"squawk box." good morning. welcome to "squawk box" on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. yesterday the markets ended higher, setting themselves up for the best week that they've had in three weeks. nasdaq actually poised for the best week since the first week of the year. this morning there are green arrows once again. dow futures indicated up by 17 points. s&p up by 2 points, nasdaq up by close to 12. this comes as talk about tax reform is surfacing again after comments from treasury secretary steven mnuchin. in asia, the nikkei actually ended up just over 1 %. markets in china were flat. and in europe, in the early hours there, after all the events that unfolded overnight, just ahead of those french elections over the weekend, you can see the cac is down, only by a third of a percentage point.

ftse is slightly weaker. the dax is actually indicated slightly higher at this hour. looking at crude oil prices. crude was down again. fourth session in a row. settled down to just about $50. this morning that new contract has rolled over. a june contract there, down by 4 cents, trading at $50.67. our top story, france is on high alert after a gunman ambushed police officers on the champs elysees yesterday killing one and wounding two others. president hollande called it a terrorist attack. isis has taken credit. the gunman was shot and killed. the gunman was known to french authorities. the attack disrupting the final days of the french company leading up to the election. this morning marine le pen said france should immediately reinstate border checks and expel foreigners who are on watch lists and surveillance

services. we will talk to wilfred frost from champs elysees in a couple of minutes. >> i don't know, andrew. terror is feared. terror is feared according to the "new york times." every other paper calls it that. terror is feared. but they knew the guy. >> they knew the guy. i don't know why you can't make the -- in corporate news, shares of mattel plunging. what's going on with barbie? the toymaker reported a loss worse than expected. sales fell 15% as leftover inventory from a weak holiday shopping season delayed retailers from stocking up on new products. barbie sales fell 13%. american girl sales fell 12%. not 13%. fisher-price fell 9%. mattel did maintain second quarter dividend payment. we can look at a long-term

mattel hasbro chart and see starkly different things. >> let's see. maybe we can call that up. >> we can do that. we can do that over a year or two or three years. maybe we'll get that. hasbro, you know, i think it actually -- management matters, operating acumen does matter at times. visa reporting better than expected results on the top and bottom lines thanks to growth in its european operations. the company announcing a $5 billion buyback program. e-trade topping earnings and revenue expectations sending shares higher in the premarket. the company saw a double digit increase in daily revenue trades from the previous quarter. oh! oh! they put that in quickly. >> i was looking at that myself. >> let's check in on the mattel chart. maybe we have a hasbro chart to go along with it? i haven't looked at this myself. i probably should have before i said it. see, that's -- >> you are correct. >> yeah.

>> part of what they say is the 2014 hasbro contract with disney where they got the licensing -- >> yeah. >> -- a huge hit. >> big difference. if we go back further, one is up 9%, one down 23%. >> hasbro has been much more aggressive about licensing toys, not only for disney but for others. there was a period in which they almost wanted to become a media company. >> yeah. >> they were in talks with works animation. >> mattel had the haunting hour. i think it changed the name, one of those childrens networks. hasbro had a joint venture with them. >> nickelodeon or something? >> discovery kids? >> the "frozen" line made them go off the charts. the housing sector is in

focus once again. march existing home sales out at 10:00 a.m. eastern. they're expected to rebound after a sharp drop in february. we'll also hear from minneapolis fed president neel kashkari. he'll speak about the economy later this morning. on the earnings front, general electric, honeywell and sun trust report before the opening bell. the trump administration is signaling that next week could be huge. that's what it is saying. congress will tackle a spending bill to avoid a shutdown as well as potentially a new health push on healthcare reform. eamon javers joins us now to break it down. what's the chances of this happening? >> well, it's a long shot. the trump administration is pushing hard to get a number of things done before the 100-day deadline by which we traditionally sort of judge presidencies. today the president will go over to the treasury department. we believe this will be his first public appearance at treasury. he'll sign three particular executive actions. one is an executive order. the other two are presidential memoranda. these all have to do with the financial services sector.

let's break it down. the first one is a tax burden executive order. they'll direct the treasury secretary to review tax regulations from 2016. the idea here is to determine if the taxes added undue burdens, if they had additional complexity or if they exceeded statutory authority. that's the executive order. the other two are the presidential memoranda. one is on orderly liquidation authority. this is one of the key pieces of the dodd-frank financial reform in the last administration it directs treasury secretary mnuchin to review this. it pertains to the government's ability to seize failing banks. the idea is that it aims to determine whether ola, orderly liquidation authority could result a cost to taxpayers or excessive risk taking. they'll write a report and the president will decide what to do at a later date. on the financial stability oversight council, or fsoc, they'll have an assessment of

fsoc's designation process and associated risks. we saw steven mnuchin out yesterday, he had an optimistic timetable for tax reform. here's what he said. >> we're pretty close to being able to bring forward what's going to be major tax reform. on the regulatory side, my focus is primarily on the finlt markets. though across the administration we're focused on regulatory relief. we believe in proper regulation. this is not about having no relation, but as it relates to regulatory reform making sure our banks can lend. >> so the markets seemed to like those comments from the treasury secretary yesterday about being close to bringing forward tax reform. not clear which direction they'll go in. or what the details of the plan are. the treasury secretary hinting that they will unveil something soon. all of this is contingent on

where they go with healthcare reform. the president said yesterday he would like do it next week but there's no guarantees. >> eamon, help us really try to handicap what's going on. the markets seem to like it. in this case they seem to believe to some degree steve mnuchin and what he's saying. tell us what has to happen next week also relating to the potential shutdown of the government. we have healthcare, the potential shutdown or not, and then when would we get the deadline? >> officials don't want to go into the 100-day line without a significant push. we'll wait to see if they can go healthcare before that date. tax reform can't go until healthcare clears the deck.

that will depend on where healthcare lands. there is an effort to avert a government shutdown. i talked to an official if the west wing yesterday who said we think of the shutdown as the "s" word. we're not thinking about it. we don't want to shut down the government. you heard the president say that yesterday. still there's a question about whether the president will insist on border wall funding in any government shutdown bill in order to pass that. the question is whether or not democrats and other republicans will go along with that. there's a bit of a showdown there as well. all that coming next week. the question is, they might be close to unveiling something on tax reform as the treasury secretary said. but whether they're close to passing that and whether that can happen this year, that's an entirely different question. >> eamon javers, appreciate it. >> i have been feeling this thing with mattel and hasbro for a while. >> i'm impressed. >> i've been feeling it for a while. that's -- i said it would be better to look at a three-year chart.

they both make toys, right? >> yes, when you hear things like it was because of a weak retail christmas, that's why stores are not restocking on some things, this probably tells a slightly different story. >> what's our buddy's name? >> the larger story is that hasbro is no longary ter a traditional toy company or mattel is no longer keeping up with the times on what it means to ab toy compabe a toy company. that's when you try to look through and figure out where the revenue will be coming from. >> we think of them as toy companies. you don't need go into back flips on it. you think of hasbro as a toy company. mattel as a toy company. there's the difference in the stock performance. i don't need greater -- >> i'm suggesting that the fact that they changed the business models they are now different businesses. >> they still both make a lot of toys. one makes a lot of barbies.

>> there are investing articles writd beten about this. >> some articles say buy mattel because it's undervalued this tells you the danger of a value trap. >> let's check the markets now. joining us is simeon and richard. guys, we've talked about a lot to of different issues that will be moving the markets already this morning. simeon, we start thinking about what's happening with the french elections coming up this weekend. that has some people concerned. you look to washington with the idea that you could get some tax policy that comes out, healthcare reform, too. when you look at all of those issues what is it that you think rises to the top and how you position yourself? >> i am still looking at earnings. it's a good position so far. we have 5% top line growth. but we're starting to see more dispersion. there's going to be more winners and losers, not quite as

consistent or out of the earnings recession. but you wanted to look at companies consistent earnings growers and dividend growers that have been on the right side of some of these binary trades, even within industries. >> so don't look for value in some of these issues, look for the guys with momentum? >> it's a combination of quality and growth that's important. not just the value trade. with regards to the washington side, you know, the challenge there is we know that -- if the administration is achieving some of the things it wants to achieve, we kind of know that some of those things we feel like are good for the economy. some we're nervous about. so with some of this momentum, we hear some sabre rattling about the canadian dairy industry. >> with nafta. >> a muted pace of change from the administration may not be the worst thing. >> joe, earnings are what you've been paying attention to what are you taking out of the earnings season? >> earnings are the key story

that hasn't been as much of a focus as it should be. we had this other narrative where we have got the moods of the market being determined on a daily basis by news out of washington. when you look at the stories that matter for stocks, also for treasuries, for the ten-year treasury, things like that over the long-term, the underlying fundamental stories is one that continues to get better and better. this week is a great example of that. markets are more or less sort of just kind of bouncing along. slight downward bias, then we wake up yesterday and there's talk that there's rumors that the healthcare -- we might be able to find a compromise on that. stocks go up. later in the treasury secretary comes out saying there may be a potential tax cut. all these leading indicators show the leading edge of the economy is not folding. that conditions not only here in the u.s. but abroad are not that bad. it's an environment where you want to be bullish. >> we do see some misses on the

earnings front. maybe those are the exceptions to the rule. but when you see somebody like a goldman sachs or ibm. ibm beat expectations on the bottom line but missed on the top line. and it was punished severely. >> we are early into the earnings season. as we look back on the fourth quarter of 2016 that was reported several months ago, we saw eps growth that was in the range of plus 10% on a year over year basis. if you also look deeper into the markets where you look at things like mid cap and small cap, small cap earnings were some of the strongest in the world. i think s&p small caps, their earnings were up 90% year-on-year basis last quarter. it's no surprise that small caps outperformed in 2016. there's lots of earnings momentum out there. the two strongest areas of the world are the u.s. and eamericans meamericamerging markets. >> joe, simeon, great to see

both of you today. >> i want to look at a ten-year. >> i think it started in 2014. >> no, no, no. >> long before that? >> no. >> 2014 -- >> it's a toy company. not a media company. both ceos had a chance to guide their toy company into other areas. one ceo may have gotten it different. but here it's american multinational toy and board game company. the third largest toymaker in the world with revenues. so the only point is that one guy took his toy company one way and got a return of 212%. another toy guy took his company a different way and was down. why does it have to be anything beyond that? why argue with me and make point? other than that? >> i was just trying to offary offer a detail which explains the choice one company made.

>> what is that? >> the choice was that hasbro made a concerted decision that children liked toys that were characters related to tv shows and -- >> so it's not media. >> to tv shows and -- but they also then as a result of that started to produce tv shows and toys. >> the percentage of revenue is what? >> small. but it changed the dynamic. >> you're right. you're right. >> because they did transformers, they did disney. >> okay. >> on the other side mattel was living with barbie and their own brands. one was a licensing business. one was doing their own brands. >> both toymakers. >> i don't understand the debate. >> just -- final days of the french election. >> that's what happened. >> overshadowed by yesterday's terrorist attack. a live report from paris after the break.

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how far are you -- i saw your shot earlier. you must not be far at all from the actual point where the policeman lost his life. >> that's exactly right. as you said, we're just in front of the arc de triumphe. behind that is the champs elysees, so about 300, 400 meters. just to recap as you said that tragic event last night. one police officer killed, two injured. the attacker shot dead by police at the scene. isis claiming responsibility for that attack overnight. i asked a journalist this morning whether it would influence the election. he said, yes, it would benefit marine le pen and francois fillon, why? because they have the toughest stance on security and immigration. let's look at what marine le pen has been saying overnight. she said i'm angry. went further to say the battle

against terrorism begins by getting back our borders. she, mr. fillon and mr. macron, three of the leading four candidates have suspended their campaigns for the finlt dal day campaigning. the far-left, mr. melenchon said he had not because the democratic process must continue. we've been asking voters whether the attacks would change the way they plan to vote. here's what they had to say. >> terrorism is an issue for me obviously. but it's not -- well, it won't help voting. >> i heard some were saying that they are going to remove some security measures in paris. well, this is not right or a good idea. >> my ideas are in my mind before the attack or after or during, because we had a lot of attacks. so, one more, nothing changed.

