systemic risk there. >> october of 2010, one term president. o'connell. >> it was after. it was after the aca. >> but -- >> but it was -- it wasn't like right at the start of -- it was after i won. this is what we do. >> i may be wrong, but i'd be give you fairly big odds, i think before he took office he said that. >> we're going to go. i'm going to buy you breakfast. in the meantime, thank you, mr. secretary. we appreciate it. >> great being here. >> join us tomorrow. "squawk on the street" begins right now. ♪ good thursday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. futures recovering after a day of triple digit losses for the dow.

more components reporting earnings today. europe is mostly green and german wholesale inflation is at a six year high. and got some reassuring comments in the saudis yesterday. we begin with a big day for earnings. verizon, black stone, travelers all reporting this morning. bill o'reilly is officially out at fox. so what does the network do now without its biggest star and are even more big changes ahead? bizarre letter and a soccer ball seems to be behind kleinfeld's ouster from arconic. and amex is going to do its part, rising in the market and helped by an increase in card member spending. on the flip side, verizon and travelers each posting earnings misses and i think fast called it the ding in the dow. goldman, ibm.

today might be verizon. >> verizon is clearly a disappointment. travelers i would tell you you have to see through the catastrophe. i like the number. i know that's not necessarily today's business, but travelers had a good combined ratio. very good underwriting so keep that in mind. it's really a verizon issue of which i did find to be rather shocking. it was american express and csx, they were excellent. csx is extraordinary. i don't know if that's a change in the ceo. but it's rather remarkable. >> yeah, i'm going to spend more time on verizon later in the program. sort of the whole -- the conference call just beginning at 8:30. or -- we're about half an hour in and we'll get to q&a and see what mcadam had to say. it did reverse course, but the stock is suffering this morning. it was ibm yesterday pressuring

the dow, goldman sachs before that. but i don't pay attention to the dow anyway. i pay attention to the s&p. and you mentioned a lot of deentdz -- decent earnings. >> we've got when you see a transport like csx up $2.87 you have to take notice. you're talking about cargos that went well. when you talk about american express you take about consumer spend, it was very good. consumer spend worldwide is rather extraordinary. by the way, i know that they have kind of disappeared from the radar screen, but uh-uhnile was very good. and really interesting, that dovetails with what american express is saying. they call it mexico, this is the second time that mexico has been called out this year. because michael core back called out mexico. you're having strange places doing well. >> mexico a strange place to be

doing well? >> well, i think they have received a battering in the press and they're considered to be from our president a country that is -- a failed state to some degree. except for what nafta does for it. and i think that what you're really seeing is a peso that's dramatically undervalued given -- >> failed state, come on. venezuela is a failed state. >> well, you read the notion of the no border, i find that we always think of -- you go back and to the founding fathers borders are important. i think the no border is a veiled statement to the state that can't control itself. >> so goldman, ibm, j&j, a series of one is off? >> morgan stanley -- that was an extraordinarily good call. bank of america was an excellent call. citi was terrific and wells has its problems. that's a chipotle situation. you have to wait 18 months for that to come back. jpmorgan was superb.

i think j&j we don't know yet. they had a drug that came in that was -- that was competitive because you have the new way of going around patents. but the consumer business was quite weak for j&j. that was a shocker. i don't want to say that's an outlier yet but when i look at what's going on, i have to say that ibm is not going to be -- not going to be the way that tech is going to come down this quarter. it's just not. not after what we see about apple. >> it's not a bellwether. >> it's an outlier. it's an outlier because it's a wanna-be company when it comes to analytics. when it comes to cognitive. >> look at the growth initiative areas and say that's more of a reflection of what you can expect to see -- >> yes. i come back -- there's a battle going on involving toshiba. i'm usually reluctant to go overseas but it's not front and center. >> i wanted to talk more about unilever too because it's important. >> but toshiba has this

semi-conductor division and the stakes keep getting upped and upped. when you compare -- when you contrast that with lam research and two capital equipment companies, you come back with a voracious demand for chips. there's a note by chris danely at citi, and he is talking about back up the minivan on the semis. investor sentiment is worsening, time to back up the minivan. now of course he's not talking about one of those 18 wheelers from caterpillar -- >> got a lot of space. >> he does have a lot of space. >> you can fit eight people in a minivan. the toshiba, by the way, that would be worthy of an entire program what's going on there in terms of the sale of the company. the sale of the flash. the westinghouse division in terms of the bankruptcy. the nuclear power plants. southern company. you can go on and on with toshiba. to your point on the sale of flash, you have broadcom and you

have fox com that wants to buy it, but likely not able to. because of japan saying no way. >> i know. up. >> and you have western dij trying to figure out a way to say that we have -- >> doesn't have a partner. does have -- >> fascinating. enormous. >> and the reason i'm focused on the companies, again and again, whether it's the imf saying that the rest of the world they raise growth but not the u.s., or when you have a nestle saying that the u.s. is not that strong. when you have a unilever saying the u.s. is not that strong, it's front and center. if idea that goldman sachs did say, the first quarter was not that good and then contrast it again -- the mixed signals. american express, month of march incredibly strong. watch what matthew boss said, calling it a trough bottom in retail in february. april numbers are good. verify what footlocker said this morning. >> we have upgrades today for gap and for starbucks.

>> those are big. the stifel upgrade of starbucks is good. the gap -- you have had tremendous underperformance. that's a turn at old navy. he points out the coals which is a brick and mortar department store could be doing better than expected. there's a note about under armour saying they won't have a good quarter. under armour and kohl's it's doing with. >> well. you mentioned this briefly. nestle quite strong. >> i liked the nestle quarter. >> but not in the u.s. >> no. north america -- they used the word subdued. >> more positive -- what's going on with the consumer? fairly soft demand due to the uncertainty by the consumer. uncertainty of what, buying ice cream? >> people not eating chocolate bars because of what's going on in washington. >> if you believe footlocker today it's about tax returns not coming to 62 million americans. >> right. but the progression is in keeping with boss' statements. i have -- i'm having him on "mad money" tonight. let's go over what he says.

keeping with the american express he is literally saying that we saw february down 5.4%. there's the tax refund issue. there's an easter shift and a storm. april to date, plus 1.3. does that put the lie to the mall is dead issue? certain malls are not dead. >> i don't know. >> i think that there's a pulse. >> maybe for footwear. >> well. >> you run in and run out. you don't stop. >> okay. i'm saying that if you pronounce it dead, you pronounce everything in the mall dead. which is a mistake. >> so it's mostly dead. kind of like the princess bribe. >> not entirely. >> mostly dead. >> there's a difference. >> strip mall, burlington, very strong. big lots, very strong. i don't really like big lots but it's strong. ollies bargain, the key to the market stuff. but tj -- >> ollies, it's got the best

numbers of all the retailers, david. i'll get this front and center. go to pennsylvania. we'll go to the ollies bargain store in pennsylvania. he will see prices that you won't believe. >> how does ollies spell that? >> o-l-l-i-e. he does this to me. one day we'll be shopping at ollies. >> i'm not quite convinced. we do want to get to fox news parting ways with o'reilly following the sexual harassment allegations. 21st century fox released a statement saying that the agreement was released quote after a thorough and careful review of the allegations and o'reilly said it's disheartening we part ways on unfounded claims. a lot of discussion about fox -- fox a's largest ambitions. how this is really quite overcomable when it comes to the overall business. >> there are so many stories about stickiness. david, i come back and say, if there could be a report this

