepared to do it now than i was four years ago. i think four years ago i still felt like something was missing and now i think, i can look back on my career and say i'm super pumped with how it all finished. but i mean, golf is another good way to get that competitive juice going. but -- >> it's hard, though. >> it is. >> harder than swimming. >> it is. >> you have a role model either in sport or business now that you sort of look up to, or someone who you think has done it successfully, made that transition? >> i mean, if you -- like for me as an athlete i always looked up to m.j. just what jordan did on and off the court and obviously what he's done for jump man and the jordan brand has been ridiculous. so you know, for me, i have

obviously have my brand with my swimsuit line, and working with under armour and a couple other sponsors really closely. we have some other things that we can do. i mean i think from an athlete standpoint you can also look at kobe. like kobe's doing some pretty amazing things in the business world. >> in terms of some of the new venture capital projects? >> right. right. so like i can pick their brains. kobe and i chatted a couple weeks ago and some other cool things coming up. >> people who have won more olympic gold medals -- no, wait. >> nobody has. >> no, i guess that's -- >> nobody to look up to. >> so i try to explain, people say oh, he'll swim again. he ought to be doing that to win more gold. what time when you're training do you have to get up? and then how long are you in the pool that morning? >> i was very fortunate that i didn't have to get up at the crack of dawn to swim. >> but you swim for how long once you got in there? >> two hours. >> that's it? >> two hours twice a day, probably. ten workouts a week. two hours in the pool every

workout, and then -- >> wow. when i had a half a mile that i knew i had to do -- >> that doesn't sound like a lot until you think of four hours in the pool every day. >> in a cold, indoor pool. you had some music. you have to. >> no. >> no music? >> no. >> you sort of zone out. >> you literally stare at the black line on the bottom of the pool and that's it. >> but you think about other things. >> your mind wanders a bunch. >> what do you exercise now? what are you doing? >> we've started doing some different things like everyone tried the p90x and all these other things. we're doing kind of like an mma thing and i'm lifting when i can. so, trying to stay in some kind of shape. i want to stay at a certain weight. so, i'm forcing myself to do that. >> you mentioned other athletes. but is there a business leader who's been a mentor to you? >> i've obviously gotten to know some amazing people working with some of the sponsors that i have, you know, k.p. probably -- >> runs under armour.

>> so being able to be around him and watch him, i mean he always has so much energy. i think that's something that's so awesome, and you know, obviously loves what he does and he's doing a lot. not only for under armour but also for the city of baltimore, too. >> "squawk box" anchors, probably, you've looked up to for -- that was -- you play the stock market at all? >> i was literally just talking to my financial adviser the other day and we're setting up an account where i can kind of dabble and kind of get my feet wet a little bit. >> good. >> on my own. >> 6:00 a.m. or even earlier -- >> 3:00 a.m. where you are. >> turn this on. turn it on. >> you don't have to get in a cold pool. you're in bed. you just turn on and press on. >> that's right. >> anyway. >> with an 11-month-old son, sleep is very important. so we try to get as many hours as we can. >> that's right. >> thank you. >> thank you. >> for sure, thanks, guys. >> good to be with you. >> thanks, michael. coming up when we return, market

master mohamed el-erian is going to be here to talk strategy and lessons learned from the united debacle. you're watching "squawk box" right here on cnbc. the channel of champions.

good morning, everybody. welcome back to "squawk box" here on cnbc. we are live from the nasdaq marketsite in times square. among the stories that are front and center this morning, in case you have forgotten, today is the actual deadline to file your 2016 taxes. this year's deadline is three days later than usual because april 15th fell on a weekend. yesterday marked the emancipation day holiday in washington so that was a holiday as well. also a busy day -- >> you guys all in? >> the check's going out today. >> to? >> i actually owed this year. >> i remember once having to go to the post office center so i could get it marked. >> because they stay open until midnight. >> and there's a line out the door. >> i did that once about 15 years ago. so busy day for corporate earnings. tinge this afternoon. this is the first time i owe money. >> me, too. >> get yourself an extension. >> ibm dow component will report profits after the closing bell. you can see that stock right now is down by about 38 cents.

