>> i know. i need the history lesson. >> i'm not even sure i was born. >> it was close in the late '90s i believe. >> we got down to a low four handle. >> depends where wat group. over 25. >> brian thank you for hanging out. join us tomorrow. "squawk on the street" begins right now. ♪ ♪ like we always do at this time ♪ ♪ i get to shine ♪ throw your hands up in the sky ♪ good tuesday morning. le with come to "squawk on the street." i'm carl quintanilla with david faber and jim cramer. futures up 150 as five dow components report and some of them like cat absolutely crush estimates. stocks could be looking at the best two-day gain of the year, if this holds. will we also see nasdaq 6000? europe's adding on to yesterday's gains. ten-year climbs back to 2.3 and case shiller home prices up 5.8.

big earnings out this morning set to weigh heavily on the averages, cat, mcdonald's, dow, dupont, 3m and coke all on the move. >> wow! express scripts shares falling down hard on news it is likely losing one of its biggest contracts. we'll dig in on that and the company's earnings. >> the trade war is heating up. the u.s. will impose a major tariff on canadian softwood lumber. hear what the commerce secretary says about that action. futures are getting a lift, earnings from dow components adding to the momentum. we mentioned cat, blowing past expectations with its results, raising their full year guidance, 3m exceeding consensus helped by renewed strength on latin and asia. the story of the morning may be cat, jim. nowhere near what analysts were expecting, almost double the estimate. >> what's happened with caterpillar? we call it leverage and a lot of people think leverage, what does that mean, leverage with the president with congress or

leverage -- >> leverage as in debt, how we typically refer to it. >> exactly and the leverage here is when you have a dollar in sales, a huge amount of money is falling to the bottom line here. that has to do with the fact that caterpillar has streamlined the company in a way that they can do 9.8 billion in revenues and just have a monster increase even though they did 9.5 billion a year ago. so you take that just a small amount of revenues but you've g got $1.28 in earnings versus 46 cents the restructure. if they have a big year and they will have a big year, you're going to see dramatic, and i think that frankly far in excess of what they are saying they're going to earn. i mean, i think this could be, when you see mining minerals part of the business come back, construction come back, when you see china as strong as they are, this stock is heavily shorted. it's been the hedge fund whipping boy, a pinata. people worried about the tax situation. when you take that revenue from

36, 39, to 41 billion i have no idea but it's substantially more than the $3.75 they say they can do. congratulations caterpillar. >> street is 3.26. >> good luck. put this genie back in the bottle. if these guys get the turn i'm seeing in asia and from so many countries, latin america, brazil's stabilization the united states not doing much at the all. the united states like the stock market is indicating kind of a dud in almost every single case. that's no referendum on the president but it's dud-like. >> how does this compare with some industrial metals pricing, right? >> i think that you got the alcoa number. there is some better pricing, al cowith a benefiting from the fact chinese realize you have to stop producing something that pollutes so much. you are seeing coal do better, oil stabilize. it's not up. it's the return we better buy some trackers and buy some big engines, some mining equipment,

because frankly they hadn't bought it in years. this is a catch-up, pent-up command play and a play on the fact that they just must have gotten rid of so many people. i mean, it is incredible. and produce the same amount of sales, this is what we talked about. this is artificial intelligence machine learning. all the things that you have to be worried about if you're trying to figure out how to put people to work because man, they did the number. wow. >> right, so it's productivity increases? >> big time. it is extraordinary. the company as always is just, you know, they can't save their lives to promote. they just don't do that. that's up to me. price realizations, lower cost, higher sales volume, favorable mix of products. it is a remarkable quarter and it's right it should be up. oil and gas higher sales in north america, that's really the kind of only real north american line that i like, but you've got business confidence going up, global growth going up, backlog growing up, everything is positive. u.s. construction activity is one positive for the u.s. >> amazing. three months rolling retail

sales on the verge of going positive after how many months? is. >> after years, and good for them, that they took out costs. i remember that when goldman put the sell on in the summer, it was not so great there. the only thing is that the people getting credit for it are maybe not the people who did it. that's okay. >> right, you referred over helmet farthering. let's not forget the fbi thing that's still going on. >> it is. lot of people stayed out and shorted it. i believe it's a $2 billion liability over multiple years max and what is important is that this company is the leanest i've ever seen cat since 1982-'83, when they decided take on the union and '84-'85, big earnings split. mcdonald's better than expected numbers as well. global comps up 4%, company says the u.s. benefiting from the expansion of all-day breakfast, meantime coke misses on the bottom line, beats on revenue. stay tuned for an exclusive with

the incoming ceo james quincey coming up later this morning on "squawk alley." mcdonald's, the two-year stack in the u.s. is 7.1, that's the best result since the first quarter of 2013. >> yes, easterbrooks doing a lot here. the comp. plus 4%. people say how can that be if the u.s. is only up, is up less, even though that is a great stack number. u.s. is only 33% of the company. china was called out, the big mac and beverage promotions called out. steve is very matter-of-fact about it. he has the franchisees motivated and i this i that matters. he's talking about gain laps customers, convert casual customers to committed customers. the personalized and better visit has to do with the fact the franchisees feel like this guy has their back and this stock, which has, and this man continually underestimated. we had an aflac commercial who is the ceo of mcdonald's? we better start talking about

easterbrook because he delivers, one of the better ceos around. >> it was the trivia question. >> like who is on the dollar bill? hello? >> uhm, the stock performance itself is saying that, isn't it, jim? >> yes. >> seemingly was mired right around 100 f not below that for some time and has had a significant move up as we can see over the last year. >> he's underestimated constantly. why is that? why do we underestimate this man? i don't know. >> we had two upgrades last week and another outperform initiated. >> the same-store sales for worldwide are incredible. i do think that people are underestimating how much, you know, how much that is not all-day breakfast. all day breakfast is important. >> there is some discussion past the initiation of breakfast comps. >> right. >> it's a much easier compare. >> i think people ought to recognize this is like a dollar store. they have cut prices. they have given, they're giving you a value meal that you kind

of worldwide resonates, and that does matter. people like a value. and are they eating big macs now because they don't worry about calories? i don't know. it is rather amazing, big mac making a comeback here. big mac. the big mac is like if you eat those, you get -- >> i wouldn't know. wouldn't know. haven't eaten -- >> have you ever had an egg mcmuffin? there's 337 calories delicious. what do you do after you had a big night out on the town? >> a long time. >> orange juice, a cold pressed beet and asparagus? >> orange juice has a lot of sugar in that. >> nothing like an egg mcmuffin after a big night on the town. >> you got that right. to your point, jim, there was a time people thought it would go out of business because millenials would never go and a time we thought shake shack could disrupt their business model or operating margin. >> they didn't realize the key to mcdonald's, i told mr.

