it's friday, may 12, 2017. "squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box." >> good morning, everybody. welcome to "squawk box" on cnbc. we're live from the nasdaq particular ket site market site in times square. markets ended slightly lower yesterday. you can see that that trend is continuing this morning with some pressure on the dow futures, down by 37 points below fair value. s&p futures down by 6. nasdaq down by 12. overnight in asia, take a lock and you'll see that the nikkei was down by 0.4%. markets in china were slightly higher. hang seng up by 0.10%. shanghai was up by 0.71 is%.

in europe, things have barely budged in most of the major markets. cac is flat. dax is up 0.1%. the ftse up almost 0.2%. crude oil prices continued to climb yesterday. this morning giving back just eight cents. but there is a thought that with supplies in the united states experiencing an unexpected draw down, and with more countries looking like they may support saudi arabia in terms of continuing that production cut, we have seen prices that have stabilized well above the lows we've seen earlier this week. wti trading at 47.76. >> some big corporate stories. retail wreckage continues. department store chains taking a major hit. nordstrom's posting better than expected earnings and revenue, but the stock dropped on a same-store sale miss. they're the latest department store to get hurt by a slump in

clothing because of online shopping. macy shares dropped 17% yesterday during the trading session after quarterly results missed. it was the worst day for macy's shares since 2008. we'll get another schanapshot o the retail space this morning as jcpenney posts results before the opening bell. it's struggled and struggled for so long. that chart is just one part of a very long and tortured story. >> no a coincidence that bezos is worth 81 billion as this is going on? >> consumer lab by thabits have. >> i would be ecstatic if i had a tenth of that. 8 billion. or a tenth of that, 800 -- wait, i would be ecstatic with a tenth of that and a tenth of the next thing. >> the scientific notation?

>> he's like four places ahead of anything we can ever -- you know what? >> are you back to that whole wealth tax thing all over again? >> no, i just thought now, you were looking me in the eye, which i warned you before the show, to stop -- don't talk to me. don't look me in the eye. don't walk and talk. don't come to my dressing room. don't come to my makeup room. didn't -- >> are we co-hosting the show with steve harvey? >> that's what will be hard if we're co-hosting the show. it seems like we have to -- >> people, if you didn't see the steve harvey letter. >> there's a letter in the papers today. >> was it today? i thought it was yesterday. >> steve harvey sent out to his staff, don't talk to me. >> stop looking me in the eye. >> don't go near the dressing room or any of those things. >> don't even speak to me unless you are requesting it in writing to say hello in the mornings. that's what i want from you.

>> nbc universal property. there is some economic stuff going on. everybody at home is now look at their tv and looking at me. i haven't given them -- i bet they would be glad not to look at me. it's okay. please look at me. april retail sales, and cpi will be released at 8:30 a.m. eastern. followed by may consumer sentiment and march business inventories at 10:00 a.m. a pair of fed officials are speaking. chicago fed president charles evans and philly fed president, patrick harker. po poli to politics. donald trump explaining his decision to fire james comey to lester holt. >> he's a showboat, he's a grandstander. the fbi has been in turmoil. you know that, i know that. you look at the fbi a year ago it was in virtual turmoil.

less than a year ago. it hasn't recovered from that. >> monday you met with the deputy attorney general, rob rosenstein, did you ask for a recommendation? >> what i did, i was going to fire comey, my decision. >> you made the decision before they came into the room? >> i was going to fire comey. there's no good time to do it, by the way. >> because in the letter you said i accepted their recommendation. >> yeah. >> but you had already made the decision? >> i was going to fire regardless of recommendation. >> he made a recommendation, highly respected. very good guy. very smart guy. the democrats like him. the republicans like him. he made a recommendation, but regardless of recommendation, i was going to fire comey. >> president trump also said comey told him on several different occasions that he was not under investigation in regards to russia. we may hear more about this, because there are reports that comey has been asked to testify before the senate intelligence committee next week. we may hear more of his side of the story. >> i don't know.

i thought that was an amazing interview that lester did. really nice job with that. >> maybe you can get comey to be the independent prosecutoprosec. bring him back as the independent prosecutorment. >> you guys? you guys who? >> like you guys. like you guys that i thought wanted to fire him after what he did to hillary, then after they fired him, then you didn't -- i'm so confused by this. >> trust me, i'm confused. i'm very confused. >> i heard. >> after the weiner gait lgate i thought you wanted to fire -- >> we haven't seen each other the past couple of days. >> it's all coming out now. >> were you hyperventilating, you and don lemon and everything? chris cuomo. i thought he would have a heart attack on the set. i was afraid to turn on cnn because somebody would die. >> it's just the way it happened. i know.

>> you can't be happy with the explanation. >> don't tell me what i can't be happy about. i was happy i was on a golf course, not here. if democrats -- if there's fire where there's smoke, which is the fervant desire of every democrat. if there isn't, i don't understand. i'm waiting for the leaks. where are the leaks on russian collusion. >> i will not dispute for a second the hypocrisy of the democratic party in saying that he had no credibility and then saying that he needed to be in the job. having said that -- >> we talked about that with the congressman who was here. >> the rationale for why he was fired and when he was fired has raised at least serious questions that probably deserve answers. >> i can tell you something about donald trump, loyalty is paramount. he doesn't give a doubt how he does things. >> clearly. >> the great thing was, he fired him and met with lavrov the next day. he doesn't care. he doesn't care about percept n

perception. >> though he did not let american media in, and was upset that the russian media leaked photos. >> when things like this happen, whether right, wrong, gaffes, whatever it is, whether it takes oxygen out of the room, for all the policy stuff these guys are here for and care about, the way the investors care about where the economy is going -- >> yesterday, in -- i can't control what people i'm with, i can't control what they watch. they were watching "squawk box." so i had to watch you even though i wasn't here. i was like can't you turn on "morning joe" or soimething -- >> ugh. you can't support your own show? >> i was looking at the numbers, for a constitutional crisis, it doesn't look like the market thinks we're quite there yet,

watergate. coverups are worse than the crime. this is all the hyperbole that i'm hearing, and i'm waiting for more than 20 points down on the dow to see something. even if it delays tax reform and obamacare, would think the market would go down. with nixon, agnew, jerry ford, when that was happening, we were worried about democracy going forward in the united states. >> the markets suffered greatly. >> a huge relief when some guy like jerry ford got in. i don't know. neighbor is gets there. i doubt it. >> i'm not saying -- >> a lot of people are. breathlessly, hoping. >> i was with people last night who were asking what do you think the chances are of him getting impeached -- >> no the people you were with were like what do you think the chances are? can it happen, andrew? will it happen? >> only if i sort of -- okay.

let's get you some other washington news this morning. we have some guests this morning. >> oh, yeah. >> as it happens. >> their time's up. >> the united states and china reaching new trade agreements. the plan is aimed at increasing access to china for beef producers, electronic payment providers and gas exporters. the ten-point deal was announced by wilbur ross, and he will join us at 7:00 a.m. eastern time. let's talk markets. swroe se joseph? >> yes. jason pride is here and cliff. let's not even delve into the worst case scenario. talk about whether this makes passing things legislatively more difficult and why isn't the market which supposedly is trading higher on anticipation,

why is it not pulling back on this? >> it's funny. i was siding there with a handful of investors the other day, in the knowledge through a group of people. there's a debate among that group as to how much the market that actually risen on this. versus just underlying fundamentals. ra reality is that earnings are up 12%, maybe 13%, first quarter we've seen this in two years. the economy behind that is actually some what decent. not just a u.s. story. the numbers, the revisions we've seen overseas have been pretty monstrous compared to the past five, six years in terms of earnings. so there's an underwhelming -- or underlining fundamental surge occurring at the same time as all this political occurrence. so there's a debate that's going on, you know, people said we actually think the market is

basically expecting nothing out of this administration at this point in time. and what the surge has been is actually on a fundamental basis. >> you got deregulation, the fed at zero basically. up a little, but very slow going now. money still cheap. you have a lot of deregulation and corporate -- corporations doing well already. it's that simple? >> i think just adding on to that, we have for the first time in seven, eight years a synchronized global recovery that the market is buying into. i think go figure, fundamentals matter a bit. given trump's frequent tweets, maybe there's a callousness, a callous nature to the way the market is thinking about this noise and news. unless where there's smoke and fire, maybe not, because there's going to be a lot of smoke with trump's tweets. easy money. let's talk about that. we have the potential evolution

out, away from the fears from the last seven, eight years, yet money is easy across the globe. >> it is. >> some numbers much higher than 50% of developed government debt is below 20%. it's not going to change quick. economy recovering, still easy money. low rates, that's a recipe for low vol. >> on monday, ta-ye25-year low e vix does that give you pause? >> that's been a big topic for us and discussion for us. typically at this point in the economic cycle, we seem to see vix get down to this level or volatility of stocks. vix has not been around that long. it does tend to happen. what we haven't seen is have it hit these lows. this is really extreme. about half the magnitude of the

average point at this point in the economic cycle. but it may be just a representation of how much liquidity has been pumped out by the federal reserve. there is an extreme amount of dollars tracking less assets than what it wants to have. that's maybe created some complacency in the markets that they can't see actually going away until that liquidity goes away. >> i don't know if that liquidity is going away any time soon. we have a 4.2 trillion plus balance sheet at the fed. you can look at other central banks higher. ecb, japan. the fed told us -- they're telegraphing that they'll be really slow about pulling that balance sheet away. that's the likely path. at least in our view. so you'll have easy money for quite awhile supporting assets. that's part of the equation we're dealing with. >> this is one spot where we're hearing some differences in opinions.

some -- there's some marginal increases in opinion that the fed is actually going to have to start tamping down harder. we're seeing numbers, you see the inflation gauge from the atlanta fed, you see the wage inflation numbers. you look at unemployment numbers, actually below natural rate of unemployment. we're getting to the point now where inflation does creep into the system. the fed seems to be pointed in that direction. that could put them on a path of actually tightening a little bit more than this market is expecting. i think the market now is thinking about a 50/50 chance of three rate hikes this year. i would probably put odds on favorite is what it should be, three. yet it's prigsi ingpricing in 5 chance, and they may take it further than that because of that inflation build up. they may have to tamp down harder. they're not alone. ecb is also starting to talk this direction.

will that hurt stocks? will it come because the economy is rising the way we need it to rise? >> i don't know if we're at the point where that hurts stocks. it could hold us back a bit. i don't know if it's at the point where it could hurt stocks. but anything can happen. there's a range of expectations around that. could they overstep a bit and take it too far within the next year or two years? that's in the carts. i wouldn't put it as the base case, but it's in the cards. >> guys, thank you. jason, cliff, thanks. is that a new place where you are? where did you used to be? >> same place, joined up with an international firm. so insight. >> where were you before? >> cutwater asset management. >> you do stuff like that, you know, i was confused. did you realize -- is this the first time you had this new -- >> second time. >> second time. >> fixed income specialist with over 600 billion in assets under management, leader in global fixed income. >> making more money?