ibm is expected to earn $2.35 on revenue of about $18.4 billion. if those numbers hold up, ibm will see its 20th consecutive quarterly revenue decline. and let's get a check on the ftse 100 at this hour. stocks there touching the lowest level in nearly two months after the announcement from prime minister theresa may that she was calling for snap elections. those elections will be held on june 8th. she was talking about the current political divide within the uk, saying that it would put it in a weaker position if they waited for those elections to 2020, as they were supposed to be. as britain is negotiating for terms of its exit from the european union. joe? >> all right. we are just seconds away from march housing starts. rick santelli is standing by at the cme in chicago. we've had -- we talked basketball today, rick. and we just had michael phelps. michael phelps on and actually his idols are b-ball guys

mostly. >> jordan. >> the cubs are supposed to win again. we'll see. we'll see. you know, i'm afraid to hope for this for the reds but they're actually above .500 which it's been awhile. so, we'll see, rick. anyway what are the numbers you're looking for today? >> all right. we're looking for march starts and permits, and they're out. down close to 7% down 6.8% on starts. to 1.215 million seasonally adjusted annualized units. slight downward revision from last month. actually i take that back. upward revision, originally up 3% now stands up 5% on permits. up 3.6%. so another good number to 1.26 million seasonally adjusted annualized units. and last month, moved from 6.2 down to 6% down. so a positive revision there. but still leaves the permit side negative. yields, well ever since we

closed below 2.27 last wednesday we've continued to melt. really melting has been the watch word for interest rates for awhile here. we're hovering just about $2.20. the dollar index is down three quarters of a cent now on the bad side of 100 which is of course psychologically important. equities are a bit flat coming in. and in terms of the cubs, yesterday's loss last night put us below .500. not so good. the chicago blackhawks are down three. so i don't know, joe. i think i'd rather stick with swimming than stick with mr. phelps' sports this morning. >> he's a pretty good bet. >> rick, i don't know, when i came in, i just started thinking about, you know, i was kidding around with wil that we would lend him the constitution, and they can check it out over in the uk, just -- you know, we don't copy right it. people can borrow it.

a snap election really? does that make sense? would we do that here? where it's been a couple of months. i don't like that outcome, maybe we ought to have another -- vote for trump again? you know, it's bizarre. >> it is somewhat bizarre. but in theresa may's case, you know, there is something to be said for circling her wagons with regard to conservatives. and also to note that post-cameron she was kind of put in office versus elected, and so i think those issues will give her a bigger tailwind going into brexit negotiations. you know, joe, anybody can use our constitution. sometimes i think our own congressmen ought to kind of reread it. >> maybe we should use it. >> but for the most part, i don't know, i think theresa may's on the right track. like us, you know, their parliament is rather divided, and i think, in my opinion at least on brexit that should not be the case. in this instance, i actually

think that their rules being able to have a snap election might work to her advantage. >> no way to run a country, i don't think. anyway, thanks, rick. all right. >> thank you, joe. >> coming up when we return, "squawk" market master mohamed el-erian is going to join us to talk strategy. check out shares of goldman sachs at this hour. the bank reporting an earnings miss and that stock getting hit down about 2.5% in premarket. back in a moment. excuse me, are you aware of wh's happening right now? we're facing 20 bli security events every day. ddos campaigns, ransomware, malware attacks... actually, we just handle all thprioty thrts u dithat? we did that. really. we analyzed millions of articles and report we c identify thres 50% faster. you can do that? we can do that. then do that.