>> overall i'd say the tone of voters is one of solidarity in paris than one of fear. we should say that the betting market and the financial markets, which are live and up to date, they have not really reacted to this at all. the latest poll that came out yesterday before the attacks still has emanuel macron leading by 24%, and marine le pen close behind. >> when was the obama call to macron? was that recent? >> that was late yesterday afternoon, before the attacks. and he said to mr. macron he should keep campaigning into the final day because it could make all the difference. mr. macron said in reply he will fight until the very last moment. it did look staged, because the conversation was on a loud speakerphone and there were cameras around it recording it. i would say two things in response to that. president obama is very, very

popular here. there was, in fact, a campaign to allow him to be a candidate in this election. clearly slightly joking, but it did get over 50,000 signatures here in france. that said, on the flip side, mr. obama made a pretty overt intervention into the brexit debate and backed the remain camp. many suggest that backfired and hurt david cameron and the remain camp. >> israel, too. i think it will help this time. he is very popular in france, obviously. >> yeah. very popular indeed. mr. macron, of course, the centrist. the interesting thing about him is whether or not he can shake off his past as having worked as an adviser and an economy minister to the current president, francois hollande. he has single digit approval ratings at the moment. the candidate for the socialist

party, benoit hamon, distant fifth place, also poling in single digits. whatever happens, it's a wake-up call for the center-left who are really struggling and don't look to feature significantly in the vote on sunday. >> you're really good at the french pronouncers. i would think, since you start with an accent which is pretty thick, the british one, you would find it harder to pronounce the french words. i can't do either. >> joe, you're very kind. i suppose the truth is relative to the amount of tuition i had growing up towards the french language and time i spent here, i'm pretty poor. i will take the compliment. >> i think you at those prep schools and stuff you got some french learning, didn't you? >> french learning until 16.

>> yeah. all right. >> that's what i'm saying. >> okay. you lk like you could run, standing there in front of the arc de triumphe. i'm not going to try. wilf, thank you. >> i'm wearing the french flag, there we go. >> we'll check back later this morning. i know a couple of french words. sabotage. >> what's the one you always make fun of me on. >> cordon bleu? >> vigilante? >> vigilante. turning to corporate news. tesla recalling 53,000 of its model s and model x cars globally due to a parking break iss brake issue. the carmaker says no accidents or injuries have been reported. adding that less than 5% of the vehicles being recalled may have been affected.

>> and steel prices are up, some interesting news this morning about how much steel we have been buying from folks abroad in the three months since president trump became president. sony shares on the move after the company raised operating income forecast by almost 19%. the company posting its pre-tax income forecast. coming up, general lek tlel set to report in a couple minutes. we'll bring you those numbers, instant analysis as . first, a look at yesterday's winners and losers.

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welcome back. you're watching "squawk box," live from the nasdaq market site in times square. welcome back. just getting earnings from general electric. let's walk you through what they got in the numbers. 21 cents a share, better than the 17 cents that the street had been expecting. it's a beat of 4 cents there. revenue better than expected. 27$27. bil $27.7 billion, versus the 26.4 the street was expecting. >> so it's above, but year over year, down 1%. industrial segment revenue up

7%. >> the operating profit for industrial up 11%, up 20% over organic. they say first quarter orders were $26 million, up 7% organic. look at the stock chart. it's up by 8 cents right now. >> ge is continuing its portfolio transition, which has been not quite his entire career. he started -- >> 2001. >> continuing a portfolio transformation, investing in innovations in ge digital. our planned combination of ge oil and gas and baker hughes remains on track. expect the deal to close mid 2017. executing a $2 billion cost-out program over 2017 and 2018 to deliver more value to customers, shareholders and employees. and the question is -- this is

where now you need to chime in on this, andrew, how long does he have? who -- did the guy who gave him sort of a -- >> with my deep sympathy for jeffrey immelt, i don't like to say he's not long for this world, but i'm not sure he's long for this job. i will say -- >> this is because of the pressure coming from -- >> what's happened with nelson peltz is this. jeffrey immelt effectively went in part to nelson peltz and said get involved in this stock. we're a good company. we'll do the right things. you will effectively be the good housekeeping seal of approval. i can assure you the trian people now a year later feel they were suckered. if you know nelson peltz, you don't get suckered. >> though nelson peltz has not won with everything. with pepsi he was not successful. >> when you miss your numbers --

>> this is where you are shining. this is where i totally defer to you. >> i'm suggesting it's very difficult if you miss your members, nelson peltz and trian don't like that. >> i would be surprised if he was pushed out by something like this. >> he has the board, doesn't he? always has had the board? >> remember, trian is on the board. >> right. is it possible he can move fast enough to nullify -- >> we talked about if you sell the light bulbs, which they're trying to do. there's been speculation, do you sell off other pieces of the business? maybe there's a way to get tern sources a lot of people are unhappy. jeffrey immelt knows they're unhappy. >> when you joined cnbc six years ago, was it totally out from under or did they own half? >> they were still part. it was around the switch. >> right around the switch.

>> i'd be afraid to say any of that. not afraid. i like jeff, i have known him a long time. >> i like jeff a lot. i personally like jeff a lot. i'm just saying that it's very difficult -- >> but i did own a lot of options and stuff that were at $40 a share for -- since we got them. i valued those things. i thought they were worth something. none of them are worth anything ever. right? they all expired. at least mine did. i think maybe some other people got repriced. which doesn't make me real happy. >> let me say, i take no pleasure in saying this. i hope he figures it out. i hope they're all singing kumbaya together. >> you're kind of smiling. there's no pleasure, but you're animated. >> you asked me what will happen. the question is when does it happen. >> you know who's been long --

is it an overstatement to say long suffering? would you say that? >> yes, he's been long suffering. anybody who has been in this stock has been long suffering. let's be honest. >> i don't say these things, jack. >> just to clarify, trian is not on ge's board. >> they're not? >> no. >> peltz isn't? >> i got a note that just came through. they are not. >> well, there is a guy -- you must be chairman of the board of harvard advisory, or chief investment officer? are you -- do you feel like you've been long suffering? >> well, we have, joe. i think the only thing that made that easier to take was that we added shares in march of '09. it hasn't been a total disaster. clearly working through this transition that jeff has been working on his whole career since he took over as ceo, it's been painful. but we're almost at the end. i think andrew is right.

once this transition is complete, which is, by the end of the year, jeff may decide that his mission is over, and he's rebuilt the company, and it will be time to move on. turning to your viewers, this is a great report, joe. i think your viewers who don't want to take the time to build financial models of this country should focus on three simple metrics. if they look at organic revenue growth, industrial operating margins and share count, they want to see organic revenue growth in the mid single digits, they want to see industrial margins expanding and see share count contracting. if those three things are happening, they'll generally do reasonably well in the stock. >> it's possible that at some point this company will be in a position to flourish in a global

economy. immelt could be long gone by then. almost in the same way that some people think that jack welch had a great one obviously. but maybe it was -- it wasn't the worst time for him to hand over the reins probably in 2001 either. >> he nailed it. he nailed it, joe. but i think jeff is going to at the end of the day be viewed as a guy who stepped in to a really difficult situation and spent his career fixing it. i think you're right. after he leaves, his successor is going to benefit from this shuj tra huge transition. you're right, moving forward from this point or the end of this year, this is probably going to be a much more dynamic stock. >> we'll see. there are a lot of people that question the timing of a lot of the asset sales and acquisitions. >> especially the acquisitions.

>> going back to that. nbc part of the -- when that was sold. i don't know what it was worth. but comcast seemed to get the better end of that deal, certainly in acquiring "squawk box." >> that was a smart move. >> that was a game changer, as they say. all right, so you're going to hang in there. the dividend before the financial crisis was -- do you remember? 1.50 or something? >> it was well over $1. >> it's not back to where it is. i don't know what could have been done. you never know the counter factual. maybe nobody could have done better or maybe someone could have had it like -- you look at honeywell's performance, united technology's performance, multiples of what ge has been able to accomplish. >> that's right. ge started that period when jeff took over with an extraordinary valuation. it was trading over 40 times earnings. for an industrial/financial

stock we now know that was ridiculous. >> all right. okay. jack de gan, thank you. >> thanks for having me. when we come back, the cereal entrepreneur behind bare naked granola will join us. he has a new company that makes organic clothing. and austan goolsbee will be our guest host at 7:00 a.m. eastern time. later former threshry secretary john taylor has been mentioned as a possible candidate for fed chair. you're watching "squawk box" right here on cnbc. brian, i just need to know if 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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. welcome back to "squawk box." time for the executive edge. president trump is not giving up on healthcare reform pushing for a vote next week. kim munk joins us now. what are the chances that we get a new bill on the table that actually passes in the house? >> good morning, thanks for having me. yes. there's an effort underway to try to revive the repeal and

replace effort when speaker paul ryan pulled the bill from the floor of the hca. restarted referring it as dead alive in reference to a zombie film. but they're trying to get something to the floor. congressman mcarthur and meadows trying to bridge the gap between the conservative freedom caucus and a more moderate tuesday group. we're skeptical that they'll be able to get there, certainly not by next week. there's a chance they could pass repeal and replace. it's a major republican campaign promise but a heavy lift. there are still some large policy gaps between the various factions in the house. >> if you're an investor and you're trying to bet on a couple of things, trying to bet on that piece of it really bet on what happens with tax reform and whether you get there, then you have to bet to some degree on what happens on whether we have a government shutdown. how do you gamble all of that? how do you -- what's the equati equation? >> it's a difficult bet.

all these things are closely intertwined. i would say health reform is possible but not probable. coming up next week they're going to have to deal with government funding. either have to extend the continuing resolution or kick the can for a couple weeks. more immediately on healthcare they'll have to deal with the obama care subsidies, csrs. i would say they will in the background continue to spend some time on repeal and replace. because the stakes are very high. in the meantime they'll be teeing up tax reform. i don't think they're ready to do that. but it's a heavy lift. >> kim, here's the question. we hear from steve mnuchin yesterday, he says tax reform is coming. the markets move on that news. by the way in the same way they moved on the news when he was interviewed by us several months ago and he said he would have it done by august. all the comments throughout. where's -- at what point do you believe him? at what point don't you believe him? how do you try to parse it?

>> right. i'm more of a healthcare expert. >> right. >> but there are efforts underway to tee up tax reform. like healthcare, it's a heavy lift. i don't think they're ready to bring it up yet. it's probably, like healthcare, going to take longer and be more complicated. but, you know, they're working on it. it's coming. i do think it would be better for tax reform if they were able to pass repeal and replace. it improves the baseline. it demonstrates that republicans are functional and can deliver on their campaign promises. and it really helps pave the way for tax reform. i would say even if repeal and replace crashes and burns, they will be able to pivot to tax reform at some point. >> kim, i'm going to describe a narrative that's been described to me and we'll -- i know we'll talk about this later in the show. so, none of this stuff happens. because they're unable to wrangle these people. 2018 starts approaching.

all of president trump's support in congress starts evaporating because his poll numbers don't do very well. suddenly all of his support abandons him and nothing gets done, he becomes a lame duck by 2018. we have a guest coming on who will paint this narrative. i'm trying to preempt it so i don't have to do all the work. i guess that's possible, right? >> first, i'd say 2018 is still a long time away. >> not to these people. they're ready to -- that's barring impeachment, too. with a lot of these people. they suffer from the trump derangement syndrome, which i think you've seen. about seven stages -- don't know where they are. at anger. still a little bit of denial but also anger. have you seen it? >> yes, certainly. >> can be very acute. >> i think congress always moves slower than we anticipate. but they're just getting started. there are various katd catalystt

will force them to deal with healthcare and tax reform. if they can't do repeal and replace, they will repair on a bitart san b bipartisan basis. >> it's really -- people say the market responds to different things. but it's been a pretty decent barometer of the temperature of what's going on in congress. yesterday that was definitely mnuchin yesterday. >> yes. >> the markets feeling better. when it sort of stalls, it's like aca doesn't get repealed it stalls. you can almost see it happening as people vote with their feet in the stock market. any way, kim, thank you. appreciate it. >> thank you. coming up, the cereal entrepreneur behind bare naked grano granola. they have launched a new company selling organic clothing. i don't think you eat it. he'll explain next.

