he created in many ways but clearly how competitive he is, i get that, but there's lines. in terms of what you can cross. >> i get it. winning. >> what you can cross is a small company as a big company it's a different story. >> are you going to be a publicly traded company? >> right. >> be sure to join us tomorrow. right now, time for "squawk on the street." ♪ >> good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and macron and le pen advance to the second round of the french elections. couple that with the merger monday. congress returns to work this week. and one of the busiest weeks in years for corporate earnings. kax at a nine year high, gold is selling off. our road map begins with the french election results.

the u.s. stocks set to surge at the open. >> a hectic agenda on capitol hill with president trump's 100 day milestone looming. taxes, health care and avoiding a government shutdown all on tap. >> robot warnings. alibaba's jack ma is predicting that robots will make many irrelevant. and first up though, global rallies in place a day after the first round of the french presidential election. macron and le pen set to square off in a runoff may 7. shutting out france's traditional ruling parties. polls show macron as favorite to defeat the anti-eu le pen in second round and win the presidency. these polls, jim, somewhere 64-36. some argue this was one of the best outcomes the market could have hoped for. >> it is, but i wanted to distinguish between them and us. i think that we should not go up as much as they did. they had a lot more at stake. i think we're going to quickly revert to what has controlled us which is oil.

which is already sinking. the interest rates which need to go higher. and our earnings, we were really one out of three. just the last one. i warned people again that when you buy up this much, it's usually not been fruitful. wait a little bit. wait till oil goes down. wait until people says you know what, we're focused on the government shutdown and then you get your chance because the government shutdown is a bit of a canard since all three entities of the house, the senate and the president are uniquely set to do something, but remember paul ryan is the key here. and so far he hasn't really been the delivery man that i think people expected. >> the senate gets back tonight. the house gets back tomorrow. deadline is friday to extend the government funding. now we have this dynamic where the president is offering a dollar and obamacare subsidies for a dollar for wall building. >> right. that's a horse trade that's

within his cabinet, but not within congress. look, i think that congress very much wants to keep the government open. i just don't think that they're on the same wavelength. i don't. >> so do you give it a chance that we could be facing -- >> no. >> most pundits give it a small change that we'll face a shutdown. 20%? >> so 20%. just because i want to see what the tax proposals are. i want to see whether there is an immediate backlash from the republicans that were really busting the budget. maybe we have to teach a lesson to the president. i think it's odd but if you look at france, let's analogize. the ruling parties have disappeared and who knows how macron -- i mean, this guy he represents roths child. he worked for roth child, inc. >> wilbur you're talking about? >> no -- macron. former investment banker. i'm saying that we don't have party fealty in either country.

>> so it's too early to declare an outright victory for the merkels of the world. the globalists so to speak. >> well, he was the biggest fear monger last week. i think it's important to point that out. i know that you're not supposed to. and i did it. i will be here again tomorrow, i hope. >> i expect you will be. >> as far as the tax announcement that we expect to get this week, mulvaney over the weekend now says it's general guiding principles and apparently the president has not even decided whether or not this was going to be revenue or deficit neutral. >> right. i know, but it's going to be huge. well, i mean, remember that the big splash effect of the president and then whatever happens will be viewed as a big splash. i'm not being facetious. i just think when a guy announces there's going to be a huge plan, i don't think that -- i think that -- this administration does a little bit more on the fly than i think a lot of the other administrations do.

i don't think that this is a president who sits down with hundreds of people. we had an interesting article who the advisers are. a very close knit group. >> interesting to read. many of those names are names we know certainly from the business community. not unexpected that he speaks with carl icahn on stephen schwartzman, a frequent visitor toer the white house and they don't to be on the same schedule. the reference you're making to friday's interview with the a.p. in which he said the biggest tax cut of all time and seemed to indicate wednesday and then everybody had that walk that back, marley at treasury where they were -- particularly at treasury where they were unaware. >> this is unaware. a different kind of cabinet. look, we have come to recognize that the president is his own guy. even to the extent he has a lot of people discussing and then he reaches conclusions. and he is given to, um, to hyperbole is that fair? >> i think that's fair. that's the way he's always been and always operated.

as a new york real estate -- >> straight out of "art of the deal." >> what was the most important show on tv. best ratings. >> to the bigger picture, jim, i think there are those who wonder whether or not you're able to effectively marshall the resources you need to do execute on capitol hill. >> right. >> and that's because there it can get somewhat complex as the number of people have learned. >> right. >> you had the president say at one point he didn't realize health care was as complex as it turned out and mnuchin said that tax reform wouldn't be as complex as health care. >> we found out that china was more complex -- >> north korea was more complex, yes, when it was -- >> a lot of complexities. >> after ten minutes with xi jinping. >> look, we want tax cuts though. no one wants their health care touched except for they want it to cost less. but in terms of the tax cut that's not something that people say you know what, i'm not going

to stand for that. there's a hard right part that says we're worried about it. but america loves tax cuts. this is something that the president should really press because he's not going to get a lot of blow back. provided it isn't just a tax cut or the -- for billionaires. the billionaire bears because they want to keep -- on the stock market every chance they get. >> the irs doesn't have thatdefenders. >> i know they'll try to outsource the debt collection. did you ever get the debt collections? i was on more shaky finances one time. it's really interesting when they call you. >> one of the robocalls from india said i had to call irs immediately. >> the exxon is like the irs -- i gave them a payment plan but the bank -- those collectors get their man. if you don't want to be -- you

don't want to be on the other side. they tend to be very reasonable up. if you can pay. >> for more on the french election let's get to paris. a live report this morning from wilfred frost. good morning. >> reporter: good morning, carl, yes indeed, so why are markets rallying this morning? it's because investors think this election is done and dusted. they think that the pairing of mr. macron and madam le pen means for certain means that mr. macron will win. why do they think that? let's look at the 2002 presidential runoff election. that was the only other time the national front made it through to the second round. in that second round vote, chirac got 82% against jean marie le pen who got just 18% of the vote. the thought is in the second round, voters unite against the outside candidate. indeed the polls this time around show a big gap. more like 60-40 to macron than

80-20. but an uphill battle for marine le pen. but things are different. in the first round the vote was much closer and more candidates at play. therefore, key in the second round is what happens to the roughly 40% of voters who opted for the far right or the center right francois fitton. he was come to come out loud and clear and back macron in the second round and encouraging his voters to do the same. melench melenchon, the leader of the far left party has not done that, even though in 2002 he did come out and back jacques chirac. to dive into that deeper let's look at how working class voters here voted yesterday. le pen won and by a much bigger margin than people expected. 37%. macron just 16% of the working class. melenchon in between the two as you can see. that's 24%. which way it goes will be key

for this election. but the bottom line, as you have already said the market very confident that macron wins. two key positions that le pen has that aren't palatable to middle ground voters. firstly her tough rhetoric on immigration. often labeled as xenophobic and her position on withdrawing france from the eu. this is much tougher to get past the voters than brexit. it's a bigger risk to their economy. >> wilf, there's one big debate which chirac famously demured from participating in. i wonder if macron has made statements about whether he'd face off against le pen in a debate. >> in terms of a television debate, i'm not sure. there were three in the last round in which in fact mr. melenchon -- i'm not sure to be