morning about why you should buy disney because of espn, the bulk case, and if i hit you, it would sting, and then there's a book case for fox. >> i think we'll have to wait to see if there's a financial impact on the fox network which make no mistake is important for the overall performance of 21st century fox. over time we'll get a better sense of that. what this shows though guys is the change in the power of social media and everything else. it's not as though we didn't have charges like this to a certain extent from mr. o'reilly. but no advertisers seemed to blink back then, but 50% of the advertising disappeared in a week. perhaps shocking and perhaps unexpected for fox to be dealing with that response over that period of time. it's a different world and behavior that might have been --

not enabled, but allowed is no longer the case. as for fox, why they didn't get on this when they had paul weiss doing the full review of ailes' behavior and moved on to this, they could have dealt with it all at once instead of the drip drip drip drip. >> i can't agree more. i don't understand the way -- it was a discreet investigation. >> right. then they moved on. >> that didn't make sense. >> no. >> i would point out to your point about advertising there's a stark line in the american express conference call. 60% of their leads are coming from digital. because they need the millennials. what does that say? maybe it says that if you're going to advertise on a program where the demographic may be older it's not getting to one of the principal advertisers in the world which is american express. what does that say about facebook and alphabet? they're buys. i don't know if you can extend

it to snap. but 60% of american express, holy cow. i guess -- i have been a member since '81. >> how about some of those were trading on the o'reilly head? >> that was my mistake. i called it orly. i put people in the stock yesterday. >> oh, my. >> thank goodness there was a good number reported. people can still profit. like cbs. they're changing the -- people are buying channel 2. >> channel 2, snap-on tools, computers can't grip on it. the eye opening letter that kleinfeld sent to paul singer. and two people to hear from, former fed chairman alan greenspan and img chairman lagarde. the s&p is down 5 of 6, but recovering today. back after a break. ♪ say carl, we have a question about your brokerage fees.

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♪ gene kelly of course, but apparently paul singer in 2006 perhaps in a fountain celebrating the world cup. why are we mentioning this? well, we have some insight into

the very much unexpected, truly, remarkable dismissal of kleinfeld of arconic, that took place because of a letter he sent to elliott management, specifically to paul singer, the company's founder in which he sort of makes some veiled threats about mr. singer's behavior during the world cup in berlin in 2006. give me some excerpts. doesn't really say a lot. but it says some things. it was sent -- you know, on april 11th. quite a few people there in berlin, they're still full of colorful memories about the remarkable time and it has the strong potential to become lasting lastingly legendary. if i find an indian's head dress

i will send the essential memories and by the way singing in the rain is a classic although i have never tried to sing it in a fountain. so this letter was received, quickly responded to by elliott privately on the 12th. where they say, well, much of what it says does not make sense, we do understand dr. kleinfeld to be making veiled suggestions that he might intimidate or extort mr. singer based on mr. singer's family trip to germany in '06 when he attended the world cup. then they come out on the 17th and say in a public announcement today he chose to inject dr. kleinfeld's letter into the news. this may have served whatever preemptive services you may have been trying to achieve, but it made a privately bad situation a publicly one. jim, the tenor of this battle was fairly nasty. >> yeah. >> it is not uncommon in activist situations. i know elliott does this for them to hire private

investigators to try to cook up or find dirt on the ceo. maybe just as an intimidation tactic. go through his trash, knock on his neighbors' doors all of which may have happened here and clearly mr. kleinfeld took the bait. he shouldn't have. and he did. >> this is a very ill-advised letter. i actually had someone go through the german papers which first broke the story and the german papers played it as such, an attempt to be able to make it so that singer would have to withdraw his very heated proxy fight unless we would see pictures. which -- apparently there are none. >> right. >> so 11 years ago the guy was having some fun. >> and the letter -- >> apparently. >> letting loose a little bit singing singing in the rain. >> the letter reads incoe

heerntly. it is on kleinfeld's letter head. is it possible that some of t the -- let's say larger blackrock index funds would they ever vote with paul singer? because then he wins. >> they might. they might. >> that's what i understand. >> but i think what's interesting here is that it does shine a light on what is again the -- the campaign sometimes of a personal nature and in this case, they didn't say anything -- i mean, i went through this morning, tyler went through a lot of their different correspondence. here's what we've got. this is what kleinfeld was dealing with. apparently, he just very ill advisedly went after them. and shouldn't have. and was fired as a result. you know, they said dr. kleinfeld is unambiguously one of the worst performing tenured ceos in the u.s. do we have this? that's something. they went -- management's

monologue is like from an etion say from the college student who read the cliff's notes but doesn't understand the book. dozens of employees have said that he surrounds himself with sycophantic colleagues who does not have the expertise to lead arconic successfully. jim, he wanted to get back at them in some way. almost were baiting him. >> yeah. >> and changed -- changed the entire trajectory. >> this is a personal -- what i would say is a personal suggestion that there could be bad things happen if it continues. that's certainly the way that the german papers read it. to me, it's embarrassing. and i have known klaus kleinfeld a long time. >> i was going to ask you, does it reflect the kleinfeld that you know? >> absolutely not. absolutely not. >> taken a different way?

could it have been meant in jest, not that it matters at this point. >> you know what, one can only hope for those who have known him for a long time. that that's the way it is. i certainly reached out to get his side. >> wow. we'll watch the trading on arconic and a bunch of other names. csx is going to have the best day of the year, even of the decade. we'll get cramer's "mad dash" and count down to the opening bell when "squawk" comes back. nf the customer app will be live monday. can we at least analyze customer traffic? can we push the offer online? brian, i just had a quick question. brian? brian... legacy technology can handcuff any company.

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loots to get to. earnings from amex, csx, imf meeting in washington and some macro data. we'll get to all of that when the opening bell rings in five minutes. again.

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the opening bell is brought to you by bright the house financial. established by metlife. all right. let's get to it with two minutes to go before the opening bell. csx in the "mad dash," it's worth a mention for sure. >> hunter harrison came in with the wind at his back. i'm talking about coal numbers. david, coal is up 3% in volume. that's not been -- we have not seen that in a long time. obviously csx is a big coal rail. it's export coal. let's remember what -- australia knocked off line by some storms. and let's talk about some others that are interesting. miner minerals. minerals are up 21% in volume. that's actual aggregates to build things. so that's a very bullish time for the economy.

and price increases. hunter harrison, price increases. >> don't forget of course shareholders because the board punted on this to the shareholders. they'll have an opportunity to decide at the annual meeting in may, where they either accept the deal they struck with him in terms of the additional compensation he'll receive for having left canadian pacific or he resigns. it would seem to me with numbers like this his future is pretty well assured. a guy who sits in the living room and watches every crossing on tv and calls up the engineer if he notices a train late. >> very bullish. >> this move is going to rival january 19th when harrison was appointed. that was in 8.6% move. the biggest move in 20 years for the stock. >> well, look 38, 39, ward thought to be doing a good job. but numbers that are extraordinary. they're doing it -- they're running a better railroad. i'm putting it out. there. >> very rarely you see a move like that. >> yes.

on a railroad. >> csx. let's get to the opening bell. s&p at the bottom of your screen. the big board it's national fragile x foundation. it's an inherited cause of autism. for nasdaq, forbes list of the top capitalists. we'll talk more about this morning on "squawk alley." pretty good trade data out of japan. exports doubled the estimates. german ppi, 3.1, year over year so the global outlooks okay. >> japan was plus 11% for american express. i don't think anyone thought that could happen. we're getting great numbers from overseas. it's meaningful. when i talk about a latin american turn -- there hasn't been one in ages. >> and nestle results that was part of it. >> yes, they put through price increases in latin america.