easterbrook there was a very dirty bathroom on the exit to go to the l.i.e. off the hamptons. you know how clean it was the next time i went in there? this guy is about the basics. keep it clean, simplify the menu, get some technology in there. he is about blocking and tack tackling. he is the offensive line of mcdonald's. never gets enough credit. >> never. i agree. they struggle in the trenches all the time and nobody even knows their name, even when they go to the hall of fame. >> right here right now. >> that's true. the president is upping the antein a trade dispute between the u.s. and canada. trump white house announcing a 20% tariff on canadian border, typically used to build single family homes. earlier on "squawk" wilbur ross explained where it fits into the president's strategy. >> i think there is a larger takeaway. the trump administration has been much more focused on

enforcement, than had been true previously, and there's a good reason for that. u.s. is the least protectionist of major powers and yet we have the highest deficit, $500 billion. the other countries that talk about free trade are really very protectionist -- europe, china, japan. so they have the rhetoric of free trade, but the reality of protectionism. that set of facts is not going to be permitted to continue. >> that is the commerce secretary. top of the fold of "the journal" if you think it's an arcane topic it's not. we'll watch lumber futures which have been anticipating this, watch home builders and see if their prices rise. >> we got to get first of all when i listen to the secretary, i think his, he's speaking some common sense for anybody who tried to do business overseas. the numbers here. the average wood is 15,413 in a

house, so we tack on some money there, not all bought in canada. let's use polte at the entry level home. they report today and people weren't crazy about the number, it's $375,000. are you hurting their margins, no. is it a shot across the bow what canada is doing? it's been a long running dispute and pulte is not down because of that. they are missing some numbers. >> the others are not down like that. >> some people were saying labor is hard to get. it depends. home builder versus home builder, some are complaining, most aren't. i just say this is not the devastating thing that people are saying. it is being played up big. >> dairy and last night apparently the president said aluminum is coming next. >> well aluminum if you go over the alcoa quarter, there's consistent dumping. the chinese continue to -- the only reason the chinese have cut back is because they realize it's nothing sturdier than smelting, but alcoa has some good numbers about what is going on with china, and they're still

throwing it around. they're just not as bad as they were, which is one of the reasons alcoa is going up. china is producing way too much. chinese stockpiles continue to grow, chinese are ramping up in guinea. there is, let's just say the chinese aren't playing fair. >> one important point here we've speculated about what the president's approach would be in terms of tax reform and what a border adjustment tax, in other words a broad tax on imports be part of it. these one-offs, whether it's aluminum or lumber or whatever it may be, seemed to indicate to me at least, and we'll find out soon enough, that border adjustment tax may very well not be a part of any planned proposed by the white house when it comes to tax reform. i want to talk more about of course that later in the program. >> you're dead right. if you invoke the very contentious steel the actual -- >> you do steel. do you aluminum. do you lumber. >> no longer price by price steel. listen, steel is of national

import. >> right. >> of course some people say listen, it's not going to hold up under the world trade because the defense department hasn't called for it, but he's talk being steel plate, talking about making tanks and not being reliant on chinese steel to make tampg tanks. to me that's common sense. i think it's horse sense. >> it may also indicate that approach. tariffs as opposed to a broad border adjustment tax being a part of anything the white house supports. >> which is essentially the obits are being written on border adjustment as of today. mnuchin and kohn with meet with congress tonight on tax. >> if you're involved in some of the industries i think wilbur ross is right. my view is irrelevant, i'm not in the business, but i know that these market have been, we don't sell much in korea. they won't let us. we don't sell much in china but they dump. why is alcoa good? do you think there's a surge in demand? it's been decent but the chi

knees can't make it as much because it's polluting the skies and they have a million people dying of respiratory illness so maybe cut back in dumping of aluminum. that's the saviour, they want cleaner ear. i don't hear cat pill ear squawking about the high price of steel. >> they're not. we'll look at the premarket and might have the biggest two days of the year and potentially nasdaq 6000 around the open. we'll check on that when "squawk on the street" comes back. been. 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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big day for earnings as five dow xocomponents report and a l more tonight with chipotle, at&t, wynn, texas instruments. we have express scripps false sharply. the manager says its contract with anthem unlikely to be renewed after it expires in 2019. anthem is one of the company's largest customers, accounts for about 18% of revenue during q1 and the stock is reflecting that today, jim. >> that's about as ugly a fight. david you focused on the idea they couldn't resolve anything. >> no. they hate each other. when you talk to the companies, they're not like t-mobile, where john ledger is like it's d&b and fu for the other guys. this is just a real dispute where they don't like each other. and they couldn't reach any -- it wasn't like they were chatting. >> for those who care, read

appendix "a" in the release that came out yesterday gives you background on the relationship with anthem of course which really is a result of a contract signed back in 2009, but is somewhat complex. that's the ten-year pbm contract, they talk about how during the several years initially of the contract the anthem business underperformed express' financial expectations as anthem's prescription plan volume was significantly below, and they go sort of to give you a real background as to what is behind this cessation of a relationship. as it appears to be likely. >> how do you make that business up? >> i'm not sure. i'm not sure. it's a lot of business. >> yes. i think it's interesting of course they kept their current earnings forecast, not that anybody cares. i mean, this is a real battleground. i know cvs traded up immediately. people think they'll get the business and no surety to any of that. i'mly bi la little surprised.

anyone who talked to either company recognized there was tremendous acrimony. >> express scripps says it was surprised that anthem intends to move its business without fully pursuing discussions. so express was a little surprise . >> maybe they should have talked to anthem and they wouldn't have been surprised. those guys don't like each other. this is not like harvard versus yale. >> cramer's mad dash and count down to the opening bell. lot more "squawk on the street" still to come.

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in about eight minutes start with trading. we are looking like we're going to have a significantly strong open, that is if you are long the market, with the nasdaq poised to hit new highs. >> is dupont a referendum on president trump or a referendum on ed green? >> i don't know, as we get to our mad dash, about eight minutes before we get started trading? i think ed breen. we'll go with the breen. >> this man is a quiet miracle worker. managed to be able to, the organic growth here is extraordinary, plus five. there's a 20 cent delta here. literally 20 cents better. you have to move it so it's the first half because there's crop issues but i got to tell you, david, he did that deal with fmc, still $20 billion in are ef knews coming from crops. they're going to merge with dow. >> that deal is going to close fairly soon. >> august, he's given us, that's a late day. it's not like the rite

aid/walgreens deal. >> they split 18 months late near three different companies. >> there's some decisiivisions . consumer electronics is strong. david, that's tv, that's cell phone, and by the way that's why best buy was upgraded today. tv and cell phone, remember the days, wow! corning, best buy. tv and cell phones are doing very well. this is the two iconic cell phone companies. i can't mention one, just kidding, apple and samsung are shipping product and all of these guys benefit. dupont, breen, when he splits this he will create value. i'm using a $100 per share target when they xwcombine. >> bernstein writes "dupont is joining the culture club with the '80s party. as far as we can tell as much by internal culture changes as by external markets" they say "while we're not sure breen is roaming the halls with dye and

beads in his hair, the end result is we got the beat." colorfully they are saying it is culture, it is what breen has been able to do. >> it's not a lot of -- >> and improving performance. >> breen is a guy who came in, a lot of people felt there was nothing, there was nothing that could be -- coleman had taken it out. no, nutrition by the way when he gets that fmc business nutrition will be great. the guy did it with tyco and he's tireless. he's tireless. he just gets up every morning and says we are going to expand our margins. i'm not kidding. this morning should i wear a yellow tie or blue? no, where can we expand our margins. he is a margin expander. >> i think you got him lined up for another gig, i heard the undertone. >> the red sox? >> boston is the city. the opening bell coming up next. about your brokerage fees. n

fees? what did you have in mind? i don't know. $4.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.

