together. "squawk box" begins right now. ♪ >> live from new york where business never sleeps, this is "squawk box." good morning. welcome to "squawk box" on cnbc. live from the nasdaq market site in times square, i'm melissa lee along with joe kernen. joining me is guy adame, a fast money trader. as joe was mentioning a bloodless coup happening this morning. >> bloodless now. it's early. >> i'm watching you two. don't get any ideas. you have two-thirds of the fast money -- >> until the end of the show. >> we have two-fifths of fast money. two-thirds now of "squawk box." math i though is tricky. >> we're all cnbcers. >> i like that, we're all team. >> there's no i in team, but

there's an "me" in team. >> always has been. well, i'm happy to be here. >> you're fired up. if you're up at 4:00 a.m., you might as well get fired up. >> why not. if you put in that -- what time did the alarm go off? >> 4:05. >> so you -- >> i'm a 3 handle. >> me, too. >> you say you can do this. you did it once. try five out of five. >> i can barely do this. >> 52 out of 52. >> you're a stud. i say it all the time. >> we have a big market day. good to have you here. a check of u.s. equity futures. this is what we've been matching all morning long. this could be the biggest move in the markets. about a half percent move or so. this would be on the s&p 500. that would be the biggest one-day move. >> we've been 0.3. >> the dow looking to lose 100 points at the open. the nasdaq looking to lose 24 points at the open. the volatility index is surging this morning. that's an interesting turn of

events. up by 11.25%, almost 12 at this moment. action in asia, big development. here is long eem is snapping a seven-day advance. the nikkei finishing lower bay half percent. hang seng down by 0.2%. as for european equities, we have got red arrows for the dax as well as the cac down by a half percent a piece. the ftse 100 managing a slight gain here. italy and spain feeling pressure. look at the action in the ten-year yield. this is telling as well. people are reaching for safety this morning. we do have the ten-year note, 2.292%. i believe that would be the lowest since early may. 2.292%. >> so, 12%, 11% on the vix, it's like 1.17. >> yep.

>> so the low, that 25-year low was 9.56, you're somewhere at 11 and change today with the yearly high of 27. big move, but from historically levels. we'll see if this amounts to anything. who knows. nobody has even seen the meomee. >> that's right. >> great to have jim jordan come on. senator thune coming on as well. reading the cut issscuttlebutt. democrats think this rises to something. if you express the desire, i hope you see clear to let this

go, that's a different thing than quid pro quo. this is after he resigned. at the time, even the "washington post" wrote a piece that said in terms of actual criminal or elicit behavior, there wasn't any. it was that he lied to the vice president. and they looked at what flynn actually said, and there was nothing there. so at that time when trump in february, when he already resigned, unless there really is a russian connection, a collusion, a collusion with the administration, if that's why he wants comey not to pursue it, that's one thing. if it was just that -- >> do you think that matters? >> i think that's the key issue. >> i think the fact that he -- if you want to make the argument that him inserting himself into this is obstruction of justice, it doesn't matter if the charges are truly substantiated or not. it's the notion that he is simply stepping in. think about the motivation.

this is a good guy, he shouldn't have lied to pence, he shouldn't have done that. that's one thing. i hope you see fit to let this go, i'm tired of it there's no russian connection, or if he knows, wow, he had some knowledge that flynn was coordinating a wikileaks -- who knows what people think the fire actually is. if that's the reason for trying to drop it, that's a far cry from trying to say -- >> the jump would be obstruction of justice could be the basis for impeachment proceedings. in the closer term it could impede the republicans enacting the agenda. >> i would say 100 points, even though -- like, we've been questioning it every day. okay, you got the leak of the now looks like from israel. you have that. you get 20 points. you get this, you have comey firing. you get 20 points. nothing at that point looked like the market was sitting up and taking notice. you have 100 points.

100 points is a 100 points. it's not 500 points. >> but in the context of the volatility market -- >> but a constitutional crisis, when you actually start to think there's a -- a -- something -- >> doesn't this speak to him being a political neophyte, which is why he got elected in the first place? words have meaning. i learned that back in the day on wall street. his words really don't have meeting. >> i'm not surprised he had people leave the room and said, look, he's a good guy. you are going to let this -- it does not surprise me he said that. and if he did say it, which they're denying the white house on background is denying that was said. >> this begs the question, if there are tapes -- >> right. >> release the tapes. >> right. this would be a grade time. >> the other thing, we'll bring in john harwood. if i were comey, and if at the time that the president told me, if i saw that as him trying to

obstruct justice, and telling me to drop it, i would have resigned or immediately have told someone. i don't know if i would have waited however long. if it rose to the level of what we're talking about here, then comey just -- did he tell the assistant director? i don't know. john is listening to all this. john harwood is in washington. lots of questions. we need the memo, i guess. we probably need comey to come and talk to guys in kochcongres. >> and we need his colleagues who we are advised by comey associates that he did advise colleagues of what his conversations with the president have been like. we have been building for this moment for more than a week, ever since president trump fired fbi director comey. it got a little more serious

later in the week last week when he did an interview with lester holt and said he had been thinking about the russia investigation. yesterday we had the news that james comey kept con tem rain u contemporaneous memt mos of the conversation with the president and one of them said can you drop this the white house put out a statement saying while the president said that james comey is a goo and d and decent guy, d not asked comey to end that or any other investigation, but there was a markedly different feel to the reaction from republicans. jason chaffetz immediately put out a statement saying he want all records of james comey's

memos and conversations with pem at the time. chuck schumer went to the senate floor and urged other republicans to inquire deeply into this as chaffetz did. >> concerns about our national security the rule of law, the independence of our nation's highest law enforcement agencies are mounting. the country is being tested in unprecedented ways. i say to all of my colleagues in the senate, history is watching. >> whether or not the ground which has been softening under president trump gives way and you have a flight of republicans towards a most tposture like ja chaffetz -- and john mccain

saying yesterday this is approaching watergate levels, in addition to the question of president trump on the republican agenda it's not possibility in washington for a president to be fighting for survival in office and to be pressing an ambitious legislative agenda at same time. just not going to happen. so we'll have to watch and see whether or not president trump can somehow engineer this blowing over as opposed to consuming the entire town for the next several months. >> john, there are a lot of people that are looking at -- like, what chaffetz says, i didn't interpret it as what you said. i interpreted it as saying he wanted to make sure comey -- obviously it was read to the "new york times" reporter. they don't have a copy of the memo. he wants to see it to make sure it said that. i didn't see that as him getting ready to throw trump under the

bus. >> investigate. >> schumer, we -- i've known schumer a long time. likes cameras. that was very dramatic and everything else. >> mm-hmm. >> but here's the thing. democrats, if it is obstruction of justice, they will try to prove that. they're like a pit bull on the throat of prey. if it rises to that level, fine. at this point, saying i hope -- i hope you see clear to drop this, he's a good guy. that would be a tough one if there was no quid pro quo, if there wasn't i'll fire you if you don't do this, or i'm ordering you to drop this probe that would do it. saying it's my hope that you'll see clear to let this go, i don't know whether that rises to the level that where -- where that would happen. >> and if the memos are produced -- >> that's a he said he said.

>> right. >> and the tape wildcard. i was trying to figure that out, comey calling the bluff, i don't believe you have tapes. if you do have tapes, this is what is said. there's all these nuances to it, too. >> yes. when you talk about the consideration of what james comey wrote and what president trump did, it's possible there's no tapes and it's the president's word against the fbi director's memos and his word. one question is how would that go in a criminal proceeding with a jury. and the other as a political matter, if you're a member of congress trying to figure out whether to support your president or not. all of that will be subjectively determined by the mood of the republicans in congress. what we saw during watergate was -- what finally brought

president nixon down was not news that he had -- or proof that he had directed the watergate break-in. because no such proof ever s surfa surfaced, but him talking to his chief of staff about dissuading the fbi from going forward. >> right. >> it's a you know it when you see it type of thing. >> john, one thing democrats have done, they went with the "i" word early. i think january 21st was a little early to started talking about impeachment. they've been talking about it. when they had nothing, the entire time, maxine and whomever. so when you say something, and you say the "i" word. we've been hearing it for the past 120 days. the other thing, we have to figure out -- you remember that poll, 92%, 94% said i have seen all this, i would still vote for him again. that was before the last two, three weeks.

during the campaign we had a tendency to say, that's it. second amendment with hillary. he just asked about the hacker. every week, we had something that was going to derail his candidacy. we saw that the voters felt differently than what the echo chamber in washington felt was significant. i don't know whether it's changed from 92% or 94%, but i wouldn't assume that the people that voted for him are -- when they hear i hope you see clear to drop this, whether that rises to impeachable -- >> the question is not the core trump supporters who believe him under circumstances -- >> it's a high bar to impeach a president. >> no question. but republicans, they have a special election in georgia, midterm elections next year.