>> the riyal is revalued by 20%. last year took a significant price increase in june, had to give some back. mexico doing well with positive growth. but slowed down a bit. this is nestle. to your point, unilever also having a pretty strong quarter. paul poolman fought off the very ineffective and poor execution by 3-g/kraft heinz to acquire that company. i'm going to mix and match a little bit here. i'll give you short term good cities with the buy back and other things. and then focus as best we can on the longer term. >> keep this in front of us. will proctor be able to deliver? they've been having problems. unilever is stronger in the emerging market but proctor has trian in there. >> yeah. they do. that's worth watching. i think that's going to evolve over a longer period of time. not looking for any proxy fight in the near future or anything

like that. that's a longer term working with management and then perhaps trying to see, you know, if things are going as well as they in terms of cutting costs. >> they better, because unilever is giving them a pricing umbrella. that's right in proctor's wheelhouse. these numbers, they come out between 2:00 and 3:00 and they'll influence our trading today. as well i go back to the footlocker number and what matthew boss is saying about retail. talking about a bottom in retail. and a group that's been the worst. i mean, horrendous. so you have soming things going on here. you have transports. >> metals. >> metals. you tweeted a very interesting percentage gains of metals. there's a note -- this is is an unusual one. rio was upgraded. rio tinto today. i have to tell you, a lot of people have lost a lot of money playing in the metals but this seems to be the right call for the moment. citi doing it.

not in sync with the carm agedden thing in china. i think they're okay. >> gap call is jpmorgan going to neutral on valuation. starbucks call with stifel, going to buy on comps. optimism. all the buzz around the unicorn frappuccino yesterday, was that crazy? >> i think so. my charitable trust has owned it forever. they're talking about five or six comp stores. it would mean that starbucks has got its hands around the mobile pay issue. which has caused some stores to stumble. that's the case, then starbucks returns to 5.6, then the stock goes up rapidly. >> qualcomm, the semis. and there's a dispute with apple. >> it made you -- they're still making money. made you feel good about apple.

they made you feel good about intellectual per car. and then david, 5-g, the celebration. they're in and they have got 5-g. qualcomm, 5-g it's out there. it's the pot of gold at the end of the rainbow. >> it is. it's a pot of gold at the end of the rainbow that the ceo of verizon hopes to deliver. when we had a conversation the other day, i want to get to verizon a bit more in the second. you're right. the beneficiaries of 5-g and when it comes to fruition which is still a number of years from now, is the internet of things. the idea with the complete lack of any latency you'll be able to connect machines to the people working on them without them having to be there. how do you do it? in part because of chips. >> chips. >> did you see what ledger has tweeted? >> i did. >> oh, my god, is he doing the rolling paper thing yet. >> lol at verizon, are you okay? nobody sucks this much unless

you're #ver hiezen. >> he's got some rolling papers he sent me. rolling papers. rolling papers? i mean, they tell you you use to roll legal -- >> in washington it's legal too. state of washington. >> massachusetts. so i mean, i think john ledger is breaking ground. he doesn't waste any time. >> but he should be careful. on the upper west side where he hangs out sometimes, they won won't -- they won't arrest you for smoking a doobie. >> no. but i will say that i bet you a lot -- you'll go over verizon. but at that level of -- >> i'm stating myself. >> weed. grass. >> i think weed -- >> i don't know. >> i like the chronic. >> we have to name the bad ones. united rentals -- >> i was going to ask you about uri. >> it's -- ebitda did miss, but

we don't have the text of the conference call. people felt like the rates were under control and people thought they weren't. you know kind of like -- you know -- >> when you're making a noise. i don't know what the noise is. >> cartoon character. >> well, that along with the caterpillars of the world is a huge infrastructure trade. >> yes. >> this going to take you back to late january. is this done? >> without the conference call i can't say. i know that oil and gas business has turned up for them. i know it's a heavily shorted name. big battleground. and there's so many nonbattlegrounds. do i need to be in a battleground today? i don't think so. >> ruben on "squawk" talking about the political complexity of infrastructure. as for tax reform he talked about how hard that is to do as well. b of a, percentage of managers who see tax reform by summer recess. 5. 5%.

see it happen. >> well, i mean, when you're in the conference calls you're beginning to hear it, a little mystification about what is going on in washington. but goldman was the one that really referenced it. i thought it was interesting that morgan stanley of course did matter. because in washington, business is good. >> right. right. >> goldman call continues to be a puzzler. >> yes. well, goldman quarter -- >> sorry. >> goldman quarter was a real puzzler. given the divergence from the rest of the performance as it came to fixed income. what were the guys doing and why weren't they doing what everybody was? it's goldman. you'd think they'd do it better, but they did it worse. we have another proxy fight in the works -- >> mercado. >> yeah. they want to get rid of sally smith? >> what are they going to? there's ways to be able to make -- make a place more

technologically oriented. maybe more screens. i don't know. but they have done a very good job. made a very good case. >> do they have an argument to be made, underperformed? >> it has. i don't want to make light -- i happen to like sally smith as a ceo. but i do think that marche doe -- look, mcguire is a bright guy. the restaurant challenges have periodically been great. i mean, there's a lot of people who felt that darden was doing well. and then suddenly -- you realized that darden wasn't doing well. people thought that csx was doing well and hunter harrison gets in there and it's a real reg -- the board is not doing that good of a job. panera some said that the cages were rattled. we thought we had the high water mark of activism. it doesn't feel that way. >> no. the guy who brought hunter harrison to csx which is an interesting case in and of

itself, bringing a ceo along with your activism and installing him successfully. certainly have to be feeling good at that firm. with that stock up almost 7%. as i said, harrison, 72 years old. >> great quarter. >> doesn't move around that much. although apparently he is over some of his infirmities that he suffered when he was with canadian pacific. sits in his living room apparently with all of these tvs i'm told. i haven't seen it, but others have. and just watches the crossings and will just get on the phone and say, why are you running late to an engineer. >> yes, he's talking about breaking up the trains in a different way. he's talking about having sidings being different. he's a very hands on railroad guy. it is quite impressive. impressive and by the way, you remember, you're up against nobody if you're a railroad. there's some trucks that can take lumber. but the price increases seem long overdue. and this man is doing a good job. i'm going to give him that

$100 million. >> you are? i think he'll get his $100 million. >> yeah. maybe -- i see another $50 million. >> i think -- >> cherry on top. >> i think that looks safe. given the market cap appreciation is far above that. >> the market cap appreciation on apple is more than csx. super cycle talk again? we have the super cycle talk for apple. you know what, here's my problem with the super cycle. that sets up tim cook. can you deliver, but there are people talking about 90 million phones being sold. morgan stanley says super cycle they love that term. on owebs not reflecting the assumptions, raising the asps it's interesting. my wife saw a thousand dollar phone in italy last week. thousand dollar phone. >> well, we have a lot of things working as jim said. csx, your best gainer on the s&p. retail, amex helping the dow up 36. let's get to bob pisani.