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reported. the german ten-year back to i aone-month high, u.s. ten-year back to 2.3, as the cac is coming off a 4% day. hasn't had a 4% day since in two years. we haven't had one here in almost six years. >> it's funny. i had illinois tool works last night, a great american company and they had tremendous growth in france. 5% growth and pvh is doing better in france, calvin klein, tommy hilfiger. the french economy could be coming back. i feel they have to stop the whatever kind of stimulus they're doing, it's really to me protectionist at this point. >> how tuned is your radar to things getting expensive here or are we catching up to what you think earnings are already doing? >> i think when you see these revisions, obviously look, if you get a 15% tax rate, we are undervalued but we see the revisions and you realize, how many people did we take out? how much firings were there, how many streamlining, how much

supply chain management because these companies are making so much more than i thought with less that it's not like there's this giant vector where there's just a huge ramp in sale. dupont had a good ramp in sales but it's kind of like well they're making a lot of money with some decent growth but asia and europe are the call-outs. brazil stabilization these matter. asia is so good, europe is so much better than we think. i'm waiting for somebody to say that europe is bad. not one. >> we do have a bit of a divergence between u.s. markets and chinese markets. biggest since '08, is that because the chinese are trying to tap the brakes? >> i think the chinese want to tamp speculation. i do see some good infrastructure building this time. construction is good. united technologies is my favorite. >> look at what shanghai has

done the past few weeks. opening bell, s&p at the bottom of your screen. at the big board sec acting chairman doing the honors. at the nasdaq avidas medicine. [ bell ringing ] a lot if pharma and biotech we have not gotten to yet. >> it's interesting that ionis, it really is causing people to sit up and take notice. i look at buy jiogen, the ms dr was nothing that big but people wanted to see something from biogen. terrible disease they have something for weakness of the spine, kind of amazing. lilly wasn't as bad as everybody is saying. i think lilly's fine. >> what's interesting, i was looking at gilead as we pass nasdaq 6,000 we saw the scaring

looking bolt. gilead has had a brutal run. once a $140 billion market cap. down to $87 billion. they have a great balance sheet. >> acquisition. until they do something, they've got to do something. you know what? i can give you a list of a half dozen companies they have to buy. >> right. will they? they did try on medivation, hanging around and cellgene, but pfizer bought it. interesting to note not the level of acquisition activity some might have expected from buyers such as gilead or even a cellgene. or an amgen. >> pfizer and merck their stocks have been stuck here. >> we're not going to show any of those. we have to show the nasdaq. >> j&j said they needed to do it. the consumer business was weak. that's interesting.

that's cvs, everyone is excited because of the pharmacy benefit. get the deal express scripps wants. you're freaking out about the nasdaq 6,000? >> i'm not. i'm not but the control room apparently is. >> control room? >> take a minute to talk about what this means here, jim. it surpasses the five handle levels of the dot-com boom. the thousand point thresholds to get from five to six, 6,255 days is how long it's taken. >> well look, i'll give you some stocks that are not expensive, intel is not expensive, am gen, microsoft is not expensive. there's a big cap stacks that aren't expensive. as facebook expensive in 2018? absolutely not. as a matter of fact it's pretty cheap in 2018. alphabet is a cheap stock. 20 times earnings. remember the big thing everyone was pulling their ads? huh? turned out to be a cunard.

>> speaking of alphabet, did you see the comments from diane green? she runs their cloud business. >> she's fabulous. why? >> google, she said some things i wanted to share at forbes. i don't know what she's smoking. >> what? she's the best. >> she thinks they can pass aws within five years. >> really? wow. >> "i think we have a pretty good shot at being number one in five years. i actually think we have a huge advantage in our data centers and infrastructure, availability, security and how we automate things. we just haven't packaged it up perfectly yet." this is a growth area for microsoft. amazon and google, five years, really? >> that's impressive. that's impressive. that's not why -- >> unless they were to buy something, large. >> interesting. like investment trust that own this? >> i don't think it would be that. >> you mention a few select large companies. >> right. >> which is the knock on the

index, that it's being carried by five, 10, 15 quarterbacks and the rest sort of just -- >> true. >> minnows blind a blue whale. all-time high on netflix. >> when you look at some of these, you know, major semiconductor companies, they are doing so well. look at broadcom, avgo. mid teens. skyworks, mid teens. this isn't like when cisco was selling at i don't know, 80 times. it's not the same. >> no, it is in no way similar to the late '90s. >> i think microsoft report will be reporting a fantastic quarter. i hear how good pcs are. if you want to look at overvaluation, i think that you would look at overvaluation as some of the industrials but if

they get the repatriation and get the tax cut then you're going to say it was cheap at 24 times earnings. >> when you say tax cut it is a worthwhile moment for to us stop for a second. tomorrow the president is expected to unveil at least and perhaps very minor form or brief some sort of a plan that involves again given the reporting of 15% tax rate for corporations. very light on specifics, is what i'm hearing. probably less than five pages long. >> really? >> but you know, important things to keep an eye on, doesn't include any sort of border tax, doesn't appear that will be the case given this focus on tariffs. will there be anything involving the middle class and individual tax reform that's a part of this, or is it all going to be simply based as it would appear based on comments from secretary of the treasury mnuchin on dynamic scoring and some assumption of a gdp growth rate the likes we haven't seen in

this country in 40 years? i don't know. but the people that i'm speaking with, guys, seem to indicate it's not or should not be viewed as a seminal event in any way because it's not going to really happen in terms of what's presented versus the reality of what will actually pass. >> so it's, what, for show? >> yes. >> it is for show. >> yes. >> well we need it to be not for show, because a lot of these companies to get them to go much higher requires much -- >> do you think this market rally is based on the hopes there's going to be a 15% tax on corporations? no. >> no, actually there's a lot of people who don't want to get up at 3:00 and read these darned things and they just say listen, tax goes through. i'm not one of those guys. it's not fun. it's not fun. you can't watch the phillies beat the mets and at the same time read all these earnings

calls. phillies beat the mets. >> i will get my revenge on you, as will the mets, of course, over time. >> this is typical. the stock was down ten. whirlpool. morons trading it before they get the debt, before they get the comp. score. the free cash flow is $1 billion, it's fantastic. so many people don't do any work but maybe they say listen, get a couple congresspeople and shoot at the, you know. >> right. consensus still seems to be that we end up with some sort of a tax cut to 25 or 28%. >> it would help. >> we get a repatriation deal that seems to be the general expectation of market participants perhaps reflected in equity value indications already. >> i think that some of these companies, again, some of the companies are doing so much better than we thought, and i just struggle to say okay, well walmart has been great but this is back to where it was when mcmillan took over. whirlpool looks great but hasn't done anything.

the companies have been greater, facebook, amazon, netflix and alphabet was hitting a high. it was down low doing the advertising. the diane green thing is stunning to me. i'm trying to get that out of my head. >> in five years, yes, i don't think that that's going to happen. but who am i to argue with her? she's a i havery accomplished l. >> compensated? >> accomplished. compensated would be marissa meyer, compensated versus accomplished. >> diane green is very smart. there are people at alphabet who are within the company that ruth porat runs day to day they could work anywhere in the world and it would be dynamite if they did. >> people still point to negative year on year revenue at ge, honeywell, ibm, price with a,in telecom and food, price wars in used cars. mike jackson today saying he

sees new vehicles flat to slightly down, incentives 10% of msrp. >> these are -- z >> what about the auto sales? >> the united states is not the leader here. we're just not. i look at low growth for almost every company i deal with in the united states. it's not the united states. mexico is growing faster than the u.s., asia, japan doing withal. >> do you know why russell and small caps are having trouble keeping up? >> i think so. ib marx has its own problems. general electric was suboptimal, let's just say. the u.s. is not the driver here so the companies you look at, and whether it be mcdonald's, whether it be, i think 3m is wrong that it's down. i think the quarter was very good. when you look at caterpillar it's really not us. it's not us. and people keep looking at the u.s. and thinking wait a second, how good can things be? i suggest you stop thinking about u.s. it's not the driver. it just isn't. it's europe. it's asia.

it's latin america stabilized. these are the places at the delta. >> and verizon does keep going down every day. >> by the way, the t-mobile conference call. >> you had ledger on yesterday as well, always you know, he's, sometimes speaks his mind. >> he's really talking about verizon and this is something i think you got to go to lowell mcadam on. since verizon went -- >> unlimit. . >> did their unlimited, their network has slowed down dramatically. >> verizon would say that's not true. >> right. >> their capacity has been fine and they had a network architecturally ready to handle it. >> okay, because well that's, when john does his conference calls a lot of it is to get new customers really energize his people. >> yes. >> he's a gorilla, and now he's a griuerrilla.