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will comback to "squawk box." the natural and organic food space buzzing with m&a activity. our next guest says it's overcrowded. he's targeting eco-friendly customers in the retail space.

we want to bring in brendan synnott. founder of so many things. we want to call him a serial entrepreneur, not just with an "s" but with a "c." he's the founder of bare naked, founder and ceo of a power company packed organic. we're thrilled to have you here. you have five different companies you've created. >> yes, i started a number of different businesses with products i just love. >> let's go through them. bare naked. >> bare naked. evil foods which is a frozen food business. i am loving you which is a pet food business. little secrets which is a candy business. wild snacks which is a meat bar business and past organic which is our underwear business. >> are you wearing that now? >> underwear, socks, t-shirt, whole thing. >> it's organic underwear. >> it's organic underwear. >> that is interesting. >> you were talking about water earlier this week with michael phelps. organic cotton is 70% less water than conventional cotton. >> and it's super soft. >> and it's super soft and comfy. that's most important. >> one of the things we always talk about is whether an

entrepreneur can have multiple ideas, right? and whether, you know, everyone has their one great idea. you clearly are bucking that trend. >> yeah, i've been able to be successful in a couple different categories. but all selling to the same consumer. like i've always built products that i myself love, or my friends love, and that i'm proud of. i think just to have a different connection. >> i was going to say, is that part of it? like because you're -- once you develop the connections, once you develop the footprint for getting out there, is it easier to come up with multiple ones? >> it's definitely easier to go raise capital to build teams, to execute within the marketplace, to get big retailers to listen to you. that's definitely easier. connecting with the consumer is about just listening to that conversation. >> i would assume going from bare naked which is food for humans to food for pets is a totally different world. and then going to clothing. i mean, is it the relationship with the retailers that helps? >> to me it's the understanding of the consumer. i think about a consumer sitting on my shoulder that i'm targeting in every decision i

make building a business. they're with me in terms of making decisions. >> so you sold bear naked. >> yes. >> very successfully. when you start a company like this, do you say to yourself, i hope hanes or fruit of the loom buys me? how do you think about this? >> i start by the store and walk in the store, hanes, fruit of the loom, jockey, they're going to mean nothing to the next generation of consumers. who's going to fill that space? and start building the business. but i eventually have like a stocking horse where i think if i don't hurt them they're not going to change how they make products. >> what i was going to say is why do you walk through and look at these brands that have been around for some of them over 100 years, why do you think it's not going to resonate with the next generation? >> they were all built around opacity. there was no transparency in relationship with consumers when those brands were built. where today consumers expect 100% transparency with the products they make. teach 3450e who made the republican, where did it come from, how was it sourced.

we all learn that from the food industry. >> would you ever want to manage a big, massive multinational? >> -- >> yourself? or do you -- do you just like building these companies and tentively selling them to the big guys? >> i love learning. i'm for it. i don't know if i would be that successful in that space. >> you may end up managing a big full-time national with all of your stuff. >> i'd love to go build one. >> sounds like you like to be a disruptor. >> yeah, i like to disrupt the spaces. i want to grow 100% a year. >> real quick because we're always talking about retail and the failure of retail these days. >> yes. >> what channels are working? what's not? tell us what we don't know about what's going on here? >> when i started the apparel business, i wanted to take it to target. i wanted to take it to whole foods and those retailers. but what ended up growing the fastest is our direct to consumer piece. and the direct to consumer piece just feels like a landslide that's about to occur within the retail space. it's going to happen faster. it's going to come faster. >> and people are buying

directly on your website? >> they're buying directly on our website. we also sell through amazon but you can't ignore amazon. i'm big, big fan of amazon myself. but, you know, the direct-to-consumer space, and consumer's desire to connect digitally in a really seamless, convenient way, is coming faster than i ever thought. >> okay, final question because we've got to go. granola. healthy for you or not? for real? >> it's healthier than frosted flakes. healthier than rice krispies. >> you always look at granola and think it's so healthy -- >> look at the calories. >> you can't eat too much of it. very dense. very dense. >> yeah. >> thank you. >> thanks for having me. >> really pleasure to meet you. >> good luck. >> when we come back the nasdaq trading at a record high and small caps on pace for their best week of the year. we're going to talk portfolio strategy right after this break. and later former treasury official john taylor has been mentioned as a possible replacement for janet yellen. he'll join us live from washington. "squawk box" will be right back. companies won't pay for damages,

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france on edge. breaking details on a terror attack in the heart of paris just days before their national election. we have a live update straight ahead. markets here looking to build on yesterday's gains after treasury secretary steven mnuchin says that the white house would unveil a tax plan soon. we're going to find out what sectors of the market could see a pop. and the race to a trillion. why amazon could get there first. we'll go inside the numbers and tell you if you should be a buyer ahead of next week's earnings report. 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 and welcome back to "squawk box" right here on cnbc. lyn live from the nasdaq marketsite in times square the debate has already begun. austan goolsbee is here. i'm andrew ross sorkin, becky quick, and joe are with us. and as i mentioned austan's here. we can get to him in just a minute. futures, see what's going on. green arrows pretty much across the board. dow looks like it would open up 22 points higher, s&p 500 about 3 points, nasdaq up 11 points. yesterday we had steve mnuchin's comments about hearing about a tax plan that seemed to move the market higher. we're watching europe. wilford frost is going to join us from paris. the city on edge following the deadly shooting there ahead of this weekend's presidential election. let's also tell you what else is making headlines this morning. dow component ge out with earnings this morning. ge reported quarterly profit 21 cents a share, four cents above estimates. revenue was also above forecasts. so they did beat and you know we

talked about fate of jeffrey immelt. perhaps this gets him another day to -- >> a great report but i don't know. down twelve cents. it's not like people are drns >> if you beat your numbers, perhaps maybe time will get them -- >> we should look at maybe, 30. doesn't ge and 30 sound like it's almost, if you say ge say 30. doesn't that sort of seem like -- how long has it been? i mean. >> 30. >> it's still 30. you do this and it's 30. we sell off this and it's 30. and then we buy this. and it's 30. and then we -- and it's 30. but at least it's not 6. >> maybe it's like cap. it's just holding. >> exactly. >> oh. >> we had a couple of things going on today. one economic report due this morning. the national association of realors with existing home sales. expecting a 2% increase which

would partially reverse february's drop. also president trump will sign executive orders today designed to ease tax and regulatory burdens on banks. he's going to be directing the treasury to try to ride reforms that would accomplish that goal. despite the market's recent downtrend there is a reason that we're just a stone's throw from record highs. mega caps, dom chu has more on that story. good morning. >> good morning, guys. as we talk about the idea that the nasdaq composite hits a record close yesterday there are certain stocks driving most of the action but not everything is all that healthy. take a look at this. we're going to call them pillars of the stock market because if you look at the top five companies in the s&p 500 by market value. they represent about 12% to 13% of the overall index, just those five stocks alone. so when they do anything, they carry a whole bunch of weight around with the index. every one of those stocks in the top five is positive year-to-date. so they have a lot of at least ammunition and firepower for the way that the markets are working overall. take a look at this.

because the names are familiar, and they're pretty much just all technology. apple is already up 23% year-to-date. alphabet, parent company of google up by almost 10%. microsoft up 6%. amazon not technically technology, retail, but it's still up 20% and facebook is up 25%. when you have apple, facebook and amazon all up 20% or more, that's one of the reasons why the stock market is holding up as well as it is right now. despite the fact that we've seen this move lower. now, if you take a look at the overall index for the s&p 500 we are well above where it traded on average over 200 days. things look good. things look healthy. however i would point out there are about 120, 130 stocks in the s&p that are trading below their averages. so some of the biggest companies in america that are really doing the heavy lifting for the markets, and that might be one of the reasons why, guys, you see at least near-record highs for the market despite not everybody participating. >> and apple across the board. s&p, dow and nasdaq.

>> yeah, it's just a huge weight. >> look at, andrew, do you look at dom's shot? let's take that shot. that you're right about, whoa. you remember the tom snyder show that came on at like midnight or something? >> yeah. >> that's kind of what i'm feeling. >> so dark behind you. we're looking at your backdrop, dom. a floating head in the -- >> you know -- >> you got the charlie rose table, basically. >> yeah, charlie rose. >> yes, but the tablecloth. i just need it to be like black. >> right. >> what time did you -- >> midnight when you filed this report? >> it might have been. i was delirious no matter what it was. >> we like this set because we could have one, two, three, four, five, six -- we can have seven people at any given time. and then we put about ten more on the remotes, and we could have a 17-box. >> wow. >> problem is, it's the canyons of times square the light never comes right through. >> it looks like it's raining. >> it's kind of dreary. >> we've been here for six months, and we have not seen --

>> a lot of sun. >> a lot of sun since we've been here. >> yeah, yeah. >> but daylight is coming. >> summer is almost here. >> so we're -- it's sunny. >> dom, by the way, you've got to show your picture of your baby because it's so beautiful. >> you know, i have it. my phone is right over here. i would say this -- >> what happened? >> she's beautiful. >> the overall picture. >> she sent it to you? >> no, she showed me. >> no, i was showing some of these things over here. >> that was my baby right there. >> this is his new baby on easter. and she's just beautiful. >> got the dress on. >> the first time he was here i didn't get a chance to ask him about the baby. >> yeah. i mean, she's- >> elizabeth is libby as we're calling her right now is growing fast. she's like in the 96% percentile for length and height but only like the 70th percentile for weight. we've got to bulk her up a little bit. >> no, no, no. i'm not fat shaming. i'm not fat shaming. but height is fine. you don't necessarily need 100%. it's early. >> it's still too early to tell. >> i'm thinking, you know,

runways and stuff like that. tall and -- >> it would come from my wife's side of the family. because it's certainly not -- >> $40 million a year. it's a good one. anyway -- we're going from the mundane to the sublime here. baby vice versa. this is the mundane. minutia. steve mnuchin says the trump administration plans to release a major tax reform plan in his words, very soon. regardless, regardless of the outcome of the health care overhaul bill >> soon. very soon. very soon. and just to be clear, we hope this won't take till the end of the year. so we're very focused on it. big priority for the president. we will get tax reform done it will be sweeping. it will be significant. and it will create a lot of economic growth. >> yeah. buddy mark they're interviewing him. we should have had him on to

debrief him on that. that gave the markets a boost in yesterday's session. here to talk markets and more, former council of economic advisers chairman austan goolsbee. professor at university of chicago's school of management and sarah hunt portfolio manager at alpine fund. and i mean like it or not, austan, sometimes the market seems to be a barometer of the chances of some of the trump stuff going through. at least in terms of tax reform. i mean a lot of the -- >> i agree with that. let's start on a happy note. i agree with that. i think a lot of the increase in the market is businesses, particularly the big ones, thinking they'll get a tax cut. and when the chances of the tax cut go down, like when they announce that they're going to do health care, try to redo trump care, before they do tax reform, you saw the market saying, whoa, whoa, whoa, that's not what we -- >> because of the first experience with that. but if you heard that the, whatever it is, the ruby tuesday

group, i don't think it is called ruby tuesday -- it's tuesday something, i don't know. >> the tuesday morning -- >> well. >> friday morning. tuesday. there's a lot of songs. anyway, but you combine that with the freedom caucus, if you start hearing those two groups really do have some common ground, it might not be a negative, austan. it might be, wow, maybe these guys heard enough from their constituents, and their fund-raisers, that maybe they're ready to back something -- >> on health care or on taxes? >> on health care, maybe. you think that's just -- no way. >> i think no way. >> why are they trying to do it again? >> i have no idea. the democrats have their own problems. they've got to sort out. >> yeah. >> they're all universally in agreement if the trump administration wants to blow their honeymoon window with son of frankenstein style let's bring back trump care where in the new version you probably seen if you had breast cancer, your premium will go up by