>> good morning, guys. up trend day. reflation trade definitely. i hope you saw the fragile x foundation ringing the bell. the guys are very involved in that, very worthy organization. as i mentioned, reflation trade. the bank stocks are leading. the reflation trade leads and then we have a sell-off in the middle of the morning. that second line there, that is the semiconductors index which is doing very well. up almost 3% this week. that's a big move. the upside industrials, there's your reflation trade. consumer staples. defensive, they're lagging. materials also on the upside here. just checking in on earnings here. good earnings reports here. dr horton the building business is doing very well. they beat a 13% rise in new orders. their revenues are higher than expected. they're going to close more homes. that stock is near multiyear highs. to do it yourselfed by is doing

very well. sherman williams they had good numbers, raised their guidance. same-store sales sales up 7%. we're getting some of the big industrial names. i love those because they work all over the world. dover is really big in the energy business. they make drill bits for the oil industry. the rig count is way up. better than they thought that it would be. their numbers are better than expected. they upped their full year guidance. we're getting other big industrials coming out. textron was yesterday. general electric was going to be tomorrow. they gave us guidance earlier in the year. that was $1.60 to $1.70. it's about $1.63 the consensus. see if they keep that number when they come out tomorrow. market's been pretty stable despite all the worries. we spent half the day yesterday here on cnbc talking about the worries of the markets. the weaker hard economic data the geopolitical risk and the

risk from earnings. the while -- higher valuations and we saw that with goldman and ibm and with johnson & johnson. those are all issues but the market trends are holding up very well overall. i mean a month, that's what short term is to me, we're in a down trend, but long term over the last six or eight months it's an uptend. and the volume is remarkably light. been trending down for a month now. and the volatility, 15 on the vix is not high. i'm sorry. what we're seeing is a lack of buyer enthusiasm, but sellers are not dumping. we're sort of cruising along at this point. if you look at some of the other markets it's essentially the same way. you're going to hear a lot about france in the next few days and the elections. but the french markets have been holding up as well. we have been 4% on the upside for a while. we had one weak day this week, that was when the bond yields dropped on tuesday. other than that, the market is

holding up there very well. and in fact, most of the global markets are doing fine, year to date, up 11%. the emerging markets are up, india and mexico and brazil. s&p up 4.5% overall. finally, i just want to point out what the problems are when you have an index that is a small number of stocks that's price weighted. you get a distortion. so the dow with the problems with goldman and with the problems with ibm, j&j this week, it's down 1.25%. but the much broader s&p 500 is up 0.4% and as data we pointed out so many times, -- broader market cap indexes are better ways to look at the overall market. that's all you have to know when you look at that full screen right there. david, the dow is up 33 points. back to you. >> there it is, the dow again. yes, of course, i agree. mr. pisani, thank you. i wanted to delve deeper into verizon's results this morning. that stock down about 2%. off the lows of the morning. this after reporting a poor

quarter at verizon. which of course continues to fight the battles and the wireless wars, the heated competition, the likes of which comes from john ledger who we mentioned earlier, who's tweeting up a storm again attacking verizon. but what really happened during this quarter is fascinating in the sense of things were going badly in terms of the loss of postpaid subs for phone service. for wireless phone service. then they introduced the unlimited plan and they managed to turn things around a bit. before the did that, they were down 398,000 subs for the quarter. after having done it, they were 289,000 when they ended the quarter so they were able to gain back almost 100,000 subs that had been lost. on the call, the cfo discussed that trend and whether it will continue. >> the other piece that's in the

wireless number is when we -- you know, we were down close to 300,000 net ads, those were revenues that we didn't build in the second half of the quarter but we saw the resers in the trends and -- reverse in the trend and look forward to that continuing. >> perhaps that's given investors a little of solace or hope here as they follow verizon. the stock is down over 10% this year again. when you look at company, when you look at the analysts estimates for 2018 are more or less what they earned in 2015. the earnings have not gone anywhere. but it's still an enormous company, 125 plus billion in revenues. the generation of all of that cash flow enables them to do other things should they choose to do so. but with timo buying all that spectrum in the most recent auction, covering the country in a more robust way is only going to go up and therefore their competitive position may only go

up. we have the prospect at least once the anti-collusion rules expire on the 27th of -- 26th of april, that sprint and t-mobile will at least try to figure out a way to get together. what would that represent as a competitive threat to verizon? so many different things out there. i spoke to lowell mcadam about what he hopes is the next growth leg for his company. trying to get investors it would seem to focus not on the near term numbers but on the prospect of 5-g and what that will mean for verizon. take a listen. >> we see this starting to accrue in '18, david. that's why we're out there with the trials now, obviously it will take some time to deploy this. but we should -- we'll be commercial next year. and we'll be moving hard over the three year. >> that was the three year deal he was describing, of course to buy fiber from corning that will dense-fy the market to allow for

the 5-g services, jim. this world is changing dramatically. it's not about service for verizon and down 400,000 for the quarter before they come in with the unlimited we know why they chose to do it. >> we said look at interest rates. do we buy verizon? i don't know if that's the right linkage anymore. >> because of the dividend which is around -- almost exactly 5%. >> but the point is, you don't want -- >> 4.81. >> the capital down -- income up. >> no. you know of course i talked to mcadam about the charter acquisition and he talked about the lack of an architectural fit and an unwilling seller and/or buyer and then he went on to speak to bloomberg and raised ideas about disney and comcast. i think many of the things are not realistic, but it gives you a sense at least that they have to be thinking about all options. their competitive at&t seems to be running away from the core

business and mcadam hasn't done this. >> people had this model wrong, david. they had the model wrong. a lot of people were saying that verizon would have a good quarter. i find this shocking. >> maybe the momentum they get from going unlimited will continue as the cfo said. the stock only down 1.8%. that 4.8% dividend yield -- >> that will buoy it. but t-mobile not picking up what i thought they would. i thought the stock was at a high -- >> you have a price war that's moving the entire cpi index. >> yes. a very good point. i think that the people at the federal reserve have to recognize that this is a core build. as is your -- these are core bills. if they go down, you should not necessarily be jumping to the conclusion that inflation is coming back. everybody has to pay that bill. >> it's a core. well, we'll talk a little fed there. a good intro to rick santelli. rick? >> perfect segue. look at the two day of tens. yes, rates are moving a bit to the upside.

they're actually fighting to hold and get traction. you know, we have talked technicals. the year end close was 2.44. we're down. if you look at the two day of the euro two year, i like this one. okay, here we are basically minus 78. pretty darn close to where it settled at the end of last year and it's really popping and for all those who love the european numbers and are excited about the economy, that's all fine and dandy, but there's still a minus basically 80 in their two year. that has to have some ramifications at some point, doesn't it? let's look at our two year on top of their two year year to date. looks like their two years actually leading a little bit. they do obviously correlate and they're both basically unchanged for the year unlike the flattening we have seen. look at the tens minus boons it's under 100. it is pretty good directionally. still doesn't look like the market had turned if you used

that as your sentenceal indicator. the curve looks like it could hold at these levels. see the left part of that chart. and then the dollar index, down on the year. we're still fighting to hold that support from the end of march around 9917. we're still half a cent above it. even though many don't think the euro has any horsepower the upside from the levels let's watch that dollar index at that key level. >> thank you very much, rick. some developments here on a potential health care bill out of washington. our kayla tausche has more. >> good morning. there's an amendment that's being circulated that's being interheaded by -- spear headed to include the coverage for the patients with pre-existing conditions as well as consumers up to the age of 26 and some that would appease members of the freedom caucuses, namely some waivers for the state on the health benefits. i spoke about what the changes

would do for the caucus and i was told that the changes in the memo if they're incorporated into the bill text would secure 18 to 20 new yeses from freedom caucus members. that would bring the overall vote count for the freedom c caucus to 25 and that's a significant number. 18 to 20 new yeses. the president said there were 10 or 15 vote ate way from clearing the -- away from clearing the house when it was previously put forth at the end of march. the question is how the moderates would feel about this and whether they'd give away net votes to offset that. we're waiting to hear about where the moderates stand on this, but there's significant movement on behalf of the freedom caucus. back to you. >> wow. a new wrinkle. we'll watch that. thank you for bringing it to us. right now, christine lagarde addressing the imf world bank meeting also in washington. when she's done she'll appear on

"squawk on the street." sara eisen has that. a live interview with the imf chief. amex is helping the dow, csx helping the overall market. we're back after a break. these goofy glasses.