whom anyone. >> stock up again today and watching verizon shares sink after that poor quarter. >> takes verizon in a way -- how can you feel bad for verizon? i felt bad for verizon. >> do you? >> yes. >> they still have $45 billion in ebitda. they're going to figure something out. >> he makes you feel bad. geez i hope they're okay. >> ibm div hike 7% to 150 from 140. >> it's kind what have people, what warren buffett wants and i think that we want a growth, that stock is down to where it was the day they reported. they're not giving you growth. they're giving you buyback and giving you dividend. people think of technology they want growth. they want, this is the good tasting tua versus tuna with good taste. ibm is tuna with good taste. >> what does warren buffett want out of coca-cola? >> see what quincey says. the company dramatically reduced

its head count, going no longer for volume, going for price and it's working. now a total beverage company, selling a lot of different beverages not carbonated. quincey is giving a good hand. i would be a buyer of that stock. >> we had a deal worth mentioning, tyson foods buyed advanced pierre. >> were they lucky? >> i can't get -- >> was pierre luck why i? >> they make pre-made sandwiches. >> philly steaks, let's not be gener generic. >> sandwich components and snacks, the company getting bought for $40.25, 3.2 billion in equity, tyson food shares reacting positively to the deal which is always important as we know. >> anything that makes -- >> see how at quithe acquired s reacts. yesterday dickinson's shares did

not react positively to the deal. >> this is a higher value-added product which gives it a higher multiple versus conagra. people feel you can't get a higher multiple. tyson has done right. remember it was a chicken company and whatever the price offic chens was, they were hostage to it. they've done remarkable things. >> they're willing to pay up in their acquisitions. they came and they paid and they have benefited from that. without a doubt. >> self-help. >> nasdaq 6000, record high, dow up 208, triple digit fort the second day in a rope. let's get to bob pisani. >> 3:1 advancing to declining stocks. yesterday we moved on geopolitical events in the french election. today we're moving on earnings. two big risk areas, a little less risk in the market. take a look at the sectors right now. it's the reflation trade, it's banks, it's techs, it's materials, a little bit on the industrial side. you look at the industrial

earnings, caterpillar you heard about the great numbers, 3m had great numbers and raised their guidance. 3m is at an historic high right now, tough to move it forward even with good guidance but the guidance is coming up to the expectations. that's the key right now. look at the comments. look what jim umpleby said "these are encouraging signs with promising quoting activity in many of the markets we serve and retail sales to users turning positive for both machines and energy and transportation for the first time in several years." how much more positive can you possibly get? look at all the companies that have not only beat guidance but they are raising guidance for the full year, in the last three or four days. caterpill caterpillar, 3m, illinois tool works, honeywell, stanley, black & decker, dover, sherwin williams, not only beat but raised guide ansz. that's a trend. gm affirmed $1.60 to $1.70 guidance. those are encouraging terms.

masco, think plumbing and cabinetry their numbers were excellent and look at the commentary of the ceos, if they say things are getting better. keith allman said "the building products industry fundamentals remain favorable and are expected to support long-term growth. our outlook for demand in both repair and remodel and new home construction continues to be positive." again, encouraging. so the important thing here is it's not just here. europe is getting pretty good earnings this morning as well, and the trend there is also well. so know var tis, longa, also farm sulical, volvo had good numbers, s.a.p. business software they had good numbers as well. it's not just here. there's a global trend of earnings improving in general. so remember, where are we on the risk scale? four big risk factors we talked about consistently. yesterday we moved on geopolitical events being a little bit lower and had this continuing worry stocks might be too high priced given what the earnings situation is. given what the earnings trend

has been so far and the guidance for the full year, i would say it's still a risk but that concern is diminishing now as we're actually getting full year guidance from companies. the weaker economic data, well that first quarter were not great. the risk is still high there. if the second quarter numbers really improve as a lot of the bulls think they will, that will diminish as well and of course these delayed fiscal reforms moderate risk there. you know how big the president has been in trying to move forward that tax cut. put it all together we're trading range right now. 2300, 2400, 2500 on the s&p. the risk is to the upside something happens on taxes and second quarter better than expected we it make the number quickly overall. you never get 100% perfect story. there are companies that have disappointed on their full year guidance. you just never get 100% perfect. we saw it with whirlpool, with lockheed martin, is ayou it with

ryder. generally their guidance was not as great as people were anticipating and ryder moving down and lockheed martin as well. they tend to be outliers. the overall earnings trend is positive particularly for earnings and the banks. we'll see how the tech companies start reporting in a very short wlil. we're up 200 points on the dow and remember, 2401, carl, is the old high on the s&p 500. we're 15 points away from that right now. back to you. >> we'll watch that, bob, thank you. let's get to the bond pits with rick santorum at the cme group. good morning, rick. >> good morning, carl. it's almost sort of an anti-hedge move. equities and fixed income markets always have had a very interesting relationship really cemented in the '87 crash. stocks go down. people buy treasuries as a hedge, but what happens when stocks lead the way? virtually that has been the case really since november, especially when their gun's hot like they are now. so we see a very reluctant treasury move as rates try to

creep higher. look at a two-day of tens, keep in mind we're up three on the session, also what's fascinating is if you consider yesterday's high was 232 we haven't got on it that. year-to-date of tens and we are fighting to get back into that bottom of the 2.30 to 2.60 range. the two-day boons their high yesterday was 36. the reason i mention that they're up at 39, up three or four basis points so they've taken out the high. europe's leading the band at this point so we'll continue to monitor to see if we test that 2.32. france's rates were down because it was a spread relationship. the bund yields were up, french and italian yields were down. today all yields are up, that is important to monitor. you can see it on french oaths hovering below 90 or the italian ten-year hovering just below 2.25.

the dollar index is the odd man out. we talked about key technical levels to keep viewers, listeners in the hunt. 20,700 good pivot for stocks yesterday it's zoom, zoom, zoomy. 2.27, you want to monitor and treasuries were above it. that 99.15 to 17 area, the dollar index can't get there. it certainly seems the dollar index is just having troubles mounting any type of structural rally especially below 100 and if you look at a december 1st start to the dollar index you can see the lower lows are really forcing the market to work pretty hard to try to hold any ground. carl, jim, david, back to you. >> thank you very much. isn rick santelli. when we come back, james quincey talks about earnings and future for the soft drink giant as he steps into the top job next week. dow up 206, putting together the best two days of the year so far and the nasdaq crossing 6000 for the first time ever.

take a look at some all-time highs, facebook, alphabet, microsoft, two of those vr earnings this week, that doesn't include net plix, scrawl time high today along with the nasdaq above 6,000. we'll get trading with jim in just a moment. the new new york. we are building new airports all across the state. york. 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

time for cramer. >> maybe it's not as bad as i thought, that's free port, fcx, gold a little bit better. copper, fine. what this feels like, this stock has been in a down trend along with the rest of the minerals. put this together with alcoa and caterpillar and come up with a rosy outlook about the rest of the world. my focus is on the rest of the world, united states we have plenty of data which says the united states has stalled. tupperware my god, plus 30% from china. the rest of the world is doing better than we are, that's why the rest of the stock markets are doing better than us, fr freeport i call a bottom. i think you have to. >> that's he a big call. >> i know. i'm out theren ocopper and gold. they cut the debt down to 15

billion, that's exciting. if the stock goes lower you want to buy it. >> what about tonight? >> a company that is just hitting on all cylinders, a good name for it is briggs and stratton. i'll go aisle by aisle at home depot and whether it be stanley black&decker, whether it be paint, whether it be engines, this is outdoors by the way, the summer and spring if they are good, it's a little outside, briggs and stratton will go higher. i do not mow high lawn. i shovel my walk and i shovel david cotie's walk but he's no longer there. >> dow holding to a strong gap open, and it's holding up 200. back in a minute. stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient.