>> the firm is making money. >> no, no did you get a raise? was it a step up? was it a lateral step? >> we'll do a job interview during the break. coming up, startups are looking to disrupt traditional lenders. future fuel took the prize in the personal education finance portion. the founder joins us to talk about student debt in a moment.

what are you doing? getting your quarter back. fountains don't earn interest, david. you know i work at ally. i was being romantic. you know what i find romantic? a robust annual percentage yield that's what i find romantic. this is literally throwing your money away. i think it's over there. that way? yeah, a little further up. what year was that quarter? what year is that one? '98 that's the one. you got it! nothing stops us from doing right by our customers. ally. do it right. let's get out of that water.

welcome back to "squawk box." the annual fin tech awards were held yesterday. the winner of best educational personal finance platforms is on the set. they do a great awards ceremony and they look at fun fintech companies. laura taylor is founder of fuel

education. you give out these cool awards. how did she win? >> they built a great product to help with loans for people. we celebrate innovation at fintech, this company is on the cutting edge to pow er the consumer. >> what do you do. >> we exist to crush student debt. simply put. to crush it. >> how? >> we empower the private sector to solve their chief concern which is the acquisition and retention of top talent. there's a critical discorrect between the benefits employers are offering today and related desperate needs of our emerging work force, which are student debt, even before 401(k). >> but take us a little higher, 30,000 feet so we understand. how does the product itself crush the debt. >> so we are a b-to-b, so we

move the money and administer student debt as repayment, so students can turn it on light a light switch. >> let's say i just graduated from school. i'm in deep. >> you're in deep. >> i'm in deep. what's the average student debt? >> the national average is supposed by 35,000, in our platform, it's 68,000. >> so i'm graduating. i'm in deep. i have $68,000 in debt. i'm going to go get a job where? that will be hooked up with you that will help me. >> today 4% of employers are offering student debt repayment. this is a new normal. it's a new category we're launching. projections will be 40%. options in the future will be much greater. >> the idea is it's another benefit. when companies look to differentiate themselves, it's another benefit, you can be a part of our program, we'll help you pay loans, pretax, after tax. >> what kind of companies are doing this thus far?

>> companies across industry verticals from tech, healthcare, travel, financial services, retail. >> can we name some names? >> sure. >> in case there's some graduates out there trying to look at companies that want these benefits. two companies that asked me to talk about them this morning because they are hiring engineers, data scientists. two companies, one call assurance, they use ai to optimize life insurance products real time. another company called future x, a machine learning ai company to determine predictive outcomes in the economy. if i take a job there. i'll get a salariment. >> salary. >> a great salary. >> and health benefits, and what? >> they'll crush the debt. >> how? >> every month they'll offer between $200 to $1531$1500 a mo directly to the student loan. on top of the base salary,

they're offering an additional student loan payment. >> is there a tax payment? >> today there's no tax benefit. but there are a number of bills that we have high hopes actually having a shot at coming to fruition, which would create incentives for employers to offer student debt repayment. >> and the product itself that you're selling is to the consumer. >> we're -- >> sorry, to the business. >> to the business. >> this is a back end enterprise product that would work to or benefits website. >> exactly. >> just wanted to get the whole thing. >> this is one of -- there's over 400 companies that applied to the fintech awards this year, this is one of them. they got over 100,000 votes. >> everybody says they want to remain independent, is your business ultimately a business

that would do better inside a larger, benefits tech nol swnol company? or is this the beginning of a platform wore you' platform? >> our primary go to market is a white label to existing hr benefits and payroll providers. i wouldn't be surprised if we have offers in the future for an acquisition. we'll see. >> tell us about the deal. come on back. can you give us an exclusive here? >> we're thrilled, jason, thank you for the opportunity, 1.5 trillion, exploding at 100 billion annually, as entrepreneurs we have to make our way out of this mess. >> fintech innovation empowers consumers. we take the power back. >> thank you. >> thank you. before we head to break, check out this viral video. rescue crews out in southern california used a helicopter to hoist a horse. pretty cool.

it's believed the horse and its rider fell 300 feel down a steep hillside. i don't know. apparently the rider is okay, too. the horse -- we're talking about the horse. the guy went to the hospital. hopefully he's going to be okay. but it's all about the horse. >> the horse walked away. >> that's good. >> look at that. >> it was able to walk away in good condition on its own after the rescue. >> we all know about -- thank god for us, when we break a leg, they don't kill us. that can happen to a horse. it's tough for a horse. >> wow. >> amazing video. >> that's good. >> almost looks like a donkey and the democratic party being hoisted around. >> because they put blinders over it. >> there you go with the blinders. exactly. that makes sense, too. whoa. when we return, real estate titan howard lorber will join us. we'll talk tax reform. he's a long-time friend to president trump. and later, wilbur ross

releasing a trade deal with china. he'll join us at the top of the hour.

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the ceiling. s&p futures down by 6. dow down by 41. sprint and majority shareholder softbank have begun preliminary talks to join sprint with t mobile. sprint up by 3.3%. t-mobile up about 9 cents. apple awarded corning 2$200 million as part of apple's commitment to foster innovation among u.s. manufacturers. the focus of the investment will be to produce glass production methods in its harrisburg, kentucky office there. here's wh

. >> we're creating an advanced manufacturing fund. initially put 1g billiting $1 b into the fund. >> this i did not know about. >> we're announcing it today. you're the first person i'm telling. >> a billion dollars of apple's 256 billion. >> a billion dollars of u.s. money that we have to borrow to get. that's another topic. we're proud to do it. by doing that, we can be the ripple in the pond. because if we can create many manufacturing jobs around, those manufacturing jobs create more jobs around them. because you have a service industry that builds up around them. we'll be announcing the first investment from this fund later in the month of may. >> corning has partnered with apple to produce gorilla glass for apple devices since 2007. the house weighs and means committee will hold a hearing next thursday to look at

potential impact of tax reform on economic growth. joining us is howard lorbee elo. long-time friend of the president. i'm reading an article here that says some of the stuff swirling around this week could speed up tax reform, because congress wants to put points on the board, change the subject, get that going. they think it could speed up. we want to talk to you about tax reform. but it's hard to ignore what has been going on this week. i asked you off camera, do you -- deep down, do you know or think there's anything to the collusion with -- if there's nothing there? if there's no fire, there is a fervant hope among some people that there is something there. do you think there's anything there? >> no, i surely do not believe there's anything there.

>> where are the leaks -- we had the leaks on flynn, roger stone. how many months is that? four, five months. >> i don't know what else there is to leak. i don't believe the president has anything to do with this, or knows anything about it. his russian connections brought up in the past is a couple trips to russia to look at business deals in the '90s. >> wouldn't an open investigation almost silence the critics then? >> there is an investigation. it will continue. >> in the senate. the house is not doing it anymore because the guy stepped down. >> the fbi is still doing it. >> hold on. one more question. that is that the timing of the way it happened. i mentioned earlier that -- knowing trump and he's not a politician, he's a little bit mercurial, even maybe a bit -- he can do things impulsively. he may not have done this based on the investigation. he may have just decided i am

sick of this guy, he was on tv again saying he was nauseous of hillary not winning, so he may have said i'm just doing it, or was it because the investigation was getting more intense? >> look, comey should have been fired. if anything, she have been fired early on. that's irrelevant at this point. i don't think anyone can say comey was doing a good job. he was doing everything that an fbi director shouldn't do. >> people say when did you become part and parcel of what's prosecutable or not. >> as somebody who knows him, does it trouble you as a citizen when he says one thing or his people go out and say one thing in terms of explaining to the public and the voters the rational for why he made a particular decision, in this case firing comey, and then

effectively you hear another story, in this case from him yesterday, suggesting that the folks that were talking on his behalf were lying -- he didn't say that, but they had to be. >> you have followed politics for a while, right? >> i have been. >> you were born at night, but not last night. so is spinning the story a way to the advantage of the administration -- you have never seen this before? >> i would listen to him. i wouldn't listen to everyone else. listen to him. >> do you think the other people were off the reservation? >> i'm not saying they're off the reservation, but it gets lost in translation. he's the president. he's the one we should listen to. he's the one that sent the message out, why he won. that's what we have to depend on. >> andrew -- >> where do you think we are in terms of tax reform? >> where are we? >> yes. >> relatively good shape. i think there will be some small changes, but i think it will move ahead. i said this before on this show

an others, that nothing else has worked to get the economy going. we had low interest rates forever now. that has not spurred the economy. okay? the deficits, i personally don't think deficits are a maimer issue. i don't wake up at night worrying about deficits. i heard for 40 years, your children will be in debt, your grandchildren will be in debt. >> you just don't care. >> i don't think anyone cares. it doesn't affect anyone in day-to-day lives. i truly believe the only way to spur the economy is tax reform. then the deficit also take care of themselves. >> how terrible do you think the economy is today? >> i think it's same it's been for the last 5, 10 years. >> do you think we're at full employment in the country? >> well, you know, look, when they give the employment numbers, the unemployment numbers, it looks good because so many people left the work force. i can't tell you. >> do you think it's a function

of demographics or something else? one of the main reasons that people left the work force is functional age issues. >> no, one of the reasons functionally is there were no jobs for them. they left. >> you've seen the numbers of how many people between 30 and 54 that are not in the work force. >> a third, a third, and a third. i'm still thinking about the way things -- i can't get it out of my mind. remember gruber with obamacare, no, don't call it a tax. spin it. remember the iran deal, they were saying no, we have to say -- all the crazy -- it's just rampant in politics. it's naive to think they won't spin it in a way -- >> i'm not agreeing that politicians spin. i'm suggesting that this is -- >> you are shocked that they weren't forced -- you can keep your plan and doctor. you're shocked that there's desemibling going on in

washington, d.c. when did this start? january 20th. >> the repidity of statements made within one hour, contrad t contradicted the second hour -- >> we all have to learn the anderson cooper eye roll. i'll do it now. we all have to learn that. >> do you think we'll see tax reform by the end of this year? does it matter? >> it would be nice to see it at end of the year, if not the first quarter of '18. it's very important to get it done. this is the only chance we have to spur the economy. and you put money in peoples pockets. they have more money to spend. that's going to help every industry and help every american. i don't see how it doesn't get done. it must get done. >> you want me to roll my eyes at what he just said? i have respect for this gentleman. >> no, just in general. have you practiced it?

>> i think of you, and then i roll -- >> we do it all the time. >> howard, we need you. >> if they have all camera shots of mow lookie looking at you, t where we would be. >> you have done that before. you have done that. >> hey. >> i feel like the moderate in this group. >> interview us. howard, thanks. >> my pleasure. >> great to see you. coming up, when we return, the u.s. and china reaching an agreement to expand trade in beef and chicken and increase access to financial farms, and quarterly results coming out from jcpenney, a day after macy's stock went lower. and then we'll see if the retail wreck extended into april. the government's retail sales data numbers come out. you're watching "squawk box" on cnbc as i roll my eyes.

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opec -- talking about -- that's factual? >> absolutely factual. >> stronger the coffee the less the caffeine? >> bingo. true.

when we say stronger, that's the longer they roast the beans, so the more it has that rich flavor, the less caffeine there is actually in the couaffeine. does it roast the caffeine out of it. >> juan valdez here. that's cool that you know that. >> let me get my starbucks second of the morning. i need it. >> do people know they bring that to you? >> my diva behavior? >> yeah. they bring that to you from starbucks every morning. you don't pay. >> my people. >> your people do. >> mu his people are allowed to look at him. yours aren't. >> you just did. >> steve harvey got us going. to write a letter like that. i just love that. the diva behavior. >> keep the camera on me, please. >> exactly. >> get back to -- hi. >> hi. >> we'll talk with you. >> we are? >> opec set to meet later this month. the meeting could have a huge impact on crude prices. they'll decide whether to extend

the production cut. >> that's right. there's three possible outcomes here. opec could go out with an output extensi extension, deeper output cut or back off and start pumping again since apparently shale producers have been doing exactly that. now, reactions to these scenarios and extensions may be enough to keep us supported, but it won't necessarily take us higher from here. you need that deeper cut to get back over $50 a barrel. if they step back from the deal altogether, a lot of analysts think crude could move closer to 40, even with the anticipated summer driving demand creeping back into the price. but there's a bigger theme to think about. that's the fact that opec, the saudis are starting to look desperate. it was a game of chicken. they did blink first with the cut. now the cut is not keeping the price high enough. they'll look weaker if they cut more to bolster the price for an aramco ipo. the fact they're ipo'ing at all, it shows they're not in control of the market the way they once

were. the shale producers, they brought their costs down. so $40 a barrel is not ideal but it won't crush them either. that's why the meeting on the 25th is really important to see how hopec will act and what the saudis will do. people are worried that they lost control. >> jackie, we have heard already that a couple other nations, iraq and another nation were considering standing by saudi arabia with these production cuts, saying they would extend them, too. i had not put it in the context of the ipo for aramco. other nations may be thinking about it, why am i helping you? >> and the timeline is important. it's not like the ipo will be immediate. they're looking at 2018 possibly. that's a long time to try to extend this price and keep the cuts going to keep the price up to just benefit that ipo. you're right. it would only benefit them. but it shows how much they are being squeezed and how they need that money. >> thank you. >> great to be here.

when we return, the author of the new book "everybody lies" he studied online search behavior at google for five years. for example, wives speaking about husbands on social media used terms like the best, my best friend, amazing. the greatest. mu wi but wives who searched google used terms like annoying, a jerk, annoying. that's next.