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at your local mercedes-benz dealer. mercedes-benz. the best or nothing. the white house reportedly considering an elimination of local and state tax deductions to pay for tax cuts. the honeymoon is over infrastructure spending an tax cuts. the president said he was working on tax cuts yesterday. the market ignored him. there is just general confusion in this country about taxes. general confusion in this country about what's going to happen. there's nothing in that executive order that prohibits people from -- or companies from bringing in people under the h-1 program. they just have to answer more questions.

time for cramer and "stop trading." >> two incredible stories out here. one is from drag to driver the espn bull case -- morgan stanley is talking about the new ways to send programming over, including the streaming bundles says by disney. people have been running from disney because of espn. they're saying run to disney because of espn. a very bold call, 33 pages i think it will move the stock and move it well. then the other i think that people felt that ebay was doing so many things right. putting a lot of money in to change the site and make it more user friendly and think didn't pick up as many active buyers as people thought. guided to the tepid growth. i had thought that ebay would

make inroads against amazon like walmart is doing but it wasn't the quarter that did it. >> what's tonight, jim? >> wow, you know, i had this -- matthew boss, because he's making a bold call on retail. i think the gap stores is not up enough and kohl's not up again. and the shorts have been leaning on snap one forever. of course the president visited there the other day. nick pinchuk said don't mess with us, stop with the shorting. start with the buying. not snap. snap-on. >> that's on tonight. "mad money" at 6:00 p.m. when we come back, greenspan and lagarde. don't go away. y playing air gui. the baby's room won't build itself. and her paw won't heal on its own. we're all working forward to something. synchrony financial can help your customers make it happen sooner. so she can plug into her dreams...

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♪ good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla with david faber and mike santoli at the post 9 and sara eisen is at the world imf meeting. she'll bring us an interview

with alan greenspan and christine lagarde. the dow trying to get some points after two triple digit losses. up 50 points. the ten year is steady and oil has dipped negative for the fourth straight day. >> our road map at 10:00 a.m. eastern starts with o'reilly out. ousted after allegations of sexual harassment. what does it mean for 21st century fox's bottom line, straight ahead. earnings season under way. verizon and travelers both miss expectations. and the imf world bank spring meeting is kicking off. the focus is trump and geopolitical implications. we have philly fed and claims and let's get to rick. >> yeah, leading indicating economic indicator is up 0.4%. we had three up 0.6 in a row. now it's revised up 0.5. what's interesting, when you

looked at that spate of up 0.6, that was the best level since december of '14. even up 0.4 in the context if you took out the 30.6 in a row, it still looked good. the yields claimed at 223. pay attention if we get close to the 2.27 level. that's technical resistance according to the traders. carl and the gang, back to you. >> thank you very much. the dow is on track for the worst month since january. not of this year, but last year. we have earnings from amex, better than expected numbers from pretty good card spend. we have dow components, verizon and travelers with i both missed. we have some interesting trades suggesting the infrastructure trade remains troubled. >> yes. >> your thoughts overall where we stand. >> i think it's interesting. i think expectations in general and just kind of the general attitude of investors has moderated a lot more than you'd

expect for being 2 or 3% below all time highs that's the benefits versus the problems column. i do think that you have seen this kind of quiet underlying constructive action in all of the hot groups like the banks and the transports. i don't think that you have a lot of built in expectations for kind of a rescue from policy and all that's probably positive. even as the market remains kind of stuck in the narrow range. >> we talked with jim about ibm and today travelers and verizon. do we sort of look past the big cap misses? >> i don't know that you look past them. i do think that earnings season is going to have the standard amount of beats as we have the 67 or whatever, 70% -- >> typically where we are. >> but it's the main field in the caps. i think the bigger issue is back half of the year so as we start to get visibility toward the third quarter, the third quarter gdp was 3% or something. so you had a big rebound effect

in 2016 so you have to anniversary that. this is the easy number in aggregate for year over year numbers. >> and atlanta sits at 0.5. we'll get a fresh number tomorrow. let's get over to sara eisen who has big interviews at the imf spring bank meetings. sitting down with a special guest. >> hi, carl, good morning and nice to see you. joining me in the imf tradition is dr. alan greenspan the former chairman of the federal reserve. good morning. >> good morning. nice to see you. >> in the past few meetings you have been warning of stock-flation. are you feeling better after seeing the surge in the confidence from consumers and others after the election. >> you make it sound wonderful. i think there's been a little surge in part because i suspect but i don't know for sure, where it's coming from is the expectation that the whole

regulatory structure that's hitting the financial system, dodd/frank basically, is going to be removed. and if you got rid of dodd/frank, it's going to have a very significant positive impact on the economy. and in my judgment, that's where the surge in the stock prices have come from. because it's very difficult to find anything other than that. which i find really positive. >> well, find myself hearing you talking about the stock market hearing your warning about irrational exuberance, where it was above the historical valuations in the, wh -- in the market. do you see signs of that? >> it kept going after that. it sounded like very prescient at the time. except in retrospect i'm glad i didn't sell. >> you kept holding stocks. >> well, my view is that i think i may have mentioned it before.

is that because of a fundamental of human nature, fear dominates euphoria. and that means there is an equity premium in stocks over bonds or any other credit instruments, which is the result of human nature and people are willing to pay the difference between the rate of return on equities and the rate of return on bonds merely because of an irrational fear. in my view, if you can live through the ups and downs of stocks, the best thing to do is -- you buy stock, and forget that you own them. >> well, hold them for the long term. >> because there's no doubt about it. that this is not an issue that the markets will adjust. markets do not adjust human

nature. so long as fear is a greater force than euphoria and remember, the way we see that is when the economy crashes it goes down fast, it comes up, it comes up very slowly. and that's true and always been true. and that is a reflection of this phenomenon. and you can trade against this if you have the guts. i remember -- i remember the crash of october of 19 -- 1971 -- >> '87? >> i think it was probably that -- october the 19th, '87. that particular crash now it went down 23% in a day for the dow. >> right. >> i remember people telling me after the farkts -- after the fact that they sold out close to the bottom even though they knew that it was the wrong thing to do.