$28,000 a year. i mean if they want to revisit the old days, i think it's going to hurt them a lot. >> you -- you agree with that? should they not -- because it frees up a lot of money. instead of 28 on the corporate tax you can get down to 25. >> i think that's the tricky thing. i think one of the reasons that they're going back to we're going to work on the health care first is because it was supposed to free up a bunch of money for those tax cuts. >> right. >> the argument now is if we try to do tax reform first we're not going to have as much money to play with. >> -- the border adjustment tax which was supposed to be another trillion dollars. >> yes. and i think that the whole enthusiasm yesterday was oh, we're going to get this health care thing done therefore we have the money and the time and the ability to do the tax thing, and i think that that's the more important thing for the market right now. whether or not that's actually true doesn't matter. i think that was the perception yesterday. le. >> we had liesman on yesterday, it was interesting, austan, this is a discussion for both sides, but the consumer confidence

numbers. and the small business confidence numbers. all these things have gone up, as well. with the market, but he showed yesterday business confidence, and consumer confidence, if you're a republican, you're look at 80%. >> yeah, right. >> if you're a democrat you're like, even if you're in business, you still are mad. it's like -- >> i think it's the first time i've ever seen them do it by partisanship. this is the first time they've ever -- >> austan doesn't help. he goes on fox constantly. see that's why i'm not going to argue -- >> -- me, joe. >> i'm not going to argue. but you take on sean hannity. who am i -- that's why i'm just going to lay down for you today when you start trashing trump. i'm not even going to try -- >> -- they've been talking to me about taking your job. >> you know -- >> said they need somebody who doesn't know anything about anything. >> what did i tell you? >> -- qualified. >> you've got a face for radio. i'm sorry. there's some openings there now. i think owe riley had a show, right? didn't he, or not?

>> i -- i don't -- >> but like i said. the -- it has turned into a political discussion across the board. no matter what. >> mm-hmm. >> do you want tax reform to go through? austan, do you want anything -- do you want anything good to happen for the next four years? >> yes. i would like many good things to happen. >> other than impeachment? >> other than impeachment. >> is there anything else you would consider as a good thing? >> i would like us to get the growth rate higher, wouldn't you? >> we would all love to get the growth rate higher. my question for you on the tax reform, did you read the op-ed in "the new york times" yesterday that larry kudlow and a whole group of people put together? >> yes. larry my friend, steve moore my friend, they did what i months ago i told you on this program, they were going to do. which is, they will start talking about tax reform, they would then realize the border adjustment tax that becky said, wow, that would increase taxes on consumers by $2 trillion. let's not do that. they would stop with the

interest deductibility they wouldn't tax anybody and just say you know what? let's just cut the rate and say it pays for itself. and here they are. >> did you think, by the way, just read the tea leaves because you lived in washington before was that a break with the administration? meaning, they were almost -- >> why do an open letter? >> -- an open letter -- >> it looked to me like it was a lobbying thing. >> with a suggestion, by the way, and by the way they criticized the white house all the same, which i thought was sort of a bizarre approach. >> i thought so, too. >> unless there really is some kind of divide in terms of where they stand relative to the white house. >> oh, but there's clearly a divide within the white house, between different camps. kind of the national list camp, and the supply side camp. i took it, i don't know what you guys think, but i took that as, it was a public lobbying in which they were trying to catch the president's attention and say, no, no, whatever they're telling you -- >> i thought that, too. why did the open letter, unless

you feel like you're not being heard inside. >> right. so that's what i was going to say. it must be that they're not getting their channel that they used to have. and that's why you go public. otherwise -- >> i thought it was very strange. >> you just go to the president yourself and say, don't listen to them. do what we want. >> as far as the things that you don't need congress for? how much is that worth? >> well, i think -- i mean ultimately what we really need to see is some activity some better earnings and i think this earnings season is going fairly well. i think that's helping. if it was going poorly that would be a negative given all these -- >> -- regulation executive order type thing can any of that -- >> including more that are going to be kind today. >> well, absolutely it can. i mean i think there's a whole lot of areas where if you just get out of the way there would be more activity. you've already seen in the energy sector, pipelines go up that people were waiting on. you're seeing a lot more, part of it is the higher oil price but you're seeing more drilling and activity in that area where before there was a lack because you didn't have the frauk your. you're getting the go ahead to

build the infrastructure, i think that's helping a lot. they're talking about signing some orders today to do something on the banking side. i'm not sure exactly what those details are. there are things they can do that will push back on some of the regulatory issues that we've had. i think that can help. >> hmm. >> that's what joe assured us was what trump was going to do was just find the outmoded regulations, unleash the -- unleash the animal spirits, and kind of sit back and watch. >> joe even you might have been nervous -- >> no, no. >> about the trade war situation that we're now with canada, he attacked canada yesterday, we've now threatened all five of our biggest five trading partners with trade wars. >> it seems like -- it seems like we have mended fences with china. >> austan your biggest fear and the biggest fear of, you know, the phantom menace is going to be that we had a trade war with china, and now -- >> trade war with -- >> i wasn't there. i don't -- i wasn't there to hear how they spoke but the president talks glowingly about

president xi at this point. almost as if there is a working relationship there that might help with north korea. >> look, i hope you're right. and i hope it does help with north korea. because who knows -- >> he didn't do the currency manipulation. there have been things -- your greatest fears, you've got to admit, a lot of those things have been walked back and did not materialize. now canada i don't know. >> some of them. >> you've got your own problems. talking about canada. >> never believe a word -- >> but we've got to go but in truth why do you think the market is where it is today if the trade wars are creating the uncertainty that you would suggest? >> -- don't think -- >> but -- >> lingering effect? >> i still think they believe they see mnuchin they're hoping that they can get a substantial corporate tax cut through. and i think that's a main thing driving what's in the market. when that gets in trouble, as joe even said, when that looks in danger you see the market get a little wobbly. >> yeah. >> and when it looks like it's moving forward, the market immediately picks up. >> yeah.

>> thank you, guys. >> yeah. >> when we come back, amazon bulls believe the company may be on pace to win the race for the trillion dollar market cap. we're going to hear from an analyst who says it will do just that. "squawk" returns in a moment. brian, i just need to know if the customer app will be live monday. can we at least analyze customer traffic? can we push the offer online? brian, i just had a quick question. brian? brian... legacy technology can handcuff any company. but "yes" is here. you're saying the new app will go live monday?! yeah. with help from hpe, we can finally work the way we want to. with the right mix of hybrid it, everything computes.

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now the answer to today's aflac trivia question -- welcome back to "squawk box" this morning. french voters going to the polls in less than two days to elect a new president. the latest polls still too close to call showing centrist macron ahead of le pen. those polls taken before the tragic developments last night where a police officer was shot and killed in a terrorist incident right there on the champs-elysees. this morning wilford frost joins us this morning from paris. i believe -- right -- where the scene of the crime unfortunately took place. there he is. wil? >> absolutely right, andrew. just the other side of the

arc de triomphe. the champs-elysees is behind that. let's discuss a little bit more what to expect in the election coming up and factoring last night's developments, we're joined by the "financial times'" paris correspondent, he's with us now. michael, good morning to you. good afternoon here, my apologies. morning back in new york. last night's developments, tragic developments, is that likely to have an impact on the election on sunday? >> we've already seen a massive impact on the agenda for the day. events have been canceled and in terms of the tone of the rhetoric of the candidates you've seen the far right marine le pen as one of the center right, francois fillon making hay out of this and using it to beef up their credentials as the tough on immigration, tough on security candidates. and there's a real risk when you talk to pollsters that these guys will get a bump from this event. leaving the left leaning candidates trailing a bit further behind. >> we just mentioned the polls as we came out to you. do you think that there's a high portion of people, though, that are still undecided, that could

make those polls perhaps inaccurate? >> well what's extraordinary about this election is that there are four candidates who could potentially win, it's the most uncertain election in french post war history. they're all at around 20-ish percent and as you say, a quarter of the electorate still haven't made up their mind two days to go to the election. so, it's really anyone's guess whether the polls are right or not. >> what would be the worst outcome for markets, and for the economy here in europe and france? >> what investors call the nightmare scenario is a first round with melenchon the far left leader facing off against marine le pen the hard right leader. both of them want to erect trade barriers, leave the euro, leave the european union. this is the real catastrophe for global investment. bond yields would soar, equity markets would crash. >> in that instance, one of those two winning, marine le pen for example winning, how likely

is a eurozone exit for france after that? >> well, there are huge number of barriers to actually leaving. namely the fact that she's very unlikely to have a majority in the parliament. which have their elections in a month's time. so she will be limited in terms of what she can do. there are arguments about whether she can use various clauses of the constitution to ram through a referendum. but most importantly, even to call a referendum will be difficult. but then she needs to win the referendum. and the french people, mostly, say they want to stay in the european union. so, it wouldn't be the end of the eurozone project as we know it, but it will be a colossal blow. >> marine le pen winning just simply even if you don't get to the referendum point, would that be a big wake-up call for the eu? would we see reactions in other bond markets outside of just france's bond market? >> i think it would cause chaos across the european bond markets. it would call into question the future of the european project. and even if it didn't destroy

the european project, destroy the european union, the fact is that it would prevent its further integration, which is what market people, and economists say is necessary for it to fully function. >> michael, thank you very much for joining us. great to have you with us. michael stothard, the paris correspondent for the "financial times." guys, back to you in new york. >> wil, thank you very much. we'll come back to you in the next hour, as well, as those elections loom this weekend. when we come back a health care bill on the horizon here in the united states. the president saying that we could see another vote on the bill as early as next week. we will talk about that very shortly. ♪ predictable. the comfort in knowing where things are headed. because as we live longer... and markets continue to rise and fall... predictable is one thing you need in retirement to help protect what you've earned and ensure it lasts. introducing brighthouse financial. a new company established by metlife to specialize in annuities & life insurance.