honest if there's a television debate at this stage. >> the markets are watching everything between now and may 7th. wilfred frost in paris. >> can i point out that wilfred frost was out there saying that maybe the polls could be right and that this was not something that if you followed him was all that surprising and congratulations, because it was certainly a different calm view into the election. i really appreciate what he's done. good reporting. >> do you think it was an affirmation in polling of sorts? >> yes. i think the high water mark was the netherlands when they failed for nationalism. the you follow what wilf is saying, there's more of a globalist, pro euro feeling out there than people realize. the euro, really running here. i think that does matter for american earnings because it takes away the negativity we don't know what will happen with the currency. listen, europe has been strong. >> well, the german index is

strong and takes the pressure of of what draghi has to say. >> we are so worried about the banks. any one of them can refinance today. if you bought on the big deutsche bank, you killed it. i think that's very important for people to recognize that if you buy -- remember, all these banks are short of capital. i know the standards are quite different, but it takes the pressure off. >> all right. interesting. the cac on pace for the best day since the eurozone summit in which they did arrange for easier financing of banks. >> i think we have to stay on this story because i think we all want to try to call a bottom in europe and that happened a long time ago. i think pvh has the best call which is tommy hilfiger, calvin klein. the best part of their product is europe. what does that say? that's high end over there. so keep in mind that europe is stronger than we talk about here. >> we'll gear up obviously for a big open here on wall street. when we come back, we'll get to movers on the m&a front and

also, jean-claude trichet. the s&p is less certain, but we'll watch it closely. "squawk on the street" from post 9 is back in a minute. so what else is new? how's your mother? umm..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. hey you've gotta see this. cno.n. 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.

dow hasn't had a 200 point rally since march 1st when it was up 303. that was the last record high for the dow and s&p. we'll get close though.

looks to open at 220. >> we have some m&a to get to, carl. medical supplies company becton dickinson acquiring rival cr bard. mostly cast and some stock. ppg is back in the news. why? well, it's once again sweetening the unsolicited offer to buy akzo nobel. this time up to $28.8 billion in cash and stock and they did increase the cash portion by four euros. akzo nobel says it will review and consider the proposal. let's talk about both deals. let's start off with the deal itself this morning. becton dickinson, actually it was yesterday, about 5:00. roomed into my -- rolled into my e-mail. about 223 in cash. they're leveraging themselves up to 4.7 times. that's an inconsiderable amount of leverage on the balance sheet. they're using stock. they won't need a vote. they're not issuing more than 20% of their stock.

about 15% or so. some people see the fit and other analysts say, well, there's some fit, but not cleat. it's accretive. there's some cost savings and i'll be curious to see how the stock price reacts this morning. >> look, i think the combination is great because you're shipping to hospitals and bard has an amazing, amazing catheter franchise that fits in well with the general suite of product. the hospitals have wanted over and over again and said they want fewer providers. we don't want a lot of providers it's so much easier for us. it's so hospital friendly -- >> and that brings consolidation. 24.7 times 2018 consensus numbers. also looking at 18.6 times ebitda. i'm told high end of the range in terms of med tech transactions. >> well, i had sent a memo to my "mad money" staff sunday around 2:00 saying, you've got to get to the bottom of why bard keeps

going higher and then at 5:00 this comes out. okay, at least we know why. there's been some chatter so that brings me to question if there was someone else involved? >> i don't know there was. they seem to have gotten a good price. we'll know when we get the background of the merger. i wasn't able to talk to anybody involved who indicated one way or the other. there was some sort of question, well, was bd feeling some pressure, again, levering up, not having to worry about a shareholder vote. but there's becton dickinson -- >> the stock has been a winner. >> see how that stock reacts. >> i live near the headquarters of bard about, i don't know a stone's throw. i have to tell you, i guess i don't want to say who knows who will survive or who's not, these two are next to each other. you certainly don't need two headquarters. >> no. 25% premium to the unaffected stock price. to your point -- >> how do you hedge against this?

they did a strange -- 222.93 in cash. how do you short it to be able to make -- what are the -- >> you don't worry about that part. you worry about the stock parts. let's move on though quickly to ppg which keeps coming, jim. they go up by four euros in cash. by raise by 7.5% over the last bid. interestingly they also this time say that they're willing to include a reverse breakup fee. they don't tell us the number but if there are any antitrust concerns on the part of akzo nobel they want to reverse them. please, let's talk. let's sit down and try to get something done here. it's unclear what the response will be but you can see certainly the response in the stock price. and these guys would have to come hostile by june 1. that's under takeover law over there. there's a presence of a shticking and that can make a takeover difficult. akzo nobel does have elliott in the shares which seems prepared to keep applying pressure.

and there's sort of a diversion here i have to say amongst the takeover stock -- stock takeover investors as to whether or not ppg will find a path here that gets them to getting what they want. which is sit down prior to june 1 and obviously we have the threat that they will go hostile. you have some thoughts about ppg's business. >> well, i just think -- first of all, chuck bunch who ran that company excellently for a long time, i don't believe he'd go hostile. they missed the quarter a couple of times which is disappointing. they have seen regular earnings. one of the things that structures me to get the deal done, think had to get rid of the division, sell it to axalta for a give away price. you're dealing with the duopoly with the banking companies. i don't know how the justice department will handle this. they didn't like the valspar and sherwin williams deal.

>> they take steps to make certain assurances about jobs and keeping jobs, you know, at akzo noble. operations in the netherlands and those kind of things, jim. and of course the presence of this reverse breakthrough. we'll be watching this one. but it is getting up there. >> is it ugly? >> getting a little ugly. don't forget the shticking. >> we'll get to cramer's "mad dash." virtually every global market in the green except for china interestingly. back in a moment.

six minutes before the opening bell. for the start of trading this week. we want to talk a little kimberly-clark in the "mad dash." >> we have to focus on some stocks that really didn't deliver. kimberly this is in relation to unilever not being able to be bought by kimberly. i mean, by kraft heinz. you better not outshort -- so unilever says no to kraft heinz. >> start speculating about what others might be in their sights. >> you would have seen the same reaction in colgate. >> that's right. >> so what happens now is we have to examine what if the earnings are a bit of a miss and they are. now organic sales minus one, north american not that good. tax rate was down a bit. cash flow from operations down.

i think that cash flow has been the mark of this earnings period so far. we have been looking at cash flow, that said no one ever got -- no one ever got buying kimberly on a discount. i happen to like the company very much. be aware. this kraft heinz premium is just really created a level of -- you know, you have to look over your portfolio and make a decision whether you have been boosted by kraft heinz or not. because that's what's going to cause this -- >> a great point, jim. okay. we will be looking over a lot of portfolios. that is a lot of stocks of course when we get the opening bell. netflix doing another 1 billion euro bond deal. we have other smaller deals. we'll get to that when we come right back. at fidelity, trades are now just $4.95.

