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, keeping close

watch on today's president -- on sunday's election in france. >> and jeff immelt may be safe for now. he's been under pressure, and ge has a first quarter beat. and trump heads to treasury, set to sign some executive actions today which further might dismantle dodd/frank. reverse some obamacare rules on tax inversions. and the nasdaq posted a record closing high. we have ge, honeywell and visa, one of the catalysts for the rally, those comments by mnuchin, expressing optimism about the timetable for tax reform. he said you don't need to do health care reform first. it will pay for itself. >> soon, very soon. very soon. >> well -- >> and just to be clear, we hope this won't take till the end of the year. >> okay. >> so we're having 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. >> last night you didn't really cite that as a reason for the overall rally. >> right. well, weinberger -- it's a good interview, by my problem is the same which is there's an unreal nature -- mnuchin would be -- it's fabulous for the market. but you have to get it through congress and congress doesn't want to take it up like that. that i can give us -- they can give us a schedule but they don't run the congress. >> those are some serious comments he just made. >> he's a serious guy. >> it's going to be sweeping. it's going to generate economic growth and it is going to happen. >> i think that the first two could be eye opening but the -- but very clear that the house doesn't favor it. >> the sweeping part, we heard austan goolsbee on "squawk box"

come back to the general consensus which is we'll get some sort of a tax cut, repatriation deal and that'll be the end of it. it won't be reform as we describe it but as the secretary of treasury said it would be sweeper. >> it's back to reagan. we're going to blow it all up. but blowing it all up without the mandate that reagan had is very difficult. remember, reagan, he had tip o'neill. i mean, it was an era of good feeling there. >> and bill bradley. remember in the senate. >> you know a very good point. >> we tried to get him to come on and talk about what happened in '86. >> that was an era that people talked. mnuchin talked about, maybe we can do things with the republicans and he said there won't be a shutdown. that's a low bar. >> rosenberg -- david rosenberg called the president and mnuchin dueling banjos. the president said we'll do health care first and mnuchin

said we might not. the president said the dollar is too strong and mnuchin says absolutely not. whose word do you take? >> "deliverance." >> i take jared kushner's word. what does he have to say? >> i take paul ryan's word and paul ryan wants to do a national sales tax. andif he wants to delay -- that's what i call the border tax. it's called the national sales tax on the poor and the medium -- it's a regressive tax. if paul ryan wants to do that first and paul ryan wants health care first, and mnuchin whose plan i favor entirely, then mnuchin -- >> you don't know what his plan is. >> did you listen to the interview? >> we'll find out very soon. >> sweeping. >> okay. >> now we talk about radical tax rate tax. no, we don't know. it's amorphous. gary cohn i thought talked about my series e savings bond and the public/private partnership. the e savings -- he didn't call

it the cramer plan yet but that will happen. i think the executive branch -- i mean, dueling banjos, i mean, the executive branch in this administration seems to be unaware of how powerful the house is. and they don't speak the same language. the house isn't -- i guess i would say this. the house doesn't sense a lot of urgency to the economic plan is the way i look at it. they sense urgency to health care and that's the issue. it's the urgency. i don't think that the president as much as he's doing a lot to try to preserve jobs has been able to communicate the urgency of tax reform to paul ryan. it has nothing to with the white house plan. >> you're talking about ryan having been the architect of what is the only blueprint we have for tax reform. >> but it's an unpassable blueprint so, so what? >> you say it's unpassable. i think you might be right. >> thank you. so complex. >> but the idea he somehow is

not going to try -- of course they're going to try. i mean, the administration just decided we'll put our own bill forward because of what happened on health care. we're going to try -- >> well, the administration's plan is good. but i covered the reagan -- i'm sold -- i covered the reagan tax bill how it went through. and what reagan did was basically said to the democrats, we have got to stop this situation where people are paying a fortune to try to figure out what they pay. we have to simplify and we have to change the real estate and make it -- >> so five years in. not 98 days. >> yeah. the democrats said, you know, this tax system is ridiculous. this thing went through so fast. the capital gains -- it was like lightning. and this is the exact opposite. but at that point, reagan had the country. he just had the country. he owned the country. and the country wanted simplified taxes. i don't feel the country is behind any of this. i just don't. and i think that the republicans in the house are just saying,

listen, we're being to get this health care. by the way the health care system is in more disarray than it was. trump is right about that. there's no urgency. >> so do you believe these reports that we could get a health care vote next week when congress returns. >> that would be great if we had a plan. i mean, it's fredonia down there. first we have to take up the taxes. not the carbons. >> last night your point was it remains a story. not about policy promises but nestle earnings and amex earnings and we have visa -- >> there's a -- i want to talk about people who left companies in great shape. charlie char of he gave -- dave cody gave them a great hand. there's one moment in the visa call that one of the analysts says can't you predict how great things will be and al kelly said who thought these international markets would be so great?

that was -- the stock i know to ask that the stock should be up even more. but that was a conference call where you just said, could it be this good? i mean, you know what was the standout in the conference call? >> what? >> russia. russia. how great russia is. russia. when was the last time someone said, let me tell you how great russia is. >> you wouldn't expect that. >> that was the visa call. >> a consumer -- >> there were a of credit cards there. it will take some time. can you imagine when the chinese had visa, i mean, talking about india. some of these countries are really -- they don't have debit cards. >> the chinese typically are a lot of deb it. or -- and they use, you know, ali pay. and financial -- >> and india is a big country. that demodernization plan, to come back and they do debit card, that was fantastic. now the stock has run very big. kelly is doing a fantastic job and the hand that cody finished

with, honeywell is fantastic. i lead to ge, it was up 53 cents and now almost flat. >> it is, isn't it? you know, i'm still trying to make my way through that hard to read press release. >> you can focus on the operating cash flow like jpmorgan did. >> first quarter was a strong start they say organic revenues were up 7%. a lot of these have asterisks because they're nondata numbers. they talk about orders being up 10%. >> that was very positive. >> that was positive. industrial operating margin was up. total revenues though down 1%. >> that was very big. >> industrial -- i can't -- >> operating cash flow. better than it was. >> well, that's -- david, that's okay. it's better than it was. >> talking about being able to read through it. >> better than it was. okay? >> it was better. >> not as bad as it was. >> especially in the year ago.

when they had a lot of costs associated with asset sales. >> it was cleaner. i liked it. positive quarter for oil and gas. second one in a row. i think the bhi deal is son track. i like that. 4.4 billion return, i like that to grow. 2% growth in back orders a lot to like. >> return to shareholder -- >> but the key thing, but the key thing we need to focus on is how many costs are continuing to take out of the business because that's where tryon is focused. that's the promise that has already been made by ge's management in the form of mr. immelt and cfo born stein. they said $2 billion over the next two years i believe. that's where their shareholder which -- while still a large economic position, i mean, a small position of course given the can overall percentage, nonetheless has a great deal of influence. that will set up for a fight later this year potentially if in fact they don't believe that's moving in the right direction.

taking costs out. talking about a company that has $100 billion in costs. >> big costs. i like at some of the divisions. why do we need locomotives when harrison and csx is taking the numbers out. csx by far, the question by the way on the csx, michael ward set up harrison or harrison knows how to run a better railroad? >> the best quarter -- the -- >> best earnings -- >> is hunter harrison really an outli o outliar in running a better railroad? i don't know. back to ge. you had a very good call last time when the quarter came out, definitively negative. >> it was terrible. >> you don't feel that way this time. >> no, this is a more on track quarter. i like to see industrial segment organic revenues plus 7 was very good. i know it's nongaap and that does matter.