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welcome back, everybody. our next guest has studied google's search data for the last five years and his findings shatter a number of stereotypes. or even things we think about ourselves. he even describes google as a digital truth serum. let's bring in seth stevens davidowitz. he is a former google data scientist, a "new york times" op-ed contributor and the author of the book "everybody lies" big data, new data and what the internet reveals about who we really are. seth, thank you for being here today. >> good morning. >> we've been playing around with this today. people say things about themselves, they say things about their spouses or their kids on social media, but they are then turning to google and searching for very different things and this is just the beginning of what this tells us about ourselves and what we're willing to admit. >> that's exactly right.

people are constantly lying. they lie to friends, family members, to surveys, to social media. even to themselves. but that tends to be really honest with google. they tell things to google they might not tell anybody else. >> what? >> this is really an interesting interview. >> are you like? >> i mean, how do you -- >> it's a horrible thing that you're saying right now. >> okay. >> really fascinating. >> yeah, yeah. okay. i got that. he's lying, okay. >> how you do know this? what are they searching for? what kind of examples can you give us from google that we would never guess from what we would be willing to admit to other people. >> just totally bizarre things about things that i probably can't say on cnbc but also -- >> horrible. very disturbing. >> yeah, some disturbing things. some racism that you don't usually see in parts of the country that you wouldn't expect to have high levels of racism. anxiety. insecurity. that people don't normally talk about and definitely don't talk about on social media. >> i mean the things i was

thinking were illnesses. maybe something embarrassing you wouldn't want to admit. >> they definitely -- people do that a lot. and a lot of health problems don't make it into the traditional sources. you learn a lot, i talk about in the book, a lot of health conditions that people really struggle with and think about a lot and are paranoid about and look for a solution but people don't -- >> dandruff or toenail fungus -- >> or even things you wouldn't think about. embarrassing areas that there are a lot of opportunities for business. but people don't know about them because people don't talk about them. >> you've any"liar, liar." >> yeah. >> the heavy set guy walks in the morning and he goes, hey, what's up? your cholesterol, fatty! it's horrible. i mean it's horrible what you really think. you get on the elevator and you can't -- if you ever said -- we all know this. >> there is some value to lying i think is what you're getting at. >> there is. and everybody does it. >> everybody does it. but there is, if you want to know what's actually going on,

if you're in business and you're trying to figure out what's really happening you want to know the truth and you can't just trust what people are telling you. >> is that data available for businesses to mine and try and find out some of these things? >> yes. the source i suggested google trends which is still an underused source, more and more people and businesses are using it. but not enough. considering how powerful it is. >> what other things would you find on google trends that a business might find really useful? >> definitely marketing. i played around surveys way less predictive than people think. when you ask people what they're going to buy in the future, it tends not to work out. but you can see from what they're searching how high car purchases might be, or house purchases, because in the days leading up toit, people tend to turn to google. >> this is something every viewer out here, what do you do with your search history? meaning do you delete it? do you search using anonymous, you know, go into the private place or whatever it is, or do you have your search history for the last decade living on google right now? >> it's living on google.

i think all that data is anonymous now so i think it's pretty safe from a privacy perspective. >> but your search history did not -- no, no, if somebody were to hack your account -- >> if someone hacked your account yeah. >> your search history, not just your e-mails, your search history for the last decade. >> yeah. if someone hacks my account i'm screwed. but -- >> pretty remarkable, though. because that's even -- >> forget about e-mails. >> what were you saying if something that doesn't -- what were you saying? >> incognito. you can go incognito. >> and if you do, isn't it still there though? >> i believe your search history would not be there. >> you can search incognito or other services which -- >> it's called incognito. >> oh. you don't know about incognito? >> i don't. >> i think you do. >> no i don't. will you show me how? do you get it on the app store? what is it a browser or something? >> it's part of google chrome. we talked about this -- >> no. >> the privacy settings. >> i know about privacy settings. >> yes. >> i don't know about incognito. do all the privacy settings work the same? >> we will talk about this

later. there's reasons why i think you might have used incognito before. >> seth, it's fascinating -- >> i don't even know what that is. >> your book is going to make people really sit up and pay attention to this. especially marketers or businesses that you mention. but we want to thank you. part of google. your book is called "everybody lies." thank you for joining us this morning. >> thanks very much for having me. >> coming up, president trump has promised to renegotiate trade deals and the senate just confirmed his trade representative robert lighthi r lighthizer. congre wilbur ross joins us next. "squawk box" will be right back. stay with me, mr. parker. when a critical patient is far from the hospital,

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good morning. the u.s. reaching a trade deal with china. the first steps to boost u.s. exports being hailed a success. commerce secretary wilbur ross joins us in a first on cnbc interview. the futures pointing to a lower opening on wall street. we will get you ready for some key data that is due out in just 90 minutes' time. we're also going to talk about where you can be making money. and a message to the bosses out there. more than half of your employees are looking for a new job. the cfo of adp joins us with some new data that may shock you. the second hour of "squawk box" begins right now. live from the beating heart of business, new york city. this is "squawk box." good morning. welcome back to skwk skwk right here on cnbc, we're live at the

nasdaq marketsite in times square i'm andrew ross sorkin along with becky quick and joe kernen. we're all hanging out together. i think that was the first time in awhile. >> it's permanent now. >> take a look at the futures right now. dow looks like it would open off about 35 1/2 points. nasdaq down as well close to nine points off the s&p 500 looking to open down by five points. some of the big headlines of the morning. we're now about 90 minutes away from two key economic reports. the consumer price index. also retail sales for april that comes out at 8:30 eastern time. retail sales rose 0.5% last month with consumer price index up 0.2%. anthem has lost a court battle to keep cigna from terminating their merger deal. a delaware judge requiring them not to end the transaction. anthem has until noon monday to decide whether to appeal. cigna pulling out of the transaction. it accused anthem of following a failed strategy to win regulatory approval.

separately a judge has ordered walmart's ceo to submit to questioning in a lawsuit surrounding alleged bribery by the mexican unit. he was president when the retailer was accused in the shareholder lawsuit. walmart said the company is reviewing the court order and deciding on the next steps. remember when we talked about that story, probably i don't know, four or five years ago when that first broke. we want to check out the market drivers that are moving things right now. dom chu is right here with us on set with that. dom? >> there's not a lot that's driving the market right now as you can tell by all the volatility or lack thereof. if you take a look at one of the reasons why we are shrugging off some of the stuff coming out of washington, it's because other parts of the market are showing decent signs of strength here. take a look at corporate fundamentals. the s&p 500 earnings season is now 90% done, pretty much in the books at this point. if everything, the rest of the 10% of the companies come in as

expected you'll get 14.5% earnings growth. you'll also get over 7% sales growth. so there is a case to be made, guys, that you have better corporate fundamentals although the caveat here is the first quarter of last year was a pretty bad one, so the easy comparisons this time around maybe make for some of those big moves higher. the other thing to watch as well as perhaps a balanced positioning in the marketplace overall. over the last perhaps 13 trading days you've seen about a 1% trading range up that's high to low for the last 13 days. s&p 500 etf trading volumes, the spider, the most active etf out there showing some trending lower in terms of volumes overall and futures movements premarket showing people aren't taking wig directional bets or hedging one way or the other. it's not just the stock market, guys. take a look at the bond market as well. if you look at the high yield market and the investment grade bond market, you're talking these two etfs, the i-shares,

iboxx, heigh yield they're up maybe 1% to 1.5% overall just year-to-date and the high to low range is 2.5% to 3%. there's nothing happening. >> it's like a beach ball trying to hold it down underwater. remember they on the s&p when he said don't chase this rally. and we're 2394 now and it hasn't given you a 2% pullback, much less a 5% or 10% pullback. if you're not in you're like watching this going -- >> getting more and more anxious waiting and waiting. >> it's also about the idea that there is perhaps an amount of dry powder or cash on the sidelines where people feel like if there's any dip whatsoever they're not taking a massive move on it but they request still buy a little bit every day. >> it's very nice. >> i was going to save this for a second here but you know i was down at the players. >> yes. >> on monday and tuesday. and it is the -- >> that's really nice.

>> it is the fifth major. but i brought you back a sweater. >> that's really nice. >> a sweater? >> it's a pullover. it's not a fancy one. but i figured i would get -- >> it's fancy. >> but i wanted to bring it back for you because i know you're a huge golfer. >> did you bring anything for andrew? >> i didn't bring anything for andrew. >> what are we, chopped liver over here? >> when there comes a circumstance. first of all they don't let me in the field very often. when i do go in the field the next time, i will find something -- >> how about we share this? >> what would be an event you would bring back something for andrew or for me? >> oh, that's a good one. >> i don't think we want to -- this could get -- >> we can share this. i can wear it on monday, wednesday, friday. >> what about becky? >> no it's a guy's thing. >> week to week. did you talk to dustin johnson off camera f >> i did. >> what did you think. did you get to see him swing at all? >> i was up close and personal. i was watching him on the driefrg range so we were sitting there just a few feet behind

him. you should know that he has a lot of help, i guess. i mean there's a lot of folks out there trained on what dustin's doing. >> yeah, but he's the only one swinging. >> he's the only one swinging. >> 400 yards. >> when butch harmon is there, teaching his swing and everything else, it's -- >> someone made the point that, like, mcilroy did not look like he has a trainer now, now he looks like an athlete. this is the first time you've brought an athlete in that was also more talent with golf than anyone else. he's 6'4". >> so he is a very tall, lean, athletic guy. >> right. >> he's a physical specimen. there's no doubt about it. you kind of understand why the guy can hit the ball 330 yards. >> right. >> because he's just -- he's just got physical leverage. >> he's unbelievable. >> thanks. >> you're very welcome. >> he's good. he's healthy for the u.s. open. >> he is. still the world number one. >> where did he win last year? >> oakmont. >> that's right. >> nice place i hear. >> i hear it is a nice place. >> nice place i hear. >> i wouldn't know. >> dave evans has an idea for

this. whoever's tease week it is gets to wear it. >> oh. >> i like that. >> the prize. that's the prize. >> dom, thank you. >> you're very welcome. >> great to see you. in washington news this morning the u.s. striking a deal with china to open its borders to u.s. beef while cooked chinese poultry is closer to hitting the american market. this is all part of a bigger trade deal covering ten different points to try and improve u.s./china relations. that is still being worked on. joining us right now from washington is commerce secretary wilbur ross. and mr. secretary, thank you for your time this morning. >> well, thank you for having me on. >> you know, i think this would come to a big surprise if you had asked people 100 days ago if they expected -- you know, who they expected our first trade deal would come with. to see this, to see this plan that's been put forth, after all the rhetoric leading up to the campaign and towards the beginning, how do this plan come together? >> well the way it came together is we began the dialogue down at

mar-a-lago and we divided the economic part of it into a couple of components. the first one was we said we really needed deliverables during the first 100 days, so that this became not just a debating society, but rather something that would have tangible achievement. so we then started working out with the chinese exactly what we could achieve during this very early period and we came up with some very big things, as you know the beef cattle, and the lng and some great progress in financial services. that's a lot to accomplish in the very short time that we've had. >> it is kind of amazing, when you read through some of the numbers, $2.5 billion industry, the beef industry that's going to be getting opened up again. it's been shut down for many, many years. does this do something to lessen our trade deficit with china? >> well, sure.