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there's earnings. almost 190 s&p companies this week. it is literally one of the busiest earnings weeks in years. >> i made a plea on "mad money" on friday for these companies to rethink what they're doing. because those of us who follow these companies know, you know, granular basis we can't. look at the time, there are not enough hours in the day and they have good stories to tell and we can't listen to them all. the instant reaction is off in the wrong one this week. please, please understand that the plethora of data and information has made it so this is the most hazardous week to buy or sell within the first minute of an announcement. particularly boeing and caterpillar where people have gotten those wrong. >> thursday is a mess. google, starbucks, google, intel, microsoft all in one afternoon. >> yeah, look, those -- that's a typical situation where no one going to pay attention to one of

them. listen to me, don't do in the elle that day. you're getting short shrift. i like what you're doing. >> let's go to the opening bell. the s&p on the bottom of your screen. at the big board today it's agfiq, asset management celebrating its launch in the u.s. and then washington federal, a bank based in seattle. celebrating its 100th anniversary. we did kimberly at the wall. hasbro is really the other big one. >> i made a plea to everybody last week, please do not analogize mattel. but it's not just that. what are some of the hot divisions in hasbro? well, nerf -- >> nerf? >> nerf. transformers, monopoly. i mean, let's remember that when you're a well managed company like brian golder does, you can get a lot out of even the old products. gaming plus 43% too.

there's so much to like here. >> amazing. >> this is incredible. >> after friday, the diversion with mattel so complete and total this quarter. >> and disney. i mean, what bryant goldner has done, he said we're going to do our own movies for our product. we'll be able to do a 360 embrace of what we do. and its has worked. and mattel has been very -- let's say throw back. and throw back doesn't work anymore in a world where we're so busy playing candy crush. i think -- my wife plays candy crush when she's on the subway. >> a lot of people do actually. it's a popular subway game. >> if you're looking over -- >> good for the crush. i don't know. my daughter when i was with her in oregon last week she was playing against 50 people one of the games. i don't think people recognize unless -- if you're not a gamer you don't get it. candy crush. so let's be aware that hasbro recognizes what the real enemy

is. by the way, did anyone listen to hastings call on netflix? what's the real enemy on netflix? >> yes. >> what? >> time and sleep. sleep. >> one of the biggest -- >> people say on twitter how do you watch netflix? i deprive myself of sleep, it's too important to netflix. >> netflix does another billion euro bond deal. they raise money episodically. not at once. they're hugely cash flow negative right now. they pay for things up front. then you don't get the money back until you run the shows. but they kind of keep raising money. they do it very successfully. no idea on terms at this point. but a billion uh-euro aggregate senior notes. keep raising that money keep it going. you have to do that when you're

400 million -- 2 billion negative free cash flow i believe. >> original content. do you know who was cash flow negative on friday? general electric. >> yes. and that interestingly when we were on the stock had opened up because the numbers to your judgment and many others were okay. to not bad. but the one area -- even though it's not an important -- 18% of revenue that quarter, one of the least important quarters and they're building inventory so you would expect that perhaps they wouldn't have the cash flow. but the stock ended down about 2%. >> i don't think you can risk having negative cash flow, i don't think people say listen it's not an important quarter. they said, wait a second. there's a dividend, a buy back here. what are you doing with negative cash flow? i'm sure that the company has a reason. they always have a reason. maybe that's the problem. there's always a reason. >> yeah. >> itw one of the big gainers.

raises their guidance for the year. 16% for the year so far. one of the best dow stocks. >> for the first time, i have mr. santi on from itw. this is the best industrial that no one has ever heard of. they have a remarkable 80-20 rule about what they spend their money on. i have to tell you this new york -- it's 3.5%, i love gross margin is getting better. the auto business plus 9, construction plus 2. this is such a well run company that it blows everybody away. the fact they're nonpromotional makes it so you don't know them. my charitable trust tried to buy it at 120, never pulled the trigger. it never comes in. it's a remarkable company, and it's american. >> a heck of a show tonight. we'll promote it later. >> i book this show endlessly. there's no moment.

i haven't had to poach anything from you. >> you're abb -- always be booking. >> i'm a booking machine. i booked all three of these. >> i know it. it ticks me off a little bit. john ledger can't come on our show? >> why do you think i'm wearing this color scheme? >> pink. >> purple in there. >> it's all about ledger. >> we should mention our parent comcast record high this morning. fate of the furious will have grossed $1 billion this week after posting the biggest global open of all time. >> incredible. this is a juggernaut. we obviously work for them. theme parks are very strong. and david, you have covered the fact this is is an industry that may have been benefiting from -- could benefit from this administration. >> enormously. they will benefit from the deregulation that does appear to be taking place at the fcc. in terms of net neutrality.

even not -- even set top boxes no longer sort of pushing a replacement. the benefits of tax reform for comcast are also manifest however, it's not clear they'll actually happen. >> right. >> but they would be quite significance given the ability to expense capex. there are domestic companies so border adjustment tax means nothing. tax rate effective fairly high tax rate. so comcast would be one of the beneficiaries if you get a tax reform package. this was a week ago, of course klaus kleinfeld was sum marley dismissed from his -- summarily dismissed from arconic. he's stepped down from the boards of morgan stanley and hewlett-packard enterprises. people were saying isn't that going to be next and it has been.

his role in any sort of public companies is now gone. that's -- man, that's got to be quite a fall from grace. >> i think that -- you know, it's not about friends, it's about money. i know klaus. this is -- he's had a very public posture even maybe you -- maybe our viewers don't know, but badgette, which is a very important event for journalists, he was our host for -- he has been strident about protecting journalism. i think his public role was far bigger than people realized in terms of his posture about trying to be with the president, trying to really make a -- you know, an industrial case for america and that's -- i have to ask you, david. these were all voluntarily on klaus's part? >> i believe so, although it is interesting because patricia russo is also at hqe and she's

the chair over at arconic. >> yeah. >> that immediate for an interesting sort of combination. >> now, elliott -- i know there are a series of articles saying that elliotts is training its guns particularly on akzo nobel and i understand that. i have seen no letup in their desire to elect their slate to arconic. >> no, they already put three on the board at arconic so there's a rallying cry at least from the arconic side. great, saying it would be a change in control and they're saying well, they had three. now they will get another four, that's seven. you're giving them control of the company. those three have been independent to be fair. but, yeah, it's unfortunate. you know, when they go through your garbage, knock on your neighbor's doors, just got to accept it's part of what happens in a proxy fight. maybe it shouldn't but that's the way it goes. >> ill advised move. i would point out i think this is important, they report tomorrow. so those who are buying with the expectation that this could be a

big win, the previous quarter for arconic was not a good one. it's entirely possible this is not a good one. understand you're doing it because of a proxy fight, maybe this was -- maybe it was a miraculous quarter and klaus wanted to deliver, but that's not the way he's done it. the split is pro wa, the old -- >> alcoa tonight. arconic tomorrow. >> right. >> really quickly, jim, the banks here as odds for a june hike have gone back to the 50% range. >> right. >> are leading some of the charge this morning. do you sell some of this? >> this makes sense. i would not sell the banks because the banks are -- when you look at the earnings, i know that we don't look at price to earnings ratios very much. but when you look at wells fargo, let's talk about that. i know it's under fire. the board is under fire. my charitable trust owns it. this is wells fargo. i know it was -- i know the fall from grace at wells fargo is