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comcast business is different. ♪ ♪ we deliver super-fast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than centurylink. we do business where you do business. ♪ ♪ good morning, welcome back to "squawk box" right here on cnbc. we're live at the nasdaq marketsite in times square. among the stories front and center at this hour, we're going to catch up on some of the companies that have reported quarterly numbers this morning. honlywell earning $1.66 per share for the first quarter. four cents above estimates. revenue also above forecasts on stronger than expected sales in the company's energy and

aerospace businesses. also, beating the top and bottom lines this morning, suntrust bank. it earned 87 cents per share for the first quarter, three cents above estimates. the stock was barely budged in 2017. but is up almost 40% over just the last twelve months. looking at that chart. pretty one for investors. also some good news for consumers. may translate to bad news for supermarket companies. according to the "journal" walmart has set a goal for pricing its food 15% below that of its competitors. 80% of the time. walmart sells more than any other u.s.-based grocer. and steve liesman is here, and he's -- is that a arsenio hall sort of -- >> i love competition when prices decline. and that kind of stuff. i'm always in favor of it. >> but when we had was it kroger? we had one of the ceos or cfos on and the most nagging long-term concern for deflation and food deflation.

it's hard to make money when prices are going down. and walmart, this sums up -- and amazon, exactly what's happening with that. >> one of the two interesting trends in food which is what's going to happen to the ability to import foods from overseas. for example those things we get from mexico and south america. as well, i'm hearing, joe, of interesting stories about hiring migrant laborers in places like california. >> yeah. >> where there's apparently some difficulty in gathering the workers needed to harvest the krops. >> yep. you need a million people to help on farms. and that's another thing nobody talks about. i think i'm supposed to read this. >> read that, joe. i wrote it for you. >> you wrote this? >> well, it was a collaborative committee type of thing. >> who else? >> you know schultzy was involved and they looked over at "squawk box" -- >> the editor? >> we're talking way too much about this given what it is that you're going to say. we spent way too much time -- >> talking about how i'm going to throw up off every day and this is my -- >> i look forward to that. >> okay. >> it's like the highlight of my day. >> doing it right now. yesterday, former treasury --

maybe austan should try this. treasury secretary robert rubin saying this on our show -- watch this. because i'm going to use anchor school, everybody does this. match me do it. he was talking on our show about the economic data. take a listen. >> i think it's imperative that we protect the electric electoral fealty, whether we have fealty to the facts and data produced by the federal government because that's the base on where policy decisions are made, the base for policy and the base where private sector decisions are made. >> whew. at the end of the day steve liesman joins us now with a special guest going forward. all right, steve. >> thank you, joe. >> did i get it all? >> all of joe's pet peeves in one intro. >> people ask me about you and i say joe kernen is one of the great innovators in television. >> i'm a disruptor. >> you completely mock the process. and the process is ripe for mocking. >> i think that's true. >> let me crews our next guest here.

erica the former bls commissioner op-ed in the "journal" today saying the bls, bureau of labor statistics is potentially headed for failure. and you warn of this idea that perhaps the jobs number may not come out. is this hyperbole? is it possible? >> it's absolutely possible. people don't realize that the bls is more like a factory than -- than, you know, than you might think. because in a very short period of time, every month, the bls has to collect a huge amount of information from a huge amount of respondents, businesses and families, and turn those into the jobs report that comes out basically the whole thing is done in less than two weeks. these days the bls is underfunded. how does an agency still continue to produce all of the things it needs to do? >> we don't know what the funding is going to be for the bls in the trump administration. they've not put out a detailed

budget. they put out what's called the skinny budget. in the skinny budget there's a 21% cut to the department of labor. >> right. >> do you expect that to go and hit the bls, as well? >> bls is the second largest agency in the department of labor. and the bls has not had inflationary increases, you know -- increases to keep up with the increases in its costs. pretty much for the past decade. so, i assume that this will hit the bls. >> now this is not something unique to the trump administration. under the bush -- i'm sorry under the obama administration funding also was cut. austan, were your responsible for that? >> no. if you remember, president obama was pushing back and trying to fight that. but the republicans pressed very hard that they wanted to cut the data. now, joe, i would have thought even you would be upset if they started blowing up the numbers that the private sector relies on. does it bother you? are you nervous that they say, look, they're not going to be

able to collect the basic statistics of the u.s. economy? >> i want that funded, austan. we heard yesterday from -- is that why we introed robert rubin? robert rubin said the fealty of these numbers is the only way for anyone to decide on policy. but when he was saying that, saying that, better make damn sure they're accurate, then. because if you're going to base everything on it, and sometimes they're nuances are, you know. how many discussions can we have about the participation rate and what's really happening there? we've got the numbers but everybody's got a different notion about what it means. >> can i weigh in on this? it strike me there are places for economies and efficiencies in the bls from the following way. we have done, i don't know if you notice this, joe, more and more private sector data. we have challenger on, we do adp, adp sample by the way, adp has a bigger sample than the bls. why can't the bls save some money by using the private sector? >> bls is actually taking

advantage of big data in a lot of different ways. but, in order to do that, you have to invest in the process. and you have to make sure that the data have high quality, and you have to manage the risk that comes from collecting the data in a different kind of way. none of that is free. in fact, bls looked at using scanner data for the cpi. >> right. >> and found that that would raise costs by 73%. >> do you remember when the bls numbers, we were at the height of the questioning, it was two or three years ago, and there were, kudell, others wrote articles about guys that slept in that were supposed to be doing the polling. it still has to be statistics, right? you can't, obviously ask everybody what they're doing. >> there's a human element to it. >> and the sampling, just look at the polls in this last election. the samples of who you're talking to mattered and how you got that data. >> i agree. >> is there a better, cheaper

way? is there a cheaper, more efficient way to collect the data? >> so let me say a couple of things. first of all, all of the -- most of the big data products that you're looking at rely on the official statistics and calibrate them, to validate them, to make up for the missing parts. >> so if we don't get that it's all built on garbage? >> we have to remember the private sector, the government surveys in many cases you have to answer, and in the private sector, they're totally voluntary -- >> so the bls survey -- the bls surveys are almost all volunt y voluntary. and still we get the highest response rates in the business. higher than -- >> let me tell you something else from an advocacy point of view, which is the returns to the good data are good policy decisions by the government, are good decisions by business -- >> and -- >> picture for ordinary investors about what's going on. and we're spending about two bucks a person. you know, if we could -- if we could spend $2 in one sense it's a big deal. one of the debates we have

around this table and erica is a labor economist, is this notion are people coming back austan? are people coming back to the workforce? alan krueger says no and there's a notion, and i think we might as well try, that there are people on the sidelines who have left, who are in the prime working age, who could come back. what's your take, austan? >> look, i hope they're coming back. and let's try. let's try to get them back in. on some of the grounds, most of the people who are out are older, and it's the aging of a population. it's the main thing that's driving participation. there are some prime age as erica will say maybe they could come back, but you've got some issues there of, some are injured or on disability. you've had incarceration of some part of that population to have a hard time getting back in the job market. and so, the nut to crack on that is a little harder than just the normal business side. >> in the bls, the guidelines,

is a tenured professor at like university of chicago a -- >> a hero? >> do you consider this part of the workforce? or zero of the workforce? >> i mean -- >> is that guy actually in the workforce? i would think that it's just right now some gray area. >> if you work for pay or profit during the week that contains the 12th of the month -- >> both. >> so you are -- okay. >> the >> i think the code says professor, comma, super hero. >> all these things are -- >> and how do you classify a broadcast anchor? >> does he get paid to work? >> he gets paid? >> i work three hours a day. >> minimum wage category. >> if it's at least an hour -- >> erica thank you for joining us and promoting this very important issue of funding the data. >> there's three of us -- >> funding the data. >> basically just squeak in. okay. >> thank you. >> when we come back, president trump hoping for a vote on a new

health care bill, as conservative and moderate republicans continue to negotiate. could we see a vote as early as next week? we're going to talk more about this right after the break. and then amazon will be reporting earnings later next week. could the company's results push the stock to $1,000 or even higher? we're going to speak to an analyst. "squawk box" will be right back. your insurance company

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welcome back, everybody. house republicans are trying to make another push at health care reform. for the latest on this let's bring in former health care policy adviser to mitt romney's 2012 presidential campaign. he's now the president of the foundation for research on equal opportunity and we know that there are a lot of negotiations that are taking place behind the scenes. we don't know exactly what this new bill might look like. but what's your best guess? >> hey, becky. i think what we know at this point is what moderates and the republican party are campaigning for is the preservation of a lot of obamacare's regulations, particularly the regulations around pre-existing conditions. that's what they want. and what the freedom caucus wanted, the right wing of the republican party, is to deregulate the market so you can get lower premiums. that's been the tug-of-war. it looks like mark meadows the

chairman of the house freedom caucus, and representative mcarthur representing the tuesday group, the gop moderates, they've hashed out some sort of deal that would preserve some of these regulations in the aca. >> i mean, those are two very different viewpoints. two ways of kind of looking at the world. what would it mean? would it mean more state rights to decide that they can or can't do some of these things? >> yeah, i would call it a little bit more state flexibility. and the thing that's really interesting about this, becky, is that there was actually a deal on the table from the house freedom caucus that was more favorable to the moderates in terms of offering more generous subsidies to lower income people so that fewer people would lose their health insurance under the new health reform plan from the republicans. but what moderates really cared about was not the subsidies, they cared much more about the regulations, particularly this piece on pre-existing conditions. that tells you a little bit about the politics of this. that protecting people against pre-existing conditions, that very popular piece of the law,

was more important to gop moderates than the overall policy goal of making sure that everybody has health insurance. >> when we spoke with some of the house freedom caucus people just over the last bill was kind of blowing up when they decided not bring it to the vote, maybe that day, there was this commentary that they were saying things like, look, this is the biggest piece of republican welfare that i've ever seen. what moderated their tone with this and got them back to the tables to the point where they were willing to negotiate? because negotiation itself seemed like a dirty word. was that partially president trump putting some pressure on them? was that their own constituents who said they need to go back to the table? >> i think the house freedom caucus actually played an underappreciated and constructive role in all this. they went from saying, no tax credits, no subsidies at all to help the uninsured get coverage. they now are saying, well, we're not -- we're not thrilled about

that, but we're really going to focus on deregulating the markets so premiums are lower and more affordable for the people who need it. that's actually a more free market position. and i think they felt the pressure and the responsibility to say, okay, we know what we're against. what are we for? and i think they've really tried to figure out how do we get to yes, what are we for? what are we negotiating for? and i think they've moved a lot in a more constructive direction the last couple of weeks. >> we have a very distinguished guest, former chairman of the cea, like stiglitz and bernanke and greenspan, in this case it's more professor austan goolsbee is with us. >> there you go. we know each other. >> he referred to this latest thing as, he's so funny, son of frankenstein. so the first one that they're trying to do was frankenstein. and then this was son of frankenstein. i misunderstood the notes. i thought you meant obamacare was the original frankenstein. >> no, no. they're trying to re -- regrow this thing -- which was already dead. >> tell me we need to do something, though, right? >> my question is this.

even if they can agree in the house on a compromise, when they go to the senate, don't they still need to get some democrats on board to get to the 60 vote threshold and aren't the republicans -- the republican senators not fully on board with what's coming out of the house? how does that -- how do you feel like that plays out? >> well, my personal view, austan, is that a more bipartisan approach that would get 60 votes in the senate would result in stronger and better policy. but republicans have said, you know what? we don't think we have a willing partner on the other side for repealing and replacing obamacare, which is understandable. and so they're going with this reconciliation process that requires only 50 votes in the senate. now the problem with the reconciliation process is that you could only do fiscal policy through the reconciliation process. taxing, spending, things like that. you can't really do as much on the regulatory side. and it's the regulations in the aca that need to be reformed or fixed in order to make the individual market for health insurance work better for the

consumers who are priced out of it right now. >> i want you to talk austan in to the notion that it can't -- the status quo is unacceptable. i mean, isn't that -- isn't that where you are, austan? or -- >> look, there are things did my own position, and i'm going to talk about this, and he has put forward thoughtful plans from a conservative point of view of ways that you could reform health care. they aren't the plans that republicans are trying to push. if you want to tweak, improve, make better the health care system of the united states, we should be for that. everybody should be for that. but that's not what they're trying to do. they're trying to fulfill a promise that they voted 65 times or whatever to repeal obamacare and they just want to find something that they can say we did. >> well, i mean, final thoughts on that, avik? i want to hear your -- >> yeah, look, i think there are ways to get to reform, the 50 vote reconciliation threshold makes it hard.

i hope republicans will look more on the regulations and make sure they commit to making sure every american has health insurance through a more market oriented approach. you can do that. >> okay. >> avik, thank you. >> sure thing. >> got somewhere sort of there, maybe. coming up, will amazon be the first to hit a trillion dollar market cap? we're going to take a closer look at the business ahead of next week's big earnings release. how about that thing i know you understand. web services. i thought you ordered from it. >> aws. >> too complicated. here are the futures at this hour. they're up. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? ...no minimums. schwab has lowered the cost of investing again. introducing the lowest cost index funds in the industry with no minimums. i bet they're calling about the schwab news. schwab. a modern approach to wealth management.