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welcome back to "squawk box" everybody. let's get a check on the mark markets. we have seen the futures under some pressure after goldman sachs missed expectations. in fact i think 55 points or so of the dow loss is directly attributable to that or at least was in the last 20 minutes or so. you can see a lot of that pressure coming directly from that. s&p futures down by about 6.5. the nasdaq is down by 14. joining us right now is mohamed el-erian. allianz chief economic adviser. mohamed one of the stories that we've been talking about is the treasury secretary steven mnuchin's interview with the f.t. saying tax reform he still thinks will happen this year but not in the august time frame. is that a huge surprise to anybody watching over the last month or two? >> it's not a huge surprise. i think that by deciding to

sequence health care before tax reform the administration has lost a few months. and then you heard gary cohen, a week ago, say getting it right is much more important than doing it quickly. so i don't think the comments that we're not going to get it by summer was a big surprise at all. >> what -- what has been a surprise to you of the things that you've been watching? is it what's happening with the fed? when do you expect to see rates picking up? >> i think the hardest thing for me right now is to reconcile what's happening in the bond market, with what's happening in stocks. unless you believe the fed is going to ease, which i do not, then there is inconsistency between treasuries and stocks. i think the truth is somewhere in the middle. but getting there is going to be quite tricky. >> in the past we've always said that the bond market is smarter than the stock market. you think that's the case once again? >> it's hard. because you have inconsistencies between soft data which is very

strong and hard data. you have inconsistency between the upside. much more upside to the equity market than there is for the bond market here. so i can explain why this is like this, but it's persisted for too long. my gut feeling is that yields are too low. and that -- >> around the globe? >> -- prices are too high. and equity prices are too high around the globe. >> maybe it explains why treasuries here in the united states, the yields have been under such pressure, too? if you're still getting a much better bargain in terms of investment for your money, you understand why people would put their money here rather than in a german bond or a japanese bond. >> undoubtedly. you know, the european market has been pricing our market for quite awhile now. and in a much bigger way than i've even before. but having said that becky the move from 260 to 222 has been really domestically driven rather than driven by europe. >> mohamed, you had a really interesting column you took out that took a look at united and

the trouble that they've gotten into over forcibly removing that passenger, dr. david dao. and then you looked at delta's response, and the game theory surrounding that. you think delta was the right move by saying that they would increase how much they'd be willing to pay people to get off voluntarily up to almost $10,000? >> yes, i think that's a really smart move. i think they're going to capture some market share. but i think the key issue now is that airlines in general are going to be much more hesitant about overbooking their flights. i don't think anybody can afford what happened to united. and what happened to united should come as a lesson to many corporations. even if you lose control of the narrative, which united did early on, don't make it worse. and what united did is it made it worse. it had the wrong content in terms of what it said. it had the wrong channels of communication. so it made a really bad situation a lot worse. and i think that reflects a lack of strategic planning, and scenario planning. >> mohamed i'm going to take the

other side of this argument for two reasons. one is, given the competition or lack of competition in the united states when it comes to airlines and the oligopoly that exists today, not to say that united is not in the wrong here, they are clearly in the wrong, but that its impact to the bottom line is going to be minimal. you happen to be a united customer. i know that you like to take united. are you now not going to take united? >> no. and i think that was a big distinction. and that's what pushed me to write the column that becky mentioned. i was flying united the day after and i was very struck that if you spoke to the frequent flyers they brush it off just like you did. and yet, you had to reconcile that with what was happening on twitter, et cetera. yes, it's not going to impact them long-term. but this is a reputational risk and they should learn and other companies should learn from this. >> and not only that, look, they control the slots at the airport they fly out of so i'm going to continue to fly them. i think the big risk is if regulators get involved. somebody in washington says hang on we're going to change the rules for you because you're operating under rules that we already police.