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♪ just dance, dance, dance ♪ all those things i shouldn't do but you tadance, dance ♪ good tuesday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber at the new york stock exchange. dow up a couple hundred points. nasdaq above 6,000 for the first

time ever. some of the dow components and other s&p earnings report strong earnings >> with our road map begins with another rally on wall street. stocks surging, nasdaq all-time high of 6,000. coca-cola, mcdonald's, caterpillar reporting irpgz. >> possible trade war looming. plus getting ready to rumble, wells fargo annual shareholder meeting is under way as two key proxy advisory firms are urging shareholders to vote against some of the directors, we'll take you there live. but first, 10:00 a.m. we have some economic data. rick santelli with the numbers in chicago. rick? >> thanks. lot of data. in we look at new home sales for the month of march, 621,000, and the reason that's fascinating is, not only because it's up close to 6%, but when you compare it, the last time we're

anywhere near here was july of last year when it was 622,000, seasonally adjusted annualized units and that was the best since january of '09. let's move to some april data, from the conference board, consumer confidence, 120.3, 120.3, that compares to last look which was an astounding 125.6, so backing away from historic levels, with very strong levels and finally april read on richmond fed, that came in at 20, we are expecting 16, so it's better, and a lot like consumer confidence, when you're qualify department last month was 22, another stellar performance. both numbers might have moderated but they're way up at the top of the mountain. sara back to you. >> rick, thank you. we are glued to the markets this morning the dow is up, stocks are surging. the nasdaq as i just mentioned hitting a new all-time high, passing that 6,000 mark and being done with historic highs by some of the common names we talk about like facebook,

google, or alphabet, microsoft, ahead of some key earnings from the companies later this week. >> we got more tonight, at&t, chipotle and texas instruments to name a few. the nasdaq of course has been the leader of the week in terms of reports. the s&p nine points from its all-time closing high and of course 2400 and change is the all-time intraday. >> eliminating risk around the french election, feels like the mood is still positive from that, even after a 200-point rally for stocks yesterday, and you've got an increasing chance that the republicans that congress can avert a government shutdown now that president trump signaled om willingness to compromise over the spending of the border wall and earnings pointing to growth. we're going to get into some of the individual ones but mcdonald's coming in strong, caterpillar, coca-cola well received. >> we'll talk about all of those individual names, of course we have the 100-day milestone nearing the white house's first

major trade tariffs are not on mexico, not on china, but on canada. commerce department slapping new tariffs up to 24% on lumber coming into the u.s. eamon javers live outside the white house with the latest. >> reporter: you talk to white house officials here and ask them where the focus on canada comes from, president president trump heard from dairy farmers hurt by canadian imparts and they're focused very much on the canadian lumber problem. here is what they're doing specifically over at the department of commerce, the tariffs are going to be between 3% and 24% and they're going to be focused on specific canadian companies, they're calling it a preliminary terdetermination. final determination will be made in september, as a point of comparison the canadian lumber imports are volumed at $5.6 billion in 2016 and businesses can seek relief from the injuryious effects of unfairly subsidized imports to the united

states. wilbur ross described the administration's attitude toward all this on cnbc this morning. >> i wouldn't regard the canadian situation as being anything like the war with isis but is a precise set of tariffs on a very precise set of imports. the reason we are putting it on is canada's forests are owned by the various provinces, and the provinces charge very discounted, we believe, very subsidized prices to the lumbermen. >> reporter: and carl, that is the key to this long running trade dispute in terms of lumber between canada and the united states. the canadian forests are largely owned by the provincial governments. in the united states largely privately owned. american lumber folks have to pay higher prices, the u.s. feels, in order to get access to that lumber, so they say this will sort of even the playing field here, and we'll wait to

see the canadian reaction to all of this later in the day. >> we've already gotten some statements from the canadian officials on that, eamon. we'll get to that. for more on the president's big promised tax reform announcement tomorrow we're joined from washington by cnbc contributor and former executive to vice president biden jared bernstein, with us here larry kudlow, cnbc contributor. good morning to you both. >> good morning to you. >> what do you make of this? >> we've seen this movie before and probably see it again. i think wilbur ross is right there's pro vinnial subsidies in canada for soft lumber. back and forth, back and forth down through the years. temporary targeted tariffs, they come off and they come on. we'll see how this plays out. this is going to be an investigation and a report. we'll see. it's just not a huge thing. >> you see it more surgical than something ballooning into some -- >> that is correct. right. one thing pleases me a lot, the

early days of the trump administration, is with respect to the trade barking during the campaign, of which there was a lot, and sometimes troublesome, including to me, generally a supporter, the biting is much less than the barking, okay? so if we have to go through this and do a report on it, i'm okay. but look, we don't subsidize that stuff in the united states. we subsidize other stuff but we don't subsidize lumber. >> jared you agree? >> i do. i think larry and i have to wait until the tax discussion before we start fighting. by the way, larry, nobody know what a long playing record is anymore but i take your point. i know what it is. i know what it is. >> i get it, touche. >> and yes, targeted and not anything like the kinds of trade war rhetoric or 45, 35% tariffs on everything coming in. you know, wilbur ross has prosecuted dumping cases for much of his career, particularly in steel, and often

successfully, and this looks very much like the kinds of dumping cases we brought while i was with the obama administration, and the end of the day, we were successful in a number of these. i remember one on rubber tires, one on steel, one was on food stuffs, so a surgical kind of a surgical tariff and one that makes sense to me from what i've heard so far. >> can i take the other side of this? >> sure. >> canada is our second largest two-way trading partner, much of what is going on in the administration, the first 00 days, is all about signaling. this is not in a vacuum. they've taken action on steel imports in china, president trump is bashing dairy farmers in canada. do we want to pick confrontational fights with a close security and trading partn partner? >> can i push back on that quickly before we go to lar are i? what larry said is important. you get something surgical or something that's way too big and pushes back on globalization in

a destruct tough way. i think you should be happy with what you're hearing versus the counter factual. >> that's pretty good for jared, i'm afraid i have to agree with him on that as well. you know what? here's the really big picture. china. china. all right. president trump met with president xi. they got along. they got along famously or whatever, but they got along. there was no currency fa manipulation, which really would have triggered big problems. some of this is related to north korea. they're playing ball with us, i hope. the other one is i think big is there will be there will be no repeal, no withdrawal from nafta. that's a recognition. also when we get to it, the so-called back tax, the border adjustment tax is dead. i'm here to tell you it's dead, buried, six feet underground. i built a crypt over the grave so you'll never be able to get to it. >> do you think president trump shares that view? >> i think he's in shriline wit that kind of thinking.

there's such a thing as customs enabling legislation. can he put on temporary targeted tariffs, until the review takes place. this is i don't want to call it small potatoes. what does wood do? jimmy and cramer and i used to say dumb as wood. this is kind of dumb as wood. sorry. >> jared, are you willing to go that far, we can write the border adjustment taxes obit? >> i'm pretty sure, i wouldn't say zero but i started 30% for the tax months ago and kept coming down since then. i don't think we'll see a border adjustment tax which leads to some interesting complications because that was one of the key pay-fors in the trump tax plan, so now when you hear donald trump and some of his lieutenants talking about well, folks, get ready for some big budget deficits, not quite exactly how they're putting it and they start talking about the kind of fairy dust about how the tax cuts are going to pay for themselves, a lot of that suggested that that is gone and they're trying to prep the

public for an argument about the budget deficits that their plan is going to leave them with. >> larry, let's talk about tomorrow -- >> the back tax, factually, david, the back tack -- >> you never can win that. >> the bat tax was never in the trump tax plan. >> no, it wasn't. >> true that. >> don't mean to interfere, david, with the greatest respect. was never in it. >> i want to get your take on what we'll see tomorrow. my reporting indicates bare bones, something along the lines of a 15% tax rate with again if we take secretary mnuchin at his word, most likely being dynamically scored with some gdp growth rate we haven't seen in decades. >> decades. >> is that really going to fly with the rest of the conference? >> for 60-some-odd years after world war ii the american economy grew at 3.4% at an annual rate. the last dozen or so years i agree it slumped below 2%. let me make a point.