>> but they're on track for 3 to 5 for the year. >> yes. industrial margins up. that's good. >> it is. that's where you want it. that's talking costs there. >> yes. >> keep to -- >> i like backlog being up. it was solved because you didn't get through the orders but i liked the quarter. i like the quarter. and the stock was up yesterday so, you know, is it -- look, what i'm saying is that the quarter may have justified yesterday's move. when the stock was up 50 cents i went through it furiously. what am i missing? the answer was i was missing nothing. but it's not as bad as it was. i don't know if it's enough for nelson peltz and for ed gardner. you have to tell me that. >> hopefully, i will. >> yeah. >> or i will. because. >> or you will. you'll beat me to it. >> well -- >> i'll match you. >> really? >> yeah. >> when we come back a live report from paris as we count down to this weekend's french election. obviously the impact of that

attack on the champs elysees yesterday. later on, stanley fischer on the rates and the president and a lot more. the s&p on track for the best couple of weeks and april may be positive for all three major indices. back in a minute. hey you've gotta see this. c'mon.

no. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote.

france is on edge after yesterday's deadly shooting in paris and the french presidential election is two days away. wilfred frost has the latest. good morning. >> good morning, carl. yes, let's recap the tragic events of last night. one policeman killed, two injured. on the champs elysees. just the other side of behind me. the attacker was shoot and killed at the scene and he's called karim cheurfi, and isis claimed responsibility described him as the belgium. does this change that the way that people are planning to vote? it's thought that center right candidate fillon and le pen are the strongest on security as an issue. marine le pen has been talking about this this morning. she said quote, i am angry and went on to say, the battle plan against terrorism begins by

getting back our borders. we should say that the euro and the french stock index and betting markets haven't really reacted to the events of late last night. but if it did happen, if we did get a marine le pen victory, what would that mean for markets? >> madame le pen said if she's the president, she would organize a referendum asking about should france stay inside the eu or not. my answer is no way that france will ever -- whoever is leading this country is going to get out of the eu or the euro currency. i don't think the market should be too much worried about that. >> which ever way you look at it, this is the closest and most unpredictable french presidential election in post-war history. at the moment turnout is expected to be low. that could play into the hands of the more extreme candidates with resolute support that they

have. and up to 25% still undecided. markets certainly will be paying close attention when the results roll in on on sunday night. guys? >> we'll see what happens on sunday. we'll come back to you later on today. wilfred frost in pairs us. interesting, you've got the bond spreads at the four year high but the cac is a percent away from the year to date high. >> you know this is the '30s. you had a very similar series of -- i mean, well, at that point you had a popular front related to the soviet union. when you had this level of dissension and disarray in france it was not conducive to business. it wasn't conducive to their gold. it was not conducive to anything other than pure chaos and i'm surprised that france is this strong. maybe that means in the end, this is -- like brexit where it just turned out to be -- although brexit the numbers from britain, the retail sales aren't

that good. but i have to tell you, go back and you read -- go back and you read a book from -- "to hell and back" from kershaw, it's a book that came out earlier this year. kershaw is the best historian of his time. which talks about france and this era and you really -- you're kind -- it's amazing. kershaw. "to hell and back." fantastic. >> put that on my list. >> ian bremer points out you have -- will mention this high number of undecides, but how many are voters who simply don't want to tell pollsters they're going le pen? >> i think it's lot. this woman, le pen, i read this weekend and today, i have been watching wilf when he covers the elections. he's far more sophisticated than a lot of other people in terms of knowing what others don't know. and it just -- this does seem like the center -- like the terrible terrorist action played right into her hands.

>> one last note. citi looks at if le pen were to take it or wind up in the top two, the chance that u.s. equities could outperform as we saw in some instances in the eurozone debt crisis. >> well, that would be amazing. europe doing incredibly well. it's not like -- the french companies are doing that well, but the idea of us outperforming on that requires interest rates to go higher and i think that they would conceivably go lower if there's a rush of capital out of there. i see oil going down. i see rates going -- rates going down and the twin bull killers. >> because we're in the environment where the equities applaud rising rates, vote of confidence in growth and that kind of thing? >> this would be the opposite. so i don't get that. i do get the idea that our companies are doing well. but i think our rates go -- i think our rates go down and oil goes down. you look at that and that is the -- >> wait, you think that happens

if what? >> if le pen wins. i think there's a lot of money coming out of europe. i think we're -- ultimately, you need that back drop of oil benign, and you have to have rates go down in order to get this market to go -- rates -- i'm sorry, rates to go up. that's not -- that would be -- it would be the opposite of that. the opposite. >> we'll get to cramer's "mad dash" in a moment and the opening bell in nine minutes. don't go anywhere.

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we are counting down to the last trading session of the week. i want to talk honeywell. good numbers. >> yes. >> and of course that big change at the top ceo. >> yes. >> who's no longer your buddy. >> that's true. he -- look, dave cote lived next door to me, but he moved. when you're a neighbor, i mean, what are you supposed to do, listen i won't help you if you -- if you -- in the snow is on your walk, i shovelled his walk, that's all right. good fences make good neighbors we had a good fence. people were very worried that perhaps the business is slowed that was wrong. and they're worried about if they -- we talked about ge. when you talk with dave cote what he wants, he wants free cash flow. >> that was the one thing on ge there wasn't a lot of although to be fair, they were building

inventory for four -- >> right. they claim it will come back, but that's not the way that honeywell works. it's free cash flow, up 5 to 7%. more margin. but better gross margins. raise the low end. but they really raised the high end. commercial after market in aerospace is very good. home and building technologies which is a whole new division that he worked on -- i think there will be a reshuffling of the deck again. that's something that honeywell does very well. >> what does that mean, reshuffling of the deck? >> they like to get rid of divisions that don't fit in. that don't have gross margins and get new companies in. they are really just a tremendous trader of their hand. this is not -- >> this is not for honeywell they're cheering. kind of like a fourth quarter. like a two minute drill over there -- >> yeah, like lebron is going to miss that foul shot. i do think that honeywell is going to go higher. it's stalled and people are saying, wait a second, i don't

know, the cote years are over. as visa years. these guys are good and honeywell is positioned correctly for aerospace and for the connected home. connected car. connected plane. by the way, if you're on the new plane, david, you can stream netflix. that's all we ever wanted. >> that's it. life has been made better. all right, we have the opening bell a few minutes away.

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to help protect what you've earned and ensure it lasts. introducing brighthouse financial. a new company established by metlife to specialize in annuities & life insurance. talk to your advisor about a brighter financial future. the opening bell is brought to you by brighthouse financial. established by metlife. >> you're watching cnbc "squawk on the street" live from the financial capital of the world. the opening bell in about 45 seconds. interesting day as we come off of that rally yesterday but going into the weekend of political uncertainty in france and we don't know what we'll wake up to on monday morning. >> yeah. i think what's kind of extraordinary is that vol ill illty -- volatility -- go back to the goldman's quarter. they were looking for some sort of volatility. i think you can get some. what was interesting i want to

talk about, david, there's a survey that comes out by ian white about deal making. deal maker has had a strong 2017. 56% of the companies will make deals in the u.s. and it's even stronger. they are talking about 79%. why would you do deals in this environment? >> you may see smaller deals and by small, 3 to 10. but the big deals, the strategic deals that require a great deal of forethought and knowing about tax reform, the repatriation and regulation, harder to do. >> go ahead, carl. >> let's get to the s&p at the bottom of your screen and the opening bell. cadence bancorp celebrating the recent ipo. down here at the big board. at the nasdaq it's neuroderm, developing devices for disorders. i don't think we have had the