all of their careers are on the line. so they're going to be making a judgment against that back drop. the people to watch are republicans or people who lean republican -- >> or senators up in two years. >> but the people who voted for president trump, who might peel off. you had corker -- >> mccain, graham. >> who two days ago the white house was in a downward spiral. one problem for the president, as this is played out with the highest attention possibility, james comey has a stronger reputation for telling the truth than president trump does. you mentioned the "wall street journal" poll a little over a week ago what it showed was that only 25% of the american people said that president trump gets high mark force being honest and

trustwort trustworthy. that goes to how people will process this information. >> but if the exact quote that na they're not even copping to at this point, i hope you see clear to drop this -- even that quote. it's -- the deft is ready to go quickly on the "i" word. >> the question is not left. the question is the right. >> it's been resist. resist. resist. in their view it's been an illegitimate presidency from day one, november 9th. nothing has changed there. >> that's true. that's why the people to watch are those republicans. >> 2018 senators. in the house, they're all 2018. >> every one of them. >> what a system. >> john harwood, thank you. the markets are a story today. >> they are, thanks in part to this.

look at vix. it's showing signs of life. surging by just 11%. we're almost at 12 right now. joining sus caus is kathy wood paul hickey, and our guest host for the hour, guy adame. kathy, you are in the camp that the market gains have been made in the back of fundamentals, improving economy, better picture for earnings. any dip because of political whatever you want to call it in d.c. should be bought in your view? >> yes. we've been watching the vix like everyone else. and i think the complacency out there, it's known as a fear index because since the tech and telecom bust it has always heralded when it's at this level a correction. prethe te the tech and telecom the vix was going up in an up market. the politics now creates another brick in the wall of worry that we're climbing. yes, we think the fundamentals

are terrific. >> evenmentals are the drivers, politics could present a headwind? it has to have some or the of impact or not at all? >> it's been part of this wall of worry. the la every step of the way there's been a crisis. >> we need to keep contemporaneous memos. i get confused, what was it back then that we were worried about. are we done with the leaking? >> well -- who knows. if you were cynical, you could say at least we're not talking about the leaking of israeli intelligence anymore. >> changed the narrative? >> yeah. moved on. what's your take, paul? >> when you look at washington, there's a lot of partisan disguised as subjectivity here. we saw it eight years ago. republicans were against the democratic president. now democrats are against the

republican president. so you take a step back from washington. we had a great earnings season. we've seen earnings beat since 2010. revenues are the best since 2013. guidance more companies are raising guidance than lowering guidance. if there's a worry about this trump agenda derailing stocks, it's not there. when luke at stoyou look at sto performance, outside the united states they're performing more than stocks inside the united states. two months ago i was asked if the market -- if the trump policies don't get passed l that hurt the market? most of that is not priced in european markets are outperforming the u.s. at this point. it's more of a distraction. when clinton was impeached it

was 1988/1989, and the markets did well then. >> president obama, say what you want about him, people thought he was the most unfriendly market president. when he took office, the s&p was 700, he walked out at 2300. say what you want, his report card was outstanding. i'm with you. i could be elected president, i think the market would be rallying. it's a continuation of the last seven, aibt yeeight years. >> i'm not so sure. >> yeah, ruchlt. >> we looked at getting back to even does not mean -- >> he walked in and -- which policies orchestrated that gain in the market? which ones? >> that's the exact point. none of them. that's my point. it doesn't matter. >> i think in washington, it is not the be all and end all of market performers. >> we have to leave it there. thank you very much for sticking around. coming up, a mountain

climber -- my knees got shaky preparing for this. tommy caldwell made history in 2015 when he climbed -- he and his partner climbed the hardest rock, the most vertical 3,000 foot el capitan and it was all followed by social media. >> don't look. >> i'm afraid. i have the gene. tommy joins us next on how live streaming changed the climb and we'll talk about the climb itself. >> dear predictable, there's no other way to say this. it's over. i've found a permanent escape from monotony. together, we are perfectly balanced,

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social media has had a transformative effect on politics but also changed the sports world. we're not just talking lebron james and his 35 million twitter followers. social media has become a part of less mainstream sports. we are joined by tommy caldwell. you may remember him from -- when was that? >> 2015. >> world renowned rock climber. after the time that free climbed yosemite's national park's dawn wall of el capitan, the subject of an upcoming documentary and caldwell's new book is called "the push."

just preparing for this, looking at some of the shots, just googling it. i got nervous. my knees get weak. they set up a -- >> that is your weakness. >> it is. i'm afraid of heights. what is that? you're in the bed? you look like you are just lounging, you're at -- >> it's called a porta-ledge. >> you build that, and you can sleep there? you're perfectly comportible there? >> you haul it up the wall with you when you climb. it's like your little nest up there. >> you took seven years to plan this route going up. would go up and see if this was the right way to go, repel back down. and map out a path that would get you to the top successfully. >> yeah. it was about a year of swinging around, peopfeeling the holes, s the specific route and six years practicing it. the climbing is so difficult you have to execute it perfectly.

it's like a gymnastics routine. >> it's free climbing. there are still ropes, but only to prevent a fall. in other climbing, someone can pull you up. is that the difference? >> historically when you climb el cap, you aid climb, so you climb the equipment. free climbing is climbing the rock face. like if you go in a climbing gym, that's free climbing. >> where you put tsecure the ros to be part of the structure of the mountain itself or can you -- >> you carry up a rack of different shaped pieces of metal that fit in the cracks in different ways. you place that. >> sick. >> i'm more interested in the -- >> the social. >> no the mental preparation. this takes seven years. not many people plan seven years for anything in their lives, including courting their spouse. >> right. >> in terms of the mental challenge, at what point is the most difficult mental moment where you're like i'm not sure

if i can do this? when you're on the face or in the planning stages? >> i think the execution and the end is the most difficult. this was a paradigm shifting climb. most people go and do climbs that they're certain they will succeed at. this was like i've picked something that was so far above me, i just worked for seven years to do it. >> the moral of the story was it was great for free climbing, it was all on social media, but not so great for you, you didn't bond with your partner, you made the point, as you would have if you guys were not constantly posting stuff. you also said those kodak moments caused you guys to take more risks than you normally would just to get a good shot? >> not more risk than otherwise, but the bonding with the partner thing. i climbed deep in the mountains without any sort of media with me. >> talk about the meaning of life instead of how many hits you're getting. >> right. that was different. it was interesting.

you introduced me as this social media thing. i never intended for that to happen. >> and you dropped your phone. >> yeah. >> you lost it. and you were glad. >> somebody mailed it to me. it was a thing that totally took off. i was basically posting on facebook so my mom would know what was going on up there. >> but -- you made the point that if it happened to you and it hurt your real life experience, having everything on social media, what about normal kids constantly living their life and missing so much of it. >> either that, or they look at that and take bigger challenges or risks than they normally would. >> bigger challenges may be a good thing. >> bigger risks. >> like millions were inspired to go out and live their dream because of social media two sides of. >> you must be in great shape still. he would appreciate the story. >> good luck with the documentary. >> thanks. coming up, target set to

report and we'll bring you the numbers and reaction from wall street. that stock down sharply after disappointing results from other retailers. and reaction to the new stockpile data straight ahead. ♪ it's not just a car, it's your daily treat. ♪ go ahead, spoil yourself. the es and es hybrid. experience amazing.

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12 points basically on the s&p. and down 21 on the nasdaq. gold is up a little. ten-year yield down a little. but it almost seems like maybe target even helped a little. you think? we weren't expecting great numbers from a retailer. >> we are seeing target shares surge in the premarket after reporting earnings. just crossing the wires now. adjusted is 1.21, that's compared to the estimate. and same-store sales down 1.3%. they are just out with q2 estimates here. adjusted q295 ce 95 cents compa with 1.15. they say they are facing multiple headwinds in the landscape and will continue to plan business prudently. they're preparing their team to chase business when they have the opportunity.

still looks like good news so far for target. up 6%. >> yeah. $75 stock at one point. nice rebound. time for the trading block. dollar slipping to the lowest level in seven months. crude prices falling after new inventory data showed a surprise increase in u.s. stockpiles. joining us is christian malik. i will not ask you about what's going on here. that makes it harder, christian. confine it to those areas. boris, i will start with a similar question to you. the dollar, you just talked about, it's dropped to a level we have not seen in more than a few months. france was a big part of it. what happens in europe is

influencing the your ro moeuro what's happening in this country. what's moving the dollar, domestic things in washington or the content. >> cumulative. the whole dollar decline started way before the troubles in washington, d.c. this is just cherry on the icing as far as the trade for the dollar shorts. >> from here on out, what's more important? >> i had a crazy thought coming in today. >> not unusual for you. >> exactly. why such a muted reaction in all the market against the news today? perhaps it's because not because the market thinks there's a constitutional crisis, because it already assumes impeachment. if you chi of think of it, president pence and a republican congress, you have an agenda for tax reform and fiscal spending. >> i think that's a low probability. but the point i would make to some of our democratic friends,

you may get this guy eventually, maybe he gets himself. but you're not getting elizabeth warren if he's gone, you're getting pence. >> that's what i'm saying. >> to say the markets have impeachment in it is ludicrous. >> maybe. >> is that why markets have rallied? you're saying if he's impeached, there's a better chance of getting things done. what are the chances now of any agenda getting through washington, d.c.? >> this has been a political trade, not an economic trade. >> that's a -- >> the long their thing goes, it's like a wound. >> that's a -- >> why is the dollar long -- >> because the bond market is the only one that was smart enough to buy this whole idea. the whole idea of the bulls has been 3% gdp. >> keep talking. >> the bond market has not bond -- >> you think he's nuts? >> it's ludicrous. >> i knew it was ludicrous,