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>> >> the race to a trillion is on. amazon bulls believe the company may be on pace to win the race ahead of competitors apple and google. we talk about the trillion dollar race all the time. joining us right now to explain why amazon may have the best shot, michael olson, the managing director and seniorry search analyst covering consumer technology and e-commerce. you've heard us talk about it before many a times. the law of big numbers. and once you get too high, maybe you can't really stick your head above the clouds. what do you think, mike? >> well, i think there's always the risk of a lot of large numbers. but you look at the race to a trillion it's a fun question. and i think it really comes down to which company has kind of the most shots on goal to having a new leg of innovation within their business.

and when you think about amazon, they have multiple different potential options for that. you have same-day and same-hour shipping with, and two-hour with prime now. you have aws, you have advertising, which is we think now a multibillion dollar business. there's a lot of different potential future legs of innovation for the company. when you look at some of the oirs th others that could potentially get to a trillion before them, apple is most notably in the lead, probably more of a product cycle now. maybe less kind of a defined path towards innovation. >> what would your calendar for trillion dollars look like. when do you get there? >> that's a good question. you know, i think if you look at where we are for potential ebitda growth over the next few years, if you go out five or six years, which we don't even have estimates out past 2020, what you would probably see is that if you took a multiple similar to what most investors are using on amazon today, and apply that

to an ebitda six years out you'd be at around $1 trillion. i think five or six years is probably the right number. >> but apple should be -- unless apple drastically slow down in terms of ebitda growth, apple would be there way before amazon just purely because apple is at 750 and amazon is below 500. so you must be, you know, implicit in your analysis is that apple's going to grow much more slowly than amazon. is that fair to say? >> we do think apple will grow more slowly. and again i think it comes down to, you know, apple has proven to be a bit more of a company now 80% of the business is essentially tied to iphone between unit sales plus services. which most of the services is iphone related. and what we've kind of failed to see at this point is another path of innovation for apple -- >> they only need 33%. they need 33%, amazon's got to double. >> yeah. i hear you. and i mean another factor that could come into play is if apple uses the $230 billion of

offshore cash that they have to repurchase shares. >> yeah. when it goes -- >> -- to market cap as swell. >> the debate continues, michael. we appreciate it. >> thank you. >> great to see you. >> google. google is a juggernaut, too, though, don't you think? that's a really cool three-way race. microsoft maybe, too. i don't know. tough. who knows the future. who knew social media. >> what about alibaba. >> maybe so. >> where is it right now? >> i don't know. >> that's impossible. it will come out of the -- coming up former council of economic adviser chairman john taylor. he's one of the quiet, dignified former cea guys. we're going to talk fed, the economy, the sort of nonpartisan with a shot under president trump and much more. the futures at this hour indicated up 27. or so. we'll be right back.

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the first 100 days president trump revives a health care overhaul. >> we have a good chance of getting it soon. i'd like to say next week, but it will be, i believe we will get it. >> the latest from washington straight ahead. the man who could be next in

line for fed chair. we'll talk to former treasury official john taylor about tax reform, the economy, and the central bank under president trump. plus, a terrorist attack rocks france days before voters head to the polls. we have a live report from paris as the final hour of "squawk box" begins right now. limp from the most powerful city in the world, new york, this is "squawk box." that hurt. good morning. 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. very hurtful. our guest host this morning austan goolsbee, professor, tenured forever at the university of chicago. also a former cea chairman. the futures are positive after a pretty good session yesterday. up about 200 points for awhile, and then it moderated a little

going into the close. closed up for the first time in since we were down five out of six days. so now it's five out of seven. pretty good -- >> -- the best week that we've seen in three weeks. the nasdaq is on its best track since the first week of the year. >> isn't it option expiration day too? >> i know the contract for crude oil rolled over. >> treasury yield, 2.23% right now. >> okay a developing story this morning. a gunman ambushed police officer on the champs-elysees yesterday. president hollande calls it a terrorist attack. isis is taking credit. the gunman was shot and killed as he tried to flee. the gunman was known to french authorities. the attack disrupting the final days of the campaigning leading up to the french election. we're going to have a live report from paris in the next half hour. in other news fed speak on the agenda. neel kashkari scheduled to speak

about the economy later this morning and then on the economic front march existing home sales coming out at 10:00 a.m. eastern thyme. >> dow component general electric out with earnings. ge reported quarterly profit of 21 cents a share. that was 4 cents above estimates. revenue was also above forecast. the stock up by about 20 cents. earnings also out from stanley black and techedecker. the company raised its full year forecast based on strength that it is seeing in its industrial businesses. that stock is up just over 1%. and check out shares of mattel. the toymaker reporting a first quarter loss that was worse than expected. sales fell 15% as leftover inventory from a weak holiday season they say delayed retail frers stocking up on new products. barbie sales were down 13% in the quarter, american girl sales down by 12% and fisher-price fell by 9% and that stock is off by more than 6.5%. >> politics, president trump

expected to take executive action targeting regulation and the finance industry today. joining us now is john taylor, senior fellow at the hoover institution. he's one of the editors of rules for international monetary stability, past, present and future. and possibly has more government service in his future. good to see you. we got a lot of professor overload today. because i've got a professor over here austan goolsbee. so, if i call you professor, he might answer. so can i call you -- i'll call you john for now. >> absolutely. sounds great. >> i want to start just by -- we just looked at the 10-year again, john. 2.23. i just am not sure that people that, and i'm one of them, that people have been arguing for higher rates for years and years that the fed behind the curve, and that these are artificially low rates, i'm not sure that we

can necessarily claim that. now the fed's moving. we're talking about the balance sheet rolling off. there's been a couple of hikes. you're still not seeing an ee quill brags back to what we thought would happen by now. i'm wondering if you did have a rules based fed wouldn't you be higher right now and that might have been a mistake? >> you would be higher. and i think they're moving to higher rates. that's part of the normalization that you just referred to. and looks like the balance sheet by the end of the year. so i think that's there. i think maybe it would be a little clearer if there was a strategy that was out there that people could talk about and understand. and i think there may be moving in that direction. i think the field curve, it's still above where it was above the moves began. and it's come back a bit that's for sure. ultimately i think if this normalization continues we'll eventually see a more normal sloped yield curve. >> if we had gone up let's say a year, two years ago, and if we

were at 3% or 4% right now, isn't it possible we could have, you know -- that maybe we would have engendered a slowdown or a recession prematurely? maybe rates really did deserve to stay this low for this long, and maybe we have benefited from that with where unemployment is, and, you know, other metrics that are doing pretty well versus the rest of the world. >> i think overall, we would have had a better recovery had policy been a little more systematic. that's what i've argued. i think the evidence is accumulative in that. also the global aspect, which is what this book you refer to is about. the impact on the global economy. monetary policy in europe. monetary policy in japan. it all hangs together. and there's some instability out there of exchange rates. people are talking about. so i think more rules -- based international system is part of what you get from a more rules-based systematic, doesn't have to be technical, just kind of things that greenspan often would talk about with respect to

policy. just changed more recently. >> john, austan's gunning for my job so i'm asking all of his questions right now. basically, and i'm -- you know, i almost made sense to myself. austan i'm going to let you in now. we may have cut this recovery short if we had gone -- >> if we raise too fast. look it could be. i was going to ask john, it's austan. >> professor. >> professor, and -- >>professor. >> the one view of global monetary stability centers on choice of interest rate policy, and transmitting rules in a clearer direction. and another group says try to do it with the regulatory side. where do you come down on that regulatory side? now there's discussion about appointing a vice chair for supervision at the fed. do you think that some efforts could be made on the either to the world system, or within the

u.s., on the regulatory side to enhance stability separate from the monetary channel? >> yeah, i think both are important. i think the notion that you have a predictable rules-based policy on both sides is important. one of the things that i testified recently about here in washington is some reform of the bankruptcy code, which would provide clarity for large financial firms who got in difficulties. it's a special chapter 14 of the code. and that is using the rule of law. using the priorities that are in the bankruptcy code about having it set up so it handles large financial firms in a very quick way. so that's an example, some of the things that are being discussed that actually passed out of the house judiciary committee unanimously and was a voice vote in the house. so it looks promising on a nonpartisan basis. >> i don't know what kind of discussions you have with the trump administration but do you have any feeling about whether janet yellen gets another term? >> no, i can't comment on that at all. i think i've always argued that

for the kind of monetary policy i think makes u.s. perform better, and i think there's some of the comments that she's made and stanley fisher's made recently are more in that direction. i think, in particular a speech he gave in california on january 19th advocated comparison with policy rules. so anyway, no information about that whatsoever, but as always i'm interested in better monetary policy in the u.s. >> do you think a real estate guy that has even broached the notion that maybe the dollar can be too strong, does that seem like a guy that's going to want someone that's not a dove at the fed? >> no, i can't comment either way on this. but let me say this. i think, you know, when you're thinking about exchange rates. this goes back to this international monetary stability aspect, it's not just the u.s. it's europe, it's japan, it's china, all this has been this together. and so that's why i think it's so important for transparency

purposes. to have a clearer set of rules for monetary policy. and i think as the fed normalizes, i think you'll see options in that direction both in europe, the ecb, and eventually in japan. so it will be a -- it will be a clearer world with respect to exchange rates and the kind of issues you're referring to. >> yeah, well we'll see just like with the supreme court, people said i don't know, he may not -- he may not stick with the 20. he's supposed to pick a bunch of hawks. and we'll a chance to pick hawks. we'll know early on whether he's really going to pick hawks or not. >> the hawk/dove distinction, talked about that before, really is not very meaningful. it's whether policy is more systematic, strategic, these are the things you want to look for. people who think that's important. and we've seen it in the past, and i think that's where the fed ought to be going. i think that's where they want to go. so i don't think this duff/hawk disdings is very useful. >> but can the fed some day not be something we talk about every

hour? do you think it ever gets to that point -- >> yes. i hope so. i don't know if you'd like that. >> no, no, no, we wouldn't. liesman i can't speak for but the rest of us, you know, there's like 12 of them or i don't know how many there are. >> yeah, used to be it wasn't that way. it was much less of a back and forth, and too much talk doesn't really help with transparency after all. but it's good for traders. good for talking. >> all right. >> john, real quickly can i just ask, we talk all the time about the 10-year note and trying to figure out why the yield has come back under so much pressure when it looks like the fed is in the process of raising rates. why do you think that is when we're looking earlier this week we saw the 10-year yield fall below 2.2%? >> i think the early part of this year the economy is coming in a little weaker than people thought. that may get people thinking about whether the fed is going to continue with its normalization. and i do think that that's question about what's happening with policy. i've been arguing very strongly that this efforts to reform the regulations on the financial side more generally tax reform

those things have to go. i think we have a huge opportunity for better and stronger economy but we need those changes in policies. i think people are beginning to look at that. i'm still very hopeful. but there's people may be a little doubtful at this point. >> john, does the hoover institute have a view on immigration? this is another one of those things that you know, gdp is based on population growth and productivity. and if we need like really smart people with hsbs and we do need people that do other jobs. i mean that would be tough to hit gdp numbers if you don't have the same amount of immigration, wouldn't it? does the hoover institute have a view on that? >> actually it was 9 hoover institution doesn't really take positions. it's people like me or george schultz who is a distinguished fellow at the hoover institution have different views. so we get out there and debate it. >> unbelievable. i'm austan -- >> -- going to sleep. >> he's trying to take my chair. so i can do what you do. anyway, john, thank you. always a pleasure to have you on.

i thought i could get you like waving your arms at me. because -- >> i agree with everything you said. >> it's amazing, right? >> in the past you would have yesterday at me for ever implying that higher interest rates could have been stimulative. in what world are you living where higher rates would have been better for the economy? >> and you said it better than i could even say it. >> but you didn't -- >> you didn't agree -- >> maybe it was -- >> i agreed with you 100%. >> but you didn't really say it. i wanted you to say it. >> you guys can get a room, it will be a love-in during the commercial break. in the meantime a lot ahead on "squawk box." up next, health care, tax reform and geopolitics hot spots. congressman robin kelly is going to join us on the set next. plus the final countdown in france. voters on edge after the terrorist attack days before they head to the polls. reaction from former u.s. ambassador to the u.s. anthony gardner at the 8:30 eastern time. and then later on cnbc, an exclusive interview with fed vice chair stanley fischer.