sticks -- >> no. i feel like it's world cup soccer in south africa where we have horns and then really make our job useless. >> it's marketing. it's marketing at the exchange to a large degree. so honeywell is one of the best gau gainers in the open. >> it deserves to be people, because people are feeling, wait a second, maybe we have to wait and see what happens, maybe the transition isn't that smooth. i really feel very strongly that these industrials have shined. they have done so well this quarter. and it's rather amazing. >> and you were saying during the "mad dash," i mean this transition is not an insignificant one. but you believe the new ceo at honeywell going to be given the latitude to continue to make the kind of moves that cote did to reshape the product portfolio at the company in a sitting want way. >> he had a -- there was a great letter, transition letter where he basically said, listen, you know, this division could

change. that division could change. typically what happens the guy isn't bold enough who comes in. >> but particularly after a very long tenured successful ceo. >> right. so david cote is emboldened damcheck. remember cote didn't get a good hand and cote -- it's augmented again. this is a company that you want to own. it's been a remarkably performing company. and i think it's going to continue to do so. because they have a tremendous portfolio whether it be aerospace, whether it's performance materials, turbos for cars and the stuff that cote was doing at the end which is really internet of things. i mean, real internet of things in industrial. not talk of things. >> all right. only performer better than honeywell is stanley black & decker. beats by ten cents. what a quarter. revenues ahead on the strength of the industrial business. >> you know, this is a read through as is -- by the way,

sherwin williams with a monster quarter. so you have the paint aisle doing pretty well. you have the tool aisle doing incredibly well. what does this say? it -- >> tell me, what does it say? >> it says that home depot and lowe's are going to be very good, and it's gardening season, not that you have a clue with how to plant a tomato seed. you get your flats there. do you know what a flat is? >> no. do you know what a flat is, carl? >> no. i have seen your garden at home. it's nice. >> you can do it by seed, which i do have seed. and then you have -- you buy a box of the seed -- of the small plants. of which home depot has the best. >> right. >> and -- >> i was at the home depot last weekend. i didn't go near the plants but i saw all the people out there. >> it's the most important season. i'm not making light of it. but the gardening season is their christmas. so if you get these two aisles

great and a then a good gardening season, and april showers you know what that brings. you understand that. >> i do. i do. rain brings growth. >> mayflowers. >> yes. >> thank you. >> sell in may, go away. he's not totally useless. >> anyway, you buy at home depot and lowe's. >> all time high for black & decker today. best buy sees $50 again. >> you know what, that was supposed to be a show room. >> that you have to say, that was -- that's impressive. >> i think that matthew -- from jpmorgan, it is the takeout of the capacity. tremendous numbers of stores closed against best buy. it does matter. best buy gained when circuit city went under. >> they did. but it wasn't that long ago that we were talking as carl said about it being a show room and

that they would never fully get it together and somehow they have managed to do that. >> when you go to best buy, they really walk you through everything. they walk you through it. >> in those kind of areas you need questions answered. >> yes. that's why i like going to best buy. i find it fun. find it enjoyable. i find going to home depot fun and lowe's fun. costco's fun. what? what's the matter? >>ust trying to think about that. >> it's fun. >> just associating fun with those things. it's interesting. >> for the year to date, visa is on apple's tail now of being the best dow component for the year. not too many percentage points behind. >> if that stock goes down today, i have to urge people to buy it. they have a $5 billion buy back. firing on all cylinders. it's a remarkable company. i know it was up big in the advance. that's kind of hurt companies but al kelly has -- he's taken the baton. he visits and visits and remember, that's his market share game. i believe they'll have a good

quarter. but visa is a remarkable company. and it's just a money machine. >> it really is. which is why we forget it's the largest market cap company in the country. $250 billion value, visa. >> i know. people have to remember there are whole countries that are still not plastic. >> that's roughly the same market cap as bank of america. >> how do you like that? >> bank of america is higher. >> bank of america has great technology. huge percentage of people -- >> oh, good, more noise. >> anyway, i just thought the visa conference call was beautiful. by the way there's a company i've got on tonight, called prove point. you ought to look at this one. this is one prove point is a company that does -- they block spam e-mail. spam e-mail. it does a remarkable job. they're on tonight. this is a company that was down graded yesterday.

okay, ahead of the quarter. and on the call, the baird analyst said i obviously got it wrong. causing a bit of a short squeeze today. >> interesting. speaking of analysts costco gets an upgrade over at barclay's to overweight. then mcdonald's, now bmo initiates with an outperform all time high. >> yeah. easterbrook has the balance sheet. they have energized the franchise. costco, i love that report because it's about amazon, it says that people go to costco for food and amazon is still having trouble with food. do you think kroger will buy whole foods? >> i don't know. >> people feel like amazon has to in order to understand food. i think that's antithetical to the culture of amazon. am though -- although they bought zappo's. >> it will be interesting to see what whole foods chooses to do or how they go about trying to change things. and deal with that. >> i'm curious about that. >> you seem to think there might

be consolidation in the future? >> kroger, there was a good note out about how they have to take market share. kroger is a good company but supermarkets need inflation. costco said has said there would be inflation in the second half of the year. you want as many food stores as possible when it comes back. >> look at shares of verizon, day two. they weren't off that much yesterday given the enormity or the -- just the fact alone that they actually lost wireless subscriberers. the fact that put it on the front page of the "wall street journal" as one of the lead stories. we had lowell mcadam the ceo as a guest this week. the future is right around the corner there in terms of the services they'll start to offer. right now they're testing. on a commercial basis as soon as next year. a lot of mixed messages there. unlimited helped them stem the losses in the quarter. we talked about this yesterday. but when you look at overall service revenues more and more

people on unlimited doesn't necessarily mean more revenue even though you have a lot more traffic. you may not lose as many subscrib subscribers. remember they were down as much as 400,000 at the end of the quarter. but also some other things in talking to me about charter. the architectural fit not quite there. can't agree on -- not a willing seller, not a buyer that wants to buy at the price and comments about disney -- i think they were taken out of context. but the question is what does verizon do in this interim period if you want to call it that if you believe lowell between no growth now, tough competition and the coming of 3-g that may bring another level of growth they saw when they were the early leader in 4g lte and all the benefits that brought to their base. >> it's great you mentioned it because i didn't think the

conference call as dire as the stock indicated, just in the cash flow. >> it did come back yesterday, the stock. >> yeah. the yields -- the dividends are good. i think it's a great question because this is a question of technology. not as much about position. i think you're right. but the -- the price that went on there just justify the fact that the justice department didn't want -- >> that didn't allow tmo and at&t to get together and didn't allow at&t and sprint when they were considering it a few years back. no doubt. which brings you to the idea of telecom consolidation this year and whether or not you would see a deal between sprint and t-mobile. would it be allowed not just by the justice department but the states too. many states have a role also in approving these deals. given how important the cell phone is. >> you know it's interesting that my charitable trust owns the stock that's down very badly

today, schlumberger. it's an honest company, listen, we're not seeing the turn on the conference call, the numbers are below, the street's too high. it's a great company but what they need is drilling. and they say the middle east has cut back. >> look at oil and gas to ge. down by a third. >> it's a tough business right now. you need to see dramatic expansion. they did see that the u.s. is better. but one of the things that always bothers people who owns schlumberger is their honesty. they never said something was good when it wasn't good. it's one of the cases when it's good, you have to buy the stock with both hands because they'll say it. when it isn't, they say it's not a great environment and it's pa painful. they're so honest. can you but more upbeat, no, that's not our game. we play a long game. what a great company. first to see the downturn. laid off a lot of people.