rather a lot, but remember the chipotle rule. remember the 18th month of the look back from the illness, i think that wells fargo, people will forget why they stopped dealing with them. because in the end they have such incredible market share. it's difficult to say no to wells fargo because they're everywhere. i know that does matter. they took advantage of the great recession to be able to get well above what the founding fathers would have liked for market share. founding fathers. you guys have seen "hamilton"? one of the best history lessons i had ever seen. >> did you go finally? >> i just loved it. so much -- i mean, there was a lot there. i mean, i took that class. i still didn't get enough. >> a lot there. you should listen to the soundtrack over and over. you'll pick it up. >> you have to listen several times. jefferson doesn't look as good as i thought. comes off quite poor. washington -- >> the book on washington it was a great one. >> try to explain to your kids

why the $20 is worth more than the one. >> for those who care about pure pay reits, felcor is getting bought. >> it is? >> yes. >> you saw that. >> yeah. >> nothing gets by you. it's a $1.3 million -- 1.18. >> i want to tell you why this is is an opportunity. for the last two years every hotelier has come on "mad money" and we're tired of hearing that airbnb is killing our business. well, it's not. er but it's created -- but it's created some discounts in the group. if you like at wyndham, and marriott, because marriott made a shrewd acquisition in retrospect, didn't they? buying -- >> yes. even after having to compete a lot more on price than they thought they would, when au bon came in to only disappear.

that was interesting. >> an important deal. i thought it was important to be dramatic about it. >> i'm glad that we mentioned it then. third largest pure lodging reit for those of you who like to keep track. >> everything that we thought would happen is in place. the dow is up about 200. let's get to bob pisani. >> good morning, carl, what a monday morning. 6-1 advancing to declining stocks. see that's going on in europe they have a huge rally. all the bank stocks, your deutsche banks and some of the -- the italian banks are up. even axa is up. even broad sectors are up. so siemens and the conglomerate group is up. put up the other one in europe. the auto stocks are trading on the upside like bmw. put up the next one there. you can see what's going on. the important thing is there you go. ovmh everything is moving to the

upside. ten of 11 sectors are on the upside. telecom is down here. industrials and materials and gold is the big laggard. the earnings parade is continuing, it's favorable. been good so far. illinois tool weeks, an historic high for them. they make arc welding equipment, construction products, food equipment. everything. 100 countries. and 50% is outside the united states so this is part of the pattern. they beat and they raised their full year guidance. we have seen this with a number of the big overall companies out there. so ge beat and stanley & decker beat a and raised. sherwin williams beat and raised. the banks started well, now the industrials are coming in. it's a good sign because we need earnings to be doing well this quarter. a lot riding on it. where are we in terms of the risk? we have been talking about four risks for a while here. by the way there's the new highs on the industrial list.

all of them at 52 week highs. back to the risks. where are we right now? people feel in light of the french results that we should be reassessing the geopolitical risk, it's lower now. although north korea is still out there, but it's lower. that's why the markets are responding. weaker economic data is still -- i think the risks are very high. we have to show that the second quarter data is greatly improved and that it's not some kind of trend with the weak numbers in the first quarter. i have been talking about the earnings risks because stocks have high valuations right now. any variation from the guidance is a problem. we saw this with ibm. we saw this with goldman sachs. i would say their valuation risk is still moderate. then the whole issue about delayed fiscal reform still out there. and president trump's comments about a tax bill coming is an exaggeration. all we can expect is a statement of principles this week. we want to see a little more action. of the four risks, geopolitical,

definitely lower but the other three are still very much out there right now. where are we for the stock market? my sense right now is look, we're 20 points, 24 points away from a new high on the s&p. but that's a ways. we're probably in the trading range that will resolve the issues on the earnings. it will resolve the issues on the economic reforms overall and certainly enough with some of the weaker economic data. so trading range is still the most likely, but towards the high end. ipos folks, this is it. been saying this for three months now, but they're finally going to pick up. seven ipos this week. the busiest week since mid september here. we'll have 18 ipos if they all go through this would be the second busiest april. and take a look at some of the big names here before we go back to carl china rapid finance is there. and emerald exposition is the biggest company in the u.s.

cloudera, back to unicorn and a used car company coming as well. ipo, etf, up 12% so far this year. we're up right at the highs of the day. 213 points in the dow. carl, back to you. >> bob, thank you very much. let's get to the bond pits as well, check in with rick santelli. >> wow, lots of things going on. nobody should be surprised but maybe there are still surprises. i'm not talking about the second round of french elections. i'm talking about the goodwill in the marketplace. especially against the fixed income side. is it just a happy rally with regard to price rates pushing down price so yields have moved higher or something that's going to catch up with us. that's a key issue. look at the one week of tens. we clearly jumped. look at year to date, this is important. ever since we closed under 227 the market hasn't come back. today we literally jumped over it, so now there's a band of

untraded price structures right around that yield. it's going to be so imperative which side of that gap we close on. if we look at the year to date of the shots of the european two year it's popped up about 11 basis points to minus 68. if you look at the boon, it's popped about ten basis points from friday's settlement of 25 to 35. look at the spreads and these are interesting because when things go bad, we should see widening versus better credits. in this case the supreme sovereign being the boon. look at it versus the french ten year. if you look at that, year to date, you'll see that boy, we have come back. we have really tightened it up and that only is it unique to france, but italy was more talked about against the boon. you could see how that's trading with regard to a one month chart and the spread and finally, the dollar index.

the reason i question whether the rate bounce is going to last is because of this contract, the dollar index. it's the lowest level since the 10th of november which equates to the euro at the highest level versus the 10th of november. we took out the huge march 27th bottom at 9917. this is one to watch. especially on which side of that previous bottom, 9917 we closed. and by the way at 10:40 eastern we're talking to the man that ran the ecb, jean-claude trichet about french elections. carl, jim, david, back to you. >> all right, rick, thank you. we are watching shares of gm this morning. the supreme court has declined to hear the automakers appeal of a ruling that allowed lawsuits over the faulty ignition switches to proceed. and that means the gm -- that gm continues to face billions in potential liabilities claims. got a lot more on this morning's market rally. the i do is up 197 -- the dow is

up 197. more "squawk on the street" continues in a moment. the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.

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pretty strong breadth as the s&p is some 23 points. best day for banks since march 1st and the ten year is the best in a couple of weeks. back in a minute. ♪ ♪ welcome to holiday inn! ♪ ♪ thank you! ♪ ♪

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time for cramer and "stop trading." >> last week we speculated on "mad money" that cy links would be the target of broadcom. this morning, both credit suisse and evercore isi recommend the stock. credit suisse says 5g is coming sooner than people expect. all i can tell you is everybody knew that. so why are both firms pushing it so hard today? it seems since that excel rated change of control -- it makes a lot of sense to be as a high end company that does a lot of intellectual property. makes a lot more sense -- >> broadcom looking at toshiba's flash business which would be a big business. >> i think kkr with japanese financing is more likely to get

it, but i totally agree with you. i want to figure out why they want to go down market flash as opposed to up market. it will be a $28 billion bid if it happens. >> what's on "mad" tonight? >> we have john legere reporting. he's giving me some rolling papers -- is that like for tobacco? then we have on tool works, scott santi and then hasbro, brian goldner. he won't say woe is me like mattel. it's about the numbers. >> speaking of which you might have nasdaq 6,000 to play with. >> holy cow. you're the top, the louvre museum. baby, if you're the bottom -- >> on the bottom -- >> cole porter. doesn't get enough credit. >> it's lovely. see you tonight, "mad money,"

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♪ good monday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen who's back, david faber at post 9 at the new york stock exchange. obviously a big rally in place. the dow's up 213, record high on the nasdaq which is 18 points from 6,000, which would be a big milestone. focus on d.c. and earnings as well. take a look at france's cac. >> we begin with the french vote. the rejection of the mainstream parties setting the markets rallying ahead of a presidential runoff in may. >> big week in washington. tax reform proposal and a potential government shutdown serve as the back drop to trump's 100th day in office.