that's why i brought it up. it's an interesting assessment of what's going on here. otherwise -- >> somebody turn off his mike. i will turn off your mike if you don't shut up. >> you sound like bill o'reilly, look what happened to him. >> whatever. that's a goldberg analysis. the market is up because it's assuming that pence would be ability to get things -- >> the question is why isn't the market not down so much more? >> because we're in a low volatility environment? how much will the market move if the vix is 11 or 10. >> that's been an interesting and separate issue. >> i feel bad for you, christian. i feel bad for myself and you. let's talk about oil. you think oil is rallying on a pence presidency? now i feel like anderson cooper rolling my eyes. >> the context of not just the pence presidency, but the tug of war on opec deliberating whether they should roll over and the time frame and the eyes on

expectations for draw downs. you have a tension and oil price is swinging back and north in terms of expectations on both fronts. >> yeah. so, with oil though, i mean, it's even hard to do the political back drop. every time we hear about supply, production cutbacks whether they're serious or not whether people cheat, how many rigs we got back in the united states, those are more of the things to watch. aren't they. >> absolutely. i think in terms of opec and the meeting next thursday, the 25th of may, the key leer is whethhe we can get opec to roll over. expectations have been pushed out to nine months. if they can deliver six months and 100% compliance, that's a success. the best case is they do roll over, but there's a departure from compliance in the second half that will weigh on prices. putting it towards the low end

of the range which is $40 to $60 a barrel. against that, you have invent y inventories f thoinventory s fsh s, if those come off, and there are stronger refining draw downs, we may see that offset. i think as we go into next week's meeting, we should -- we should use that as a pinch of salt even if they talk about compliance, we need to see delivery of the compliance particularly in the summer months when you see stronger seasonal demand and the propo s propensity to increase production as they have to offset that domestic demand. >> quickly, there's a notion that with the saudi aramco ipo next year there's an implied put in the crude oil market. do you buy into that at all? >> what's important from a saudi aramco perspective is the fiscal policy which is to generate sufficient cash to drive economic growth in terms of the

timing of that, it's still clearly un -- the details are not given. but if they were to list the second half of next year as the press are talking about, then prices are important, but i don't think it's necessarily at the top of the priority. what's key now is saudi deliver a lowering of the fiscal deficit through diversifying and that's on the critical path in terms of mitigating low oil prices. >> christian, thank you. we'll check back with you. we said demand one time. that's weird. demand, it's all about supply right now. the whole world is recovering, you figure we would talk about demand picking up. boris, i'm not tossing to you to talk. just saying good-bye to you. >> good-bye. >> will you have him back? >> of course he will. >> god almighty. >> thanks, boris. our guest host at the top of the hour is the master of management jack welch. he joins us to talk politics,

the trump economy and more. johnson and johnson's alex gorsqi jo gorsky will join us later, and jim jordan will join us to talk taxes, healthcare and this comey memo. you're watching "squawk box" on cnbc. what's the value of capital? what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley 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.

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welcome back to "squawk box." time for the executive edge. amazon reportedly considering whether to get into the multibillion dollar pharmacy business. why not. it's inhired a general manager formulate a new team and develop strategy. amazon recently started selling medical supplies and equipment in the u.s. in april. reports said that the company expanded the prime now delivery service in japan to include sales of drugs to patients with the approval from normal cysts. i wo pharmacists. how do you get into the pharmacy business? >> don't know. >> you can already get it

delivered to you. >> they had the logistics in place. >> if it would help in terms of pricing and make things easier, that would be good. >> a couple months ago they said they were getting into the auto parts industry, companies like auto zone got obliterated. johnson and johnson holding an analyst day, and the pharma giant is making news this morning. let's go to meg tirrell at the meeting in new jersey. good morning. >> coming to you from johnson & johnson's new museum this is the building where j & j was founded, the original head quarters from 1886. the focus today about the pharmaceuticals business. the company putting out news saying it plans to file for approval of ten new medicines between 2017 and 2021 each with the potential to be blockbusters. already they filed for approval of two drugs expected to have fda decisions this year, those are in psoriasis and rheumatoid

arthritis. additionally over the next four years they're expecting to file for approval for drugs for cancer, depression and certain viral diseases. pharmaceuticals are a big part of j & jshg's b's revenue, abouf the profits. we'll be hear being their pipelipip hearing about their pipeline and drugs today. we'll hear from alex gorsky at 7:10 a.m. stay tuned for that. back over to you. >> quick question, how big a deal is the black box warning on the diabetes drug that news coming last night? >> fda putting a new warning on j & j's diabetes drug, and analyst says this is a big deal for that drug. it's the only one in the class with that warning. the risk of amputation taking this drug. other drugs don't have it only about 2% of sales for j and j,

not a big deal for the company. >> meg, how would amazon -- i know you're on the j & j beat, would they need a pbm or a form lai formulary? would they need doctors or prescriptions? would it be that much better for amazon because of the delivery system? what's the advantage? i'm confused. >> it's a great question. this is reporting from cnbc about amazon getting into the pharmacy business. it was reported in the story they could compete with the pbms, express scripts and cvs health. several retailers provide mail order pharmacy type services. >> right. already. >> exactly. amazon haas a tech company, people get excited about the idea of tech companies disrupting the healthcare space. maybe they wouldn't be so close to trying to keep prices under wraps. that's been a main criticism of

the pbm model. they don't disclose relations p relationships and pricing. >> maybe deliver doctors, like house calls. on a drone. order -- i need a -- you know, i need a -- >> proctologist. >> i knew you would say that. >> no, you didn't. >> i thought -- i was going to say a dermatologist or something. i wasn't going to is a proctologist. podiatrist -- >> you were going to say proctologist. >> no, i was not. i got you here. coming up -- thank you, meg. had boris here. target out with quarterly results. we'll dig through the report with an analyst. as we head to break, here's a quick check of what's happening in the european markets.

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target is out with quarterly results beating on the top and bottom line. joining us is michael lasser, analyst over at ubs. obviously markets so far like what target has said with the surge in the stock premarket. what's your biggest question for that conference call coming up? >> good morning.

thank you for having me. i think the biggest question for the conference call will be about the pace of investments, and the degree of improvement. so the company beat the consensus by about 30%. and so they really walloped what the market was looking for. driven by all points and models. gross margins, same-store sales. expenses. the question is, did they layer in some the investments that they promised at a slower pace than what the market was anticipating, and so we'll still see those over the course of the year. with all this being said they've talked about seeing an improvement in the business, particularly in march, but traffic was still down 0.8%. and so they're not out of the woods yet in the road to improvement is going to be long. >> the average amount was also down 0.6%. in terms of the investment, what's your number one investment that you're looking for target to make to actually turn things around here and catch up, if it is catching up, with the likes of a walmart?

>> the number one investment area has got to be price. that's stakes for everyone in retail at this day and age. the gross margin was down modestly by 45 basis points year over year. however they talked about really that being driven by an increase in fulfillment costs which is the cost of doing business, when your e-com business is growing about 20%. the question from here is do they have to lower prices and use their p&l to fund those price adjustments in order to deal with the effective price wars going on in retail. we think that most likely pace is they will have to. >> i see inventory is down 5.5% year over year. it means potential margin improvement against a backdrop where maybe they figure this out. is this an investable stock here? >> the stock is inexpensive, and does reflect some risks that it's facing over the long run.

plus, got a 4.3% dividend yield. so the way we look at the stock is the downside here is pretty limited. to really get paid, they're going to have to show a sustained improvement in both sales and margins over time. and our argument is, given what's happened in given what's happened in retail it's going to be hard to see that. at least in the near term. so, we think that downside is limited, upside is probably limited, as well. it's really balance risk reward here. >> michael thanks for joining us. do you think it's investable? >> yes. we talked it on the show at 5:00 where we sit right here. i sit where joe would be, but we have said look at where it bottomed out. 2014, 54.5, which it traded against that. if you like walmart at 16.5 times forward earnings target at 13 especially if they're turning this vote around which this quarter makes it appear as though they are. >> hmm. i think we'll get a trump tweet? >> i hope so.