any time you increase exports without materially increasing imports you're going to help your trade deficit. but the most important thing, i think, is that the beef, the genetically enhanced foods, the beef and some of the financial service things have been hanging around for quite awhile and never really delivered. the beef thing's been going on for more than a decade. what we wanted was to prove that we're turning words from before into actions now that's why as you notice we set a specific date in july by which these events would occur. in trade deals they usually talk in years not a couple of weeks. >> it is kind of amazing to see these things happening so quickly. every good deal i believe both sides will walk away with something that they feel like they have accomplished.

something they have won. what do the chinese get in this if they are opening their doors to more imports but not exporting more goods to us. >> we open the doors for them in the sense of cooked poultry parts. those will be able to come in now frankly the american agriculture industry doesn't think that's going to be a very earth shattering development. but that's one thing they got. the second thing is that we've agreed to treat their financial institutions, their banks the same way as we evaluate other foreign banks when they want to come and open up activity in the u.s. so clearly china, whose banks are among the largest in the whole world, wants access to the u.s. banking market. and while there's no specific date for that, as long as they can comply with the normal rules, they will get access.

and then the third thing is, we agreed, each, to go to the other foreign direct investment activity conference. in the case of the commerce department, we run an event called select usa summit. that will be june 18th to 20th here in washington. we'll probably have 2,500 companies from overseas, and economic development people from the various states. meanwhile, next week, the chinese are hosting a forum, not an investment conference, but a forum on one belt, one road, which is their sort of transportation and infrastructure initiative. so everybody got something. but from our point of view, it's the first time we've really gotten tangible things in the food area. and those are very, very big deals. i think you'll find that the american cattle industry, and

the american biotech chemical industries are going to be quite happy with these developments. >> what does this mean now that you have gotten this accomplished? what does this mean you'll be turning your attention to next? is it nafta? >> well, no. we're not finished negotiating with china. remember, this is a multiple year project. now that we have these out of the way, we're going to chart for a one-year program. maybe some way stations along the way for that. and then if we make continued progress in the one year, then we'll go for a longer period, and maybe even eventually some sort of more comprehensive treaty. >> wilbur, when it comes to china, the prestige, and the agreeing to go to their forum next week, how important was that? i know that's something american administrations have not done in the past. why have we avoided it before? what was the leverage they were trying to use? >> well, you had to give something, and it seemed to us

that this was a reasonable thing to do. many of our allies, japan and the uk, for example, are going to the conference anyway. it's not really a conference, it's really more a forum, to explain about what they're trying to do with the one belt, one road. so it's a symbol of goodwill gesture. just as is their sending a delegation to the commerce department direct usa summit >> have you been surprised by the speed with which you were able to accomplish the deal that you've set forth as it is right now? >> well, i have a new boss who's very demanding that things get done on time so i'm quite relieved that we had some tangible achievements. >> yeah, you really need a job, wilbur. i don't know -- you know, we don't need you back on unemployment insurance or something trying to make ends meet. >> i know. it's amazing what you can do on government pay.

>> so will burkes let's get back to nafta, where does that stand, when would we or should we expect to see any potential renegotiation start to take place? >> well, as you probably noticed, bob lighthizer, my friend, was -- got through the senate last evening. he was confirmed as the new united states trade representative. some of the people in the congress had been holding the giving of the 90-day letter that really starts nafta, they've been holding that hostage to lighthizer's confirmation. so hopefully now that that's out of the way, perhaps next week or shortly thereafter we can get the 90-day letter agreed with congress, and that's what will really trigger the negotiations. but meanwhile i have coming in on monday my counterpart from mexico, the secretary of commerce from down there. so hopefully we can start

thinking a little more clearly about schedules, and getting going. >> wilbur, would you just characterize the environment, you know, when you go over for meetings with the president at the white house. business as usual? i mean, is it -- you know, there's all this swirling around. but is it not discussed? is it more just we're going to do this, we're going to do that. we're tax reform, obamacare repeal, is that -- is that truly what's going on? or, or, you know, is there -- are there diversions? are there distractions? >> well, in my dealings with the president, he's been very, very focussed. very, very organized. very, very oriented toward the immediate matters at hand. you know, while the tv and the newspapers make a big deal out of all the side shows, meanwhile, every day there are foreign leaders coming in, every day there are decisions to make, every day there's progress towards the tax bill, every day

there's activity in my sector, in trade. there's a whole country that he's running. he's not sitting there mostly all day worrying about what are the media going to say about this or that. >> well that would be my advice to him. and i mean, you hear anecdotally that the president watches all these cable stuff at night, and i -- i can watch like one show, typically, at night -- i don't even just from my own sanity, i -- i don't do much channel surfing. you know what i mean? and i don't read certain newspapers either. but maybe that's the problem with the country right now. we're all in an echo chamber reading and hearing what we want to hear. but he seems to like to hear what his opposition is saying and i don't know whether that's -- sometimes it's better to ignore that, i think. >> well, i don't know. i think you can easily blow out of proportion the importance of all those activities. the government is functioning.

the government is making progress. despite everything the media says. stock market is doing fine. every chief executive that comes in to see me, and there's quite a few, the animal juices are back. a number of them have said that they've begun hiring again. because they're anticipating that business will get better once our regulatory reforms get completed. once the tax reforms get completed. and as we make more trade deals, and as we liberate american energy. and that's part of the other good thing that came out of the china deal. this idea, china is the world's largest buyer of lng. now that market is really going to be open to the american producers. and as you know, they've had a pretty rough go of it in recent years. so if both the cattle and the lng sectors should get very good boosts from this. meanwhile, wall street's getting

some help. the chinese have agreed by the 16th of july to give licenses to two u.s. firms in order that they can be able to do bond underwriting, and bond trade clearing in china. so that's a very big breakthrough for the american investment banks, and similarly, the chinese have agreed to clear out the problems that have been besetting the u.s. credit card companies, and the other electronic processing companies. so these are big events affecting quite a few industries. what hasn't been done yet, and will be part of the agenda for the subsequent talks would be the rest of manufacturing, the rest of the economy, the digital economy, all sorts of sectors that take a little longer to negotiate because they're even more complicated. >> mr. secretary, just as a

question of logistics, are we ready to export liquefied natural gas or is that something that requires building more infrastructure to get us there? >> well, there's nor infrastructure being planned and there's some being constructed right now. remember, under the prior administration, there was something over a dozen applications for lng export facilities, and they had been sat on by then-secretary of state and by the president, by the department of energy, presumably that will be cleared out now, and we will get going. >> mr. secretary, we want to thank you very much for your time. it's always a pleasure speaking to you. >> thank you. good to be on again. >> good to see you. >> a half hour, too. sponge bob comes on, i watch -- >> that's all you can watch? >> yeah. what about you? you're never home, right? you're always -- >> always out and about. >> working on a career. >> flitting about.

>> that's a good answer. >> that's a good answer. >> when we come back -- >> you're locked on that. >> we'll be watching -- key data points this morning, include cpi and retail sales. we will talk markets right after the break. and later, bosses you better listen up, your employees are looking to leave. you'll be surprised at just how much money will have them walking out the door. the cfo of adp will join us with some new jobs data. "squawk box" will be right back. ? apparently, i kept her up all night. she said the future freaks her out. how come no one likes me, jim? intel does! just think of everything intel's doing right now with artificial intelligence. and pretty soon ai is going to help executives like her see trends to stay ahead of her competition. no more sleepless nights. - we're going to be friends! - i'm sorry about this. don't be embarrassed of me, jim. i'm getting excited about this! we know the future. we're going to be friends! because we're building it.

big day of data. coming out today, let's talk markets. scott clemens, chief investment strategist at brown brothers harriman and tom lei global adviser founder of managing partner and head of research. we've been making note of the low volatility in the vix, and trading ranges, no pullbacks. does it indicate something? or is it -- is it smooth sailing, tom? >> well, you know, i think low vix is appropriate given where spreads are. so i don't necessarily think it's a time of complacency. and it's probably ending up having a positive effect on markets, because for hedge funds, value risk is low when vix is low which means they're going to be carrying bigger positions. >> if you didn't get in on november 9th, it's been tough to

find. people have been waiting. >> yeah. >> and there just has not been -- does that mean go ahead and just keep averaging in as- >> well you know it's a pretty narrowly led market. we've all talked about how narrow market leaderboardship is. bad news is narrowly led markets are going to be fragile. when it does leadership can lead down as well. that means within the market there are plenty of opportunities still so it's not too late. >> we're looking at a chart where there have been a couple of periods of acquiescence after the election and interspersed in that really quick gains. so we're back in sort of a, like you're not really sure which way it's going to break out at this point. you think it's a pause to refresh? or is it having trouble moving higher? >> you know, the market's done a lot better than i would have expected. you know, given what the curve's done and oil being lower.

>> the yield curve? >> yeah, the yield curve has flattened and oil is lower. so i think that the equities have really absorbed bad news really well. i mean i think it's actually obviously quite a bullish implication. >> politics notwithstanding, i still think this is a pretty fundamentally driven market. we've talked about the rebound in earnings. the fact that it's driven largely by sales. that's a quality indicator. i do think we're in sort of a pause that refreshes. we've got most of the first quarter earnings reports in. we're going to get a couple of big data points on the strength of the consumer starting this morning at 8:30. this is sort of a pause before we get more data from the fundamental earnings driver of the market. >> so the consumer can be strong but it doesn't mean they're shopping at macy's. >> that's correct. that's what we've seen. shopping elsewhere. >> shopping online. >> yeah. >> small business confidence. there are things you said politics notwithstanding there are things responding to what is a more business friendly environment. >> yeah.

i think that's right. when you sort of push aside some of the media headlines, it does seem like there's a lot of adults involved in government. so, you know, that's a very positive signal for business. i think so it's appropriate that people are optimistic on the ceo side. >> particularly for smaller businesses. larger businesses have workarounds no matter what the political policy regulatory environment is to a much greater degree than smaller businesses. so it's a friendlier environment for smaller businesses no question. >> do you think there's an animal spirit story? >> yes. >> you think it is right now? >> kwae. >> in the markets or on the real economy? >> in the soft surveys so i think it's very much so in the -- we haven't seen it play out necessarily in the actual hard data. but what's interesting even for small businesses, you know, regulation is no longer the number two issue for them. it's become labor quality. so i think that the sort of the insipid story now is that wage inflation is actually starting to really differentiate stocks. it's a headwind for industries

like retail. >> when -- is that just a change in the perception of what's going on? meaning you look at the survey, right, regulation, moved from one to two. it's not that somehow regulations fundamentally changed the past three months. it's just the perception of this issue. >> that's right. you're 100% identifying an intangib intangible, which is it's a perception change. >> it matters, though. i mean for eight years we -- >> i'm not disagreeing with you. >> for eight years we tried to make it tougher for business, but weren't successful because business thrived anyway, the oil sector thrived. now they're trying to make it better for business but they may not be successful at that either.