>> and then jean-claude trichet will join us. his thoughts on the french election and what it might mean for the global economy. but let's start with this market movement. the dow is in rally mode as france rebukes the traditional party system in favor of far right candidate marine le pen and centrist candidate emmanuel macron. let's bring in mary ann bartles and a chief u.s. strategist at citi. how much of a lasting impact is this going to have on u.s. stocks in particular? >> well, the markets have been console dating since march and they're beginning to shape up in the positive tone. even though the seasonals are weak they tend to be strong. the earnings are coming in good. earnings estimate revisions are positive but more importantly which most of the clients don't pay attention to is what's

happening on the global scale. we have a global model that looks at global economic indicators, confidence earnings and earnings that component is the best in 11 years. that model has been positive in june of last year. stays positive, so all the readings that we're getting domestically and globally remain positive. >> yep. europe is a big part of that. how market friendly do you see the outcome of this french election? >> so i guess we'd start off, sara and say that -- you know -- for the french vote that's kind of the near tone phenomenal. when we look at the commercial industrial lending standards data out of europe it's been getting worse in the last several months. that does not bode well for the second half of the year in terms of the economic data. historically it's a pretty good lead indicator and the u.s. has been showing better trends, suggesting a better trend in the u.s. coming in the next few months on the economic data. last one i would say there is

while i agree with mary ann on the sell and go away concept, not when the economy actually strengthens. the sell and go away doesn't work when the economy firms up from first quarter. >> one of the best cap analysts in history tobias was. i'm looking at a chart of may through october in the first year, mary ann, of a presidential term. it doesn't suggest sell in may at all. >> in fact, it says go higher. the other indicator outside of earnings that you're getting in economic data is that the nasdaq is actually leading this rally which is your cyclicals. and even small caps are starting to firm up a little bit. so with market -- that part of the market's strong, is another indication we should see strength as we move out over the next quarter or so. >> hey, tobias, the journal takes another crack at the soft data/hard data divergence.

if you took the ism surveys, all the soft stuff we've gotten, it would imply gdp growth near 5. does that make sense? >> i think it's a bit of a timing issue. it's like to three six months and look at the c & a survey i was mentioning it's a three to nine month. you have the survey for duke university that's a 12 month indicator. soft data tells you what's happening in the rearview mirror and i would be much more focused on the investor in the three to six months is much more important than what happened three to six months ago. >> if you could stay with us for a few moments we talk to about earnings. we have a heavy load of earnings coming up. but in the meantime let's send it out to michelle caruso-cabrera out in paris with a special guest. good morning. >> good morning, sara.

newspapers across france in fact all across europe have the same two pictures. emmanuel macron and marine le pen, the two candidates who will face off in the final french presidential election in two weeks. ko means the same in english as it does in france -- knockout. the right has been knocked out. in fact, the two dominant establishment parties here, thoroughly humiliated in this election. it is hard to understate the choice that the french voter has, do they want more or less france or a more or less competitive france? le pen is described far right because of her associate position and her economic positions makes her a person of the left. maintain the 35 hour workweek, retire at 60 and no independence for the central bank. macron, a full embrace of the eu. less specific on his economic policies, but he says he wants france to be more competitive. the 35 hour week for example

should not be set in stone. you mentioned we have a special guest. we have a spokesperson for emmanuel macron who joins us this morning. former journalist, so she knows france well. we won't hold that against you. >> thank you. i appreciate it. >> the markets are acting like it's the done deal. that emmanuel macron will be the president of france in two weeks. is it a done deal? >> it's not a done deal until the deal is done. you know that very well in the financial market. so we welcome what happened yesterday. it's what we're calling act one. now we have act two, meaning two weeks of campaigning against marine le pen, against the national front which is a far right party. we want to show to the world that france is an example of democracy and all together the people believe strongly in the power of democracy are going to be succeed. they're going to succeed again with macron to show to the world that we can resist what's happening at this moment all

across the continent. >> emmanuel macron used to work for the current president, hollande. the posters must be put up by le pen or his political enemies, shows him looking in the mirror but he doesn't see himself. he sees hollande and asked the question, five more years? >> this is done in a very violent and unprecedented months. they're trying to say that. macron was the minister of economy of -- with president hollande. when he didn't like what he was doing, he resigned. he quit his job because he said i want to do more. it was one year -- it was a few months ago then he decided one year ago without anyone, with no political party behind him, to launch a movement en marche.

everyone was telling him, you're crazy, this is france. nobody can win your presidential election without a party. he did it. now he's one of the finalists. it shows that the people here in france are ready for a change. people hope that something is different. people want the renewal of the political life and this is a historical moment. >> you're going to faint when i ask you this, but everything you just said, reminds me of donald trump. he did the same thing. what effect did have donald trump have on this election? >> a big effect because trump for us has been elected president of the united states. and emmanuel macron said repeatedly that he's going to speak with someone who has been elected by the people. he's going to be extremely vigilant, but at this moment when you're doing a campaign, you have to understand the middle class and the anger of the middle class.

and i think we didn't do a campaign like someone else. we fried to do a campaign -- we tried to do a campaign to express to the people something very simple. trust us. we want to do something different in france. that trusted us and we hope they're going to trust us until the end. again, this election is now about the future of europe. you can see that today in the market. we believe that macron is going to advocate, and he will meet in germany, and we believe that with the election of macron as president of france is going to be the renewal for europe. >> we're going to find out in two weeks. thank you for taking the time this morning. guys, back to you. >> michelle, thank you. we are certainly seeing that in the market with the euro here at a five month high. the french banks are soaring. bmp parabra is up 20%.

let's continue with how this relates to the new york stock exchange. on the banks it's influencing the u.s. banks, the best performing group in the s&p. what do you do with this group? it's been an underperformer in the last few weeks. so far in 2017, but rocketed higher post election where do they go next? >> we think they're going higher. i think the pull back of the banks reflect the flattening of the curve, things like that as people got worried maybe there's a problem. both in domestic and economic development and international factors. you know, the cpi came out ten days ago being weak and it was related to the telecom issues that are transitory. we start to get the bond yield moving higher. amongst many of the investors they got nervous. i think financials are a leadership group. >> looks like a solid bet right now, mary ann, but does

washington spoil the party? we're up against this friday deadline for a government shutdown. a lot of hope around tax reform. we are expecting a blue print on wednesday. does d.c. get in the way? >> you know, i don't think so. i think d.c.'s already learned its lesson from the past few years that they're really not going to create an environment that's really going to derail the markets. or more so the banks. i think tobias is right that, you know, the banks needed consolidation. you had fundamental reasons why. because you had the flattening of the yield curve and the ten year break down. when you look at the value longer term the deepest value within the market are the banks and particularly the sector financials. i think they have just begun -- i think they're in the first inning. i think we'll see many years of upside possibility for the banks. i'm going to correlate them to semiconductors only because of their patterns. remember in my past i was a chartist. if you look at the chart of the