>> i feel like we should be any minute. right? are you watching? you're watching. >> i'm also looking at alien covenant. friday. friday. i mean the greatest sci-fi series -- one of them. >> were you a sigourney weaver fan in the day? yes or no? >> yes. >> yeah, me, too. >> in the original "alien." some people like the sequel and say it was better. the original was amazing. >> mel's never seen it. >> ridley scott, too. i wouldn't normally sell a fox offering, but i love "alien." >> thank you, guys. >> thanks, guys. >> have you fun >> see you guys. >> welch getting miked up over there. he is ready to go. master of management joins us for the rest of the show, jack welch is here to talk about everything, politic, the economy, educational, all straight from the gut. a lot more "squawk box" in a moment. okay, well let's see you get up from the couch. i'm sorry, what? grandpa come. at cognizant, we're uniting doctors, insurers and patients

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again here market alert. u.s. equity futures pointing to a near triple digit decline. recovered a little. was down over 100 earlier. the latest on what's driving this morning's move is coming up. this is part of it. the battle between president trump and former fbi director james comey taking yet another ugly turn. this time reports of a memo from comey claiming the president wanted the investigation into former national security adviser michael flynn dropped. saying he hoped it would -- that he would see clear to drop it, mr. comey. we will talk politics, markets, and the economy with our special guest jack welch. plus amazon considering breaking into the multibillion dollar pharmacy market. what would that mean? how would they do it? that story and a list of stocks to watch. that's straight ahead as the second hour of "squawk box" begins right now.

live from the beating heart of business, new york city, this is "squawk box." >> good morning and welcome back to "squawk box" here on cnbc. we're live from the nasdaq marketsite in times square. i'm melissa lee along with joe kernen and wilfred frost. we want to take a check on the futures market. we're looking at a lower one although futures have improved just a touch over the past hour or so. s&p looking to lose about 11 points at the open. dow looking to lose about 84. nasdaq looking to be down about 20 points. we did see an improvement once target reported that stock is higher on the back of better than expected first quarter earnings, second quarter guidance in line with what analysts were expecting. the oil markets reacting initially, to api data. although we're seeing a bit higher for both wti and brent. brent is up about half a

percent. we're getting eia later today. the 10-year note, bid for safety so we're seeing yields down this morning, 2.292% and that is the lowest level since the beginning of the month or so. the dollar, this is an interesting one, has lost all of its post-election gain. so we are seeing -- we are seeing the euro higher against the dollar here, so bits of the euro. and take a look at the vix. this is really the start, if we can say that in terms of action. a surge in the vix so we haven't been at this level for quite some time. >> off of its highs. >> yep. but 11.59. at this point. >> like so many things, that 10% when you're a $10 stock it's not what it used to be when the vix was up in the 20s. on a percentage basis it's a big move but sort of bouncing off a close which is saying something. that the volatility's been so low. we pointed that out a week ago monday, when it was the 20 -- i don't know. however long -- 20 year low.

>> here's some made lines at this hour, something we haven't heard often lately a retailer beating estimates by a wide margin. target reporting quarterly profit better than estimates. revenue topping forecasts, same store sales down less than expected. apple has assembled the first iphones ever to be made in india. the initial production run of iphone se models will begin shipping to customers in that country later this month. local manufacturing is considered key to the push into one of the world's fastest growing smartphone markets. mcdonald's is expanding into food delivery. they've expanded delivery service into four cities, los angeles, chicago, phoenix, and columbus, ohio. using uber's service to make those deliveries. >> our guest host this morning is a titan of industry and one of the business leaders who has president trump's ear. joining us now is jack welch, executive chairman of the jack welch management institute and a member of the president's

strategic and policy forum. jack, like so many of us, you're at home sometimes, watching cable, i know. you know, typically you're watching "squawk box" but you watch everything. so my first question is going to be what have you wanted to say as you've been watching everything that's happened in the past week or two, have you been wanting to yell anything back at the tv? or do you feel strongly? where are we? you can talk about the market. you can talk about the administration. you can talk about the democrats. you can talk about anything you want. >> my view is polarized. i mean, i look at the president, and i give him an "a" on policy. i give him an "a" on appointments. i love the people he's picked. at every, betsy devos, scott pruitt, the military side, rex tillerson. i love those people. i think they're great. so i give him an "a" there.

i give him an "a" on the morale of the business community and the morale in the country, the spirit in the country. the consumer service. the salaries for kids getting out. there's an air of confidence. now when you read that i could go on and point out gorsuch, and the appeals court, and all these things that i love about what he's doing. i love where he's going, if he could get there. now i go to management of a bureaucracy. i give him a d-minus and i'm being an easy grader here. the firing of comey. i don't want to argue whether comey should have been thrown out or not. but clearly you don't fire him the way trump fired him. we teach at our school that we talk about all the time on this set, love them on the way out as

much as you loved them on the way in. love them on the way out as much as you loved them when you found them. sometimes you don't bring them in. a severance dollar is the cheapest dollar you'll ever spend. and know that. because otherwise there will be customers, there will be recommendations, there will be all these things if they go out as -- >> the memo leak a consequence of not loving him on the way out as he loved him on the way in? >> well, that's one of them. clearly you don't make any friends doing it the way he did it. there's going to be retribution. it's a minor league, it's a rookie mistake. it's a clear rookie mistake. >> that's the issue i was going to get to next. so he's an outsider, no polite clal experience. there's going to be mistakes like this. is that what it is. or is there a malevolence involved in all this? is there an -- is it --

>> you're wanting to go there. a "d," a d-minus. you have got a team. you've got a white house team. you've got to give obama credit. there was no trouble on that team he had. he had that team around him. they spoke with one voice. you have to have a team. you set the mission. he set a great mission. make america great again. get jobs back. stronger military. lead the country. he had the mission. now you align the troops around the mission. and everybody buys it. if they don't get on the bus, throw them the hell off the bus. get them out. don't fool with resistance. why he's letting these people that are leaking everything hang around. i mean it's crazy management. >> should he have known that as a business leader? or is political leadership different? >> no, i think he was an entrepreneur who ran his own shop, and he never ran a

bureaucracy in my opinion. if you run a bureaucracy, they're in the weeds, they're behind the desks, they're whispering at the water cooler. you got to nail them. and get them the hell out of there. and he didn't do that. he had a family business. he ran it beautifully. in the end he was very successful. but you can't keep doing that. communication skills. you got to get your communications team all together with you and they got to live with you. so everybody has the same message. everybody speaks with one tongue. this is crazy. he says one thing, they say something else, and the press has a party. and look, he's a victim of throwing mud in the president's eye for a year. now if you -- you show up at every rally and you're pointed out as a bum and all those things, a crook, whatever you call it, and then you go home and you get the ink, man i'm

going to get you when you get down here. that's the story. >> yeah. >> and now you've got these little things, russia. the russian thing, they've made that up in the -- in the convention. because hillary had the iranian mess and maybe he met with a russian somewhere in the night or i don't know, but he got $35,000 or $45,000 for a speech, bill clinton got $500,000. from the iranian related folks. and they got tens of millions of dollars to the foundation, and they approved the iranian deal. so i mean, come on. russia is a wonderful collusion. what's collusion here? >> how does whether the rot is justified or not, how does president trump stop the rot in

the short term? >> look, the guy that screwed up, that's why i gave limb a "d." he's got all these things wrong now he's -- bill clinton had a mess in the first six months. >> and the last six. >> well, but he pulled it together beautifully. >> right. >> and let's hope he can meet without chuck schumer's drama in the pit -- oh, my god. crying that the immigration is now just -- chuck schumer used to be a good guy. >> right. >> a patriot. these guys are tearing the fabric of the country. >> at what point does all that optimism that you've spoken about get eroded from all this? >> i think it's going pretty well now. it's -- it's being eroded somewhat now. there's no question that his agenda is under assault. and they'll do anything to stop it. >> they couldn't stop it before unless they got some republican help. and now, have you seen -- i said

earlier we need a list of senators that are up in 2018, because those are the ones -- they're all worried about their own rear end. >> -- come along today. and i want to mention to them how did they like being in the minority? they've forgotten already what it was like being in the minority. would they like hillary in there now? what role would they have with their agenda? >> we will have them on. they were conspicuously absent last night when, you know, even -- and that's immediately you see places like media matters, which i don't even like mentioning, but their initial take was, republicans aren't even going on fox tonight they're so worried about, you know, sort of piling onto whether this -- how many times -- >> he screwed up. >> i know. but during the campaign there were probably 20 times, instances where oh, this is it. the guy's toast. this is it. and it never was with the

public. with the people that were actually going to vote on november 8th. i don't know it -- i don't know where we are right now. obviously it's been a tough eight days. that's for sure. >> yeah, well, self-inflicted, most of it. >> well what about this -- if, in your view, if the memo is correct, and it supposedly takes meticulous notes, if he said, in those words, i hope you can see clear to let this go, is that -- does that rise -- >> it doesn't rise anywhere to me. but that's the law and i don't -- >> you're not a lawyer. >> i can't comment on that. but i'll tell you this, this whole idea of russia and collusion, this is a ginned up idea by the democrats because they had a hillary problem from the summer to the election on iranian. she approved an iranian deal that gave 20% of the iranians to

the russias. >> right. >> and her involvement with the russians ought to be invested because there's a check to him, there's a check to the foundation from the board of the uranium company. that's real stuff. flynn is a whisper in the wind. and now he may have done something. i don't know. we'll find out. >> coming back to the trump administration, and the leaks internally -- >> do you know who it is? >> are those something that he is to blame for from a position of weak leadership and not something? or is there a sort of malicious level of it going on underneath that he can't deal with regardless? >> you tell me. >> you're the expert. >> i'm not an expert on that. i wouldn't have anybody in a meeting that i didn't, believe in, and wasn't part of the agenda that we were pushing. that doesn't mean i want to do something corrupt. >> how do you find -- i mean if you were still the head of ge

and stories were getting leaked to the press about ge's strategy, et cetera and you had to close ranks how would you go about doing that? >> i had a mission and i had a set of values, behaviors, and i reviewed every person by their behavior. and i looked them in the eye and said, you did this, you go home. you did this, you go up. i mean, straightforward. this is not a rocket science. this is get people who believe in the mission, who climb mountains for it, who will fight for it, and he's got these guys, i think some of the obama people are still in the white house. >> if president trump rang you for advice this week would you be telling him for quite a radical reshuffle of his team? >> i don't know about a reshuffle of his team. he's got to go through the team, yes, and who's doing this, and he can find out, he can find out that pretty easily. you got enough of your friends there, i hope >> a lot of different factions.