fabulous balance sheet never a question of how they do, but at the same time, when things aren't that good they say things are not back yet. they're still not calling -- that's important. >> visa is giving the dow what strength it has. up some 20 points. let's get to bob pisani. >> good morning, carl. happy friday, everybody. mixed open, nasdaq down a little bit. but remember historic high on the nasdaq yesterday. a sign of a mixed market. the key are the industrials are up because three industrials, three good reports there. there's your up sector. energy tough time for a good part of the week even though oil has stabilized a little bit. still a tough week for oil. banks are down, so you see a bit of a mixed market. three industrials, three good reports. the guys talked about ge and honeywell. but the bottom line is you can see here, ge flat. honeywell up nicely. dover, stanley black & decker, a great report. very tough to get organic

growth, organic growth means cut out all the acquisitions. tools are what stanley black & decker are about. about 65% of the sales. organic growth, 6%. those are great numbers, better than expected. industrial is strong. security is up 1%. maybe they expected more out of that. but that's a small part of the overall business. this is a terrific report overall and of course i mentioned they raised their guidance so now we have five big industrials/consumer oriented companies in the last two days that have reported. four of -- if they all beat and four of the five have raised estimates so general electric beat and affirmed their full year guidance. $1.60 to $1.70. stanley black & decker beat and they raised their guidance. yesterday, we had dover, they beat and raised sherwin williams also beat and raised. this is a very good start to the industrial/consumer part of the whole earnings cycle. people should be happy about it.

the markets are reflecting that overall we're up about 1% for the week. elsewhere i want to point out some other things here. the laggers have been playing catch-up this week. banks which are laggards are up 3%. retail is up 3%. the russell 2000 has been a laggard all year long, that's outperforming and steel is outperforming. good earnings report from steel dynamics. that's helping. this is what you get the rotation, this is why things don't drop that much, laggards come forward. the leaders fall back a little bit. rotation has been a constant theme for the last several months. that's why we're 1.5% below historic highs. we have an ipo trading today. it's been a light week for ipo's. select energy. interesting company. they provide water services for the fracking industry. and prior price talk had been

$10.6 million at 15 to 18. right now we have indications of 15 to $17 so looks like it will open on the upside. down scaled that again a little bit. next week is a big week, ipos. going to be at seven looks like right now. flood gates will open. a very, very diverse group of ipos. six of them will be down at the new york stock exchange. one of them over at the nasdaq. good week, carl. up about 1% for the week. the dow is up 19 points. back to you. >> bob, thank you. let's get to rick santelli at the bond pits at the cme in chicago. happy friday, rick. >> happy friday, carl. of course it will be an interesting weekend. whether it was the horrible events in paris yesterday or the notion of trying to follow the polls with one eye towards the rearview mirror in terms of reebtd -- recent accuracy on a number of polling aspects throughout a number of elections, through it a number of the countries, it's going to be an interesting weekend.

yesterday, rates closed where they closed in the u.s. at least. where they closed last week. so very subtle down yields up price both on the day and the week. look at the two day of tens you'll see what i'm talking about. open the chart up to one year. we're doing a lot of consolidation under 2.27. but still in the low 2.20s. it will be fascinating to see how this plays out by the end of this session to see if there's any move to safety pushing yields down. if you look at the two day french and the one day french of their ten year of course you can see that there is some movement. but nothing jumps out at you like trading mass hysteria here. if you look at spreads we like to look at those of course comparing boons to oats give you a credit sense. if you look at the one month, there's been some tightening. look at the three year it's tightened from three year wides basically. but current if you want to be right in the here and now it's hard to read much into that especially, you know, nothing le

pennish jumps out on the charts. if you look at the currency side, some deterioration, but a year to date chart looks better than the dollar index. carl, jim, david, back to you. >> all right, rick, we'll talk to you in a few. we have your bases covered on the economy. macy's executive chairman terry lundgren on the retail slump and the state of the consumer. and then an exclusive with stanley fischer with the dow up 14. cdw brought i.t. orchestration to growing businesses across the city, increasing productivity like never before, which is amazing, unless you're a barista. cdw implemented dell poweredge servers with intel xeon processors to allow people to work from anywhere, so lucky me.

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e*trade's powerful trading tools, give you access to in-depth analysis, and a team of experienced traders ready to help if you need it. it's like having the power of a trading floor, wherever you are. it's your trade. e*trade biggest loser on the s&p this morning is mattel as some confidence in the turn around loses some steam. i was looking on a chart of mattel hasbro, like a fork in the road. look at that. >> that's because of intellect chum property and the way they decide to market the toys. one of things that -- i had brian goldner on a bunch of

times we need to do our own tv shows and get people to understand what we do. go beyond just the simple toy. mattel, no. mattel, this was a remarkably bad call. talking about a glut of toys. well, how about this. there was no glut of hasbro toys, but just a glut of mattel toys. >> over time, management will make -- change the story. the story of hasbro is it has a $5 billion bigger market cap than does mattel. there was a time not that long ago when mattel was far larger. >> yeah. and mattel -- i mean, look, i just listened to the call, but clearly we are disappointed with our first quarter results and recognize we have a lot of work to do to improve execution across our portfolio. i can't stand behind somebody who missed it that badly. but brian is a genius. he's taken a toy company and turned it into the experienceal

company. people bet against him, he totally proved them wrong. had it been down today, i was going to mention this as my "stop trading." listen, don't sell hasbro on mattel, but people are smarter than that. they know. >> because there's the disney factor there. disney/"star wars" factor. >> you know, "star wars," a lot of opportunities to sell "star wars" toys this year. and i just think that golden wow, he reinvented that company. i'm so impressed with what he's done. >> watch that action to see if mattel can recover in the day. we'll get "stop trading" with jim in a moment. the dow comes back to the flat line. don't go away. 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.

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♪ time for cramer and "stop trading." >> wells fargo has been a persistent value, cut the price target but i thought this was interesting. not enough free cash flow to pay back the obligations. someone -- a savvy guy said listen, can't we just speculate

in value? and i said that the valiant common stock is just a call. it's not really much more than that right now. a call on whether they can pay off -- >> well, you have $3 billion market cap and $30 billion of debt underneath it. that's what will happen. you know, you're talking about debt ten times the size of the market cap. >> valiant is not what you think it is. it's more a question of whether they can pay off the -- pay off that debt. just be aware that's not a great spec is what i'm saying. not a great spec. >> jim tonight -- >> yeah, bienaime he has a great portfolio and when you get the e-mails, listen, you have to call amazon right now and give us your credit card that is spam. that's phishing and he stops them. there are companies that do the fraud and he can catch them. i know some of us have clicked on those by mistake. >> yes. >> don't do that.

or use proof point. >> john podesta wishes he had proof point. >> yeah, the democratic party wishes they had proof point. that stops a lot of -- well, whatever. have a good weekend. >> yeah. see you sunday night maybe? jim cramer, "mad money" tonight. when we come back, two exclusives, one the fed vice chair, stanley fischer and macy's executive chair, terry lundgren. don't go away. apparently, i kept her up all night. she said the future freaks her out. how come no one likes me, jim? intel does! just think of everything intel's doing right now with artificial intelligence. and pretty soon ai is going to help executives like her see trends to stay ahead of her competition. no more sleepless nights. - we're going to be friends! - i'm sorry about this. don't be embarrassed of me, jim. i'm getting excited about this! we know the future. we're going to be friends! because we're building it.

so what else is new? humm..she's doing good. she needs more care though. she wants to stay in her house. i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird.