semis they had a massive breakout. we haven't even gotten to that level yet in the banks. they're in their early stages. i think eventually the banking system is going to look very similar to the semiconductors. there was a fundamental reason why semis broke out. we're in the digital era. everything that we look at in the advances in technology is the reason we're seeing the semis break south. >> what's the name for what we're seeing in the charts, a bullish wedge or what do you call this? >> this is more boring but more important. it's just years and years of consolidation. it's called a massive breakout. so it doesn't have an exciting name but it has a lot of legs and they're good looking legs by the way. >> should we call it a centipede? if that's the case. >> we have hit d.c., we have hit the french election and the third major impact for the markets is earnings. we have a few dow components like coke and some of the big nasdaq movers like amazon and alphabet. what sort of signals are you

looking for based on what we have heard so far during this period? >> so this is the first quarter we're supposed to see earnings finally growing at a meaningful pace, double digits based on the estimates. so far, companies are coming in a little bit ahead. not a ton ahead, but a little bit ahead. we don't have a great sample. i think by the end of the week we'll have half the s&p and have a good sense. looks like the operating leverage is starting to come through. that's what investors need to see to believe in the market. i believe there's still skepticism in the market. i know people say we're near highs but there's a reluctant skeptical investor out there, unwilling to jump in on this. figuring they have missed this. >> sounds like you're pretty bullish. thank you for joining us to preview a big week in markets. when come back, former ecb

president jean-claude trichet will join rick santelli. and an in depth profile on travis kalanick, he calls him the ceo that plays with fire. the dow is up 216. hey. pass please. i'm here to fix the elevator. nothing's wrong with the elevator. right. but you want to fix it. right. so who sent you? new guy. what new guy? watson. my analysis of sensor and maintenance data indicates elevator 3 will malfunction in 2 days. there you go. you still need a pass. our 18 year old wase army in an accident.'98. when i call usaa it was that voice asking me, "is your daughter ok?" that's where i felt relief. we're the rivera family, and we will be with usaa for life. welcome to holiday inn! ♪ ♪

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the president's first 100 day mark rapidly approaching against the back drop of what is a bull market. our eamon javers has more on how president trump and the cabinet have used the stock market rally as a benchmark of their early success. >> that's right. the president called the 100 day milestone an art official barrier. all of washington is very much focused on it. i can tell you that the white house behind the scenes is focused on the 100 day marker. one of the themes that emerges is the stock market rally that's taken on his name. the trump rally. look at the stock market since he was sworn in. the dow up 4.35%. the s&p up 3.9% and the nasdaq outperforming both of those at 6.7%. that since inauguration day over the 100 days. the trump administration has also been willing to do something that other

administrations were not willing to do which is overtly sort of cheer lead and talk up the stock market. take a look at three particular moments when they have done that over the course of this 100 days starting with the president on february the 16th. he said the stock market hits a new high with the longest winning streak in decades. great level of confidence and optimism even before tax plan rollout. that was at a time when the dow was six days into the 12-day winni winning streak. then you had the treasury secretary saying there's a lot of confidence in the trump administration and the desire to invest in the u.s. this is a very competitive place to do business. we have got great companies and you see that reflected in the markets. that was on a day when the dow and s&p were hitting all time highs. then gary cohn, the national economic council director on march the 10th saying that the stock market is a barometer. it's a realtime barometer for us and we do look at it and that

comes on day when the markets are flat. so david, this administration very much looks at the stock market as a measure of how it's doing, how it's performing and so far the verdict is it's performing well. back over to you. >> yeah. and it's a diversion from other administrations as you point out who typically did not do that. >> you always get, the markets go up and down rhetoric from administrations before. these guys are very different. >> yeah, they are. those numbers of course since the election are even stronger. >> that's right. we're counting here the 100 days but if you go all the way back it's a big number since november too. >> it sort of reminds me a little bit this was the idea of the bernanke put, that the markets would step in if anything gets out of control. i wonder if there's a trump put that they're paying so much attention to the market and hung their hat on that if the markets start throwing a pan drum based on a policy or a holdup our a trade action they'll go the

other way? >> right. well, you know, that's the danger politically of embracing the stock market. it can be a double-edged sword a little bit. but there was a day when we had a big down day on the market and i asked the white house press secretary sean spicer, do you guys take credit on the way up, do you get blamed on the way down? he said you don't look at one particular day in the markets. if the trump administration is looking at other factors that might have caused the market to go down, over than the trump administration? >> or put out a trial balloon about an amazing -- exquisite -- >> massive tax package. >> that's a great question for markets, do you want the white house operating that way? right? do you want the white house sort of juicing things along the way if they feel the market is not performing well. do you want them paying that close attention? that's a question for market experts and traders. >> yep. comments on the value of the currency, very unusual too.

eamon, thank you. when we come back, jpmorgan'sle jpmorgan's analyst will talk to us. and next, ubs director art cashen will join us with his insight. and a full percentage point higher for the s&p. we'll be right back. let's go, she's a dog.

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okay, let's go. find your awesome with the xfinity x1 voice remote. that's amazing! close to session highs this morning. obviously a lot of highs to look at both here and on the nasdaq. and art cashin with ubs is joining us on the floor. good to see you again. >> thank you. >> what's in effect right now? >> well, right now, we're basically taking down hedges and other things that were put on, worrying about the election. it's going to be interesting to see what happens after europe closes. will there be continuing interest here? what a lot of people seem to be missing is france is still a parliamentary nation and you have two front-runners for president who basically don't have any parliamentary backing. they have a handful of people possibly behind them. i'm going to also watch along

with other traders tomorrow is a holiday anniversary in north korea. it is army foundation day and in the past they have used that for some pseudomilitary operations including bomb testing and whatnot. plus, we had that little threat to destroy our aircraft carrier. of course, the wild card is the congress of the united states. any comments on the taxes, any comments on the debt ceiling, that will take over and the celebratory mood will probably end. >> cramer gave a shutdown about 1 in 5 this week. what's your view? >> i think that's a pretty good -- about 20%. it will depend on what they have to hand back. you know, i mean, they're all intent on getting it done, but, you know, they have removed the speaker of the house last year. they couldn't get close enough to have a bad bill on the health project. so about 20% for now we'll find

out thursday a lot better. >> nasdaq 6,000 is in the air. what would that mean just from the sentiment standpoint? >> you know, i think it would be amazing but it also underscores another thing and that is that it's really a handful of stocks that's been leading this rally. that's somewhat disturbing. it's a kind of negative divergence. you have, you know, 15 to 20% of the stocks making almost 100% of the gain. that doesn't go on forever. in fact, in past cases in the late 1900s it came to some real negatives. >> good to see you, art. check in with you later on. >> let's send it out to meg terrell for more on the merger in the medical supply industry. >> hey, $24 billion, $317 a share that becton dickinson is going to be paying for cr bard. that's in both cash and stock. a 25% premium to cr bard's close

of about $253 a share. now, becton dickinson saying this is going to add tools for medication management and help it expand in different clinical areas including uh-other areas. becton dickinson down about 4.4% as some analysts see this as an ambitious deal. a big price they're paying here. jpmorgan's mike weinstein is saying on the positive side, it should accelerate becton dickinson's growth and help further diversify the company. on the negatives he said it's a rich purchase price of almost 27 times 2017 expected eps and they have to issue new equity and some said this is a further consome sol discrimination -- consolidation of the med tech.

this continues the giant deals like $25 billion abbott paid for st. jude last year. medtronic and covidien before that and some speculation this will continue to fuel speculation in the space. interestingly biotech investors have been waiting for m&a action. it's really happening in the med tech space. back to you. >> thanks. you forget sometimes the size and the common occurrence of some of the deals. meg tirrell, from headquarter q. we'll look at france's stock index, it's having a big up day. later, former ecb president jean-claude trichet will join rick santelli on the historic french outcome.