because they couldn't take the physical pain. and the result of that was an extraordinary bias in the system, which has existed to this day. >> so what we're seeing -- you mentioned deregulation. there's a lot of excitement about that. also infrastructure spending. and corporate tax reform. does that trifecta lead to a big boost of growth? >> well, the question is, who is financing this trillion dollars of infrastructure? i mean, the problem basically is that we have got too much debt -- public debt. the debt is beginning to rise and in fact the data that came out for the month of march seasonally adjusted is showing now that the deficit is beginning to move rather quickly. and -- >> that's a problem? >> and that's the problem. at the moment, we can't afford

it. if you go out and build a bridge for example, you don't get any revenues from that bridge until it's complete. so there's a big cost up front doing that. and most of the infrastructure type of spending is that delayed impact. and while you're building a trillion dollars of infrastructure, who and where -- who is funding and where is the fund -- >> it sounds like you don't like the idea either of corporate tax reform and making it revenue neutral -- >> the major area that we have to cut it or at least slow it down dramatically is entitlem t entitlements. there is no other program -- >> nobody is talking about that. >> because cutting -- cutting social benefits or cutting

entitlements is the third rail of american politics. and i think the third rail of european politics everybody's politics. if we don't come to grips with that, we're not going to solve this problem. >> well, you have warned of stagflation. >> well, stagflation i think it's in the process of emerging. remember what it is. it's a state of both stagnation and inflation. the early stages are benevolent. in other words, you feel oh, the debt burden, the deflationary burden is coming off. and it is, but you are still caught with a slow growth economy. so you end up at the end of the day with both inflation and with slow growth. which is what we had in the 1970s. >> what can the fed do about it? >> the fed really has no say in

that matter. it's a wholly fiscal issue. >> tackling the entitlements that nobody wants to do. >> yeah. i mean, entitlements are up until very recently, they have been growing at 9% a year. and in fact, it's been republican administrations in which it's grown fastest. there's been some slowdown and i think if we just continue the -- continue the rate of slowdown, we might come out somewhat better. but there is no evidence anyone wants to take it. >> what did you think when you heard president trump warn about the dollar, saying that it's too strong and it's hurting america? >> i turned off my hearing aid. >> you don't think that's healthy to hear? >> no, i think it's healthy to

hear everything. >> do you think he can achieve that? talking down the dollar? >> that's -- let's put it this way. the dollar is the international currency in which all the forces of global finance converge and set the price. nobody's going to talk it up or down. whether it's the president of the united states or any person you want to choose. >> let's talk about the euro for a moment because we talked to you the day after brexit. you were very bearish. i remember you said you had never been so concerned even during the 1987 crash and you have been grave on the prospects of the euro for a while. do you see this french election this weekend as another chapter in what you have predicted before, could be a collapse of the euro? >> i think the french election is scary. i mean, it's very difficult to see your way out in some

fundamental way. i think the euro is going to eventually dissolve or restructure itself into a north and a south euro. what's happening as i mentioned i think at the beginning that the euro basically is a mechanism by -- the eurozone i should say is a mechanism by northern europe is funding southern europe and the line is right at milan. italy's cut in half. but what's happening is essentially is that we continue to desire to expand the euro, do things and it's -- i think basically greece has got to

leave the euro. it got in under false pretenses. remember what happened. on january 1st, 1999, which is when the euro started, a year later the -- >> right. >> -- switched and everyone said, oh, well, that's okay. they passed the data check. when the next administration in greece came in, they said the data that our predecessor had used to get us into the euro -- >> not so good. yeah. >> it was false. >> but specifically with france, what scares you about this weekend? it unlike greece was a founding member of the euro. >> no -- >> what would happen to global markets if someone like marine le pen won? >> listen, it depends on the person -- it not all depends,

but the other candidates -- none of which work. but france has been deteriorating very rapidly in the last six months. i don't mean economically essentially. politically. and things that we wouldn't have imagined, charles de gaulle and marine le pen. struck me as coming from the same culture. so i think that germany is holding up. i think germany is holding up reasonably well as it always does. so is austria, finland and a whole series of northern european states. but the south -- strangely enough spain was one of the culprits early on in the

difficulty. but they have not been doing all that badly, but when you look at italy it's a real serious problem. portugal is a problem. and greece had better leave before we run out of money to keep them afloat. >> so your view stays the same. see what happens this weekend. we have to leave it there. always good to check in with you on the state of the global economy. alan greenspan here from washington, d.c., the site of the imf world bank meetings. we'll be back in a few moments with the managing director, christine lagarde. she'll be right here. >> thank you so much. sara eisen in washington. in the meantime, when we return, as you know by now, bill o'reilly out at fox news amid the sexual harassment allegations. what his departure means for 21st century fox's bottom line. the dow is up 81 and the s&p, up 8.

bill o'reilly's 15-year run at fox news is over. and in a statement o'reilly calling the departure disheartening. as tucker carlson takes over that show or that time period. what does it mean for the company? anthony, you know, fox obviously a very important contributor. i should say fox news an important contributor to 21st century fox, but many seem to believe this is not going to ultimately impact the financial performance of that unit.

do you agree? >> well, i think some of the numbers attributed to the o'reilly show have been a little bit overreport. if you we look at the ad revenue impact it's less than $100 million and what's really important to the economics of fox news and the fox cable networks as you know is the affiliate feeds. so fox news on its own generates more than $2 billion of affiliate feeds so that's four or five times greater than the ad revenue. if you just broaden it out to all of the fox cable networks, david, they're going to do more than $9 billion of affiliate feed. as long as there's no carriage disruption or nothing wrong with the cable districters the economics of fox -- distributors, the economics of fox, they'll be just fine. >> it's hard to determine if there's going to be a ratings hit for the network over time. they lost megyn kelly, replaced very effectively as we know. and now they lose mr. o'reilly

and not to mention roger ailes, the man who built this network and made so many of the key decisions in terms of personnel. that's still a possibility, isn't it? that we see an audience erosion over time? >> well, i think that given, you know, regardless of your political persuasions where fox news is on the political spectrum, they really have a strong hold on the right let's be honest. unless we see a real competitor to that, a place on the spectrum, i think that the ratings should hold up fine. we even see that as fox news ratings are at an all-time high. they're up since the election. you know, you mentioned the replacements for o'reilly. you know, tucker carlson when he effectively replaced megyn kelly, if you look at her ratings and compare them to tucker's, his ratings are 10 to 12% higher than hers so you have somebody like dana perino as part of "the five" who could step in. she could take a more prominent role at fox news.

she is well liked internally and think highly of her. i'm not saying that bill o'reilly has an independent following on an individual basis, but the fox news platform is a very strong platform and has the power to create a personality and develop a personality who is capable. hopefully one that doesn't have as much baggage into another kind of successful ratings driver in their own right. >> anthony, one of the subplots to this whole story was the fact that the parent company's attempting to buy the remainder of sky in the uk and this perhaps would remove a potential barrier on a regulatory basis over there for that deal. do you think this does ease the way for that deal and how important is that just for the general financial outlook for 21st century fox? >> well, the sky acquisition is certainly a deal that fox is very focused on and i do agree, mike that -- that, you know, just clearing away any questions in terms of the fitness of 21st

century fox as a potential owner of sky certainly behooves 21st century fox management. so, you know, removing a lot of those questions i think helps in terms of relationships with not only the cable distributors on the fox side, but also clearing the sky deal. i mean, the murdochs, james and lachlan, they have a lot they're working on. the sky acquisition is one. certainly a key priority. but they have others too. and those include star tv, those include the launch of a new hulu service coming up. removing the noise here i think helps fox and i think, you know, the other thing to mention is, you know, i thought you guys might ask me, they had renewed o'reilly's contract, right? but i think that the wording and the contract there it's fair to assume that it gives fox news an out. i do not think they're on the hook for his contract so you can sort of, you know, weigh that against the ad revenue lost in terms of profitability and potentially in the near term of replacing o'reilly with lower