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♪ good friday morning. welcome back to "squawk on the street." i'm carl quintanilla with david faber and mike santoli at post 9 of the new york stock exchange. sara eisen is with us from the imf world bank spring meeting in washington. she'll speak with stanley fischer and the institute of international finance ceo tim adams in a moment. the market is flat. the dow is down three. a lot to watch including ge, some executive orders from the president as well. >> that's where our road map begins. bullish comments from mnuchin signaling the timetable for tax reform. the stocks are flat following

yesterday's rally. >> speaking of the president, getting ready to sign three eos on taxes and financial reforms. s we'll go live to -- we'll go live to the white house. and paris on high alert, days before the national election there. and the treasury second tir sending markets -- secretary sending markets higher yesterday with sweeping tax reform being implemented before the end of the year. take a listen. >> soon. very soon. very soon. >> well -- >> and just to be clear, we hope this won't take till the end of the year. >> okay. >> 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. >> for more on reactions to that and white house policy, we're joined by david kelly, jpmorgan's chief global strategist and jim lowell, a chief investment strategy.

david, i'll begin with you. it sounds praetd good, but does it change the legislative calendar or gridlock? >> well, the problems are in the details. everybody is in favor of tax reform in theory, but the kind they like is a tax cut. and the problem is that the way you reform the system means higher taxes for some people, lower taxes for other people. so i think the difficulty is going to be when they actually release the plan. if they decide they're going to lose some money, if they decide they're going to make this revenue losing and assume some higher economic growth it could be a stimulus to the stock market, but overall i'm spectacle about them getting it through easily. if they stick with revenue neutrality they'll create a lot of losers and winners here. >> the president took pains last week to say, got to do health care first to establish that more attractive base line. do we consider this now an evolution in that strategy? >> i think it probably is an

evolution in the strategy. it remains fairly opaque. we have to see the new administration deliver on policy of promises. to say that tax reform is sweeping, they're speaking big league, but they have to deliver in the real world. i don't know if i would have put health care before tax reform initially but now the president understands he has to get health care done and done in some fashion that can prove that this is an administration that can in fact not just talk about getting things done, but get them done. >> david, i guess the next level question is just how dependent our markets are on any policy progress. obviously, the stock market's held up pretty well with different leadership since hopes of quick legislative action have come in quick. we're not talking about stimulus helping to overheat the economy, in fact getting aggressive. where does that fit together? >> i think where we are in is a place that's less scary for the bond market and less scary for

the stock market than a few months ago. the economy does move at about a 2% pace, in fact, we think next week's gdp number could show less than 1% growth in the first quarter. so i think the u.s. is looking like it's going is more slowly. that's less worry for the bond market and also, look overseas. what we're seeing in europe this morning with their pmi numbers is much stronger than the united states. so i think investors should take a pause, see if maybe if there are better opportunities overseas. >> what does that mean for stocks here, david? you hit on a concern certainly as we come through earnings season here with not bad numbers. but we have a -- we have a ten year, 2.22. commodity prices have started to go down. we have oil down again today. you talk about gdp, 1%. what does that say for the 18 -- multiple? >> it looks high -- it is a little bit high in a slow growing economy. but i think there is some

question about whether the fed would raise rates in june if things don't pick up here. so i think you have a slow rate -- rate of increase in interest rates. we're still in the same conundrum with rates so low. a lot of liquidity which i think will slowly seep into the stock market. i think the stock market will go up here, but a slow grind from here, as opposed the the optimism we saw in the election. >> finally, the journal today takes a crack at the new normal which they argue looking at some things, yields and commodities never went away. you have paul tudor jones reportedly saying that janet yellen should be terrified by stock prices right now. do those things scare you? >> they don't scare me. neither does the phrase new normal. i have heard it over the rolling decades. the reality is we continue to see a lot of selective opportunities here in the u.s. but as david kelly said looking across the pond to europe and emerging markets, if you know how to manage the risk as well

as seek returns those kinds of fear driven headlines create better buys on better dips for long term investors like us. >> we'll see what the cards hold sunday night into next week with the new gdp number. thanks, guys. have a good weekend. >> you too. let's get over to courtney reagan this morning at the global retailing conference in tucson, arizona. sitting down with a special guest. hey, court. >> hey, good morning, carl. here we are at the global retailing conference in tucson, arizona, i'm joined by terry lundgren, executive chairman of macy's. thank you so much for having us again this year. >> thanks for being here. >> absolutely. it's been just shy of a month since you have transitioned from ceo to executive chairman. does the world look different where you sit now on the board than where you were a month ago? >> not yet. i'm looking forward to that view changing a little bit. but i just got back from the middle east and i'm heading for china tomorrow. so i'm still managing our international businesses and so i haven't had a chance to look

back and today i've got jeff gannett here speaking at the conference. so he and i are of course you know locked in and catching up on what's going on. i haven't had a change in view at this point in time. although the good news is my e-mails have gone down substantially and his have gone up substantially. that's the one big change i have noticed. >> there's a tradeoff. what do you think that the board's priorities are for macy's when you're looking to turn around the sales trend we have seen, drive more traffic into stores? do you have a list, number one, number two, number three. >> we do. you'll talk to jeff later on today and i want him to talk about where we're going going forward. but clearly, you know, we're very pleased with our online business. we're the third largest internet company in america in our categories. i think fifth overall. we are very pleased with that relationship. but the store business has got to improve. so that's -- so much focus is there and this conference has all retailers coming together. everyone from walmart to, you know, pet smart and then google

is here yesterday. we have angela aarons from apple. it's how do you make that store experience as exciting as you can be? you'll hear that about this today. i think that's the key for all of us. >> there are a number of deals in the retail space, some consolidation others are closing their doors. so speaking of working together, did -- ever approach or offer you a deal? >> i think jeff answered the question previously to say that people will -- there's rumors out there and there are facts out there. what we focus is on the facts so that was definitely overblown. >> is there a company that macy's would look at, maybe it's a rent the runway, a pure play ecommerce brand that would be a good acquisition, like walmart did with jet.com or some of the other purposes they have been making. >> i think what people don't fully understand, because we don't make acquisitions very often. you know, we made blue mercury acquisition less than two years ago.

and before that it was ten years ago before we bought the main company, which allowed us to be the national retailer. but we look all the time. i mean, we are active in the space to look at opportunities so the answer is if there is something clearly additive to our vision forward we would be open to that. but there's nothing on the plate at the moment that we see that makes a lot of sense. i do like the activity that's out there today because i think there's some great valuations in stock prices of companies that are well funded and that look like they have a runway for success in the future. so to me there's going to be an appetite out there for retailers to acquire other companies. so it's just a matter of what's the right fit for companies like ours. >> tax reform is something we keep talking about. the segment prior to us was discussing its with new comments from the treasury secretary. we haven't really gotten a chance to ask you your thought on the border adjustment tax. what would it do to macy's profitability and tax rate if it went through as originally laid

out? >> well, there's a lot of good things about the tax reform bill. okay, but we have been talking about this from the business round table and other organizations for many years to try to have some improvement in making us more competitive as a nation versus other countries. however, the way they're trying to fund it with this border adjustment tax is wrong. it doesn't make any sense. it's a short term idea to try to move the needle on the other tax reform ideas but ultimately the consumer is damaged by this. i mean, to have a 20% increase in the -- in what is the tax for imports coming in is just not -- it's not going to fly. it was -- so we have to raise our prices by that amount and then therefore make it expensive more the consumer to shop, not only for clothing but for oil, electronics we're then going to be uncompetitive and the jobs are going to go away. so the consumer will spend less. retail is one of the largest employers in the united states. and so if -- if we're affected by this change and definitely

there's going to be fewer jobs in america. so the details of this haven't been fully vetted. we're trying to get these points across in washington. i think we have made a lot of progress here because i think the momentum shifted away from that idea. but it just needs to be known by everyone what we're getting into here. we love the idea of -- of tax reductions. we have to make -- be more thoughtful about how that gets paid for. >> and so what would macy's tax rate look like? target has said 75%. jcpenney said 170%. >> others would be up there. i'm not going to quote the exact number but all i can tell you is that net-net this is not a good thing for any retailer. >> so i guess just to sort of wrap it all up, recently this week bloomingdales employees went on strike or at least some of them did outside. they said, look we should be getting some commissions for some of the sales that are being driven online. in some cases we're helping to drive those sales online or fulfilling the orders in store and this's taking away from our

other commission based opportunities. what do you think of that idea? >> well first of all, we work with our employees to make sure we're doing the right thing. we start with that premise. we have to make sure we can afford to do all the things as well. so, you know, what's happened is the way that the consumer is shopping they're happy to try on the products, thank you very much and then go buy it at bloomings dale.com or somewhere else. that's the way that the consumer is shopping today. i say i want to start with the consumer at the center of our decision making process. if we start there we'll make the right decisions but courtney the reality is we have to be able to afford that we are doing here. we're building these high-tech fulfillment centers that are unbelievable in terms of how they process inventory and goods and we pay very competitively for the sales associates as well. we have to make sure it's the right thing to do first for the customer and on course for all of our employees as well. but these are not simple solutions. >> not simple solutions but complex problems.