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good morning, everybody. i'm sue herera.

here's your news update at this hour. u.s. defense secretary james mattis arrived unannounced in afghanistan. he's assessing the longest running war and comes as the trump administration considerings sending more troops to the region. south korea and the allies bracing for the potential of another nuclear test or a ballistic missile launch in north korea. there's concern that north korea could conduct that test tomorrow to commemorate the funding anniversary of the military. the nuclear missile launch last week failed? a fire ripping through the top floor of a madrid hotel this morning. it started at an apartment hotel and no reports of any injuries. the cause is under investigation. look at this, there you go. a father making a rather acrobatic catch at the giants/rockies game. not even his own daughter or his wife who was nursing their new baby at the time was going to

get in his way. he got the souvenir, luckily, nobody was injured including his daughter returning those glasses. there you go. that's the news update this hour. sara, back to you. >> and himself. pain. >> right over his wife, nursing the baby. the daughter is going. but he got the ball. >> that's impressive. sue, thank you. turning to washington, between tax reform and a potential government shutdown, this is going to be a big week for washington as president trump's 100th day approaches. our john harwood is in d.c. with the latest. so walk us through what this is going to look like. it was hard to follow the sunday shows and all the noise this weekend. >> a lot of noise, and you can expect a lot more noise all week, sara. but let's look at the report card for president trump at the 100 day mark. the only thing you can say is that it's incomplete. obviously, it's just the beginning of his presidency, but he has set that as a standard for getting some big things accomplished. let's look at the big things

that are on his agenda for early in his term. first of all, a couple of things have been proposed but are in big trouble. one is health care. the american health care act, failed once. it's a priority, and he says he'll make some progress. he's proposed a 2018 budget but that's gotten a cool reception from republican leaders as well as from democrats. then look at two big priorities where he hasn't proposed anything -- tax reform. he says he'll roll out principals on wednesday, but we still don't have a tax reform plan. the plan that he proposed appears to be obsolete and he has a new one. and secondly, the big infrastructure plan. we have not gotten specifics on that. now on 100 day week there's only one thing that must be done. and that is to fund the government because government funding runs out on april 28th. and when congress needs to do one thing, especially when you've got the same party in

charge of the white house and congress and it is not in their interest by any stretch to have a government shutdown you can bet they're likely to extend government funding at least for a week or two while they keep negotiating and then in the end, because the white house doesn't have much leverage don't expect david for president trump to get money for that border wall that he's talking about. although democrats are saying they will give some money for technology and border protection. >> all right, john harwood, thank you. for more on how markets are reacting to the political agenda as well as the french election, we're joined by nicholas -- a chief market analyst. anthony, world markets doing the right thing in terms of how they're responding to the french election or the runoff phase? >> i think so, david. for the eurozone this was a near death experience. this creates another opportunity for markets to get a -- get some

renewed confidence on these election polls. they had lost some of their faith in them, and now with the fact that this one came through a little more confidence and it gives brussels a chance to fix the things that led to this disarray. that's a good thing. when you look at the estimates of the polls for the second round, they're singing a tune that the markets like and that's why the markets are -- >> what do you mean, when it gives brussels a chance -- >> to basically handle why you have extreme parties at both ends of the spectrum on the left and the right, showing discontent. those were the political parties that financial markets were nervous about. hopefully now brussels will be able to address the issue. >> -- because this was a vote of confidence in europe. now macron wants to keep the eu at the center of the euro, starting with the netherlands and now france the tide is moving away from populism. and against the eu. do you not agree? >> one of the views that i have and some other people have

expressed is that when you have a heart attack and you survive it and the doctor tells you it's because you had high cholesterol, maybe you start eating a little less cholesterol and start exercising more. but not everyone will heed that advice. >> nicholas, how about you? what's your take on the vote and whether or not the netherlands as cramer argued was the high water mark for nationalism. >> it feels that way, but i wouldn't take too much away from this move today. i think you see a snap back rally after some concern after the outcome of the election. but the underlying fundamentals are the same as they have been. we have a very narrow leadership market. mostly in tech. fairly high valuations and until today, a 20 year bond that had done better than small caps and mid caps stocks so there was a lot of questions about this rally to this day. >> john harwood set up what is set to be a busy week in washington. if the white house insists on pushing money to pay for this border wall, doesn't that make the likelihood of a government shutdown higher?

>> it does, but i think with the republican house and white house and senate you won't go through the optimal shut down when there's one party controlling it. i doubt it would shut down the government to make this point. >> if there's a shutdown does that have a market impact? >> it probably does. if it doesn't we have high valuations and i think confidence in the market is confidence in the trump tax plan and infrastructure plan. if you see that unravel part of the market narrative unravels. >> don't you think at this point there should be a lack of confidence? we're at the 100 day mark, we have nothing. >> absolutely. yet the s&p is up 4% on the year. valuations are 17 1/2 times earnings and the market feels like it still has confidence. the market has acted like what's going on in washington is to be expected. but at some point that confidence does break. >> one last point. if you look at this administration they have been highly focused on what happens in the financial markets. any time of closure or

interruption has to be temporary in nature. they haven't lost sight of the fact the s&p is up 10.9%. they don't want to see that going in the other direction. >> we started talking about europe. the economy in europe seems fairly strong or at least we get the reports that that strength is building. do you agree? >> absolutely. look at the preliminary pmi, that number has now reached the highest level in six years and in fact right now, this year, we're forecasting growth in europe up 2%. that's almost twice as fast as potential growth in europe which is closer to 1%. in fact, in the first quarter, the purchasing manager's survey are saying that you'll get a number well in excess of 2% for the first quarter in europe. >> big debate this morning, nicholas, about breadth and whether or not the nasdaq is being led by a handful or a couple of companies. but actually 59 of the naz 100 are up year to date. is this because of a few

powerful giants or not? >> it's because of tech generally, but the s&p and the dow it is mostly tech. tech is the market leadership sector and the s&p up 10% led by facebook, amazon, google, the names we know. so it is a fairly narrow tech led rally. look at earnings, earnings are 13% on average growth year over year for tech. one of the two or three market leading sectors for this quarter's earnings releases so a good positive momentum so it fits. >> do you think earnings can offset some of the sentiment swings happening around politics whether in the u.s. or in europe? >> yeah. it feels that way and it should. earnings will be at 9.2% growth year over year. the highest since the fourth quarter of 2011. so we finally have broken out of the slow earnings growth cycle into something a little bit better, led by losses in tech and in technical. >> you mentioned the european growth can exceed 2%. is it bigger than our growth?