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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. good morning. welcome back to "squawk box" right here on cnbc. we're live at the nasdaq marketsite in times square. among the stories that are front and center at this hour, corning has been the first recipient of an award from apple's new newly announced advanced manufacturing fund. corning will be awarded $200 million from the fund which is designed to encourage innovation among manufacturers. glassmaker and apple have collaborated for the past ten years. it makes gorilla glass which is used in apple's iphones. when the announcement was first

made i think there was some cynicism about it given the size of the billion dollar fund relative to the amount of money that apple has in total. but, i like this idea. i think this is a good thing. and it could have a ripple effect. and if others get on board and do it and it impacts small towns around america i think there's something to it. i just -- >> and number one -- >> i just want to be involved -- >> i want to tell you, i was thinking about it. i know we're professionally skeptical always but i thought that -- >> well, so the small towns and flyover states, you give us a -- you actually care about? >> i do. >> okay. we're evolving. i think we're all making progress because of -- we would benefit from being with each other. >> we do. we benefit from being with becky. >> and becky. the reason she's in the middle. >> retailer nordstrom's trading lower in the premarket this morning. here's what's going on. latest quarterly earnings and revenue did beat street estimates but it had a w50ider than expected drop in comparable

sales. fiat chrysler recalling 1.25 million trucks. most of them in the u.s. the voluntary recall will fix a software issue that helps troll the restraint system. the automaker says it is aware of one fatally related -- one fatality related to the issue, which is scary. the vehicle in question, 2013 to 2016 model ram pickup trucks. if you own one, call the dealership. >> all right. people in streets of upstate new york yelled run, forrest, run, to a real life forrest gump who is running across america for a good cause. rob pope is running coast to coast for the third time in less than a year. he says he's combining his level of running and forrest gump to raise money for two charities. the world wildlife fund and peace direct -- he's got the beard. with just a sleeping bag and a tent pope started his journey

last september in the same place as forrest did, which is if you've seen the movie in alabama. from there he went to los angeles. then ran back to northern maine. now the 38-year-old is running from syracuse to portland, oregon. pope says he's paying for his running adventure with money he had saved to buy a house. pretty -- >> miles on those legs. that's something. >> that is something. >> -- what the number is? jcpenney shares are out and there's a lot of different moving pieces on this. for the first quarter they're reporting a net loss of 58 cents a share. the street was looking for a loss of 21 cents a share. but there are a bunch of additions and subtractions with this. it includes a loss of 71 cents a share for restructuring charges associated with store closings, and my computer just went away. so i lost the rest of it. >> hmm. >> firm -- 71 cents a share includes gains for six cents a share for the benefit of tax

impacts. >> right. >> sorry the whole thing just shut down. >> stock's.a little bit. net sales $2.7 billion in the first quarter compared to $2.8 last year. comparable store sales down 3.5% for the quarter. we're going to drill down through those numbers and bring them to you when we come back right after the break. in the meantime, a message to bosses out there, more than half of your employees are looking for a new job. we have new data from adp on those companies giving some notice. and then later some announcements at the microsoft build conference yesterday to tell you about. capturing the attention of investors and sending that stock lower. we're going to get an outlook for the company from an analyst in just a moment as we head to a break take a quick look at the u.s. equity futures dow off about 21 points. we'll be back with jcpenney and a lot more. the show's about to start! how do i look?

like a bald penguin. [ laughing ] show me the billboard music awards. show me top artist. show me the top hot 100 artist. they give awards for being hot and 100 years old? we'll take 2! [ laughing ] xfinity x1 gives you exclusive access to the best of the billboard music awards just by using your voice. the billboard music awards. sunday, may 21st eight seven central only on abc. listen up, everybody, this is a message to all you bosses out there. more than half of your employees are looking for a new job, and they'd leave for less money than you might expect. the adp research institute has listed the disconnects that employers and employees have. turns out that 63% of workers might already have one foot out the door. we are joined by jan

significantman, adp's cfo and a member of the cnbc glob cfo council. also steve liesman is here. and jan, thank you very much for joining us. >> so glad to be here. >> this is pretty intriguing stuff. yesterday we spoke to david novak who said that something like 62% or 72% of all employees -- 70% of employees are not engaged. >> yes. >> your finding is even more concerning. even if they're not engaged, they are ready to leave. what did you find -- >> yeah, so this year for the second time we launched research study called evolution of work. the key part of the methodology is we are asking employers and employees the same question. and check -- >> it's the newlywed game for jobs. >> and one of the questions we're asking, of course, are employees willing to look for other jobs? and what are employers thinking of their employees looking for other jobs. we found an interesting mismatch. about two-thirds of all employees really are open to

switch their jobs. 27% are actively looking. but the rest, 40% are open to be approached. and employers actually have the idea that as the percentage of actively looking employees is higher, and the passives are lower. so the disconnect is about 10%, 15%. >> when you break it down and say that 40% are just open to somebody approaching them that sounds like it would be most people at any point. >> but half of all employees have left their job just because they didn't like it. and half of them would be also willing to switch a job for the same amount of money if they could. and -- >> they don't even need a pay raise to walk out the door. >> that's right. and on average they would expect a pay raise of about 13% to switch their jobs. so the exiters, particularly in light of a full employment market are quite low actually and that is one of the major findings at this report shows. >> the dating game? the newlywed game. >> because you come on the newlywed game and you ask the

husband and wife the same questions. >> yes. >> and so this is similar in that way. why would it be the dating game? >> i thought that's what -- >> but we could get some music. >> like where is the strangest place you ever made whoopee or something -- >> right, right. >> is that a myth? >> i think it is a myth. >> i think it might be a myth. >> so getting back on track with the actual interview at hand here, what does it tell us about the job market right now? which is why i was interested in this study. you guys have been tracking this. by the way, what's cool about this is it's a combination of survey data. but also using adp real data about employees. >> yes. >> what does it tell us about the tightness of the job market that people -- how many people are leaving the percentage that are looking? >> well, as you know, and you have widely reported we have full employment right now. and we're seeing not only good job growth but rising wage levels, and a statistic that is not as widely reported is the employment turnover. and employment turnover over the last two years has actually steadily increased. this year in the last four quarters, we have seen an

average of 27% employment turnover. which is up from 23% -- >> that's a big jump >> so you can see that there's a higher churn in the economy and employers are more vulnerable to lose their employees. >> what should employers be doing? be preemptive about raises, about benefits, about the workplace that they're offering to their employees? >> or is it even raises that they're saying they would leave for no raise? >> clearly employers have an opportunity to do the best with their talents. that starts with being aggressive on recruiting. putting the wage levels at the correct levels, identifying the right compensation levels. but i also feel training and engagement are key components to retain the employees. and in the longer run, i think we have our opportunities at hand. because at a full employment market we will need more aggressive means to add more labor to our u.s. economy. >> you say 62% have one foot out the door? >> yeah, about 66% -- about two-thirds. >> okay, wait, one, two, three, four, five.

wow. i'm just -- you like your job? >> i love my job. >> so that leaves -- >> it's not me. >> four of us that -- what are you up to? >> you guys are -- >> what are you up to? >> -- on the side, i've also got the thing about i could be a fishing guide. and i could feed the family with the fish. i've ghot that -- >> you don't even count because this is just like a part-time thing for you anyway. i mean you got -- >> can i ask one more question of jan before we run out of time? which is, what about different industries and pay raises? what are you finding it takes in one industry versus another to attract a new talent? >> so, we talked about the 13% pay raise expectations. >> right. >> in the survey. in reality we measure of what the actual pay raise is. if you switch from a job full-time from one job to another, and we see for example in information technology, that prelim is aboutle 8%, high compared to two years ago so the tightness of the information technology sector is reflective in fast rising wages for jobs --

>> i'm actually surprised it's only 8%. >> it is lower than one thinks but you see how the other mix in these numbers of involuntary changes and voluntary changes, and so it adds up to 8. it's the highest in the industry. for another example, in construction industry. we saw slowing of job growth in construction. and you see that switch premium in construction is up to close to 6%. 5.6%, and with only 2% just two years ago. so our fear that the construction industry is not living up to its potential comes true in the wage development. >> jcpenney is really getting crushed. >> thank you. very much. >> i think they had malware in what they sent you so that you couldn't read what they -- i think it disappeared on purpose. >> perhaps. perhaps. >> 480 now it's down like 6% or something, 7%. >> steve, thank you. jan, great to see you. >> thank you so very much. >> we had that newlywed -- >> i know, music. >> up next, snap running into road blocks with investors.

the company was a one-time cnbc disruptor. we'll take a look at other companies who've made our list and find out, this used to be a segment, where are they now? we'll be right back.

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coming up next tuesday, cnbc is going to be revealing its disruptor list for 2017. and julia boorstin joins us now with a look at some past start-ups and where are they now. julia? >> well, andrew, as companies wait longer to go public the companies on our list are bigger and more mature. there are seven companies that have been named the disruptor 50 list for four straight years. airbnb, drop-off, pinterest, spotify and uber. combined worth more than $120 billion with uber with the highest valuation, nearly $70, down to drop box and spacex about $10 billion each. investors are looking to see which of these unicorns will go public next. renaissance capital saying we're in the best of all ipo markets. if you're not moving forward you

need to have your head examined. some companies are being pushed to go public with the risk of down round. now drop box has already selected its banks so it could be next to go to market. spotify says it's considering going public without an ipo selling shares directly on an open exchange. renaissance also says houzz is likely in the pipeline. now has 40 million homeowners in its network and has been expanding globally. airbnb which is reportedly profitable is expected to go public in 2018 and lyft may file before uber does. fewer pr headaches and a gm partnership and investment helping to drive its growth. despite a record market renaissance warned that snap's dramatic stock drop this week on those disappointing earnings could square off other unicorns at least for now. becky, back over to you. >> all right, julia, thank you very much. when we return this morning, microsoft making some comments yesterday at its annual microsoft build conference giving some weak guidance on

profit margins. that sent the stock down so should you be selling or is this a buying opportunity? we'll talk about that next. "squawk box" will be right back. 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. containing this information. read it carefully. i count on my dell small for tech advice. with one phone call, i get products that suit my needs and i get back to business. ♪

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the shlike a bald penguin. how do i look? [ laughing ] show me the billboard music awards. show me top artist. show me the top hot 100 artist. they give awards for being hot and 100 years old? we'll take 2! [ laughing ] xfinity x1 gives you exclusive access to the best of the billboard music awards just by using your voice. the billboard music awards. sunday, may 21st eight seven central only on abc. welcome back to "squawk box." we're going to take a look at some stocks to watch this morning. the big one we've been watching it all morning, at least for the past 20 minutes, watching it drop, jcpenney shares are slumping. slumping is probably an understatement, really, after revenue and same-store sales

came in below forecasts. a lot more on the retailer's most recent quarter in just a couple minutes. the stock now down even while we've just been talking about it. down over 9%. maybe we'll see which way it goes. check out shares of microsoft this morning. the company providing downbeat margin guidance at an analyst briefing on wednesday. the stock still having a solid 2017. it's up nearly 12% since january. unchanged this morning, but was down yesterday on that news. in the meantime let's take a closer look with morgan stanley equity analyst keith weiss. what do you think is going on at microsoft? >> i think in microsoft, the story is about the near-term versus the long-term. microsoft presented a very interesting long-term story for developers. they're really differentiating. there's three core cloud plays out there right now. aws from amazon, google and microsoft. and microsoft is presenting a really differentiated platform, giving the assets they can't get with the other clouds. they have existing users. they have 100 million office 365

users. you can't get that on the other platforms. they have existing assets on premise. what they call the intelligent edge and a distribution strategy. they have a sales force that they're saying to the isvs, to the developers, we're going to help you sell your stuff to the end customer. so that's very good long-term. but, goodness in the cloud long-term hurts near-term growth margins. so them expecting to do better with their cloud in the near term hurts the gross margin profile and that's what investors are disappointed by. they're expecting gross margins overall to turn upward in fy-18 and it looks like it's going to be more flat, slightly down year. >> you like their strategy long-term but when you think about where aws at amazon is relative to microsoft today it is a wide margin. by a wide margin. >> right. >> can they ultimately build products that compete with microsoft in a meaningful way? i know 360 we're talking about differentiating. >> right. >> but they seem to get into every -- you know, they're slowly, and somewhat quietly subtly getting into all sorts of people's businesses that we don't know. >> right.