>> mohamed, the other thing we were talking about your column before the show started. and we were talking about this game theory, the idea that potentially the customers could take advantage of the airlines like a delta or united depending on how generous they're going to be in offering these offers to bump you, if you will. but i was saying that -- thinking to myself, that will only really work on a flight of maybe 30 people where everyone could get into cahoots with each other. don't you think it becomes much harder on a normal sized flight? >> yeah. the idea is that the game theory is very simple. collude and everybody on the passenger side can be better off at the expense of the airline. the problem is not only that these are strangers, they don't know each other. but we arrive at the gate at different times. so organizing this collusion is tricky. having said that, andrew, i think that the net outcome of all this is there are going to be more seats on planes empty, for a simple reason. airlines are going to be much more hesitant about overbooking.

because any instance of overbooking now is going to be amplified enormously on social media. >> mm-hmm. >> and some people aren't going to turn up for flights. >> right. >> so i think at the end of the day, don't be surprised if there are somewhat more empty seats than we've seen earlier. >> so in that case, this is a win for consumers. >> yeah, it is. >> mohamed, great talking to you. thank you for your time. >> thank you. >> okay. coming up, when we return, bye-bye border tax. treasury secretary steve mnuchin says it is not off the table. but it's also not the only option. we're going to get some reaction from doug holtz-eakin right after the break. think agn. this is the new new york. we are building new airports all across the state.

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welcome back to "squawk box." treasury secretary steve mnuchin telling the financial "times" that the republican tax reform package will most likely not happen as quickly as the white house had hoped. joining us now to break it all down douglas holtz-eakin the president of the american action forum and former director of the congressional budget office. doug, it's great to have you on the program. you know -- >> thanks for having me. >> i can't imagine it was a surprise that august was going to come and go. the question now is, what's realistic? meaning could we get a tax package on the docket before the end of the year? >> i certainly hope so. i think there should be a great sense of urgency about this.

the reality is that if it drags into 2018, it gets harder to get done in election year and there's no guarantee that republicans hold the house in 2018 midterms. so this is the moment. there's an historic opportunity to do something genuinely structural, and transformative with the tax code. and i think that they ought to be pushing as hard as they can. >> when you read the tea leaves between president trump's conversations, and talk about bringing the health care reform package, or repeal back to the table, and the continuing debate about what to do about a border adjustment tax, whether to put it on the table or off, do you get a sense that there is going to be a package that makes sense? >> i certainly believe there can be. you know, moving the health care bill is a priority. it has a trillion dollar tax cut in it. removing all the aca taxes. that's a necessary precondition so you don't have to deal with those in tax reform. that's job number one. >> so it has -- so hold on, you think that the health care stuff has to come back to the fore?

>> yes, i think that's an imperative. i mean, number one, there's an imperative to fulfill political promise. number two, i don't think you can let the president's first legislative initiative fail. number three, they have to prove they can govern. >> okay but you're in d.c. and you understand where the fault lines are within the republican party. >> yeah. >> and where the democrats stand. do you see a meaningful shift in the way the freedom caucus would -- might react to a new proposal relating to health care, for example? >> i think that there has been real efforts made to address their concerns. i think there's been real progress. they've amended the act since they pulled it and they now have these so-called invisible high risk pools in there. so the bill is changing in ways that make sense and which will bring votes. that's the nature of the legislative process. so, the fact that it had to be pulled once is really not all that shocking in the big picture. it's a trillion dollar tax cut,

a fundamental reform of two major entitlements. that's a big legislative lift. >> what would happen if they just went after tax reform? and could they just do corporate tax reform unto itself? >> i don't think that's a possibility. the president campaigned on tax cuts for the middle-class. it's hard to fulfill that campaign pledge with a corporate only tax reform. now you and i both know you need a serious change in the way businesses are taxed in the united states. we've got big problems with losing headquarters. we've got an anemic rate of economic growth. we need something that's just fundamentally a structural change in the way we do our tax business and that will transform this into a high growth economy. >> would you advocate attaching an infrastructure plan to the tax reform package? >> it would depend on the infrastructure plan. we've heard a lot of talk about infrastructure. but i haven't seen a specific plan. infrastructure is not really the same thing as a tax reform. it's something that takes a long time to do. and to do well. its benefits are very slow to accrue. tax reform is the thing that

could jump-start the economy quickly, and have an impact on the permanent rate of growth. that's why it's such a priority. >> okay, doug, always great to see you, sir. >> thank you. >> you bet. >> all right when we return, i'll have reaction to today's breaking news out of europe. we'll talk to financial to jillt the uk snap election and whether she's over the original brexit vote yourself herself. that's next. can weush e ofr online? brn, i j a quicquestion. brian? brian... lega tecoly can handcuff any company. but "yes" is h u're saying the new app willo live mony? with hwithhe rhtix owhyid it,ere finawork the waywant to.