name them, right? >> but i don't think that's necessarily true. >> really? you've got priebus, kellyanne, jared, you've got cohn, i mean you've got bannon. i mean that's five right there. >> but if you can't bring them together, that's your fault. that's your fault. you don't become ceo or president by playing the favorites. >> i saw your tweet. you like huckabee a lot, sarah huckabee a lot. >> i thought she was charming. i thought she did a good job. the republicans who are always yelling sexist beat the hell out of her. i mean the democrats beat the hell out of her in the press conference. these beautiful beat the hell of this woman who was trying to do a job and filling in. sexist, get out of here. >> can i quickly bring it back to the market and the effect this is having on business optimism. because so far the last ten days, the only real asset class this has taken its toll on is the dollar. and the equity markets have held up well. this morning's -- lots of

factors, but the point my point being really is that it hasn't hurt equity markets until the futures market this morning. >> 80 points. >> and it's only 80 points. exactly. so ultimately it hasn't really hit equity markets. do you think it will take its toll coming up? what more worrying factor would need to spark a bigger sell-off? >> if we -- well, if they have something real, because impeachment proceeding would blow the market away. >> not according to schlossberg. he says that it would mean pence, who can work better with congress to get stuff passed so the market would go up with an impeachment. you hear that? >> i missed that. >> you should pull the tape. worth it. >> no, but i think -- i think without question we got got a guy that's on the right agenda, with crappy management practice. >> weird, because it worked in the private sector. >> entrepreneurs every day. >> we'll have much more with

jack. jack's going to hang out with us for the rest of the show. meantime coming up, first on cnbc interview with the cho of johnson & johnson ahead of the company's analyst meeting and later the secretary of veteran affairs joins us to discuss the growing veteran population and the challenges facing the system. another look at futures. they have been improving as the morning has gone on but it looks like still the dow will lose about 75 points at the open, nasdaq down about 10. you're watching "squawk box" on cnbc. folio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you. mobility is very important to me. that's why i use e*trade mobile. it's on all my mobile devices, so it suits my mobile lifestyle.

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johnson & johnson holding its pharmaceutical analyst meeting today. meg tirrell joins us from new brunswick with the company's chairman and ceo, meg? >> melissa, thank you so much. alex gorsky, thanks for joining us. >> meg, it's great to have you here in new brunswick in the original powerhouse. this building has been around since 1907 and filled with a lot of great history. >> today you're focusing on pharmaceuticals. 47% of your revenues last year and you're outlining these ten new drug you expect to file for approval by 2021. do you expect that pharma will continue to grow as a portion of your overall business? >> absolutely. our pharmaceutical business, first of all, has had an incredible run over the past five years. i mean if you look over the last five years i think we've been able to introduce about 12 new

compounds, 11 of which are block busters, billion dollars plus. what we're really talking about today is how excited we are for the future. we've got ten between now and 2021 we think we've got about 50 line extensions, 11 of which have about half a billion dollars potential. these are compounds in cardiovascular disease, immunology, infectious disease that really make a difference in patients' lives. >> one of the things that j&j has been emfalsizing recently, and today, is your focus on prevention, disease interception, and cures. and some people might say that's antithetical to the business model, you want chronic therapies that make you money for a long period of time. how do you make money if you're curing a disease or preventing a disease? >> if you talk to our scientists today and join us for the program you'll see these are really committed people who ultimately want to help patients. we're finding across so many of these diseases is frankly, we get to the diseases way too late. so whether it's stage three or stage four cancer, whether it's

alzheimer's disease, we tent to be getting there in the seventh or eighth inning, we know if we can intercept earlier, detect it earlier through the right kind of molecular diagnostic that our chances and probability of having success and stopping that disease cascade from occurring is much, much better. yes, that is a big focus of ours going forward. >> i want to ask you about an immediate concern for the industry. everybody is saying that drug pricing is probably the foremost concern of the drug industry right now. how do you look at the pricing environment and the pressures you've been seeing? >> i think you have to take it above drug pricing and really look at overall health care. health care is important to our country. it's 20% of the economy. and if you look within health care, of course, the pharmaceutical component only represents about 14% or 15% of total health care spending. now i'd argue if you look over the last 50 years, 100 years, 1900s when this building was built the average life span was about 50 years old. today of course it's into the late 70s. much of that due to frankly antibiotics, drugs for card joe

vascular disease that have helped extend lives. first of all making sure that we innovate, price appropriately. i think the other area we have to pay a lot of attention to is the out-of-pocket component. unfortunately for many pharmaceutical products it can be as high as 25%, versus 5% in the hospital setting when the pharmaceutical component is really making the bigger difference. so it's part of the overall health care value, economics question. >> joe, you've got a question? >> just the comment and a question, alex. i mean, if you make that point again and again that you made so eloquently about early intervention in these diseases that end up costing so much money in terms of care in the hospital and doctors and everything else, then it becomes clear that you don't want to do anything to hurt the innovation of the pharmaceutical group, because the long-term rewards will be so great. but there's something wrong somewhere. i don't think it's pharmaceutical prices. there's something wrong somewhere in our health care system, maybe it's spending all that money for the last six

months of life, i'm not sure what it is, but you probably know where is it that the key area where we need to cut down on what we're spending fl we're just doing it in a way that makes sense? where is it? >> look, joe, you bring up a great point. and if you look across health care there's several areas that we need to focus on. first the one that you mentioned, end of life care. i believe the statistics are up to 30% of health care can be spent within those last few weeks making sure that we understand and we frankly better manage end of life episodes. secondly, it's making sure that we get earlier intervention. frankly some of that gets to wellness and prevention in the first place. >> right. >> about 75% of many diseases, frankly, can be significantly impacted if we just live a healthier lifestyle. and we change and do certain things with our behavior. so a lot of those components, plus we've got to also move from a fee for service, where you know, basically we're paying on each independent activity that makes up health care towards

more of an outcomes, a value based approach, as well. i think if we do some of those things it can have a tremendous difference on health care, and frankly, make it a lot better for patients. >> alex, it's melissa. just to follow up on your answer to meg's question regarding drug pricing. you had essentially said that the cost of the pharmaceutical itself is not really driving the price higher. so where is it in the system? and we're getting reports today that amazon could be entering the pharmacy business. could a player like that, in your view, lower costs for consumers? >> well, melissa, i saw the information this morning as well. look, i think more competition would be a good thing. i think that there's still a lot of efficiency. that we could do better in the system. of course we always have to remember that we ensure that we have high quality, we have the safety of the patients, and the products first. but, i definitely feel that there's a lot of complexity. there's a lot more efficiency that can -- that we can put into the system to make it overall better, and less expensive. >> well, alex we just about have

to go. can't leave without asking you about the current administration. what are your expectations for the impact on your business? will it be a positive one? or is donald trump's focus on drug pricing this issue saying the industry is getting away with murder going to end up in some kind of, you know, pressures you don't want to see? >> it's still very early days. there's a lot going on. we're encouraged by some of the things we're seeing around trade, regulatory policy, such as tax. i think we're still very early on in the health care debate. and i think that regardless of which particular proposal we actually end up implementing, there's still going to be a lot of work to do and we look forward to working with them on that. but in the end we've got to make sure that we've got a great health care system in the united states. and we can make it more efficient. we can make it more effective. we've also got to make sure that we continue to create an environment where innovation was rewarded. because that's what's going to enable us to cure alzheimer's, your cancer and a lot of the things we were talking about earlier. >> thank you so much for being here. >> thank you so much, meg. >> thanks, meg.

>> wilf, putin. putin says trump did not past secrets to minister lavrov and said that they can give records of the conversation. they have records of the conversation, they're willing to give to the u.s. congress and the senate. so putin is like -- >> what are the records i wonder? >> the transcript. >> i guess of whatever it was that was said. this is like -- surreal, isn't it jack? >> the interesting thing about that, obviously, is there was an official comment from russia 24 hours ago then obviously president trump tweeted this time yesterday when we were on air to suggest that some things were revealed. >> it was revealed that he was trying -- the rationale was that a plane had gone down balls of a lack -- because of whatever and he's trying to say, look, this is what we -- >> no, no, i get that. >> if it came from israel. israel said we don't have a problem with it and we expect to get even stronger with the trump administration. this is another -- >> i agree. >> trumped up -- >> as jack was saying earlier the issue is the mixed messages. you have someone deny completely, then someone say it

wasn't illegal, the intentions were right and still these confusions about messaging that i think people are losing confidence on. anyway, much more on that and other things coming up including veterans affairs secretary david shulkin our guest coming up on "squawk box." what happened? dad kinda walked into my swing. huh? don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital. there goes the airfair. i don't think health insurance will cover all... of that. buth my fathe! without that cash from - aflac! - we might have to choose between hawaii or your face. hawaii! what? haha...hawaii! you might have less coverage than you think. visit aflac.com and keep your lifestyle healthy. aflac! we've done well in life, with help from our advisor, we made it through many market swings.