the difference is that microsoft has pre-existing assets. >> right. >> that abs is going to have a really hard time replicating. like you're saying office 365. having 100 million existing users on office 365 is going to be something that amazon's going to have a really hard time replicating. having all the existing intelligent edge, the existing software, the existing platform that goes out into the physical world, that's going to be something that amazon is going to have a hard time replicating. so i think there's plenty to go around for both of these vendors. >> what about google? >> google is going to have to catch up. google has great technology. undeniably great technology. where they need to invest is in distribution. google is in a very similar place to aws. they have great claude technology. they don't have an intelligent edge. they also have to work on distribution. so amazon's got a lot of scale today. they've got good cloud technology. they have to have a strategy. how do they go on to that intelligent edge. google's got to do both the edge and the distribution. >> who's got the best security? >> who's got the best security

amongst all three? all three of them have good security. >> microsoft in the last year has outperformed both? that i didn't know. microsoft -- the stock price of microsoft is up 32%. >> right. >> and for both amazon and alphabet, 31%. did you know that? didn't you think amazon had outperformed microsoft? >> i did -- >> in terms of the market cap that's grown but the percentage for microsoft has been higher. >> got a higher market cap. >> and the market cap they've grown this year is up because i've just looked at a list of the top ten market caps. >> already higher. yeah. >> both over half a trillion. >> yeah, yeah. >> if you could own only one. >> mock is all three of those? >> microsoft, google or amazon? >> i think right now microsoft. microsoft is the underappreciated asset amongst all three of them. what we came away from the build conference that they had this year, they had this week, in the pace of innovation of microsoft i think is going a lot faster than a lot of investors appreciate, and they're

differentiation versus these other clouds is underappreciated by investors at this point. >> fair enough. thank you. excellent. thank you for coming in. when we come back we're going to talk retail detail. jcpenney, nordstrom's and other retailers feeling the pressure. dana telsey going to join us to help us understand the declines and where it all goes from here. and then later once the highest paid ceo, don blankenship was convicted for conspiring to violate federal mine safety laws at massey's upper big branch mine in west virginia where 29 workers died back in april 2010. he was just released from federal prison. literally just this week and he will be with us in the 8:00 hour. it's all yours. wow! record time. ♪ at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions

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taking inventory, we're just minutes away from a key read on retail as shares of major department stores take a hit. striking a deal. we came up with some very big things, as you know the beef cattle, and the lng and some great progress in financial services. >> what commerce secretary wilbur ross told us about trade

with china and the future of nafta. straight ahead. plus from serving time to your twitter time line. former massey energy ceo speaking out after his year-long prison term. he joins us first on cnbc as the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york, this is "squawk box." good morning and welcome back to "squawk box" here on cnbc live from the nasdaq marketsite. in times square. i don't know whether to say it or not say it. >> -- the crowd. loud. proud and loud. >> name after "the new york times." >> it was a great institution. >> it is a great institution. >> at one time gshs i'm joe kernen along with becky quick and andrew ross sorkin. >> one of the last great institutions. >> the futures -- i have the

hold. the futures right now down 26 on the dow. down 5 on the s&p. and the nasdaq down 6.5. treasury yields, inching higher. 2.38. 2.38. >> among today's top stories, take a look at shares of jcpenney, they have come under some huge pressure this morning. the retailer earned an adjusted six cents a share. analysts were expecting a 21-cent loss. you might think that that would be good news but if you check out the revenue it fell below the forecast. probably the biggest concern, same store sales down by 3.5%. the street was expecting sales to drop only by 0.6%. and that's why you see a decline of 9% in the stock right now. this comes as other department store chans take a hit once again despite all of the pressure we saw on these stocks yesterday. macy's down slightly. but nordstrom down another 5.5% and again jcpenney as you can see down more than 9%. we will have more on retail with the telsey group's dana telsey

in just a moment. >> the top tier guys can't cut it -- >> nordstrom beat expectations, and in fact by a long shot. >> think if you're jcpenney, and the top -- you know, you're trying to get off the stag ma of being jcpenney but even the ones, high end ones are having problems. and you're jcpenney to start with. kind of sad. you ever been in a jcpenney? >> yes! >> okay. all right. don't get defensive about it. but not in years, right? >> i actually have. not for -- i was in a mall. >> okay. >> shopping in a mall. >> okay. you done? okay. corning is the first recipient of an award from apple's newly announced advanced manufacturing fund. corning will be awarded $200 million from the fund which is designed to encourage innovation among manufacturers. the glassmaker and apple have collaborated for the past ten

years. it makes gorilla glass, which as you know is used in apple's iphone and shares of corning up about 2.4%. apple is still near its highs as the most valuable company on earth. >> the united states and china have reached new trade agreements. the plan looks to increase access to china for beef producers, electronic payments providers and for natural gas exporters. commerce secretary wilbur ross announced the deal and he just joined us in the last hour. >> we've been working out with the chinese exactly what we could achieve during this very early period. and we came up with some very big things, as you know the beef cattle, and the lng and some great progress in financial services. >> in exchange china will get access to the u.s. markets for cooked poultry products. andrew? okay. president trump explaining his decision to fire fbi james -- head of the fbi james comey in an interview with nbc's lester

holt. eamon javers joins us now to talk about it. eamon? >> good morning, andrew. this was kind of astonishing yesterday in this interview with lester holt the president swept away a day's worth of explanations with his aides about why exactly he decided to fire fbi director james comey. here's the key moment of the interview yesterday. >> regardless of recommendation, i was going to fire comey. knowing there was no good time to do it. and, in fact, when i decided to just do it, i said to myself, i said, you know, this russia thing with trump and russia is a made-up story, it's an excuse by the democrats for having lost an election. >> and in that sound bite right there you just heard the president dismiss two of the explanations from his staff over the past 24 hours -- previous 24 hours, his aides had said that he only made the decision after the recommendation from the deputy attorney general. the letter that was cited in public for -- as the reason for the firing. and also that this had nothing to do with the russia

investigation. there you just heard the president say that, in fact, he was going to do this anyway. and that also on his mind as he made the decision was the russia investigation. all of that causing controversy today, prompting his spokeswoman sarah huckabee sanders yesterday and the white house press briefing room to be on the defensive as to why she gave apparently inaccurate information about what the president decided and when he decided it. this morning within a few seconds ago, president trump has just been tweeting about all this and here's the tweet that he just posted. if we can call that up i'll read it to you. he said, as a very active president, with lots of things happening, it is not possible for my surrogates to stand at podium with perfect accuracy. so the president there acknowledging that his surrogates didn't have perfect accuracy from the white house podium. that's a surprise. he also has this -- the three dots there, the ee lip ses, which suggests to me there might be more tweets to follow and we might get more insights into the president's thinking about why

it was that they handled this in the way that they did. but, clearly, a controversy that's not going away any time soon. democrats up on capitol hill are calling for a special counsel. republicans for the most part so far have resisted that call. but there are investigations proceeding on a number of fronts. and we'll wait for more developments throughout the day guys. >> thank you, eamon. one of the questions, before we leave you, is this. if your really just look at the stock market in terms of the way investors are thinking about this. obviously a lot of people talking about the implications in washington. but most investors seem to be seeing past that. is that the right or wrong view? >> well, it looks like at the beginning of the trump administration you had this analysis from wall street that there were three legs of the trump rally stool. one was you were going to get tax reform. the other one was you were going to get stimulative infrastructure spending. and the other one is you're going to get massive deregular wlags. the trump administration so far has been able to deliver on the deregulation piece of that. they've done a lot of deregulation so far, announced

more, and they've halted issuing new regulations for the most part. so that piece is coming to fruition. the infrastructure piece looks a lot less likely. and then the big question is, will tax reform be implicated by all of this? and my sense is that republicans, being republicans, want to do tax reform. the question is whether or not this will absorb all the oxygen in the room and prevent the white house from exerting leadership on exactly how that tax reform comes about and when it comes about and pushing all the different factions on the hill. as you saw with their health care fight it does take some corralling from the white house to get these things done. will they be too absorbed by all of this to focus on that? that's the question. it's the old line of walking and chewing gum at the same time, andrew. >> okay. thank you, eamon. >> you bet. let's talk retail again. jcpenney joining the list of retailers with disappointing quarterly results. actually wasn't the results that were so disappointing when you looked at the earnings, it was the same store sales. joining us right now is dana telsey. she is the ceo and chief research officer for telsey advisory group.

and the punishment that these stocks are taking right now is kind of hard to believe. >> it is amazing. these stocks are taking a huge beating. the sales weaker than expected in the first quarter. most of them have said that business picked up, as you went into easter and even post-easter. into the month of may. these department stores need to reinvent themselves. they're going to look different today than they did a few years ago and it's not going to be as many 6 them. you have both nordstrom and macy's talking about farthernerring with the mall developers in order to figure out what the new department store looks like. what's the new number of boxes there should be? look at products. we're seeing more of these department stores focus on exclusive products. the reason why, so you don't price match. so it's a new competitive world. and they have to change. >> is the reality that we're going to see far fewer department stores in the i guess months and years to come? >> yes. you will see far fewer. and you're going to see more diversification of categories that are malls today. whether it's restaurants,

activities, dry bars and hair salons. you name it, it's not just going to be a place to buy clothing aloan. >> jcpenney is trying to point to that saying combined sales for march and april they were pleased with. they have the sephora store within a store concept, things like that. but what you're talking about sounds very different and a world away from where a lot of these department stores are right now. >> it is. and i think there's going to be more testing and more development and they're going to evolve over the next few years. there's a reason why, some of what we've seen, look how you're having big companies buy small companies. so companies like walmart taking a look at mod cloth and jet, what they did with jet.com. look at pbh and look what nordstrom has done. they've been ahead of the game in terms of partnering with smaller online entities. >> is this about people not going to 9 malls like they used to or at least not the top tier malls? >> there's the "a" malls and everything else. you're exactly right. the retail real estate, the best quality and the best locations, occupancy are high and those are doing better than those that are

the weaker performers where it isn't as great. >> what about somebody like jcpenney who a lot of times is not in the top tier malls? >> they're closing 130 to 140 stores. they have the categories like sephora, like appliances, that is a driver. and they're going to keep looking at their store base to see, they're still in some very good malls and they're profitable in even some of the lower tier malls. >> this doesn't say anything about the health of the consumer. people are spending their money just not in these department stores. >> yes and categories. we just looked at a chart over the past 40 years, what's going up? health care and housing. food and beverage and apparel, clothing and footwear, has sunk and the reason why, you have lower prices that allow people, prices are so low, you get it for cheap. >> amazon.com and other retailers. >> right. >> you would think macy's would be more insulated because they have a strong online presence as well. >> i think you need the online presence. can you imagine if you didn't have the online presence? there was double digit growth in online both at macy's and

nordstrom. >> just anecdotally i've found when i've gone into some of these stores it's almost a death spiral in some positions, because you go in, and you look for like shoes, you're not going to find shoes in the size you want, they don't have the inventory, they don't have anybody there to help you. so i mean i look at this comment from jcpenney and they were able toll beat the expectations on the bottom line because they slashed their sg & a expenses. the savings were driven by marketing, store controllable cost and saying we're not putting inventory there, we're not hiring the people, what happens at that point? >> you can't just beat earnings based on sg&a you need topline sales. none of the department stores were really able to deliver topline sales in this first quarter. makes it even more back end loaded. frankly when you think about the second, third, fourth quarter, the pilot rollout at macy's nordstrom with some of the new brands, what jcpenney is doing with sephora, you're going to need this momentum that's improved at easter to continue.

>> you're seeing fire sale prices, would you buy any of these stocks? >> i want to be in off price, some of the brands like pbh. looking at the department stores, nordstrom, kohl's, kohl's benefited with under armour, that's where you go right now. it's a tough world in department stores these days. >> thank you for your time. it's great to see you. >> thank you. >> just moments ago you might recall eamon javers shared this tweet from president trump with just a couple minutes ago. now we have a second part of the tweet. i'll read the beginning, as a very active president with lots of things happening, it is not possible for my surrogates to stand at podium with perfect accuracy. now the second part of the tweet, pretty interesting. maybe the best thing to do would be to cancel all future press briefings, and hand out written responses for sake of accuracy. interesting approach. i need to think through all of that. >> he had a tweet before that. before both of these that said the fake media's working overtime. >> overtime. >> right.

>> i don't know -- >> did you see the couple that's together -- >> what? >> 64 years, and they pass add way holding hands together? >> no. when did this happen? >> it was on -- >> been a couple of cases. not the most recent one. >> you want to hold hands now? >> i want to start now. >> you want to start now. >> i don't want to die. >> does that mean you guys are close to -- >> yeah. >> thanks, man. okay. coming up, results are in this morning. this earnings season might be one for the record books. we're going to tell you why, next. excuse me, are you aware of what's happening right now? we're facing 20 billion security events every day. ddos campaigns, ransomware, malware attacks... actually, we just handled all the priority threats. you did that? we did that. really. we analyzed millions of articles and reports.