i give treasury secretary mnuchin great leadership points for talking about economic growth, which is the most important area of score keeping, by far, okay? now look, jared will say fairy dust. jared, who wrote the obama plan, which was new deal spending and fiscal multipliers that didn't work. 2010, 2011, 2012, 2013, average growth of 4%, that came in around 2% or slightly less, that cost the federal treasury about $4 trillion plus in lost revenues. if you go back to the historic rates, david faber, you'll pick up $4 trillion that we missed. if you go back to half the historic rates, half the historic rates. >> with no at all, talking about $2 trillion in revenues missing. don't we have to are at 4% or 5% gdp growth? >> no you do tnot.

1.le is the cbo baseline. i want to be clear. if you plug in 3% economic growth, which is below historic. you're going to pick up close to 4 trillion in revenues. this is -- the biggest pay for, the mother of all pay fors is economic growth and if you're going to tell me -- >> i don't disagree. >> -- slashing business tax rates is not going to pick up growth, i'm sorry. >> hold on. i don't disagree if we were growing twice as fast we'd be doing twice as well on the revenue front and all that but look, you better, larry, you got to talk to your folks over there and you got to tell them at least this. you need a plan b. plan "a" has never come to pass. we've had lots of experience with tax cuts, and we've argued about this for 20 years, i've never been able to convince you and fine, okay, that's okay. >> reagan years, the jfk years. >> exactly. >> right. >> now your folks are writing potential legislation, so there

needs to be a plan b in case you don't get the doubling of gdp growth or whatever it is you're hoping for, which by the way you're not going to get. the tax policy center scored dynamically scored the trump tax plan and its revenue costs went from 6.2 trillion to 6 trillion so that's 200 billion over ten and that's actually about as favorable as a realistic dynamic score you're ever going to get. >> they do not score dynamically. >> i want to hear plan b. >> i beg your pardon, they do not. and i want to say this, look, jared, you had your chance, during the obama years you did the big new deal spending program and it didn't pan out. you scored it 4% growth, it came in at 2 first growth and $4 trillion. now what i'm saying, let's try something different. there's a bipartisan consensus in washington, d.c., we need to lower marginal tax rates on large and small companies, we need to pick up repatriation, we need to go for immediate

expensing for new investment. that will increase growth. if you take the 1.8% cbo baseline and raise it to 2.5, way below trend you're still going to pick up a couple hundred trillion dollars. if you move it to 3%, you're going to pick up over 4 trillion. that's the way the numbers stack up. you guys had your chance. you failed. let's try an older path that has worked. >> so let me ask you actually ask you an important technical question here. do you know if the trump plan has a 15% rate for pass-through income? because when we are talking about corporate taxes, people are making mistake. they're talking only about the business side. in fact, 90% of businesses now are pass-through, more than half of business income is pass-through, and so originally trump took the 15% and applied it to pass-through income that loses another 1.35 trillion. >> this is only in stag. i do not know. here's what i know. in the campaign, tax cut plan,

which i worked on, steve moore, steve mnuchin, steve miller, lots of people, in that plan, the 15% rate was used for s corps, sub s corps and llcs, with qualifications that this had to be legitimate business income, and not personal income. >> right. >> that is doable. kevin brady the head of the ways and means said we could separate that. that's all i can tell you. i believe it will be in the new plan but i can't say for certain. what i two know is -- >> another loophool, a big loophole. >> the national council said they threw the campaign tax cuts out. president trump and steve mnuchin brought them back. this is going to give tremendous confidence and i think they can get a deal done at least on the business side in three or four months. that's what i believe. >> we're going to find out at least with the guiding principles are tomorrow. that was a good one. jared and larry, thank you. >> thank you. >> bye, jared. >> bye. mean tile the dow getting a

boost this morning from mcdonald's after serving up a first quarter beat. for more on that, we're joined by restaurant analyst david palmer. good to talk to you this morning. >> good morning, carl. >> do you know anybody who is looking for a 4% comp.? >> it was pretty good. it was above the consensus number. the key market was the u.s., where the turnaround is happening. the u.s. lapped a tough comparison with 1.7 and the street was negative so that was a particularly good result. the international side of things has been strong for a while. so the u.s. is key. >> u.s. 1.7. in terms of the breakfast comp. thing are they past the initial buzz that drove comps back then? >> are we past the initial turn? >> are comps getting easier? >> yes the comparisons get easier from here.

they weighed on the industry and mcdonald's was not immune to that, going into the summer mcdonald's has the help of value and doing more with dollar beverages and the first time since 2012. >> the strong u.s. number, 1.7% same-store sales growth. analysts looking for a drop. does that say more about mcdonald's or the broader industry. is the restaurant recession over? >> industry is up 1.5% and that number includes mcdonald's so mcdonald's was slightly better than the industry but the industry was slightly worse on that, fourth quarter coming into april, feels like a little bit of a firmer tone still and that would track with comparisons. you expect the industry to get better but our guess is mcdonald's and the u.s. will start to gain share with the help of a variety of things. their values to start but

they're doing operational changes, they're doing reimaging of their assets and renovation of the food is on the table going into '18 so multifaceted program in the u.s. to turn it around. >> we did see a couple big upgrades last week ahead of the print, some of them built on the notion that mcdonald's is going to lead the industry in mobile and digital ordering and pickup. how important is that? >> when you think about it, you got quality and value and convenience and these guys realize that they weren't the best on value or convenience which is their right to be best in those things. digital is a big part of that convenience so with americans, obviously they have their mobile phones, they want to eat at home more and more, these guys have to bring the convenience to where the consumer wants to be, which is increasingly at home, but on the go payment is part of that, too. why not have a loyalty program? you have to interact with the consumer where they are these days and mcdonald's has been noticeably absent from that

whole dialogue. >> the old joke is that they're really an engineering tech company that happens to serve food but with every quarter that becomes more and more true. david thanks again. good to he so you. >> you, too. when we come back trade tensions are in focus. we'll talk to the ceo of a west coast lumber company that actually lobbied for these tariffs against the canadian lumber companies. steve swanson, ceo of the swanson group and former chair of the u.s. lumber coalition joins us next with "squawk on the street" with the dow surging 229 points here. ♪ whoa that's amazing... hey, i'm the internet! i know a bunch of people who would love that. the internet loves what you're doing... ...so build a better website in under an hour with... ...gocentral from godaddy.