sally alternatives. >> james is the ceo and their father correspondents to -- continues to run the fox channel day to day. they face no shortage of challenges -- james has been ceo, anthony so what do you see as the long term changes they'll make as they meet these challenges and try to deal with them, when it comes to the culture of this company and what do you see as the ramifications of the changes? >> no, i think it's a great credit to james and lachlan and the murdochs to kind of get this out of the way. it's a credit to them to do what they can. they could have acted sooner, but clearing out the sexual harassment allegations, whether it's roger ailes or bill o'reilly, it's over the long term going to be helpful. i would say investors and the shareholders of fox who i speak to are -- they respect james. they think he obviously has a

well articulated vision for the company. they respect him just based on his history having led sky and sort of news corp international. now he's really -- he and lachlan are going to be the men to drive this company forward. there's a generational kind of pass the torch from rupert to his sons. and i think that james is probably more media forward in terms of digital. he's focused on hulu. s he's focused on -- he's focused on digital advertising and they made acquisitions like true ex, and not to get into the details too much, but they're sort of the new digital leaders. that's what the place they'll take. >> yeah. that of course is really when you think about it the larger challenge for so many of these organizations like theirs. anthony, thanks for weighing in. i appreciate it. >> thanks a lot. >> anthony declemente. when we come back we'll go back to the world bank spring bank meeting in washington and

sara eisen will sit down with christine lagarde. the dow is up 74. back in a minute. of innovati. the power of 100 of the world's top companies. the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio at powershares.com/qqq. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.

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eisen at the imf world bank meetings in washington. sara? >> good morning, carl. joining me right now as always is the managing director of the imf, madame christine lagarde. nice to be back. >> welcome. >> this time has a different feel. there's a different into. we usually come in worried about european debt or fiscal cliffs. instead you have upgraded your forecast for global growth. >> yes. >> what's your level of optimism right now? >> well, spring is in the air and spring is in the economy at the moment. including on a global basis because we are seeing positive developments. either as a result of manufacturing and trade cycle that is up. or because of good policies that i have been implemented in many economies. from 3.1 last year we're moving to 3.5 this year. which is clearly a good improvement. >> well, what was interesting is a lot of the upgrade was driven though by european growth, uk, japan, china, not the united

states. not an upgrade from january. why is that? are you not buying the confidence boost? >> no, but we did buy it at the time. you know? we clearly assessed as part of our forecast some of the changes that are likely to take place, in particular a degree of tax reform. so that improvement of the u.s. economy was already factored into the numbers in january. there was no need to change them again this time around. but going from 1.6 to 2.2 for the u.s. economy alone is a major driver for the global economy. >> so do you think of all of the pro growth policies we're hearing about right now, the deregulation, tax reform is the big stimulus if it gets done? >> you know, if there is good tax reform, particularly corporate tax reform, that would certainly help. we don't really want to have a view at this point because we don't know exactly what the components will be. but if the rates could be a bit

lower, if it was simplified, streamlined, some of the suggestions currently floated are heading in the right direction from our point of view. that would certainly help. >> would it be dangerous to you if it did increase the deficit and the overall debt load? >> well, the -- there's the issue of the deficit. we don't think that deficit should be increased at this point in time. we believe that the degree of fiscal consolidation might help. not much, but a little bit going forward. in order to make sure that the debt does not increase significantly. we also believe that any tax reform would have to be mindful of the spillover effects. what impact does it have on other countries because clearly while it has to be good for the u.s. economy it should also be helpful for the rest of the world because all economies are interlinked and if things go wrong in any particular corner of the world it will have an impact on the u.s. economy. >> you have been consistently saying that message.

are you referring to the border adjustment tax as sort of the negative implications around the world? >> well, i think that we think that the border -- it's the destination based cash flow tax to put it as we hear about it, is an interesting proposition. but that one too needs to be mindful of what happens in the rest of the world. what impact does it have on the currency. and whether it is compliant with the rules of the game. so we are waiting to see the details of that proposal before we take a view. >> on deregulation, do you agree with this idea that tighter financial regulation after the financial crisis has been holding the u.s. economy back? >> you know, this -- this is a music that we heard from the bankers. whenever there was additional capital required, whenever there was increased supervision, whenever there was a rule applicable to how you separate the banking from the trading, we

heard that comment. oh, you are squeezing the margins. you are hurting the business. well, you know, i think that the regulation phase has been quite efficient in order to reduce the risks which clearly we saw big way in 2008. does that mean that the regulation sphere as we have it at the moment is perfect, no. it needs to be improved and it needs to be consolidated so that people understand what the rules of the game are. but a lot has been efficient and whatever is excessive, whatever is inefficient should be addressed going forward. >> in the outlook, you did warn that rising rates from the federal reserve too fast could be a harmful impact on the economy. do you think they can get away with two more increases this year? >> that's for the board of the fed to decide. but two things on that point. one is if rates increase it's a

clear signal that the u.s. economy is doing better. inflation is up and unemployment down. this is encouraging and it's encouraging for the rest of the world. if it moves too fast that's where we might have risks because capital flows will move back from these emerging markets. low income companies where they are into the u.s. market and that can precipitate some disorderly adjustments in those other countries. so let's hope that it proceeds in a smooth, well communicated and orderly manner as fact based as possible as has been the case so far. >> you have also warned and this has been your continuing message of rising protectionism and barriers to free trade. we did hear from wilbur ross earlier this week, calling that rubbish, that the united states shouldn't have to deal with a trade deficit while everyone else has surpluses. >> well, let's look at the

deficit separately, but, you know, when i hear that i'm delighted because it means that the concern of all of our members is to make sure that we protect free, fair and global trade. and that we all work at eliminating the distortions, at eliminating what could constitute and -- a playing field that is not levelled and accessible to all. so we're on the same page. >> is the trade deficit the right measure? >> well, trade deficit an indication of something else as well. you have to look at the current account at large. it's an indication of how much saving and how much investment. it's not just in isolation the trade deficit. >> were you relieved that the u.s. treasury and president trump did not label china a currency manipulator as promised

in the campaign? >> you know, the issue of currency has to be looked at with great caution. and we were certainly pleased to see that there was no -- there was not a major change in the report that was published by the treasury department and we know that this is conducted very thoroughly, very carefully with weighing of all the criterias. this is very encouraging. >> do you think that the u.s. and china can have a constructive relationship that does reduce the u.s. trade deficit with china and levels the playing field? >> we certainly hope that there is constructive and sustainable, solid relationship between china and the united states. those are the two major economic powers of the world and if these two have a good relationship, that is productive for both, it's going to be good for the

rest of the world. >> i have to ask about your home country, facing a big election this weekend. you'll be voting. >> i'll be voting on saturday, yes. >> you're very plugged in. how do you predict this is going to go? >> i have no prediction. >> if we do -- >> i mean, if i had, i i wouldn't share it with you. >> if we do get for instance the far right leader le pen doing very well and ultimately winning, she's come pained for france leaving the euro. would that trigger a financial crisis? >> it would certainly entail major disorder and the risk of dislocation. >> do you see the election being framed that way as a referendum on the eu and the eurozone? >> with let's see what happens on sunday. >> what can you tell us about france founding member of the euro? we were speaking with chairman alan greenspan warning of the flaws, the rise in populism has gone against what the project has stood for. >> you know, first of all, i think that the project end -- it has protected us from, you know,

the horrors of wars and we need to keep that in mind. even for the young generations which have not known any of that. but we were at each other's throats for centuries. the fact that we have had nearly 70 years of peace and amicable and constructive relationships is a jewel and it needs to be secured. again, can it be improved, can it be made better, can it be clarified? of course. but let us not waste that treasure that has been built over the course of time. that is my personal, very strong belief. that's not the imf speaking. >> you did warn ahead of the brexit vote you didn't see a lot of positive comesing from brexit and it would be a very, very bad outcome. >> we haven't seen anything, because the outcome is not there. >> you still predict that? >> we believe that the negotiations will matter a lot and what the outcomes of the negotiations will determine how much -- how much damage has been caused by that decision.