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welcome back to "squawk box." first quarter earnings season is the best in more than five years. 72% of the s&p 500 companies beating estimates. joining us now, lindsay bell, investment strategist at cfra. i wish i knew that that was a good thing and not just that analysts were wrong. right? >> look, i get it. >> i would rather have year over year gains than beating analysts expectations. maybe analysts are part of the, you know, the game that they lower expectations, and beat them. >> hey, look, i get it. and you have a very good point.

people like me come on here every quarter and we're like hey, earnings growth is better than we expected. >> because we're clueless. >> because the bar is set much lower as we go into the reporting period. but that didn't happen this time. estimates were only reduced slightly. so this beat, 5.5 percentage points better than we initially expected. growth is tracking at 15% right now. and so, that's actually pretty impressive. given the fact that numbers didn't come down that much. normally we see growth beat by three to four percentage points. >> so s&p year over year growth was 15%? >> yep, for the first quarter. we haven't seen growth that fast since -- >> no one thought -- i thought we were thinking, wasn't there a time when people thought we could have a down quarter? not just lower growth, but actually negative growth? >> yeah, the first quarter of 2016, earnings growth bottomed declining 6.7%. that was the bottom of the earnings recession as people called it. and we successfully grown out of that. >> okay.

so, second quarter, what's the -- >> growth is tracking at 7%. which is pretty decent. the third and fourth quarter we've got 9% and 13% growth. >> you have no idea about that, do you? >> you know what numbers in the third and fourth quarter haven't come down yet. that has me a little bit worried. i think expectations could be a little high. >> how many macro factors do you look at? how many -- i mean sectors are all different. the prospect for energy, versus health care, versus financials. it seems like you need -- i mean you need to be like watson or -- if watson was any good. which we now know watson is a joke. according to -- >> depends on how you ask. >> almost sounds like you need a super computer to get a real number. that's why i think it's so difficult. >> it is difficult. this quarter we're seeing some of the cyclical sectors lead technology, financials and materials have over 20% growth this quarter. so that's pretty impressive. energy, obviously, is leading the way. this is the first quarter that energy turned into a tailwind

from a headwind. so we're seeing 400 -- 400 basis point benefit this quarter from energy. >> how much is europe? how much is asia? how much is dependence domestically? >> so about 50% of sales come from overseas. >> so that matters. >> so that matters. but the top line is actually coming in much better than expected. 8.4% growth. that's pretty impressive. we were expecting 7.2%. it should taper off a little bit, though, in the latter part of the year. and you know, the top line is where it's at. you can't mess with those numbers. seeing growth like that -- >> you're admitting the other ones are useless. you don't know whether to use gas or -- >> yeah. >> lindsey, thank you. >> thank you. coming up next, when we return, billionaire mark cuban's call on bank stocks. we're going to tell you the one company he called the ultimate start-up. we'll tell you next. plus you got to watch this. this is going to be i think fascinating conversation.

former massy energy ceo don blankenship is going to be here at 8:40. he served time for his role in a deadly mining accident. he was in prison and he got out this week and he's literally going to be on the set with us to talk about it in just a little bit. back in a moment.

you think traffic's bad now, the future's going to be a nightmare! does nobody like the future? c'mon, the future. he obviously doesn't know intel is helping power autonomous cars and the 5g network they connect to. with this, won't happen in the future. thanks, jim.

there's some napkins in the glovebox. okay, but why would i need a napkin? you could have just told me a bump was coming. we know the future. because we're building it. my biggest holding is amazon and it's the ultimate ai

company. it's the ultimate start-up. they used it better than anybody. when amazon talks about opening up grocery stores, it's not because they want to sell gross riis in stores. the same with book stores. they want to know when you need it, before you need it, before you know you need it, so they can deliver it right to your door in anticipation. they become prescriptive. and the opportunity there globally is beyond enormous. >> that was billionaire investor mark cuban on fast money yesterday. joining us right now with her top picks in the tech sector is kim, vice president senior analyst and portfolio manager at fort pitt capital. are you in agreement, by the way, with mr. cuban? >> i think that some day we may be able to do that. but i am not sure ai is really ready for that at this moment. but it's a stretch goal. >> you happen to like a competitor of amazons which is microsoft. >> yes. >> given what they're doing in the cloud. make the case. >> absolutely. so, microsoft started as a tool

builder for software engineers. and that is their roots and they do that really, really well. and i think azure has the tools that people are very, very used to, because they've used them for decades. and it's expanded into the cloud now, that the tools can easily allow people to build infrastructure there. so that's why i'm betting on microsoft. they're a great tool provider. >> and you think that it's underappreciated at this point, still? >> i do. >> given the run it's been on. that's what i'm curious about. >> yes. exactly. well, they have a large corporate base that has a lot of custom applications. and that needs to move to the cloud. so are you going to train new people on azure, and that kind of, you know, technology? or are you going to use what they know? i think it's "b." they're going to use what they know. >> okay, let's talk intel. you like intel. >> i do. it is, again, providing the guts of technology. you know, servers and pcs.

but i think they're making an interesting move in to the edge, with buying mobile-i and i think their focus on drones is interesting, as well. and i think that's showing their capabilities to people who are building whatever comes next. >> what do you think the stock will be worth twelve months out? >> well, twelve months out, we don't really look twelve months out. we're three to five year sort of people. >> let's talk three to five years. >> maybe a double. >> maybe a double. and you've -- by the way, you know, we had -- well, actually we had a guy yesterday you like the mobile-i acquisition. there's been a lot of skepticism about that deal. >> i think what it does is buy a market. i don't know that the technology is all that important. technology moves extremely fast. but at least it is buying people that have bought mobile-i. >> 20 seconds, net app. >> net app, oh, we all hoard

data. corporations hoard data. individuals hoard data. and they provide a place for that data. >> kim, i know you're right. great to see you. >> thank you. >> thanks. up next, breaking economic news. we have two key reports about to hit the tape. retail sales and cpi. we will bring you the numbers, "squawk box" will be right back. so new touch screens... and biometrics. in 574 branches. all done by... yesterday. ♪ ♪ banks aren't just undergoing a face lift. they're undergoing a transformation. a data fueled, security driven shift in applications and customer experience. which is why comcast business delivers consistent network performance and speed across all your locations. hello, mr. deets. every branch running like headquarters. that's how you outmaneuver.

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welcome back to "squawk box." good morning. we're here live on cnbc. we actually are. excuse me at the nasdaq marketsite at times square. >> choked up. >> i am choked up. >> hold up your hands. >> let's get you through some of the big stories that are front and center. fiat chrysler is recalling 1.25 ram modded trucks. a million of them in the u.s. the voluntary recall is to fix a software issue.

it's an important one so if you own one listen to this. it's been linked to one death and two injuries. the issue inadvertently disables part of the restraint system during a vehicle rollover so legitimately if you do have one, please call your dealer. we are just seconds away from some news, joseph. yes, we are. rick santelli is standing by at the cme in chicago. rick the numbers? >> here we are. april, first look at retail sales. head line number is up 0.4. that's a little bit on the light side. you strip out autos it goes down to 0.3. you strip out autos and gas sales goes down to 0.3 as well. so 0.3 is the same there. now let's look at the control group used to input and other economic calculations. and that is up 0.2. half what we were expecting. but, there's some positive revisions pretty much across the board. that control number last time stood at up half one percent. it's now up 0.7. and if we look at some of the

other aspects, especially exautos, that popped up an extra 0.3 along with the down 0.2 head line for retail sales in the previous month to a positive number up 0.1. so a little disappointing on the front for april. back end came up a bit. let's look at cpi. yesterday's ppi was hot. today as expected on head line, april's cpi is up 0.2. strip out food and energy it's up 0.1. if you look at year over year it's up 2.2. that's actually even though it's a big number the two handle, lots of two handles, that's coming off 2.4. and finally the core cpi also lots of two handles. it kind of breaks that here at 1.9. and that really is something to pay attention to when you look at let's see 0.3 -- we've had about 16 in a row, 17 in a row, in that ball park with the two handles. so that slipped a bit. not the same picture that we indeed saw yesterday with the

producer side as we get more focused on the consumer side. arguably what traders look at most. what's the landscape today? well we're still kind of in that range with ten-year notes but it did back away from the 240s. remember, sometimes it's easy, last year it was 244. we back add way. a lot of maturities like 5s, also in 30s, very close to where they settled last year, of course shorter maturities are well through that. we have had some tightening. preopening equities. they really haven't moved a whole lot. down about 20, we're now down 29 in preopening dow futures. becky, joe and the gang, back to you. >> all right, rick. thank you. president trump just tweeting again moments ago, this is the tweet, james comey better hope that there are no tapes of our conversations before he starts leaking to the press. >> what? >> yeah. better hope there are no tapes of the conversations before he

starts leaking. because i guess -- >> he's saying that whatever the press is reporting is incorrect, and therefore saying that james comey is the leak who's giving the press -- >> but the implication that the president has the tapes? is that what seize saying? >> i don't know. >> better hope there's no tapes, because -- or that somebody's got tapes, and what he's saying is different than what's on the tapes? >> i don't know. >> so are we back into the wiretapping situation? >> the fact of the wire tapping situation or is there a reference to watergate where the nixon tapes were there? >> yeah. >> nice music. there was an 18 minute gap on that -- >> supposedly leaned over like this -- >> really important part of the tapes. >> well -- >> anyway. >> this will be the next part of the 24 hour news cycle. >> it's not just going to be 24 hours because next week comey has been called to testify before the senate. >> right. >> we'll see if that actually happens. in the meantime let's get back to the data. steve liesman has been watching

retail sales and cpi. >> i want to set the stage on this number. which is very weak first quarter driven by weak consume shun in the first quarter. so this number today is the first real meaningful piece of data for the second quarter and the question is whether or not that rebound is really going to happen. and i think i'm going to give it the rebound story a pass here. it was a little bit like 0.5 was looked for in retail sales. came in 0.4. good enough, close enough to say the consumer's coming back. the control group, which is the number that feeds in to gdp, was revised up in the last month of march, and came in a little bit light today at 0.2. but we'll call that a wash. a lot of volatility in the data that makes it hard to really say there's a clear story here. you had stuff bounce back. furniture down 0.5 after being up 1.5%. you had buildings up 1.2 after building material up 1.2 after being down 1.7. so a lot of back and forth. overall what we're looking at, you don't get too confused with

these numbers, 4.5% year over year retail sales growth i think that's okay. i think the consumer is doing well. we know that jobs are doing well. we know that wages are doing okay. i wouldn't worry too much about it. i think it's okay to say, that the weakness in the first quarter is probably in the rear view mirror. like a little more data to confirm it. but this number was looked at to be the linchpin for the second quarter rebound story and i think it's okay. we're on track. >> steve stay right here. let's continue this conversation. constance hunter is here. she's the chief economist at kpmg and constance, do you agree with steve's assessment of this? >> yeah, absolutely. we also got the average hourly earnings which are up 0.4% this month versus 0.3% action average weekly hourly earnings up 0.3% versus flat last month. so that says that going forward there's some momentum to continue spending. the question is what does the consumer spend on, right? >> that's a huge question. if you look at the retailers, jcpenney, nordstrom, macy's, massive pressure on that but i

don't think that's telling the story of the consumer. >> when you look at retail sales you have to look at the biggest components. auto is by far the biggest component, 20%. then you look at -- >> you're still up 0.3%. >> then building materials is another, 12%. then you get down to food and beverage at restaurants, 8.5%. and retail sales in the stores is really only like 5% of retail. it's not even the biggest component. and the question here is, do they ship to services. are people going to start spending on services rather than goods? which would be what we would expect at this phase of the business cycle. >> here's one more question, which is are people going to save money? if you look at the savings rate it ticked up in the first quarter and who am i? who are you? who is anybody to say what's the right savings rate? if people want to save 5.9% of their disposable income that's going to be entirely up to them. if the retailers are not capable of making people part with their money, that's their fault into the anybody else's. >> at zero savings rate we used to say that was a bad thing.