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the trump administration slapping new tariffs up to 24% on lumber entering the united states from canada. diana olick joins us with more on how this could impact the housing market. some of the housing markets are under pressure. >> absolutely. home builders are not happy to say the least. the industry association out this morning calling the up to 24% duty on canadian lumber "short-sighted." chairman granger mcdonald a texas home plr sabuilder said i "harm consumer answer housing affordableability." one-third of lumber used in the last year was imported that grows to framing, moulding, floors, mattress box springs.

it takes 15,000 board bead to build a family home and the lumber increase up 22%, that just from the uncertainty surrounding a possible tariff, added almost 3600 bucks to the price of a new home. nahb estimates the tariff on canadian lumber will cost over 8,000 u.s. jobs, higher cost, fewer homes and can afford fewer workers and hits businesses that sell and transport building materials. they say this is a net figure including added jobs from the increase in domestic lumber jobs. i spoke to a home builder in denver earlier this month. he could be building twice as many homes if his costs for labor and materials were lower. he was very nervous about lumber. >> most of the materials that we use are global commodities, and so anything that affects the free flow of those commodities across borders will have a price effect. >> the commerce department estimates last year the u.s.

imported 6.66 billion worth of canadian soft wood lumber. argues canadian lumber is heavily subsidized and wilbur ross said this is not an idea of a properly free trade agreement. >> diana thank you. what impact will they have? former chairman of the u.s. lumber coalition steve swanson, ceo of northwest timber company, the swanson group. thank you for phoning in on this news. >> great, glad to be here. >> you must be applauding the move today. i know this has been simmering for decades. for those of us who have not been following it carefully what exactly is your complaint against canadian lumber? >> the complaint is very simple. 95% of the raw materials, the actual trees are controled by the canadian government in canada, and they sell those trees to those companies at an

art fusificially low administer price. contrast that to the united states over 70% of the trees that we consume here are from private lands that we buy at open market fully competitive prices. so canada creates an opportunity for their companies to have extremely cheap artificially low and they unfairly compete in the u.s. market. >> and yet, steve, canada, the foreign minister national resource ministers say those allegations are "baseless and unfounded." they call this tariff "unfair and punitive." >> well it simply isn't unfair. the administration is simply enforcing u.s. trade laws to support u.s. workers, the u.s. country and communities. this is a u.s. market. this is not a canadian market. we have a right to exist.

we have entire communities that depend upon our businesses, and all we're asking for is the situation where we can compete. lumber prices in the u.s. today are barely above the price they were in 1977, when i joined this industry. nothing else has stayed static. if you adjusted lumber prices from 1977 to today, they are flat or lower. no other commodity in the u.s. is lower than it was 40 years ago, and lumber simply isn't a huge component of the cost of a home. it's still only 2% of the total cost. the entire framing package of a home costs little more than what the granite countertops cost. we simply aren't driving up the cost of a new home. the home builders should take a quick look at their own bottom line. their margins have more than doubled since 2016. we simply haven't had that experience. >> so you completely are disputing the fact that these

tariffs, which are taxes, will raise the price of u.s. homes? >> it may raise the price modestly, but a price that can be absorbed in the marketplace. these are u.s. jobs we are awe tack being. we can't have the home builders having exorbitant process while mills in the united states go out of aboutis. it simple a isn't fair. >> canadian and chinese officials are meeting this week in canada. the international trade minister for canada and the finance minister are in china this week. why can't china step in and become the biggest market instead of the u.s. for the canadian lumber? isn't that a long-term solution for canada that could end up hurting the u.s. industry? >> the u.s. industry is fully capable of supplying its own markets. we are not doing it today because we have been unfairly harmed by canadian imports. if canada wants to ship their lumber to china, fine. the u.s. industry can more than adequately supply its own

markets. >> we'll leave it there. certainly one side of the debate. thank you for joining us. steve swanson, swanson group ceo and u.s. lumber coalition former chairman. as we head to break, take a look at shares of dow member coca-cola. they are pretty much unchanged, adjusting those earnings that missed an expectations by a penny a share. net revenue falling 11% for the quarter. coke did lift the lower end of its outlook. we'll dig through the numbers and talk about some of the themes in the industry with james quincey, he becomes the ceo of coca-cola on monday, and he joins us here for an exclusive interview on "squawk on the street." hey. hi. hi. you guys going to the company picnic this weekend? picnics are delightful. oh, wish we could. but we're stuck here catching up on claims. but we just compared historical claims to coverages. but we have those new audits. my natural language api can help us score those by noon.

great. see you guys there. we would not miss it. watson, you gotta learn how to take a hint. i love to learn.

let's[ whimpers ] dog. find ping-pong. okay, let's go. find your awesome with the xfinity x1 voice remote. that's amazing! some drama at wells fargo annual shareholders meeting. iss and glass holders vote against some of the director on the board. leslie picker is at the meeting in florida and she has the latest. leslie? >> hey, david. the meeting began about a half hour ago to a packed room, more than 300 people in atendance, plus an overflow room.

ceo tim sloan opened by telling shareholders they desrerve a lo more from wells fargo and they have a lot more to do in terms of making it a better company. sources are telling me this morning that it's looking likely that all directors will receive more than 50% of the vote, and it's unlikely that we see any resignations since they're not obligated to do so, if they receive more than 50%. the three new board members which include ceo tim sloan received closer to 100% and remaining somewhere between 50% and 80%. those on the risk committee or served on the board longer had more trouble in terms of gett tg afirmive votes in. dissatisfaction with the board in general. many believe wells fargo did not act quick enough in the wake of the sales practices scandal and

we spoke with several shareholders before the meeting including a nun from philadelphia with the sisters of st. francis, they hold about 15,000 shares, she's bringing a proposal for more transparency into what happened with the sales practices scandal, she said they voted against seven of the 15 director. >> we definitely looked carefully at the board members. we believe that the board should not have been so passive. they actually apparently from the report gave control to one person, and we believe that the system did not work and many people were violated. >> reporter: now this is different than a political style voting where the votes can actually still change before the meeting ends, so we'll be keeping an eye on that as well as the q&a session which should be quite contentious. >> we'll watch that an important day for wells. thank you so much, leslie

picker. sue we rherera has an date. north korea holding a tribute at the giant statues of kim il-sung and kim jong-il, also staging firing drills but no reports of any nuclear missile launches. ivanka trump arriving in berlin after accepting an invitation from ger nan chancellor angela merkel. ivanka is participating in a special global summit in germany, focusing on empowerment for women and girls. this is her first international outing in her white house advisory role. north carolina trying to dry out from record-setting rain. storms have been ripping through raleigh since sunday, dumping as much as six inches of rain. the local airport breaking the record for the most rain in a single day. and there's a monkey on the loose in florida, about 20 miles away from orlando. there's a look at him, or her.

the primate has been hanging around restaurants over the past couple of weeks remains alucive. monkey sightings are becoming more common in florida and many believe the primates are descendants of monkeys brought to the area by film and production crews many years ago. we'll keep you posted on whether they nab him. carl, back down to you. >> all right, sue, thank you very much. as we go to break, look at shares of caterpillar, obviously helping the dow, back above $100 a share for the first time since 2014. $1.28 more than double the estimate of 62 cents and the company boosts its full year forecast. dow up 231, back in a minute.