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breaking -- i'm not laughing at this, jack, i'm not laughing at jack, with jack. breaking news on the battle between qualcomm and apple. cnbc's jon fortt joins us now on the "squawk" news line. tell us, jon, what's happening? >> well, here it is. this battle is escalating. qualcomm is now suing the manufacturers of apple's iphone and ipads. and those names include foxconn,

pegatron, and compile. they're suing them in u.s. district court for the southern district of california. and for withholding payment on qualcomm licensees qualcomm sued apple several days ago. this comes after apple stopped payment on licenses of qualcomm technology. they don't like the fact that qualcomm charges a percentage of the total price of the device. apple devices tend to cost quite a bit for a newer iphone and ipad. this is mostly about iphones. now, qualcomm says you can contact manufacturers are still paying for these other companies that they make devices based on. so it's just apple that they're

withholding payment from qualcomm says that the manufacturers say apple told us that we can't pay you. but qualcomm says hey you're supposed to pay us. you have to pay us. so thank you qualcomm trying to bring additional pressure to bear to bring this legal issue to a head. often cases like this, a company like apple will indemnify the contract manufacturer, say hey, we're going to pay your legal bills if this becomes an issue. but, we'll see where it goes from here. these folks could respond in a different way because this is another big company putting pressure on them from the other side. >> but just very, very quickly, john, let's be clear, qualcomm has already taken out guidance from their guidance the royalty payments from apple, correct? so it's already reflected in the company's outlook? >> yes, it's already reflected in the outlook. qualcomm's not getting paid. this is them applying additional pressure. >> for the hope of getting some of that payment. all right, jon, thank you. appreciate it.

jon fortt with that bringing news. more headlines after the break. ok, let's call his agent. i'm coming over right now. the newly advanced gle can see in your blind spot. [ dinosaur roars ] onboard cameras and radar can detect danger all around you. driver assist systems can pull you back into your lane, if drifting. bye chief. bye bobby. and will even help you brake, if necessary. it makes driving less of a production. lease the gle 350 for $579 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

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good morning welcome back to "squawk box" here on cnbc. live from the nasdaq marketsite

in times square. among the stories front and center, mortgage applications fell 4.1% last week according to new figures from the mortgage bankers association. those new purchase applications and refinancing activity fell. the average 30-year mortgage rate stands at 4.23%. that's unchanged from a week earlier. americans will be hitting the road in significant numbers this coming memorial day weekend. aaa projecting at 34.6 million people will make automobile trips of 50 miles or more. that would be up 2.4% from last year and the most since 2005. anheuser-busch inbev is in hot water with massachusetts regulators. they accuse the beer brewer of giving out free bar equipment to business on the condition they use it only for budweiser products. the company says it believes its actions were legal, and it is working with regulators to resolve this issue. our guest host jack welch, executive chairman of the jack welch management institute. jack i wanted to ask you a bit about the meetings you've been to, the strategy and strategic

and policy meetings with president trump. you've spoken before on cnbc and elsewhere about how positive the tone was coming off the back of those meetings, how confident business people were. >> right. >> do you think they've lost confidence, those ceos in the last ten days or so, because of the political rumblings we've seen? >> well, they're concerned about the upset that could occur in the agenda. because the agenda is right on the button. i mean, tax reform, wilbur ross has done a terrific job at neutralizing the chinese threat, if you will, in trade. betsy devos is driving the school choice. the student, the customer, rather than the professor or the teacher. and so there's so many things going right. and we're worried about that being derailed by these self-inflicted rules, and the democrats are playing this perfectly. the president may be the most

thin-skinned person alive. maybe joe is worse. >> we're right up there together. >> i mean, the most thin-skinned guy alive. and they yang him with the russian, and they yang him with this and he jumps and that throws people off. i mean, and the communications are terrible. i thought the white house celebration over the health care pass by the republicans, in the rose garden, was ugly. those fat cats all have beautiful insurance plans. the congress is loaded with insurance plans. they passed something. they didn't articulate here's what obamacare does, here's what you're getting now, there was no sales. the only celebration is we won. but the consumer didn't get a chart that said, here's what you

were getting before, here's what you're getting now. and the democrats took it away. they took the communication away. you're stealing 23 million people won't get health care. they started a rant, the democrats are outcommunicating, and they have a solid bar. >> jack we talk a lot about whether republicans in congress will soften their support or give up their support for president trump. what about the business leaders on the roundtable and the strategic and policy forum? do you think any ceos are likely to resign their position? the reason i ask is because at the jpmorgan yesterday jamie dimon came under a lot of pressure from shareholders about his position on that forum given some views on policy, whether there are conflicts. >> well, if they want to say, and where we're going, and prime minister is wide open and listening, he has done that in every meeting, and he's organized us in groups around

subjects we wanted to be involved in. i think you're better at the table, than you are in a back room. you might lose but you got a voice. >> what can the president do now in terms of communication to the business community to indicate that he is still working on that agenda, and as far as he's concerned is still on track? >> talking about it, don't go to the russian argument. don't go to these petty things. stay on jobs. stay on health care. stay on tax reform. talk about it every time. send spicer out there to talk on that stuff. not get in quarrels with everybody. but they take them off to the side. so it's simple. we want to be number one not number two in every business, fix, close or sell the business. everyone in the company walked around saying that. in their sleep. get a message. he's got a good message.

and he says it when he's on message. and unfortunately the rest -- >> the chances of tax reform, have they slipped significantly in your eyes? is it likely before the august recess? >> well, we don't have -- it will depend on them. the republicans in reconciliation can make this all happen. >> they got to have all the republicans. >> they've got to have them. but they can do it. they've got to step back and say, do i want to be in the majority -- minority, did i like it over there when obama was doing everything and i couldn't have a voice? because you don't have a voice in the minority. you have nothing. you might as well be selling candy in the street. and then -- so they got to take them and talk about what life would be like now, if hillary were president. listen, joe --

>> no, i know. i know. >> sit them down and say what do you think your life would be like now? if you didn't have the senate? you didn't have the presidency, and you were sitting out here now, going to work. >> right. i mean, jack you answered will fred's question about ceos worrying about consorting with the president. and did anyone ever ask jeff immelt or any of the ceos that were tight as ticks with the obama administration, as the obama administration talked down fat cats, talked down the private sector, tried to raise taxes, passioned obamacare without a single republican -- all the things that were done, did any ever complain to the business council? and did everyone ever ask him, are you going to abandon president obama because he's so anti-business? why ask about a guy who's doing all these pro-business things, and whether they need to abandon him when no one asked -- am i

making a point? >> but the democrats have won communication. >> that's what i mean. >> they've won the communication. >> but people don't -- they really don't ever ask themselves -- i don't think there's any introspection in asking about questions like that. they don't even -- anyway. >> it's a question, though. >> i know exactly what it is. but -- it's a different world. one thing doesn't apply -- it applies to one thing, it doesn't apply to the other thing. >> it's a permanent one off the back of the jpmorgan agm yesterday. >> my point it is has nothing to do with you. it has to do with i've never seen, for eight years i never saw a single ceo -- >> that's because they'd won the communications battle. >> i understand it. >> and i said that miscommunications are why you get the d minus. >> right. but it's also, you have one foot you know -- it's not a fair playing field from the start with mainstream media. >> we all know that. >> but you didn't say that.

jack, stick around. >> you've got a thin skin, joe. >> stick around. coming up, you know, just because you have a thin skin doesn't mean people aren't out to get you all the time. all right. secretary of veterans afairs david shulkin is our guest, "squawk box" returns after a quick break. tomorrow on "squawk box," a tax code built for growth. congressman kevin brady joins us with his plan to grow jobs at the american economy. plus, meet the rock star of biology. number 7 on the cnbc disruptor list, the ceo of ginkgo bioworks joins us to discuss the world of biodesign. tomorrow at 6:00 a.m. eastern time.

what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods?

the value of capital is to create, not just wealth, but things that matter. morgan stanley

stand up for what's right. experts are gathering in boston this morning for a conference focused on supporting veterans coping with the effect of head trauma and traumatic brain injury. for more let's bring in veterans affairs secretary david shulkin. mr. secretary, thanks for joining us this morning. let's go into, that was a quick two sentences i read. what exactly is happening this

morning? >> well, good morning. we're here in boston at a meeting that we put together called the brain trust which is bringing together people from the department of veteran affairs with industry leaders in technology, biotech, and other companies that can help us find solutions from veterans who have injuries to their brain. >> certainly a worthy cause, and we wish you luck with that. we all when we talk veterans, though, now we're all looking for a snapshot in time on where we are and trying to deal with some of the publicity -- the bad publicity and the bad things that have been happening, wait times, et cetera. where are we on that process, mr. secretary? >> well i think that we're on our way to bringing back a system that veterans can rely upon and that americans can feel good about. this is a crisis that started in 2014 with the v.a. not having

the resources that they needed to care for vaet rans. and a lot of these problems had been years and years, maybe even decades in building. and we're now addressing these problems head-on and making sure that we have a system that's modern and effective for veterans for generations to come. >> is it a funding thing, mr. secretary? if we doubled the funds, would that fix everything? is it an organizational thing? is it a -- is it problematic with a government-run program that you just don't get the accou accountability that you would get in the private sector? because you know you can extrapolate a lot of what you find out and a lot of what you do you can extrapolate to how we fix the overall health care system. >> well i think that when you are talking about an issue as complex as health care today and you're talking about a system as big as the department of veteran affairs, which is the largest health system in the united states, it's never one answer.