thank you so much for joining us. we appreciate it. congratulations on hiring 37 students here into the macy's corporation. >> one of the great things about this conference, you know, there's about 125 or 150 students here that are watching these angela aarons today from apple and jeff gannett speak. kendra scott is here. getting to communicate directly with them is a real advantage for these -- future leaders of retail. >> the ones i spoke to are very bright so the future of retail is bright if it'ses inn in thei hands. thank you. back over to you. >> thank you so much. when we come back, tax reform is in focus as we wait the executive actions from the president. we'll talk to the ceo of the iif, and plus the french elections are on sunday. the candidates are hitting pause as the terrorist strikes paris. we'll get a live report when we come back.

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french voters heading to the polls on sunday to elect a new president. as candidates hit the pause button on campaigning after that terror attack yesterday where a police officer was shot and killed. michelle caruso-cabrera is in paris with more. good morning. >> reporter: good morning, carl. today was supposed to be the final day of campaigning but you can see the headlines are dominated by that terrorist attack from last night. where you can see the iconic

building and it happened 100 yards from here. as for the election it's not clear who is going to win, but make no mistake that the international media has descended on paris because of one person only. the woman you see on the far right, marine le pen. she wants france to abandon the euro and the european union. so if she becomes president, it is going to be have global economic repercussions. it's not a done deal yet as i said the four lead candidates are neck and neck in the polls. if you take into account the margin of error anything can happen. the top two vote getters will go to another round in two weeks. we expect a market reaction. in the meantime we await a news conference from the prosecutor where we'll get more details perhaps about what happened last

night. no surprise a lot of the pundits think last night's attack helps a candidate like le pen because s she's so strong on security and issues like immigration. back to you. >> michelle, people wonder if this high percentage of undecideds help le pen, people who are not comfortable saying they'll vote for her to pollsters. >> reporter: yeah, it's deja vu all over again. people look at the brexit vote and also at the trump vote in the united states and say, we think perhaps looking at past polls a lot of people didn't want to admit how they were going to vote. and they wonder and they think actually that the same is actually true here. that the undecides aren't so undecided at this point and that could be another kind of silent vote for marine le pen. >> all right. michelle, plenty of suspense heading into sunday. thanks very much. as we head to a quick break, take a look at the stocks. they are mostly steady. hanging on to yesterday's rally, but not adding.

a little bit of a caution. treasury yields are down a touch. you have the volatility up a bit ahead of the weekend. we have much more ahead. stay with us. ♪ whether you're after supreme performance... ...advanced intelligence... ...or breathtaking style... ...there's a c-class just for you. decisions, decisions, decisions. lease the c300 sedan for $389 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. it's your tv, take it with you. with directv now and at&t, get the ultimate in entertainment plus unlimited data. get directv now for $10 a month when you have the new at&t unlimited plus plan. welcome to holiday inn! ♪ ♪

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the president getting ready to sign executive actions on taxes and financial reforms. we have more details on that. eamon. >> yeah, good morning. the president will take three executive actions today. this is important, but it doesn't necessarily mean that everything will happen today. the president is going to go across east executive drive ever to the treasury department for the signing ceremony later this afternoon. here are the specifics about what he's actually doing. the first one is an executive order. what that order would do is related to the tax burden that individuals face. it directs the secretary to review 2016 tax regulations and aims to determine if taxes add an undue burden, or exceed statutory authority. that's a review of last year's tax changes. and then there's a presidential memorandum on what's called orderly liquidation authority. this is one of the keystones to

the dodd/frank reforms in the last administration. it's going to direct the treasury secretary to review that orderly liquidation authority. that which pertains to the government's ability to seize failing banks and it's going to determine whether that should be changed in any way. whether it's outlived its usefulness. and then fsoc, a group of regulators put in place by dodd/frank they'll do an assessment of the designation prospect and that's something that wall street has been concerned about for a while. all of that being signed today. i doesn't necessarily mean that any particular action is going to happen today but it does give us an indication of where this administration might be going on financial regulations. david? >> all right, eamon, we'll come back to you later on today. switching gears a bit, investors rely on the government's economic data but a former obama administration official says those reports

could be under threat. our senior economics reporter steve liesman is here to discuss the dangers. >> hey, carl, what if on jobs day the countdown went down, three, two, one, silence. what if the data didn't come out? the former woman from the obama administration said it's a real possibility because of drastic budget cuts at her former agency. >> the bls has to collect a huge amount of information from responde respondents, businesses and families and turn those into the jobs report that come 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 that needs to do? >> president trump has proposed a skinny budget and calling on a

21% in the labor department budget, to bring it down to $9.6 billion, it promises to eliminate what it calls ineffective programs and it's skinny on details so we have no data on funding for the bls. it's the second biggest agency in the labor department and produces the jobs report and the inflation reports among other key market moving releases. and bls funding has taken hits from the sequester and the problem that the data has no friends in congress. if the street is interested in keeping it funded, it's going to need to speak up, carl. >> well, that's a provocative development, steve. steve liesman, he's had a busy morning already. let's get over to sara in washington with a look at what's coming up. some big stuff coming. >> yeah, good morning, carl. as you guys have been discussing, mnuchin, cohn, mulvaney, speaking yesterday, moving markets at that iif event here in washington. coming up on "squawk on the

street" we'll talk to the head of the group, the institute for international finance that represents 500 banks worldwide. tim adams. later on "squawk alley" stanley fischer, bank regulation, the global economy. fed policy and the markets. stay with us. live from washington, the side of the imf -- the site of the imf world bank spring meetings. this is the new new york. we are building new airports all across the state. new roads and bridges. new mass transit. new business friendly environment. new lower taxes. and new university partnerships to grow the businesses of tomorrow today. learn more at esd.ny.gov won't replace the full value of your totaled new car. the guy says you picked the wrong insurance plan. no, i picked the wrong insurance company. with liberty mutual new car replacement™,

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good morning, everyone. i'm sue herera. here's your cnbc news update. people are paying contribute today in paris at the scene where a french policeman was shot dead yesterday by an islamic militant. two other officers were injured before the gunman identified as

karim cheurfi was shot dead by authorities. vice president mike pence meeting with business leaders in indonesia today in an effort to find ways to reduce trade barriers. all part of the ten day tour through the asia-pacific region. boston university researchers will study former nfl player aaron hernandez's brain for signs of cte, a degenerative brain disease caused by brain trauma. it has been linked to the deaths of other former football players. hernandez, a convicted murderer was found hanging from his prison cell on wednesday. he was currently serving a life sentence for a 2013 killing. and on a lighter note, a new way to get your buzz. the first drive through marijuana store in the country opening this week. about 200 miles west of denver. marijuana remains illegal under federal law, but it is legal in eight states including colorado, oregon and california. that's the news update this hour. carl, back downtown to you. >> all right, sue, thank you very much. sue herera.