markets continuing to rally strong this morning, the nasdaq

hitting 6,000 for the first time ever, this as investors closely watch washington. congress returns to a hectic agenda, including budget talks and the president's highly anticipated tax reform plans coming tomorrow. joining us news is ed keon, and tony pimco portfolio manager. other 230-point rally for the dow. is this france, better earnings or this idea we'll get a 15% corporate tax rate from washington? >> i think it's unlikely we'll get the 15%, but certainly the relief rally from the french election results was yesterday's news. today i think it's partially earnings have been very good but also hope that maybe we will get some help on the policy side. i think some skepticism about the policy side is warranted but it's nice to hope we have higher prices for a couple of days. >> is the assumption government will not shut down now the

president is edging away from the demands for the border wall? >> probably a factor. it wasn't distracting from risk on attitude. generally it relates to two factors. one word and one number, stability when it relates to china and 5.5% forecast for nominal gdp growth. when it is growing in the mid fives, corporate profits grow in double digits. >> nom nol global? >> nominal global gdp. 2.5 with inflation. on the stability front look at china's data, the best industrial output in four years. gdp sequentially accelerating first time in seven years, and all indications are that with a big political shift in the congress the 19th party congress in october, november, xi jinping will want stability and it's a huge contributor to global growth. $700 billion contributor versus half that the united states. so it's very important that the stability there, so those are the key underpinnings, people

are easily distracted by the geopolitical factor and what's happening in washington, but these are ever present. >> we talked to you last fall when it seemed like the ten-year yield was going to zoom to the moon, you were very careful to say keep your expectations limited and that's exactly what's happened. has that changed now? we got "the journal" doing pieces on peak inflation. >> the ten-year yield, from 187 to 260 as you said, moved back down to 215, probably closer to the lower end of the trading range. why? because the cost of money. the central reserve has been raising the cost of money for those two finance for bond purchases, costing near one percentage point, when the two-year treasury got close to that, it's one of the reasons you could say that all yields in treasury starts to move up a little and there is the prospect of course of the feds to raise at least one more time this year, maybe two, so as the cost of money goes up it's difficult for the u.s. to go down but

don't look for big increases either because of the very powerful secular forces on demographics, credit growth and numerous other factors. >> sounds goldilock-ish. ed am i crazy in zbl? >> international growth looks good. u.s. growth first quarter is going to be a bad trend and everybody expects the second quarter to bounce back so we get to the 2% rate. if you look at car sales, you look at credit conditions, there's at least some evidence that growth may actually be slowing a little bit. and we could use some policy stimulus but i think it's hard to get it through congress, if it has to be budget neutral, it's not going to have much stimulative effect, structural reforms help, but it's not going to have a huge impact on gdp. i think i'd be on larry kudlow's side of the debate when it comes to what policies we need right now, if growth is slowing a little bit, then having policies would help us. >> one thing investors are trying to figure out on a day like today whether trade will hurt the global economic growth. we got those new actions on

tariffs from the commerce department and against canadian lumber companies. we're just getting some sound in from the canadian prime minister justin trudeau. let's listen. >> standing up for canada's interests is what my job is, whether it's soft wood, or software. >> whoa! >> the media liked that. there you go. >> i liked it. and you know, what we have to know is we are fremd usually interconnected in our economy with that of the united states. but it's not just a one-way relationship, as i've pointed out to the administration many times since they got elected, there are millions of good u.s. jobs that depend on smooth flow of goods, services and people back and forth across our border. >> justin trudeau speaking looks like in sort of a town hall format at a tech company in canada. tony, is this troubling actions

like this from the administration? or not? >> consider that it affects only 5 billion of goods, this is the sort of thing you likely will see over time. nothing big, so to speak, but look at the headlines. you just referred to it, put the focus on the prime minister in canada, and so there will be headlines created from this, but no big economic impact. >> the canadian dollar at multimonth lows against the u.s. dollar. >> i refer to global growth being stable, china being stable and strong growth. export data in korea last week was off the charts and same from japan. so it looks like the export story has actually good and the threats probably smaller than you think. one final point. most of the disputes the u.s. will have is so-called wto compliant type disputes, in other words taken up in the means that markets can handle. >> you were cautious on u.s. stocks based out on the last few

days which have been very strong. >> we're moving underweight stocks, overweight internatio l internationals, that's helped. we certainly didn't anticipate this strong a run but i think if you look at the overall picture, if we do have a link in the economy the market may be ahead of itself, not in terrible shape but we think perhaps a bit, get too far too fast. >> first back to back 200 point gains for the dow since november since the election. we'll leave it there. ed keon and tony crescenzi. when we come back james quincey joins sara in a cnbc exclusive after reporting earnings this former. talk to former oklahoma senator tom coburn, talking about taxes, regulation and health care. the wells meeting is recessed after the shareholder asked the director to explain what they knew about sales prices. we'll get an update in a moment.

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strategist tom leesays dangerous signs are lurking below the surface. find out why he's wording, tradennationth cnbc.com.

the wlgz far foe shareholder meeting has been recessed. after a shareholder spoke up. >> reporter: there were fireworks and starting early, about a half hour into today's shareholder meeting a shareholder stood up, not part of the q&a session, so he stood up out of order, and asked for each of the board members one by one to explain what they knew and when about the sales practice scandal. that of course required the shareholder meeting to be recessed and we were told that they're just now reconvening after that outburst. we'll get back to you with more as this meeting goes on. guys? >> all right, thank you, leslie. yep, promises to be somewhat contentious. we'll be checking in with leslie

picker later. now srick santelli for "the santelli exchange." >> welcome former oklahoma senator tom coburn. thanks for taking the time, good to talk to you today. >> good to talk to you, rick. w today is the day. white house economic team is going to meet with the gop lawmakers, and they're going to try to iron out some of the legislation particularly under the microscope tax reform. tomorrow, we may get the principles for tax reform. you've been there, tom. what do you think is going on and what do you think we may see tomorrow? >> hopefully we see a significant reduction in corporate tax. not just pass through but corporate tax in general. hopefully we see a tax holiday on oversea s earnings and maybe make that permanent. if you get a good tax rate, then you won't have the problems that

we've had in the past with this high corporate tax, and then we ought to have middle class tax decreases because of the decline in median family income and the decline in asset worth of the middle class. and so if we do all of those things and then pay for some of it by eliminating some of the waste and fraud that we have out there, we should get a real stimulus, a real kick out of that. >> you know what i find so fascinating is there's a lot of discussion about cbo, not necessarily from the standpoint partisan/nonpartisan, just in the form of accuracy. many "wall street journal" articles talk about what their numbers looked like before reagan cut taxes and how ultimately inaccurate they were. can you weigh in on the static versus dynamic scoring in the cbo? >> i can weigh in on static from my experience because some of the assumptions they make if you

go and talk to them after they made these assumptions, they really can't defend them often times. that's one of the reasons you see them so off. they were off on obamacare. they were off on the medicare part d. they said it would cost more than it did. so they make great efforts, but, again, they're guessing. it's the art of guessing. if you compare static to dyna c dynamic, you're going to measure in those effects as we go along and to me i think we should never have status accounting or status estimates from cbo because it causes us to make poor decisions. i found them wrong more than i found them right. >> we only have about 25 seconds, but very quickly, on repatriation. big deal. what type of strings do you think should be attached to that? in other words, for infrastructure do you foresee any strings? your final answer. >> you ought to let companies be

free and bring money back and do with it what they want and one of the benefits for the economy whether it's share repurchases, increased dividend, you're moving more money into the economy and hopefully get greater velocity out of it and greater economic growth. i would add one thing real quickly. if you want to increase economic growth, what you have to have is transparency both in terms of price equality and any health care bill. it's 20% of our economy. we don't have any market forces holding it accountable. >> i agree. thank you, tom. you need transparency. you need to make rules that everybody follows and they remain constant. thank you again. david faber, back to you. >> all right. thank you, mr. santelli. let's send it over to jon fortt with a look at what's coming up on "squawk alley." >> the nasdaq pops above 6,000 for the first time. what will it take to go higher from there? also, we have the coke ceo after

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when we come back, coca-cola reporting earnings this morning. ceo james quincy will join us in

a cnbc exclusive interview. much more ahead. "squawk alley" coming right up. stay with us. online u.s. equity trades... ♪ ...you realize the smartest investing idea, isn't just what you invest in, but who you invest with.

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welcome back to "squawk on the street." stocks off to a strong start after upbeat earnings report. materials and financial stocks leading the rally so far on materials front we have freeport, dupont, dow chemical, cf industries outperformers ones to watch today. let's send it back downtown for start of "squawk alley." back over to you guys. >> good morning. it's 11:00 a.m. at coke headquarters in atlanta. 11:00 a.m. on wall street and "squawk alley" is live. ♪