and i think that for years, the v.a. had been underfunded. and for years the v.a. had put off decisions that needed to be made to modernize its systems to keep up with where health care has gone over the past decade or so. but now, i think that we are dealing with those issues, we're making some of the decisions and i do not believe this is an issue primarily of funding. i believe that the v.a. has, in general, adequate funding to be able to fix its problems. we now need some legislative changes. we need to make some management changes to adapt to the best practices in the industry. and we're well on our way to making this a system that works again. >> i can remember, mr. secretary, five years ago or so paul krugman and others when we talk about single payer or talk about, you know, alternatives to the health care system we have in the country, prior to obamacare, they would point as a model to the v.a. as look, it can be done. it can be done under budgeted,

and providing great care and i think that maybe that was not the case. that everything finally came out that that wasn't necessarily the system that you would use to argue for single payer. is that an accurate portrayal of what happened? is it not something that works for the entire country, government-run systems? >> well, i've spent my entire professional career in the private sector running health care institutions. and so i'm relatively new coming to government. so i came in with a very open mind on this. i will tell you that what v.a. does for veterans would not be available in the private sector. and our veterans are coming back with very complex issues, after they've served defending our country and i believe that the v.a. is absolutely essential and necessary to be able to make sure that we are providing those

services to veterans. the v.a. is also not just a government-run organization. about a third of our care now for veterans is in the private sector. working with private hospitals and doctors. so what we're developing now is really an integrated system of care between what v.a. can do, what the private sector can do, all for the benefit of our veterans. >> all right secretary shulkin, thank you. good luck this morning. >> thank you. >> hopefully you make some progress on what's an important issue. and we'll see you again soon. thank you. >> thank you so much. bye-bye. >> okay. >> breaking new just in from ford. it has announced a voluntary separation program which will impact 1400 salaried positions. those workers expected to depart by the end of september. more on the story coming up in just a few moments although this does appear to confirm the reports out yesterday that they would be doing this. also coming up the code at the heart of the wanna cry virus that spread around the global earlier this week was apparently stolen from the nsa.

we'll talk cybersecurity and web disruptions with the ceo of number 11 on the cnbc disruptor list crowd strike. "squawk box" returns after this quick break. 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average?

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but we've got the get tdigital tools to help. now with xfinity's my account, you can figure things out easily, so you won't even have to call us. change your wifi password to something you can actually remember, instantly. add that premium channel, and watch the show everyone's talking about, tonight. and the bill you need to pay? do it in seconds. because we should fit into your life, not the other way around. go to xfinity.com/myaccount a lot more from jack welch when we return. and later congressman jim jordan will join us to discuss tax reform. quick look at the futures as we go to break. they are improving a little. down now just 82 points having been down triple digits about an hour ago.

market alert. futures in the red as the white house denies details of a memo from ex-fbi head james comey. tax overall. third ranking senator john thune pitches his proposal for reform first on cnbc. >> plus jack welch, straight

from the gut. >> stay on jobs. stay on health care. stay on tax reform. >> the business titan is our special guest 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." >> you've learned nothing. good morning. welcome back to "squawk box" here on cnbc. live from the nasdaq marketsite in times square i'm joe kernen along with wilfred frost and melissa lee. becky and andrew are off today. the incomparable jack welch is our guest host. executive chairman of the jack welch management institute, which is -- you got like how many students now? >> 1600. >> 1600. >> wow. >> yeah. >> and -- >> and an nps score of 84 this semester. net promoter score which is student satisfaction. it's off the charts. we're growing 40% this year.

>> we've already learned one lesson for free. a severance dollar is the best dollar you'll ever pay. >> love them on the way out as you loved them on the way in. >> i'm taking that -- >> you know you parade the m.i.t. graduate around the room, look who i just hired. and six months later you're -- i don't want to talk to you and they let him go -- >> you're talking about me again, right? why did you say that? >> i taught there for four years. >> i don't remember you. the futures up -- when you did say that i was thinking, if you were nicer to comey the way you did it do you think he wouldn't -- i don't know whether that would have made a difference though. >> you would have had to take him through. you never surprise somebody. that's another rule. never surprise -- >> it's almost like saying you're buying someone's silence,

jack, almost sounds like what you're saying. >> no. you're recognizing your mistake. you put them in the job. >> okay. >> comey is different, though, because he was appointed during a previous administration. so it's a little -- you didn't love him on the way in at all. >> yeah, but you have to deal with what you don't like about him all the time. >> he kind of loved him when he first met him, when he became president and said you can stay. >> that's true. >> you can't impulsively fire anybody. do you think you've ever seen a happy whistle-blower? >> did you learn this -- >> happy whistle-blower arrives? >> i like the new jack welch here. you don't ever remember just simarily dismissing people? do you remember a name that people used to call you long ago where the building -- buildings were left standing and there were no people anywhere. >> that was the media. >> i know it was. >> that wasn't the people. the people -- >> you learned this over time that this -- >> no i always did it. that's why we never had problems. >> right.

>> nobody ever, when i retired, i said, you find nobody who we surprised when they left. and my friends. my friends who didn't get jobs are with me now. >> we didn't look at the futures. that is a story today. triple digit losses for awhile in the futures but i think they've pared those. last we saw the dow was down, oh, it's down 85 right now. and, some would tie this and the weaker dollar to what's happening in washington. and the, you know -- >> yeah. >> some angst. >> dollar down again as well we should point out because it was down 0.7% yesterday and down 4% now year-to-date and it's down another 0.7% against the yen this morning. shares of target are surging in the premarket. the earnings and revenues topping forecasts. same store sales fell 1.3% but that was only a third of the decline that had been expected. shares are up some 7% bucking

the retail trend there. anti-austerity protests turned violent in athens. a group of protesters threw gasoline bombs and flyered flares at riot police. workers across the country walked off their jobs as lawmakers were set to approve another batch of reforms that could impose more hardship on greek workers. ford has announced a voluntary separation program. it will affect 1,400 salaried positions. the automaker will use early retirement and special separation packages. the workers are expected to depart by the end of september. ford shares down 0.2 in the premarket today. >> one of the effects of your beloved european union on the southern european -- as germany flourishes the poor people in greece are asked -- >> so who gives -- >> asked to give even more. >> who am i a representative of today? i'm representing the brussels side of the argument this time around? >> the technocrats --

>> the unelected bureaucrats in brussels, yeah. >> the socialists -- >> just like every day. >> now to politics. fired fbi director james comey wrote an internal memo, saying that president trump asked him to drop an investigation into former national security adviser michael flynn. this is according to reports and sources tell nbc news the memo is part of a paper trail that comey built to document what he believed to be trump's efforts to derail the fbi's investigation into his campaign alleged ties to russia. let's bring in congressman jim jordan, a founding member of the freedom caucus. where to begin, congressman. what should we assume we know? at this point, the language that comey reportedly condemn plainiously wrote down, can you see clear, or i hope you can see

clear to let this go in >> right. >> do you believe that much right there? >> well, i think we should get the facts. a lot of anonymous sources, a lot of reporting. one side says one thing, the white house says something else. let's get the facts. let's let the intel committees do their investigation, and you probably saw last night with chamber and chaffetz of the oversight committee said if he has to subpoena the memos, tapes, anything related to this. let's get that information. i completely support that. then we can proceed and get the full -- all the facts, and go from there. >> i guess you don't have any more insight into whether there are tapes or not. >> no. >> nobody knows. does it then become a he said, he said situation? and let's say it's proven or let's say that you believe that president trump said in his words, and you've been around him, you know, he could maybe --

they're denying it was said. let's say you know what, mike flynn, he's gone, he resigned, i hope at some point you could just see to drop this. does that rise to the level of obstruction of justice in your view? >> again i don't have all the facts. doesn't sound like it to me but i'll let the legal experts determine that. i want to see the information. i want to see the evidence. i want to see the memos. you know, mike flynn served our country well as a general. maybe that was the context of those -- that conversation, if it took place. the white house is saying it didn't occur that way. let's get the facts and more on from there. no one's ever accused me of going easy on my own party. i'll follow the trail, the truth, the facts but let's get those first before we start jumping to conclusions and having hypotheticals. >> congressman i'm glad you're here today. and senator thune is coming on. but, just watching the coverage last night, most of the cable channels were saying, they have plenty of democrats ready to

weigh in, and i was watching chuck schumer, i mean, no republicans were appearing last night. do you get the sense that this is a bridge too far for some guys that are up in two -- well you're up in two years. but for some of the senators that are up in two years? is this a bridge too far? they ready to throw in the towel yet, do you know? >> i get the sense of that. we should get the information. we should get the facts. let's proceed in a methodical manner here. let's get all the information. let's not just rely on anonymous sources and what's reported and what some people may speculate took place. let's get the information. and follow that wherever it takes us. if at some point there is a need, and a select committee is warranted, i'm open to that, as well. but let's follow the facts first. let's not just reach conclusions before we have all the information. >> congressman, senator mccain has already called trump's troubles of watergate size and scandal. sounds like you're willing to withhold judgment. are you disappointed about the reaction from some within your own party? because it makes it look like