let's get back to sara at the imf world bank meeting in washington. >> carl, here in washington yesterday, treasury secretary steven mnuchin made some comments regarding the pro growth agenda and policies. listen. >> 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. >> all the action happening at the imf institute for finance event. joining me is the head of the group, tim adams. it represents 500 banks from around the world. >> and pension funds, insurance companies all across the

financial spectrum. >> it's lucky we have you on a day that the president is expected to sign the executive actions. how significant are the orders when it comes to actually affecting changes for the banking system? >> thanks for having me. it's always a pleasure, sara. i think it's very important, the fsoc executive order looks at the nonbank activities. we think that the previous administration didn't clearly state what they wanted to do with respect to nonbanks. should the activities -- and then the other one is focus on title ii and we have some defined an strong views on. >> so these orders are they being advised from the bankers themselves? >> well, somebody is influenced by the banking industry, but they came in and wanting collect ideas and information. you heard the secretary at the event, hen't whats to promote -- he wants to promote job formation and we are for that. >> what are the expectations of the american banks of how much we're going to get in terms of

roll back of dodd/frank and financial regulation? >> sure, we're not calling for the repeal of dodd/frank but we think it should be tweaked with respect to the ccar provisions and some of the liquidity rark owe. tweaks but not repealed. >> you're a former treasury official yourself. feels like it is being implemented -- all of the roll backs by former bankers and current bankers. >> well, you want to talk to people who know the industry. you'd have an agricultural policy by talking to farmers. or if you want to reform the faa talk to pilots. so these are people who are out there every day trying to extend credit and doing what the president wants to do which is create growth, jobs ant greater prosperity. >> you had mnuchin and mulvaney and cohn at the event. what did you learn that's new as it relates to the timing and implementation of some of these policies that have gotten investors very excited? >> well, they sound very

aggressive. i think secretary was pretty clear they want to move on tax reform and move as quickly as possible. sounds like they're close to producing their own reports. he said, you know, it may not be august 1st but certainly in the third quarter. gary cohn yesterday talked about growth, job creation. i think they're very focussed. >> you have been doing this for a while. the level of optimism among your members right now? >> it's incredibly high. we had our board members in yesterday. everything we heard from the administration, secretary gary cohn, it's positive. >> what about the foreign banks that could potentially worry about not having a level playing field, losing competitiveness because of some of these regulations from the administration. >> well, everyone wants a vibe rant u.s. economy and the spillover effects are well felt around the world. i think there's the issues with the foreign jurisdictions but they like a good buoyant market. they're happy. >> we're coming off the bank

earnings quarters where the results were solid. pickup in lending. >> right. >> the frustrations seem to be for bank bulls that the treasury curve is moving against them. yields have started to move lower again and the yield has flattened. how much are they talking about that? >> you know what they're more focused z on the demand side and to lend into the growing economy. that's more important than net interest any day. we want buoyant markets. we want entrepreneurs and businesses who want to borrow and lend and grow. >> is the tighter financial regulation post crisis holding back lending? >> i think if you talk to the small or medium sized bank they'll tell you the compliance costs are onerous. for larger banks there are other provisions. they want to get back to lending and that's what the president wants to do. >> what are the timetables for rolling -- >> well, early june. we seal what the timing on today's executive orders. i think we'll see the responses from treasury on regulation by summer. it couldn't come soon enough.

>> second -- is the second priority tax reform? >> tax reform -- again, it goes back to the macro effect. a lower corporate tax rate. immediate expensing, capital formation. good for economy and banks. >> what's the expectation on the tax rate. >> we'll get a lower tax rate. >> how low? >> i'm hopeful -- i'm hoping we eat get in the mid 20s. we'll see. but i think some of the more controversial components like the border adjustability is in question. i think they'll cut races, how they pay for it remains to be seen. >> what are the banks -- where do the banks stand on the border adjustment issue and whether the tax reform is revenue neutral? >> so far, they're quiet. we saw a new group coming out in opposition. >> a view on how it will affect the economy though. >> well, there's a question about certain segment. there are winners and losers. we're trying theo be neutral. we want to see the corporate rates come down. growing and hiring and doing capital expansion. >> the other policy being floated with this administration is longer term treasury debt.

especially with your background at the treasury is that a good idea? >> i have no problems with 50 year debt. if you want to pay for infrastructure with 50 year bonds, fine with me. i don't know we why stop at 30 year. there was a period that we'd eliminate the 30 year debt. i'm all for moving out the yield of. >> is that how they'll pay for the -- >> i don't know. i think what we heard from gary and mulvaney is public and private partnerships. private money, tax credits. some through the appropriations process. >> what are you hearing as it relates to the vacancies on the fed especially as they relate to bank regulation? >> sure, there are lots of names being kicked around, we hope we get someone pragmatic and doesn't come in with ideological perspectives. some of the names are very, very positive. >> was your industry happy about dan trujillo resigning -- >> he's an old friend of mine. >> very tough. >> he was very tough. but we had a great relationship. i understood his vision, but

time to move on to a different chapter. >> tim adams, thank you for joining us. a staple here at the imf world bank meetings as the head of the iff holding your meetings. >> absolutely. >> back to you in new york. >> fascinating chat, sara. thank you. as we go to break, look at shares of ge this morning. the stock down about a percent, even though the company beat on both the top and the bottom line. the deal with bhi remains on track. when we return, jim stewart weighs in on the president's executive actions on tax reform. we're back in a moment. we're on to you, diabetes. time's up, insufficient prenatal care. and administrative paperwork... your days of drowning people are numbered. same goes for you, budget overruns. and rising costs, wipe that smile off your face. we're coming for you, too. for those who won't rest until the world is healthier,

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welcome to holiday inn! ♪ ♪ whether for big meetings or little getaways, there are always smiles ahead at holiday inn. let's get right out to the cme group in chicago.

rick santelli is there. >> good morning, thanks, mike. perfect guest for today, i'd like to welcome peter wallace in. thank you for taking the time. >> really a pleasure to be with you. >> you know, the president today is going to be signing three things. eamon javers has done a great job. two presidential memorandum, the financial stability oversight council and some of the things their important to metlife and one with record to their designation being improperly applied. but a bigger issue, you have been writing about it. mr. trujillo stepping down five years earlier. curtains for financial regulation. let's talk about that. what we're seeing today with the president's signing is kind of the way it's winding down. your thoughts, is it a good thing, how much can they get wound down? >> it's an excellent thing that these regulations going to be wound down.

the ones i have been most concerned about and which unfortunately has not been covered very much in the press in the united states are the financial stability boards regulations coming out of europe. and there was a program to see if all of the developed countries could have consistent regulatory structures. and my concern was that that would have a lot of -- cause a lot of pain for growth in the united states. >> well, when it comes to europe, i understand after a crisis where governments ended up opening their checkbook and the money they're writing on those checks came from taxpayers they wanted to extract their pound of flesh to prevent it from happening again. but trying to make it so you can't do business, well, of course might prevent another crisis but it really isn't a great solution. is that kind of the direction it was going, peter? >> yeah. well, of course it is. and then in europe they really love regulation. and one of the lessons we have

in the united states and we should have in the united states is that regulation actually suppresses economic growth. and the advantage that i think we have over europe and other places is that we have a much freer market. i think what was going on in europe through the financial stability board was an effort to bring the united states into a process in which our regulations would be as tough and as suppressive as theirs. i think in that respect now that trump is in office, we have dodged a bullet. that's the reason that dan trujillo who was a good guy of course and a hard worker, but that's the reason i think he resigned from the fed. >> okay, now the president is doing all this. he campaigned on this for the reasons that you kind of highlighted. that all things being equal we can have good regulations, but we don't want overbearing regulations in the final minute that we have left, what type of

regulations need to stay? we know pretty much which ones need to go. but your final thought, sir. >> the real problem with the growth in our economy is coming from regulations on the smaller banks because if you look at e the -- at our economy as it stands today, those institutions, those companies that can go to the capital markets and raise funds that way are in good shape. they have been growing pretty well. it's the small companies, the ones that really develop the new ideas and become the big companies in the future that are having trouble getting financing because of all the restraints and all of the costs that have been imposed on the small banks in the united states. so we have to -- we have to deal with that issue first. >> gotcha. peter, sounds so easy when we discuss it. sometimes extraction is much more difficult than implementation. thank you for being our guest.

back to you. >> rick santelli, thank you. coming up, stanley fischer will join us. his take on the economy, trump and more. "squawk on the street" will be right back. the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares.