>> do you think that the recently called snap election will change the brexit outcome, the brexit talks? >> i think it's more of a domestic issue than an international original economic issue. >> this wave of populism sweeping the u.s. and europe, do you see it continuing and how do you calculate that into the economic forecast? >> you know, we certainly take the view that more growth and better growth would address at least part of those concerns. it's probably multidimensional. there's an issue of culture and belongings and representativeness. but at the economic level if there was more growth and the if it was more equitably shared amongst all, if people felt part of the game, rather than out of the game it would make a huge difference which is why we really support efforts to increase productivity. you know, more training. better skill set. more mobility.

a better minimum wage, earned income tax credits, there a's whole range of tools to be used rather than exclude. they need to be used an applied. >> you met with treasury secretary steve mnuchin. i know you have an event this weekend. what's your level of engagement with the new administration? >> i have excellent contacts with the new administration and i have had excellent discussions and very good meetings with secretary mnuchin so i'm delighted that we have a partner to work with. >> have you met with president trump? >> not yet. >> well, will you advise him on the value of the u.s. dollar? >> he doesn't need me for that. >> thank you very much. we'll be talking later. we're doing a panel on macroeconomics. i'm looking forward to that. how to boost the economy. >> thumb up to peggy. >> peggy -- >> she's the captain of the international space station. she would be breaking the record of person in space in four days. it's a woman.

>> good to hear. did not know that. christine wh christine lagarde, thank you on a diversity of topics. back to you guys. >> great stuff. sara eisen in washington with madam lagarde who is always willing to handle questions of any sort with good cheer. not making a prediction on what's going to happen in france this weekend. but while she's speaking the cac up more than a percent. the best day since march 1st. >> yeah, seems an unclenching about the immediate impact of sunday's vote. i mean, i guess it's an understatement she said a breakup of the eu would cause a risk of dislocation which we all know. the back drop, the enthusiasm about the rebounding global growth is a contrast to a year ago so it's a bit of a lagging recognition that you know, growth is on a momentum run. >> i mean, we looked at results

from nestle and unilever this morning that seemed to reflect that. although i don't know. are you making a prediction on the french elections? >> not at all. you look at the way that the market has kind of tightened itself up. lots of hedging in as vance of this, like ahead of brexit and election and it's keeping people at bay in terms of potential buyers. it seems like we're in this cycle of day to day, headline to headline we're deciding how worried to be. now the timing is down to a couple of days it's sort of like, you know -- it's now or go away. >> you don't see a pattern, recognition developing brexit, our election. this one? >> it's hard. very hard. because i think people are kind of thinking themselves into a pretzel of saying, okay, let me find a way to be bullish about the rebound. but we went from the two day sell-off to the overnight four hour sell-off. now i don't know if we get the sell-off or if it comes later.

>> although if history holds we'll get an unexpected result and get the wrong reaction. >> exactly. totally unexpected reaction. >> well, mack ron in the most recent polls has a slight edge over le pen. but we'll see what happens. the dow is holding up 78. despite travelers and verizon missing on earnings this morning. more "squawk on the street" continues in a moment.

good morning, everybody. i'm sue herera. here's your news update at this hour. vice president pence continuing his asian tour meeting with indonesia's president and vice president in jakarta. he then joined the president in watching a group of women perform a traditional indonesian dance. pence and his family have also

visited the largest mosque in southeast asia. james mattis meeting with egypt's president in cairo. he emphasized the u.s./egyptian relationship as an open one which was echoed by his counterpart. a soyuz space capsule is carrying an american astronaut making his first space flight and a russian cosmonaut. they'll join a three-person crew and as madame lagarde mentioned it's under the direction of peggy whitson and she'll break the record for the most time spent in space. back here on earth, sarah palin visited president trump bringing along musicians ted nugent and kid rock. she has been an outspoken supporter of trump since his campaign and she posted the pictures on facebook. you're up to date. that's the news update. carl, back to you.

>> thank you very much. look at the shares of csx, 6 plus percent of gain. one of the best days it's had in two decades after the new ceo said profits will increase by 25% this year. upbeat earnings, stock buy back, it had everything. meanwhile that's helping the transports which is helping the overall market. the dow's up 78. last year, he said he was going to dig a hole to china. at&t is working with farmers to improve irrigation techniques. remote moisture sensors use a reliable network to tell them when and where to water. so that farmers like ray can compete in big ways. china. oh ... he got there. that's the power of and.

with so many political question marks around the globe has economic data become irrelevant? that's what one trader says. cnbc.com/trading-nation more "squawk on the street" coming up.

let's get out to chicago where we have the zen tell ly exchange. >> i had this all olympianed out going to talk about behind the economic curtain. like a wizard of oz statement. watch out, don't go behind the

curtain. after lngs to christine, she made me go in a different direction. we are waiting for broet. and we all developed economies of the world shs the u.s., europe, japan, even the on ward developing economies of asia like china. and she said we're starting to see that good policy. now we can argue about policy, but we are start ing ing to see something. but the issue is really looking behind the curtain. and i'll tell you why. because ultimately if we do get growth, that's going to trigger so many things that are unanticipated. we almost be careful what we have wished for or what policymakers have manipulated towards. . great example, one comment she made that was wonderful interview, great job sara. what do you think about rates and the fed raising it? >> her answer was along these lineses. as long as they don't raise rates too fast.

that's a policymaker. policymakers are in a policy world. now let's look at the real world. if we actually get any kind of growth like the president is calling for in the u.s. or the numbers in europe actually start to pan out, what we're going to really get is a test of things because it's not about the fed at that point raising rates. it's about the market raising rates. it's about the balance sheet and a couple drops of red dye in a well of potential treasuries where a little bit of selling quantitative tightening, what that encompasses. it's about the negatives that we don't talk about. you want to know the negatives. here's europe. from one, this is minus 45. minus 60, minus 44, minus 33, minus. japan, minus 22, moinus 17, 13,

10, 2 and there's no rocket economic blast off at the end. what happens to all of those negatives? what happens when you seed inflation and nothing grows. what if you put your lawn seeds in and sell your lawn mower. who are you going to take care of that grass growing. i'm hoping for growth too. it could be a little scary as what it does to the landscape. karl, back to you. >> we'll talk to you this a bit. he's ranked among the. top five in the world coordinating facebook's purchase of okay lus. we're going to talk to brian singerman, when we come back. can we push the offer online? brian, i just had a quick question. brian? brian... legacy technology can handcuff any company.

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overweight from e evaluation. the etf is up 3% this week. pest week of the year so far. keep an eye on that and all the other retail stocks. for that we'll send it over to the team at "squawk alley." >> good morning. "squawk alley" is live. ♪ good thursday morning. welcome to "squawk alley."