>> right. you want precautionary savings but it's interesting people were starting to save more at a time when there was a lot of talk about personal tax cuts. there's a theory which basically says that -- >> be careful. david ricardo one of the great economists ever. go ahead. >> basically if you're going to debt finance tax cuts people are going to do precautionary savings because they know down the road that's going to come back to bite them. you're bringing future consumption into the present. >> let's talk about the cpi and the inflation numbers which is there was a little bit of scare yesterday, tight labor markets, you had a great jobless claims number, very low. very low as a percentage of those covered by jobless claims by jobless insurance. long with a hotter ppi than expected. question was whether or not that's going to show up in the consumer numbers. it did not. you had very, very modest inflation games. 0.2 all items driven in part by a big gain in energy. 1.2% for gasoline. but take out food and energy and you're up just 0.1%.

a little bit -- >> 1.9 -- >> how does the fed process this, constance? >> i think what they're going to process is not just the cpi but the cpi in conjunction with wages. right? so they want to make sure that they get out ahead of demand poll inflation. they want a little but not so much that the economy overheats. right, and so if we're starting to see shortages in the labor market, and if we're starting to see significant wage gains they want to really try to get out ahead of that. because that's what would push us into a recession. >> i have the june probability at 80% for the rate hike. and i'm looking about a -- you guys had a guest on earlier who had about a 50% probability of a third rate hike in december. so that's where the market is, and hard for me to say that it's mispriced here. >> steve, thank you. constance, thank you for joining us. >> thank you. >> coming up when we return, he was once the highest paid ceo in the coal industry. now don blankenship has taken to twitter after serving time over a fatal mining blast.

got out of prison literally this week. he's going to join us live right after the break.

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experience amazing. welcome back to "squawk box" this morning. former mass si coal ceo wrapd up his year-long prison sentence this week getting out just this wednesday. don blankenship was convicted of quote conspiring to violate federal safety laws at a mine in west virginia for 29 workers died back in 2010 in an explosion. he maintains his innocence, calling the investigation a

conspiracy and just announced he is appealing to the supreme court for vindication. joining us right now this morning don blankenship, former chairman and ceo of massey energy. thank you for joining us. 48 hours after leave beiing pri don. >> good morning. >> good morning to you. we have a lot of questions about both your experience in prison, what took place before, and some of your views about what's taking place now. but i do want to read you something. you took to twitter right after getting out of prison effectively to some agree attacking joe manchin, senator joe manchin. he tweeted out something and sent out a statement that i just want to read to you and get your reaction to. he says that don blankenship doesn't have to answer to me, and he doesn't have to answer to federal authorities anymore. but he does have to answer to the loved ones of the miners who died in his mine for the rest of his life. his refusal to accept responsibilities for his criminal actions now only exacerbates these grieving

families' pains and the families of the 29 brave miners deserve better. i hope mr. blankenship chooses to do the right thing and disappear from the public eye. sir you are doing the opposite. why? >> well, because what the government has said about the explosion is untrue. and because if they don't tell the truth about it, coal miners remain at risk of natural gas explosions. the explosion was not a coal dust explosion. it was a natural gas explosion, following the government's requirement that the air flow be cut in half. that's a fact that the prosecution witnesses against me testified to themselves. and joe and others continue to cover up the truth because they know that former uaw member was the head at the time and required that the air flow be cut in half and the explosion occurred shortly after that. and that based on forensics and chemistry it was purely a natural gas explosion, and they were untruthful about that. so it's one of the easiest

government cover-ups to uncover, because it's just simply forensics and chemistry. >> sir, i don't want to relit indicate the case and i do want to get to some of your views about what's taking place now. four massey mines had injury rates more than twice the national rate in 2009. this comes from safety inspection records from the mine safety and health administration. all 35 active underground coal mines, owned by massey, one of your mines in virginia had the highest injury rate in the country. at 9.78. does that -- does any of that rest on management? >> no when you pick a few mines out of 100 you can find some that are outside the average. but massey's average accident rate was stellar for 20 years. and during my tenure there we reduced the accidents by about 70%. the company had what is considered by most people in the industry the best safety program in the country, and employees at

massey, in a private survey, expressed the view that 93% of them believed massey mines to be safer than other mines they had worked in. >> sir, one more point on this. this is from an s.e.c. filing. you were paid $17.8 million in 2009 and i wonder whether this goes to the public's frustration about perhaps you and this issue. even as some of the coal mines that he supervised accumulated safety violations and injury rates at rates that are greater -- greatly exceeded national rates. you take issue with that? >> no. there's no -- you know, 17.9, whatever the number was, you know, accumulation of years you know how these complicated compensation packages work. greatly driven off of share price and driven off of coal price. all that is unimportant to the real issue. the real issue here is that we had an explosion at a coal mine that was caused by a major inundation of natural gas

shortly after the government required the mine managers to reduce the air flow. and that has been hidden. and the risk to coal miners because of behavior like that continues today. and looking forward, if we don't do some things to improve the laws, and the way we're dealing with, and considering natural gas then we are leaving miners at risk. and that's really what's at issue. >> don, what do you think the lesson is in this for you personally? >> well, i don't think the lesson is for me personally. i think the lesson is that the mine safety and health administration should not be allowed to regulate a mine every day, require it to make changes that it doesn't want to make, and then when something goes wrong, investigate themselves. and issue reports by the united mine workers that didn't represent these miners, and have others that are politically connected. you know, worst thing might be that both the president of the united states at the time, and

the head of mine safety in the u.s. declared that the management people were responsible before the mine investigation ever began. and they continued to cover up the fact that the forensics, and the chemistry show it was natural gas, and that it was not coal dust. >> what was the -- >> those need to be addressed. you know, people are concerned about pay, certainly they should be concerned about the safety of miners in the future. that's what this issue is about. >> what was your experience like over the past twelve months in prison? >> well, it was different. sort of like boot camp, i think. you know, it was without the extreme exercise. so it was -- it was not something you want to do. but as i went through it i tried to learn from it. i did learn a lot about the political and the judicial process, as well as the prison process. so i look at it as an education i wish i didn't have. but i'll try to make use of it going forward. >> to the extent that you're right about what took place in

this situation, and there are other ceos out there who are watching this program now, are there lessons in this for ceos who oversee large organizations, like the one that you did, and to the extent that you don't believe this was your fault, at least personally, how they should handle this? meaning if you could go back and do it all over again, given what happened, would you have done anything differently? >> well i mean there's a lot of things that should have been done differently in hindsight. but you know, the big thing was gas inundations in that area, not just at massey mines but at others that weren't hydro carbon tested over the years which should have been done. but if you have near-miss incidents, there needs to be a thorough investigation. the government has totally let the coal industry down in terms of innovation in areas of safety. they clearly have covered up what happened at ubb, and even though the -- there was never a willful violation written at this mine, you know, they

accused me of a conspiracy to willfully violate mine safety laws without a co-conspirator, and even though the security and exchange commission had no issue with any of our filings, they attempted to put me in jail for 25 years for s.e.c. filings, when all i had done was sign the documents that the lawyers had prepared. so it's a very risky business to be a ceo, because there's a sentiment against them. but the big issue here, we need to go back to every time is, senator manchin, and the government have not told the truth about this explosion, and coal miners are at risk throughout west virginia. they basically placed a pennsylvania ventilation system on a west virginia coal mine. i won't go into why that's important, except to say that in west virginia, there's typically so little gas that you want to sweep it out of the mine. in pennsylvania the systems are designed to capture the gas and sell it in many cases. and when they came in and changed the ventilation plan,

over the objection of the miners, they put their lives at peril and they lost their lives and the government felt they need to cover that up. >> don, you just said so many things that i'd like to go back and dig through. for starters when you said if there was something you could do over, do over, you said there wasn't an investigation followed up after this. is that something that you think that you and your company was responsible for or that the government wasn't policing you enough on? >> well, there were incidents that should have been recognized. i don't know that -- >> by you or by the government? >> well, i think that people who have knowledge of chemistry and geology and so forth which primarily would have been in the government -- >> wait a second. i assume that you running the mine, your company, would have some expertise in that area too. >> well, we do have. but again, the lesson learned here is that coal bed methane is not the only gas that presents the danger to coal mines. natural gas obviously presents a

danger to coal mines and they're distinguishable by chemists. they're not distinguishable by regulators or coal miners. >> i guess my point is, you're blaming the government for forcing you to put in a different air mine shaft. you're also blaming them for t not -- so you're saying they were involved too much but you're saying they're not involved enough. >> what i'm saying is not complicated. they took away the most important thing to avoiding an explosion which was the air flow. but they did so knowing that there had been prior gas inundations in these mines and not just at the massey mine, but many mines in that area. and that they sometimes happen again still today. and no one has addressed that. so msha investigates all the coal mines and it's totally different than the faa or the

ntsb. any government agency that regulates and investigates itself is an industry that's a regulatory agency that's dangerous because they never have a reason to come to the truth in order to avoid the accident from reoccurring. >> don, before we let you go, as this interview has been going on we get a lot of viewers who have been watching this and tweeting out to us. one person says this, infuriating to hear blankenship to say everything besides sorry to the families of the 29 miners killed. do you have anything you want to say to them? >> yeah, i think the families need to understand that at this point we have to make sure we don't have to say sorry to other families. the key here is i have already said sorry to the families of these 29 miners. i don't have to say or for the industry have to say sorry to miners in the future. and that's what we have to get focused on at this point. >> okay, don, we very much you appreciate us joining us this morning and we hope to talk to you as your journey continues. thanks so much. >> thank you. >> you bet.

when we return, jim cramer joins us live from the new york stock exchange. "squawk box" will be right back. it's over. i've found a permanent escape from monotony. together, we are perfectly balanced, our senses awake, our hearts racing as one. i know this is sudden, but they say: if you love something... set it free. see you around, giulia ♪ 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. i count on my dell small for tech advice. with one phone call, i get products that suit my needs and i get back to business. ♪

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sghoo let's get down to new york stock exchange and jim cramer.

jc penney bounced -- now it's down below $5 again. would you ever buy this or -- >> no, you can't. you've got to go away from the mall. you have to go to something that can't be amazoned. you have to go to something that's got a great balance sheet. i mean, if home depot comes down you can take advantage of that. but jc penney is a challenge monster. you have some household stuff doing well. but you see amazon going against furniture. and i just feel like when -- going into the jc penney you end up with something you can't grow. if it can't grow why would you own the stock? it doesn't work. >> we have to keep it short. we'll see you in a few minutes on "squawk on the street." thanks. where's jack? he's on holiday. what do you need? i need the temperature for pipe five. ask the new guy. the new guy? jack trained him. jack's guidance would be to maintain

the temperature at negative 160 degrees celsius. that doesn't sound like jack. actually, jack would say, hey mate, just cool it to minus 160 and we're set. good on ya. oh yeah. that's jack. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. and at $4.95, you can trade with a clear advantage. at crowne plaza we know business travel isn't just business. there's this. 'a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly.

we're going to talk some candy calories. some are teaming us to reduce calories. mars and nestle and wrigley all pledging they have half their individually -- half of their individually wrapped treats will contain no more than 200 calories within the next five years. they plan to reformulate the recipes and the packaging.

>> so they're going to cut it by 20%. >> we have seen that coke has made the bottles smaller. >> comes after a decade of super sizing. >> gum chewers? >> not so much. >> i like gummy type stuff but that's got ground up horse hooves in it. >> don't ask what's in it. that's what i have learned a long time ago. join us on monday. time for "squawk on the street." ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. premarket looks like how the week is shaping up. dow and s&p lower. nasdaq hanging on. got more retail pain from jc penney today and some combative tweets from the president. europe is mostly in the green and yields have come off as retail sales is a