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we're pretty close to being

able to bring forward major tax reform. just to be clear, we hope it won't take to the end of the year. >> okay. >> 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 csignificant. it will create a lot of economic growth. >> we are going to come out with a unified, united tax proposal from the white house. >> that includes the individual as well as corporate? >> individual as well as corporate. >> the trump team setting a very bullish tone on tax reform yesterday. but more than two months after president trump said his tax reform plan was imminent, we still have no word on the details. here to discuss, cnbc contributor and pulitzer prize winning "new york times" columnist jim stewart. man, those were strong words from the treasury secretary. >> very strong. you saw immediately the market loved that. it shot up yesterday on the news. i think that it's coming along, still on track. i think especially that it's

going to be sweeping, comprehensive and deal with both individual and corporate taxes. recently in the wake of the health care disaster, we see people saying, well, let's not go for the home run here. maybe a single or a double, chip away at this. two problems with that. if you're going to muster the political capital to get something done, you go for it now or you don't. secondly, i have been digging deeper into the tax code especially after filing my own hundreds of pages last week, and it's all -- it's such a complicated piece of machinery. like a swiss watch. if you start tinkering with one piece of it, all the dominos fall down. let's say you want to have immediate expensing of capital expenditures and people feel super pro growth, what do you do about interest deductibility? you can't have both of them? >> well, the house ways and

means blueprint got rid of it and had immediate expensing -- >> there's a lot of fighting over the border tax but people have told me, you know, you have to have the border tax because you've got to get the revenue somewhere if you lower the rates. let's a say the border tax goes away then you have to deal with the interest rate and that is a huge going to be a huge fight. >> what do you mean? the treasury secretary said a few weeks back it was much less complicated than health care reform? >> isn't that how many angels can dance on the head of a pin? i don't care which one is more complicated. they are both super complicated. by the way, i don't think they really believe that. if they don't realize it's complicated, it's going to run into the same catastrophe health care did. putting aside substance of the reform which is super important, there's also the strategy here. we've already seen the republicans breaking into multiple counts over this. they are already arguing about it. i hope somebody is not rushing into this and is getting the

supporters lined up so we do not have another warfare over tax reform. >> you're not calling for nothing to get done? >> no. i've been pushing for tax reform ever since i've been on this program. i don't think there's any doubt that it is badly broken and that all of the gains from 1986 have been chipped away over the years, and it's worse than ever. i totally agree with administration. this could be a huge pro-growth victory for them if they do this right. i think democrats don't want to cooperate but most democrats i talk to in congress also agree this needs to be done. >> is that where the complexity is in terms of congress with democrats? it seems as if it breaks along similar lines with health care where you have wings of the republican party with different priorities whether it be making it revenue neutral or not and then you have senators from states that are influenced heavily by retailers and don't want border tax. it seems to get messy. >> it does get messy.

you can go back and look at what hillary clinton was backing in tax reform and there's a fair amount of overlap especially with support for smaller business, getting rates on llc small businesses, partnerships at the same level as bigger corporation, having faster expensing, getting rid of ridiculous depreciation schedule so there's a lot of common ground. i don't think we're in a world where this is a bipartisan thing. '86 was bipartisan. reagan had a huge popular mandate and dragged democrats along. i don't think trump is in a position to do that. >> being an avid reader of your columns, i know your tax rates are pretty high. you hay hope it will come back as a result of tax reform but the potential that they're not going to allow deductibility of state and local income taxes for those of us that live in high tax states is going to be a real bruising blow. >> i'm trying not -- i'm not arguing about this because of my own personal taxes. >> i bring that up because it's

a life or death struggle for governors of states such as california, new york, even new jersey. you can go on. a number of high tax states that feel like it will really hurt them in terms of having workers there and businesses there. >> absolutely. i will confess to something i have in common with president trump. i get hit with the alternative minimum tax because of the high state and local taxes in new york and i thought i was going to lower my tax rate by giving more to charity, so i've been giving it away more lately. that got -- i got hit on the alternative minimum tax on that too. >> to david's larger point, there's a third rail everywhere you look. there's a third rail on mortgage. there's a third rail on state and local. >> which is why strategically there's only one thing that will get people behind this. the minute you start changing it, you're going to have losers and winners and they'll all go into action. you have to have the carrot of the lower rates. that was key to '86. they lowered the rates. the first thing people will do

is say how does it affect me? you have to give people something positive and that's the lower rate structure. two things will come out. democrats will say that's a tax cut on the rich. well, the rich pay most of the taxes. if you're going to cut taxes, they're going to save more. let's put that one to the side. but then people are going to say get the lower rate but i give up this detuduction or something. there's a fairly small group of people who really lose. if you can actually lower the rate and get rid of a lot of these carve outs, exceptions and special interests, you can narrow it to a small enough group that you can get popular support for it, but you have to lower the rates. you have to give people a carrot. >> that group is made up of extremely wealthy people, i'm assuming. >> they're very wealthy. they have powerful lobbies. >> some represented by the leader of the senate. >> exactly. that's another thing. support for this is bipartisan.

if you look back at who voted -- remember in '93 when the real estate breaks got put back into the coat that were taken away in '86, who signed that bill? bill clinton, a democrat. democrats were pushing for this because of real estate interest. >> all right, jim. prediction time. i don't even know what the date is. i'm going to remember it. what do you think? are we going to get as the treasury secretary said, significant mind altering tax reform? >> i think we'll get proposed legislation. will we actually get -- >> yes. >> i don't want wishful thinking to get in the way of reality. i think it's going to be very, very tough. >> okay. i think we have a sense for what your column may be about on sunday as well from our conversation here. looking forward to reading it. >> i'll keep you in us suspense. >> looking at stocks. not moving around much despite

big picture questions that loom over the market including the election in france over the weekend. when we come back, stanley fischer. stay with us. ght. she said the future freaks her out. how come no one likes me, jim? intel does! just think of everything intel's doing right now with artificial intelligence. and pretty soon ai is going to help executives like her see trends to stay ahead of her competition. no more sleepless nights. - we're going to be friends! - i'm sorry about this. don't be embarrassed of me, jim. i'm getting excited about this! we know the future. we're going to be friends! because we're building it.

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welcome back to "squawk on the street." despite the market's recent slight downtrend here, there's a reason why we're still a stone's throw away from record highs. if you take a look at the largest s&p 500 stock by market value, the five biggest ones out there, they're doing most of the heavy lifting for the market. we'll call them pillars of the s&p 500. a lot of them are tech related names. you have apple, facebook, both more than 20% higher just on year-to-date basis along with amazon, more of a retailer than tech company. and check out shares also. alphabet, microsoft as well. also showing signs of gains this year. all of these names account for around 12% to 13% overall for value of the s&p 500 just in five stocks alone. this might be where we're kind of seeing these things towards record highs in the marketplace even though not everyone is participating. these are names that you'll want to watch as we head into the thick of earning season.

those five names doing much of the heavy lifting overall for the stock market. that does it for this hour of "squawk on the street." i'll send it back downtown for the start of "squawk alley." guys, back over to you. >> all right. thank you very much. good morning. it is 8:00 a.m. at tesla headquarters in palo alto. it's 11:00 a.m. on wall street and "squawk alley" is live. welcome to "squawk alley." market in a tight range despite questions that