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as the range of cybersecurity threats affecting our national security representative robin kelly. member of the foreign affairs committee and the house oversight and government reform committee and we're thrilled to have you here this morning. >> thrilled to be here. >> let's talk north korea first. where do you see all this going? >> well i don't know if you're aware, or maybe you are, that i just came back from south korea saturday. it was bicameral, bipartisan, and we spoke to chinese, south koreans, and japanese and the message that i got is that they don't want the tensions to continue. they don't want this to turn into war because they'll be the ones that are devastated by anything that happens. so they're hoping, i'm hoping, that china will take the lead role because they have the best relationship with north korea and it was because of their leverage that north korea came to the table before. >> right. >> they're hoping that that happens again. we diplomatically deal with it. >> you know, the one issue, though, we all hope we can

diplomatically deal with things. that assumes you're dealing with rational actors. and i'm not convinced that that's necessarily the case in this situation. what's the best case scenario we can hope for if you can't have a rational discussion? >> well i think that's where china comes in as far as north korea. and leveraging what they do for north korea, because then information we receive seems like it would be hard for north korea to continue if china didn't help that country. >> just in terms of yanking any energy -- >> right. >> or any -- >> the resources that they helped them with. now, on our side of the ledger, i mean, i have faith in general kelly, and general mattis, and we met with our military there. and i definitely have faith in them. they were very impressive. >> i wonder who's really right about china? i hear both. that if they wanted to, they could definitely, no doubt, rein this guy in. and then other people say no matter -- that it's not about

them. the guy's really like a rogue, and that maybe china doesn't have as much sway. i like to think that they do have enough sway, don't you think? >> i think they do have. i mean, there's probably a little bit of truth on the other side. but i do think they have sway. if you're depending on them for, i won't say your country's surviva survival, for a lot of things, they would have sway. >> i would think that, i mean, we really are suddenly talking about how close california is, how close hawaii is. these are things that i never thought we'd talk about ever again. and which implies that the possibility is not euro something like that could actually happen. but china that would not help anyone and it would not help china. >> no, it would not. >> seems like they have the wherewithal to absolutely make sure that doesn't happen. >> but this guy has come in, in north korea, and he's decided that he wants nuclear weapons. and -- a lot of the experts said that's only four to five years out that he could have one that

he could put on an icbm that could reach our coast so the clock is really ticking at this point. >> but people we've spoken to there, yes he wanted them, but so did his dad, and so did his grandpa. really didn't start with him. this has been the thinking all along. >> but we can't live with that. >> right, right. that he's just carrying out. and also, it seems like it's a legacy about him not so much that he feels that he has to protect north korea. but it's his legacy. >> by the way, this failed missile launch, do you think that it failed on its own? or do you think that we had something to do with its failure? what do you know? >> what i know i think it failed on its own. i don't think we had anything to do with it. but i've also earned you never know. >> well i ask only because you also spent a lot of time thinking about cybersecurity. >> right. >> and the other piece of this is all relationship with china, vis-a-vis cybersecurity, and what china is sometimes allegedly doing with our own

security, and vice versa. >> mm-hmm. >> you know, i never even would have thought of that unless someone mentioned it when i heard it on the news. so, it seemed a little farfetched. but i know nothing's impossible. so i'm not going to say 100% i know what really went on. i don't think it's likely. >> and in terms of cybersecurity what do you think is the biggest threat? >> the biggest threat? >> the biggest threat to this country. >> i think the biggest threat is other countries hacking in to our systems. whether it's elections, or whether it's retail, banking, medical, the hacking that went in to the personnel files for federal employees. so, i think that we have to get a handle on that. but also, will hurd and i who is the chair of the subcommittee, we have to find skilled specialists, also. >> he was a cia guy wasn't he?

>> yeah. >> he knows. he knows. >> yes, he does. >> we need to ask him. will you ask him whether we did this or not? i want to think we did. >> okay you want to think we did. i'll ask him. >> great to see you. we appreciate you coming on this morning. >> thanks for having me. >> we do have a few stocks to watch this morning. honeywell out with earnings. the company came in with earnings of $1.66 per share for the first quarter four cents better than expected. revenue also above forecasts on stronger than expected sales in the company's energy and aerospace business and that stock is up by 2.25%. and sony shares are on the move after the electronicsmaker raised its operating income forecast by almost 19%. the company also boosting its pretax income forecast and sony shares were up by more than 3.5%. when we return, elon musk wants to link your mind with computers. his brain machine could come in less than four years. and would it -- i don't want like electrodes actually going into my brain, though, is that what it takes? >> i have no idea. >> prefer not to have like

incisions and stuff. details next. you're watching "squawk box." ♪ ♪ i'm dr. kelsey mcneely and some day you might be calling me an energy farmer. ♪ energy lives here.

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well camp back, everybody. google has been secretly developing its own chips that could shape the future of artificial intelligence and machine learning. cnbc has learned several engineers from the project recently left google to team up with venture chaptist

palihapitiya on a start-up. right now he isn't offering any details or many details but he did hint at the start-up in an interview last month that he did in an interview on "squawk box." >> took us a year and a half to find the group of people that did that at google. but we were able to take them out. and we had eight of the ten original people that built that chip building and next generation chip. that chip is revolutionary on every dimension. >> an s.e.c. filing shows that the other principles include jonathan ross who helped invent google's secret chip unit and douglas whiteman who worked on google's moon shot project. elon musk said his latest company nura link is working to link the human brain with a machine interface by creating micron sized devices. the company hopes to bring a product to market in about four years that can help with certain severe brain injuries. it was ringstered in california as a medical research company last july. musk said his plan or he plans

on funding the company mostly by himself. and uber says it has extended its internal investigation into sexual harassment claims within the company to the end of may. the extension was granted to ensure that quote no stone is left unturned. a lot of people waiting for that report. when we return today, a terror attack in france puts the country on high alert. just days before they head to the polls. we have a live report from paris next. plus we'll talk to former u.s. ambassador to the eu, anthony gardner. stay tuned. you are watching "squawk box." right here on cnbc. [pony neighing] what? hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony.

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good morning, welcome back to "squawk box" right here on cnbc live. we're at the nasdaq marketsite in times square. here we go what? >> he's running along. >> he's running along. we got some stories to tell you about this morning. samsung's latest smartphone

officially hitting store shelves today. the galaxy s-8 appears to be off to a favorable start. preorders surpassing those of its predecessor the s-7. we know it for probably the wrong reasons. another greek debt crisis won't akur. at least for now. the country exceeded its lenders demands for budget savings. 2016 by a wide margin. and valeant pharmaceuticals announced pricing for its injectable psoriasis treatment. it will cost $3500 per month. but that's the lowest among those in the market in that category. expected to hit the u.s. market during the second half of the year. every time i put valeant it sort of just -- look at the chart. that will force you to make a face. >> yeah. president trump weighing in on the deadly attack in france. tweeting another terrorist attack in paris. the people of france will not take much more of this.

will have a big affect on the presidential election. wilford frost joins us this morning. he is live in paris. and wil, what are you hearing from the french people today? >> becky, i mean we've covered that point, of course, quite a lot this morning. it's really too hard to say whether it will drastically change people's minds. i want to ask the question, of course, is what have investors got to fear about this election? the outcome that will be worse for markets would be a runoff between the far left melenchon and the far right marine le pen. that potential run justify choice is something that the head of the biggest business federation in france describes as a choice between economic disaster, and economic chaos. if it materializes. why the concern? well, it's because of the possibility it could lead to france leaving the euro. but i think it's important to highlight the process of how a potential frexit would be

reached and how complicated that is. you need a president that would want to carry it out. the government would need to propose a constitutional amendment because it's written into france's constitution that they're a member of the eu. both houses of congress would need to approve it and then it would need final ratification by a referendum. and the indication at the moment in the polls is that the french people wouldn't vote for it. and just to highlight how much investors are pricing this in, let's have a look at the spread of french 10-year yields over german safe saven 10-year yields over the last decade. because this week we did hit the highest point in that spread since the eurozone crisis. we hit 75 basis points earlier in the week. you can see the line tick up right at the far right-hand corner of it. yet still below the peaks of 2011, 2012, which was around about 160 basis points. so investors' concern is elevated but it's not at those levels when people feared the

eurozone might break down back in 2011. if we did get that scenario of a le pen victory watch ought for what would happen in greece, italy, where of course there's a slightly higher chance than normal of concern in that area moving forward. guys? >> wil, thank you very much. we'll continue to watch through the day. anthony gardner joins us right now. he served as a u.s. ambassador to the eu under president obama. he's a visiting fellow at the college of europe. ambassador gardner, thank you for being here today. >> thank you. >> the -- the markets certainly have a sense that this election matters. it matters quite a bit. what do you think is riding on all of this at this point? >> a lot is riding on this. this is i think the most important election that europe will see this year. i think your correspondent got it absolutely right. the disaster scenario would be a runoff between the far right and the far left. which can't be excluded.

i mean, look, we learned a couple lessons both from our own election in the united states, and from brexit that it's all about turnout, turnout, turnout. and secondly, it's about voter intensity, not only about voter intentions. and that's very, very hard to judge. and i think this latest news we heard yesterday in the terms of the attack on paris could -- could well play into the hand of the law and order candidate which le pen is certainly trying to do. so the disaster scenario, while still unlikely, is not impossible. and, even though le pen, or melenchon may not be successful in getting -- in taking france outside of the eu, or even dumping the euro, i think your correspondent was absolutely right. it would mean a disaster economically for france, and certainly would mean potentially the end, certainly, of an effective european union. >> let's talk about the effect on the european union at this point. we've already seen brexit come through and it's certainly a

huge issue that investors have been weighing. whether or not the eu can continue to stand. i realize it's a question we've asked again and again over the last seven or eight years but every time one issue seems to get resolved it seems like something pops up somewhere else. it could be greece, what's happening there. it could be italy. it could be france. how -- how secure do you think the eu's future is at this point? >> well i would say look the news is not all grim. the economic news is actually improved substantially in terms of economic growth. now, reappearing in every european member state, which is quite rare. not robust growth which is still good news. secondly we saw a good result in the touch elections which gave confidence to those they believe that the forces of populism, for want of a better word, may be receding. and even macron, it was

remarkable, he was waving the eu flag. he's doing it because he thinks it actually serves his interest. he thinks there is a core bloc of voters who want to see france continue its role as a key supporter of the european union. so the message is, you know, i think the european union will survive. i think the news is good if macron gets into the second round and wins, that would be hugely significant in restoring confidence in the european union. and it would perhaps signal a high water mark for the forces of populism and euroscepticism. >> that's probably the most basic question is, has populism peaked at this point? you sound like you are of the opinion that yes it has. well the jury is still out. you know, i'm hear in brussels, and i spent a lot of time in brussels, and i will be, and i feel that there is returning sense of confidence, even with brexit, as difficult as it is. the 27 are holding to the. there's a sense of unity which

frankly i haven't seen here for a long time. and if the results in the first round will include one of the mainstream candidates, whether it's fillon, macron and if that main stream candidate wins, yes i would be very much more confident. >> why do you think that there's a sense of unity, is it being brought together by the idea that the british voted to leave? is it the idea that things are easier and they're seeing more eye-to-eye? >> well, i think both the u.s. election and the brexit votes were shocking for many people. because it wasn't expected here, certainly. on either score. the u.s. or brexit. and i think in some countries, actually quite a few countries, we're seeing in recent polling an increase of those who support the european union. because there's a view of how much is at stake. in other words, what would happen if the european union really were to fall apart.