british prime minister theresa may calling for snap elections earlier this morning. joining us on the squawk newsline is jillian tett of "the financial tiles." it's different from our political home. was this a smart move as far as you're concerned? >> well, it's a very shocking move for many british people, and i'm actually in london right now, and until recently theresa may was saying she'd not be calling a snap election. what appeared to change her mind was signs the labor party opposition and liberal democrats were going to do everything they could to block the brexit, so frankly, she's taking a gamble she will call an election, get the mandate she needs to push brexit through and that will help her deliver a much smoother

exit from the european union. but it's a gamble. >> although the opinion polls are in her favor at least at the moment. >> at the moment, the polls are in her favor and the british opposition labor party is week. many conservatives hope this will give her a strong mandate but if there's one thing we learned in the last two years, elections can be very unpredictable. politics can be unpredictable so what this has done is introduced a new note of uncertainty into europe at a time when we already have the urn certainty of the french election answer german elections later this year. >> most of the people we heard from this morning seem to think it's a question how much of a majority she'll win in parliament. if she doesn't win that does that mean fort whole idea of brexit? >> most people at the moment find it hard to imagine the labor party led by jeremy corbin

could in a conceivable way defeat her. you could see a high turnout for the anti-brexit pro-european camp, and -- question -- >> gillian, we're losing the connection there. i'm not sure if it's a wireless phone, sounds like we are losing the connection. the point was made, gillian said this adds additional uncertainty and that is certainly what we've seen playing out in the stock mashts today. thanks to gillian tett. coming up, stay tuned, bcs b "squawk box" will be right back. can also detect early signs of corrosion at our refineries. high-tech military cameras thth see through walls, can inspect our pipelines to prevent leaks. remote-controlled aircraft, can help us identify potential problems and stop them in their tracks. at bp, safety is never being satisfied.

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. theranos will be able to operate a blood testing labs again in 2019. they reached an agreement to pay $30,000 and wait two years before operating in a lab again. theranos failed multiple lab inspections, shut down all of its clinical labs in october of last year. so i don't know. do they open again in 2019? >> it's a long time to be out of the lab business. >> four or five british elections by then. >> at this rate. >> if we keep it up at this

pace. chipotle raising prices, guys, by 5% in many markets around the country. the first price increase in three years. price hikes will affect 440 of the company's 2,200 restaurants, add 25 cents to 35 cents to a typical entre. they are paying for higher food and labor costs. all the avocados cost so much money. the move shows confidence in the comeback from the e. coli outbreak crisis in 2015. >> a lot of the prices went up earlier. they weren't able to institute price hikes. >> exactly. one more look at the markets, big macro news in the uk and french elections coming up. now we're in the middle of earnings season and affecting us most today was xwakz and a miss by goldman sachs stock, down five or six points, the high priced stock, you do the multiplier and its effect on the dow and a lot of the loss that you're seeing in the dow is because of goldman sachs. united health care had a good

number, that's also a dow component which i remember again this morning. goldman sachs is johnson & johnson. >> yes. >> bank america i thought that was interesting, marty mosley pointing out they're an old bank. >> the real banks. >> interest rates up they go better. goldman sachs has to be still good at trading. right now it's time for "squawk on the street." ♪ >> good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with sara eisen, and david faber. cramer is off. stocks looking to give back some of monday's rally. the best gain of the month as goldman prints the surprise earnings miss, housing starts at a four-month low. europe is lower. pound on a wild u-turn as theresa may announces plans for a surprise snap election in june. ten-year yield stable around 222.