>> well, we're looking for 2.2% growth this year. it's the earnings that are really driving everything. we could see earnings moving well above 8%. in fact the consensus is around 10%. that's pretty impressive. that's offsetting all the swings that sara has talked about. we saw that the vix index had moved 20% above the 50 day and 100 and 200 day average. that can mean a correction is coming but of course we didn't get that. but the good news is that that index in terms of forecasting a correction only has an accuracy track record of somewhere between 6 and 9% when you're looking at it from the one month to the six month basis. yes, it's a warning but it's a very, very low -- a low noise warning. >> yeah. wouldn't want to take the odds. guys, thank you both. we'll watch that, and vix below 12. unbelievably yet again. when we come back, jean-claude

trichet will join rick santelli on the santelli exchange. and then the director for the council of foreign relations will tell us what france's election means for the global economy, when we come back. last year, he said he was going to dig a hole to china. at&t is working with farmers to improve irrigation techniques. remote moisture sensors use a reliable network to tell them when and where to water. so that farmers like ray can compete in big ways. china. oh ... he got there. that's the power of and.

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all right. let's send it over to rick santelli in chicago with a special guest for this santelli exchange. rick? >> thanks, david. yes, i'd like to welcome a very special guest. jean-claude trichet, former ecb president, all around cool guy. thanks for taking the time this morning. >> a pleasure. it's a pleasure to be with you. >> all right. we see the results of the election, the mainstream parties really getting shut out to some

extent on one side emmanuel macron, on the other side we have marine le pen. we go to the second round. tell me your thoughts on the election and your thoughts on the second round that we'll be experien experiencing in a couple of weeks? >> i think what happened is historical. first, as you said, the governmental party -- that is something that's dramatic. never happened. second you have a young guy, 39 years old, coming number one in the first round. and he was totally unknown two years and to -- 2 1/2 years ago. it's really something that's equally extraordinary. then you have marine le pen showing that we really have the populism, protectionism, i would say you name it, but it's exactly the phenomenon we are seeing in the u.s. as well as the uk and that is something

that is strong because le pen is in the second round. i would say all taken into account, this is enough in french politics and we don't see -- we don't know yet how the political forces will re-establish the proper equilibrium, particularly the two governmental parties. >> now, you talked about it's an earthquake, mr. trichet. let me interrupt you. it's an earthquake that we're experience on the richter scale globally. everybody seems to have an earthquake and as michelle caruso-cabrera in paris said earlier on our show, that the idea that macron hasn't let us know what he thinks very much economically, but on the other hand, we have le pen who is as you pointed out protectionist. a lot of the issues for the economy in my opinion aren't going to deal with some of the issues.

how will either of the candidates no matter who should win, how are they going to impact the inertia in france's economy in particular, but in the eurozone economy generally? >> first of all, we know that it is extraordinarily likely that macron will win. this is fully in line with all of the surveys that we have on the second round. and also fully in line with the very, very strong desire of the french people not to leave the euro. 72% of the french people do not want to leave the euro. so europe of course. so i don't think that from that standpoint we have any real doubt. that being said, if the governmental parties are eliminated, it is very much because of what you said. unemployment too high. the youth unemployment much too high. it seems to me that the success of the new government, the new

president, will rely upon eliminating this youth unemployment which is an abominable disgrace. i hope very much that it would be done. it is a must. and i have also to say that if it is not done then we will see the populism, protectionism, you name it, continuing to grow. but even if we solve that problem, we could see in the u.s. and in the uk that you nevertheless have such a move which is associated with the overall problems of the advanced economy. so we have to embark on, you know, treating seriously the problem of many of our citizens. it's true in the u.s., true in the uk, in france. you have training, retraining. education. i would say appropriate handling of all the problems that are for real of our citizens.

>> all right. now, considering what you just said, i read some good research by bank of america that says that central banks, year to date, have purchased $1 trillion worth of financial assets on an annualized basis. it's kind of record setting, 3.6 trillion. now directly to your last comment, does it really matter so much about the elections when we have this ticking time bomb of issues that seem to be continually swept under the rug? are the elections just a fresh coat of paint and are the termites eating all the wood in the house, sir? >> no, i think of course you're absolutely right. this is a big, big issue. it's clear that the central banks embarked on this nonconventional measures, because they had to avoid 29, 30 crises which would have been a

dramatic big depression. great depression. they did not avoid and it was unavoidable recession. but the depression would have been totally dramatic. of course, the central bank cannot be the only game in town so they are be the only game in so they're telling governments and other partners and parliaments, you have to fix the problems. you have to embark on the structural reforms. you have to be sound and reasonable in your own policies. we cannot be alone in trying to cope with the problem. and i think that they are all saying that. the fed is saying that. and of course, the ecb and mario draghi is saying that. the problem is that our governments are not -- i would say really listening to this message. but you're absolutely right now. it cannot go forever. still, i have to say that what did the central bank to me seems very, very well done in the circumstances and provided they

continue to be as strong as possible in sending their message. it seems to me they're doing what should be done. >> all right. the final question i have for you, sir, is, when i look at what our central bank is doing, we have three tightenings, talking about balance sheet reduction and then i contrast that, as you have discussed in your last answer, what mario draghi is doing in europe, what's going on in japan, is there a view of which central banks, japan, europe or u.s., you think are most on the correct path? because sooner or later, sir, they do all have to converge, do they not? >> well, they have already converged, if i may, because they have the same definition of price stability. namely, 2%. so in a way there's a very strong convergence but they're not in the same episode of the

cycle and u.s. is advanced in the cycle in comparison with europe and japan is a special case. but it's clear that thaerp late in the cycle because we had specific sovereign risk crisis. so i would say that being -- i would say ahead in the cycle, it is no more than the central bank of the u.s. is increasing rates and reflecting on not purchasing the maturity that are fully due. it is absolutely normal. and of course, in europe it is not exactly the same situation. we are still late in the cycle. and i have to say that in terms of co-inflation, for instance, we are not at the level of really appropriate. but of course, i expect the central bank of europe to be as sound and reasonable as has been in the past and i am sure that when the cycle signals clearly we are in a different universe

than the consequence will be taken and i'm happy to see it was said on your broadcast that the pmi in europe are now quite good. they're the best for six or seven years and it seems to me that this is a generalized illustration of the fact that we are now in the good episode of the cycle. i hope that it will be confirmed. >> excellent. >> i have reasonable optimism. >> mr. trichet, thank you for your time and your cogent answers. david fa david, back to you. >> we have mike isaac of "the new york times" to talk about his article and continuing to track the market's reaction to the french elections. as we head toward this run-off and apple's iphone 8, some think it's late. does that matter?

all that and more coming up.

final check of the hour on markets. relief continues. s&p 500 up a percent.

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welcome back. i'm dominic chu. financials leading by a wide margin. morgan stanley, b of an up. citizens financial, lincoln national, all these early gains, the sector positive year to date and down fractionally on the month. that does it for "squawk on the street." let's send it to carl and the gang for "squawk alley." thanks a lot. it's 8:00 a.m. at uber headquarters in san francisco. "squawk alley" is live. ♪ ♪