and so it's for those reasons, coupled with the return of economic growth that the 27 are beginning to hold together in a way that we haven't seen before. >> mr. ambassador, you refer to the dutch vote or the netherland vote as a good outcome, and trying to avoid a bad outcome in france, i guess. do you consider both brexit and the u.s. election to have been bad outcomes? >> well, i was an appointee, obviously, of the president obama. but look, you know, i want to be clear. this is not a partisan statement. you know, the u.s. has always supported the european union. and i think properly so. both parties have done that. we spoke out, at least in prior administrations, spoke out on brexit. and the conclusion was, under the prior team, that brexit was bad for the eu. which is not particularly controversial even for the

leavers. bad for the united states. by the way. and i think that's not particularly controversial. and we thought it was also bad with britain. but the british people took a different view. the trump administration obviously has a different view about brexit. you know, i disagree. i think brexit is a bad thing. but that's water under the bridge, right? the important thing right now is that brexit is very likely to occur. and it needs to occur in as smooth and predictable a way as possible. because there are fundamental large interests of the u.s. business community at stake. in terms of the business climate in europe, in terms of investment in europe. in terms of exporting to europe. so we need as a country to make very clear what our interests are in the brexit negotiations. and certainly, the u.s. chamber of commerce has done that very effectively. >> great. 578 bass door gardner, thank you for your time today, sir. >> thank you very much. >> coming up, next week marks

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call usaa today to talk about your insurance needs. welcome back to "squawk box." google's home device can now tell who's talking. the tech giant introducing a new feature to the virtual assistant. it can recognize multiple users by the difference in their voices. we have one of these things. we're going to have to try it out now. it can support up to six accounts and provide different information based on which member of your household asks a question.

>> oh, so you use it, edit it for your children so they can't ask any question that they want? >> i don't know. >> what was mom's gpa? >> my kids ask all sorts of questions. >> yeah. that's what i can imagine. >> birds and the bees questions? >> we have a lot of questions going on. but you know what, it's very good at math. my kids ask it math questions all the time. >> do they really? >> it will tell you. it's very good at it. better at math than i am. >> that's interesting. becomes your tutor. that's nice. all right now to politics. treasury secretary steven mnuchin says the trump administration plans to release a major tax reform very soon. regardless of the outcome of a health care overhaul bill. >> we're pretty close to being able to bring forward what's going to be major tax reform. and on the regulatory side, my focus is primarily on the financial markets, although across the administration we're focused on regulatory relief. and again, we believe in proper

regulation, so this isn't about having no regulation. but, as it relates to regulatory reform, making sure that our banks can lend. >> the market's listening very closely to all of this. in fact the treasury secretary's comments giving stocks a boost in yesterday's session. >> okay. president trump sparking hope for a revamped health care overall. kayla tausche joins us now with more on that. >> good morning, andrew. it's clear that the white house wants a legislative win. they just have one week and three legislative days that stand between the trump administration and that symbolic 100 day mile marker. here's the president sounding optimistic yesterday. >> this is a continuation and the plan gets better and better and better. and it's gotten really, really good. and a lot of people are liking it a lot. we have a good chance of getting it soon. i'd like to say next week. but it will be, i believe we will get it. and whether it's next week, or shortly thereafter.

>> he said keeping the government funded beyond the deadline next friday, and getting a health care bill passed, were not mutually exclusive. but the white house has overestimated this before nobly in march when they gave the house an ultimatum and then the vote had to be pulled due to lack of support. so far this time around, congressman mark meadows and tom mcarthur who lead the two factions who couldn't agree last time around they're on board with some of the high level changes that have been made as of yesterday. now it's up to their members to agree on the substance of those changes and of the bill's text itself. a freedom caucus source says it has 18 to 20 new votes. the issue, though, guys, will be net new votes. whether there are any moderate defectors, and also the clock, which they are increasingly racing as we get into next week. >> okay. kayla, thank you for that. all right. let's get back to our guest host, austan goolsbee. former cea chairman. tell me have we not had a meeting of the minds? >> we've had a meeting of minds.

you've realized that i am, indeed, a centrist. and you espoused the views -- >> do you remember when -- okay this is, you don't need to listen to this viewers, do you remember when we were at the white house correspondents' dinner together. we're happy to see each other. >> yes. >> we hug. it's weird. >> you told everybody how weird that was. >> i didn't think it was weird. >> the hugging or what? >> yeah, i came up -- >> no, no. not that was weird. but that none of this really matters in terms of just human to human contact. >> look. the thing is -- >> they need to know this in congress. >> they need to know this in congress. and the country would be better off, don't you think. >> i do. >> if they recognized there's more to people than just their politics. okay, fine. we can disagree on what car we want to drive. we can disagree on what music we like. you have terrible taste in music. that's okay. i'm not going to hold that against you. it's still fun to hang out. >> you don't like captain and tenille? >> no. no, no i don't. >> all right. all right. that's a subjective -- that's a

subjective stance. >> no objectively. >> objectively captain and tenille, i was trying to come up with the worst possible -- >> love will bring us together? >> the worst possible pairing i could think of. you know what really scarce me, austan, seriously is that i almost think health care and the bill that they are trying to do was easy compared to tax reform. >> to taxes? really? i think the idea -- what they're going to do, i think, in the end, but it's going to take them awhile to figure out it's what they have to do, is just cut the rates and say, let's just prepare -- i'm not listening. it will increase the deficit. i'm paying no attention. >> what about the freedom caucus? they'll be okay with that? >> i don't know. i think in the end they probably will be okay with it. but they have to discover that every other option is not going to work. >> about it be transformational? will it be just at the margins? >> i think it will just be at the margins. and they're going to be severely

tempted to do what the administration will be tempted to do what they did with this executive order yesterday. okay. so in the executive order, it was an order, ordering others to figure out some details. and then if they asked them what's your plan, they'll say oh, we have a plan. and if you look at the plan, it's -- it moves it back to congress and says you come up with a plan, but now congress doesn't want to do that. because when they actually put forward details, you see the administration say i don't like those details. so they're basically saying you do it yourself, then. and i don't know that they can get out of that box. >> the infrastructure, you know, really being hot to trot for it. is more on the left. typically. historically. >> historically. >> is that changing? >> i don't think it is changing. even you've got to recognize the consequences that trump is actually for an infrastructure bill are greatly diminishing. i mean if they had one trillion dollars, they would use it for

tax cuts. >> yeah, but austan i think he wants to show his skill as a builder to bring these things under cost, on time, i think he really -- >> in a way i hope you're right. but what it feels to me like is they don't have the money, so they're going to turn this in to a tax credit for commercial real estate developers like himself. rather than building the roads or bridges -- >> now you're back to being cynical -- >> one of the things we heard from richard lefrak who talked about it, is look they want to know the process for how to simplify things. the regulations -- >> permits. that could be true. if they could find a way to do that to save money that would be good. and all i'll ask you, joe, is why didn't he start with that? why didn't he start with some things where half the democrats would say you know what, he has a reasonable point and let's try to find a way to -- >> well that becomes the question. are there any democrats who would actually vote for him? because it seems like democrats at this point just don't want to see him get a win. and there's un city among them

and they're able to just step back and let the republicans kind of rip themselves apart. >> a fair question. and i guess i would say on their behalf, they believe that trump has revealed his true type. that he actively wants to defund planned parenthood send us back world of no financial regulation. and so if he comes forward with a one off idea that sounds good that it's really just a trojan horse front. now, i hope -- >> having said that, that's a recipe for we'll never get anything done. >> i hope we get out of that mind set otherwise we won't get anything done. >> uh-oh. this guys -- goals bee a centrist, between barack obama and lenin. i would say mccartney who's even more. even more out to -- anyway. >> it is being what a centrist -- >> he's right in the center. >> in the modern age. >> you're getting punched in the

face -- >> bernie sanders era. >> you're over there. >> we'll be right back. we'll be right back with jim cramer. >> jim cramer coming up from the new york stock exchange. hey. hi. hi. you guys going to the company picnic this weekend? picnics are delightful. oh, wish we could. but we're stuck here catching up on claims. but we just compared historical claims to coverages. but we have those new audits. my natural language api can help us score those by noon. great. see you guys there. we would not miss it. watson, you gotta learn how to take a hint. i love to learn. ♪ to err is human. to anticipate is lexus. experience the lexus rx with advanced safety standard. experience amazing.

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let's get down to the new

york stock exchange where jim cramer is joining us. jim, earnings all week long, that's what we do. that's what moves stocks but yesterday it was mnuchin. didn't you read it that way or did you think it was oil or -- >> yeah, he just said, look, forget health care we'll get this done. but geez, these industrials are good. honeywell is terrific. ge's fine. stanley works -- stanley black & decker much better than expected. we're seeing very, very good numbers and those do matter. so obviously if you get -- i had snap-on tool where the president had been earlier this week. if you get some tax reforms, snap-on tool, a highest taxpayer, you would see the numbers go through the roof. because the companies are delivering in the atmosphere where mnuchin gave you a pretty good heads up that things could happen. so there was a lot of momentum yesterday. maybe can carry through to today. >> jim, why do you believe it? >> why do you believe it? >> yeah. >> why do you believe the

numbers? >> no, the mnuchin part. >> the president and mnuchin? >> only because he told us other things when the tax plan was going to happen and it didn't happen according to his schedule. >> that's a different thing between whether i believe it or whether he said it. if you ask me whether they can do it, i think that paul ryan doesn't want any change. i think paul ryan is the master of nothing. he's the -- he's the jack of all trades, master of none. he can stop anything. he can stop mnuchin and trump. he can stop anything he wants and i think he'll stop this. i think he has no desire for any of these tax reforms. >> that's a nice longing young man that seems so earnest. you keep hammering him. >> he's einstein. he's a genius, what are you saying? he's a genius. >> oh, man. >> paul ryan -- >> tell me the background on this. >> people would like to get something done, but remember, paul ryan runs congress. he's so far delivering health

care and so far delivering tax reform. >> all right. some people are glad health care -- austan is here -- >> i agree with jim. >> you're glad -- >> look, he's a rejectionist. he rejected everything that the democrats want to do. he's a rejectionist, but he's smart! >> smart and -- >> academic and cute and fit. very fit. >> self-styled genius. i love that. i love -- those guys really always know everything. >> jim, see you at the top of the hour.

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our guest host this morning as we listen to country music as we end on a friday is austan goolsbee. the former cea chair and you were and joe were listening to country music in the break because you agree on it. let's go out on a note of hopefulness on this friday. >> what is the note of hopefulness -- >> and you have 45 seconds. >> i think if we can get past the nonsense which will be relatively hard, it's worth remembering 90 plus percent of what happens in the economy has nothing to do with washington and outside of washington there's a lot more agreement own what kind of things work. so i think it's going to be fine. despite what you see on c-span. >> all right. so things look good. things like hopeful.

we'll leave it on that note. austan, thank you for being with us. we really appreciate it. >> i'm shocked. i'm shocked. i'm shocked, shocked at the hopefulness. >> see what can you can learn? >> do you think you guys can figure out tax reform together? >> i think you and me can do this. >> got to learn. make sure you join us on monday. "squawk on the street" begins right now. ♪ good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. the nasdaq set its own record high yesterday. we're going into the uncertain weekend in europe, stocks are pretty steady there and bonds and commodities are steady. our road map begins with some bullish signs, boosting the markets yesterday,