the party has fissures right now. >> i think what we should be focused on is the things the american people elected us to do. i think we make this job way too complicat complicated. our job is to do what they elected us to do. that is getting this health care bill done. that includes doing the tax reform, creating a tax code conducive to economic growth so we can get out of this 1.5% economic growth we've had the last five years. let's actually get to 3%, 4% growth, creating the right kind of tax code will help that. let's get focused on those issues the american people elected us to do. we do that i think we'll be fine. and let's get to the facts on this other situation regarding former fbi director comey. >> -- projected is 3% to 4% growth et cetera. i'm story i'm looking the wrong way. to get to the 3% to 4% growth he needs to have a unified republican party. right. >> you're going to have to not

each get 100% of what you want. and the problem we're facing with the republican party is you each have your little taxes. the tuesday group, the involved with meadows, et cetera. you don't get a unified party. the democrats come at this thing as one. >> yeah. jack, i think we were unified on election day and the house freedom caucus stands for the very things that people elected us -- did the people elect us to repeal obamacare? yeah, that's what the freedom caucus was fighting for. did they elect us to reform the tax code? yeah, that's what the freedom caucus will be fighting for. they didn't elect us to put a whole new tax on the american people like this border adjustment tax some are talking about. the freedom caucus is doing exactly what we were elected to do. we will continue to do that. people are united around that message. let's make sure people in congress in our party and our conference get united around that as well. i think we're doing exactly what the american people elect us to do and that should be what unifies us because that's what they said on election day. >> well i loved you when you were in the minority and i loved

you in the hearings. you were my favorite congressman. >> well i appreciate that. >> i wish you would now coalesce around the issue of supporting the president and driving his agenda. because we -- if we don't get his agenda done, we won't get to 3% or 4% growth and you guys will be in the minority before you know it. >> i couldn't agree more, jack. and the tax principles, tax reform principles, that the white house rolled out a couple weeks ago we support those. we want to unite around those and get those done. let's create a tax code that let's families keep more of their money and one that's conducive to economic growth so we get the growth rate we need. we're all for doing that. let's let this other thing, we can do both of those things at the same time i believe. >> congressman, what is your eta for that sort of tax deal? i mean clearly the unity is not as high as it could be. is it realistic that it arrives

this year? >> i hope sooner rather than later. i would love to get it done before the august recess. that's probably pushing it. but let's make sure we get it done this calendar year. i think politically speaking that makes a lot of sense and obviously, as we talked about economically if we're going to get the kind of growth rate we need the sooner the better. >> congressman you were right there in a lot of jack mentioned in a lot of the hearings. just to tie up a couple of loose ends, did it become known, is it factual that the justice department or certain parts of the justice department told the fbi to stand down on the hillary clinton foundation investigation? is that different than this? do you know? >> well i don't know that that specifically happened. i do know we saw things in that investigation we've never witnessed before. have you ever seen the subject of the investigation's husband get to meet with the attorney general three days before the fbi interviews the subject of the investigation? have you ever seen that happen? so we know -- i actually saw the immunity agreement cheryl mills and heather samuelson got.

unprecedented. >> in terms of investigation. and the other thing if trim had said to comey i'm ordering you to end this probe of mike flynn i think comey would have had to resign or something at that point because that would have been truly obstruction at that point. he didn't do anything. he said all right. he took some notes. he was there for another two or three months. we find out about it now. if in his view it rose to obstruction why didn't he view he had been totally compromised at that point? >> great point. i'm confident that the president wouldn't say something like that and that he didn't say something like that. >> i don't think he did either. just shows that comey obviously didn't think that this was -- >> i'm just going to add one final question. jack earlier gave the president a d-minus for communication. what's your take on that? >> i never give grades. let's do what the american people elected us to do. let's stay focused on that.

>> that's why you're a better politician than i am. >> good to be with you. >> dockman thanks for coming on this morning. >> you bet. >> and as jack said you're -- i don't know, the guys that are up, the senators that are up in two years, they need to -- they can't hide. you know what i mean? they got to come out sometime. anyway, and say something. quick programming note, we're going to talk about more about tax reform tomorrow on "squawk box." house ways and means committee representative kevin brady will be our special guest at 8:00 a.m. eastern time. we've still got a lot ahead on "squawk box" up next cybersecurity disruption. crowd strike taking the number 11 spot on cnbc's 2017 disruptor list. the ceo will join us. and later senator john thune out with a new op-ed on cnbc.com. he will be here with his pitch for tax reform at 8:30. plus, the welch way. we get you back to our guest host jack welch. we've got much more on the economy, markets, and of course president trump. stay tuned you're watching "squawk box."

♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.

>> welcome back. to "squawk box." disney was downgraded to neutral now from outperform.

this after macquarie, as well as continuing subscriber declines at espn. and cnbc has learned that amazon is breaking in to the pharmaceutical space, or attempting to. company hired a general manager to lead a new team and formulate a strategy and is in deep talks with industry experts. amazon recently started selling medical supplies and equipment in the u.s. in april reports said the company expanded its prime now delivery service in japan to include the sales of drugs to patients. with the approval from a pharmacist. crowd strike has been disrupting the cybersecurity space since its inception in 2011. it is number 11 on your disruptor 50 list. the company was called in to investigate the dnc breaches of the 2016 election and continues to be involved in analyzing international cybersecurity threats. joining us now, crowd strike co-founder and ceo george kurtz. george, good morning to you. thanks very much for joining us.

i mean of course a week where this is front and center in the discussion point once again. i wanted to start by asking whether, particularly when it comes to the consumer, should protection against cyber attacks be a public good? should it be something that the state provides for all people? >> well, it's a great question and i think that's one of the areas where a lot of u.s. citizens and maybe folks around the world are a little bit confused. and in different countries the protection is different. for example, in the u.s., there is no mandate that the government protects the dotcom domain, if you will, and all the companies that are associated with it. their mandate in their charter is to really focus on the government protecting the government. so i think it's a broad issue. and i think what consumers need to do is to make sure they have the right protection in and can be able to protect themselves and have the write security software to prevent those advanced threats. >> should there be more severe punishment for the wrong doers in this space, as well? >> well, it's very hard to actually apprehend a lot of

these cyber criminals, nation-state actors, just because of the geographic boundaries and challenges. so, again, i kind of think it's one of those areas where you got to protect yourselves, and where you can bring people to justice, certainly the governments are involved in trying to do that. >> and george, obviously crowd strike number 11 on the disruptor 50 list, cnbc disruptor 50 list, the fact that you are a very much cloud focused company, do you think that plays to your strengths, both today and for the future? >> well, absolutely. if you look at the existing legacy players they all look like seabold. we know what happened, they got sold for $5.5 billion and after having a 45% market share. you look at sales force, they're $55 billion market cap because they have the cloud architecture. it's difficult for the legacy anti-virus players to make that architectural change and we believe the cloud is the futured powered by artificial intelligence which is really what we're driving. >> george you recently closed $100 million in definancing in the latest round, valuation over

$1 billion. there are a lot of companies out there, with the likes of cisco looking to expand in the security space. what are your plans? >> well, we get this question all the time. our plans are to drive customer growth, geographic expansion and make sure we have happy, smiling, protected customers and then we have option allties. we look to the future, understand what the public markets might mean for a company like crowdstrike. we've got tremendous annual recurring revenue growth over 300% compounded year over year and it's been just a great run so far. and i think when you look at some of these latest attacks like wanna cry, it highlights the need for advanced technology that can actually stop these threats, using something that goes way beyond traditional signatures, which is what we do from an artificial intelligence standpoint. >> optionality means you're entertaining all exits? so to speak? >> optionality means, yeah, opti

optionality means we're focused on the customer and in the future what our plans are, we'll look to our board and investors and decide what's best for our company. given our profile we certainly believe we could be a public company in the future. >> george kurtz of crowdstrike. coming up, a memorial spacecraft. one company wants to send your loved one's ashes into orbit. and elon musk is getting in on that mission. that story is next. >> space space. >> as opposed to what space. >> going forward. >> oh, i see. >> later senator john thune out with a new proposal for tax reform. he makes his pitch first on cnbc. we'll be right back.

space one company wants to bring a death from underground, to the celestial with the help of elon musk, they plan to send ashes into orbit on a spacex rocket. each customer who signs up will receive a kit with a custom ash capsule. and you collect the cremated remains of one of their loved ones, and then the memorial spacecraft will orbit the earth

for about two years. so far, believe it or not, 100 people have paid $2500 apiece for a reservation to have their ashes orbiting the earth. >> how do you even prove that it's actually orbited the earth? >> that's a good question. >> versus collecting capsules and putting them in the basement? true. >> i mean when you young you think you're immortal. i don't really care what happens that much to me or my ash -- ash ashes. anyway, once you're gone my soul's going to be somewhere else, hopefully. coming up, senator john thune says the current tax code strangles business growth and job creation in a new op-ed on cnbc.com jack is going to love some of these ideas for small business. and i want you to pay attention and talk to senator thune about this because you have great input, jack. the third highest ranking republican in the senate will be here with details about a new tax proposal. you're watching "squawk box" on cnbc. the baby's room won't build itself.

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a sunny good morning and warm welcome to "squawk box" here on cnbc. live from the nasdaq marketsite in times square. among the stocks on the move ahead of the wall street open, the apparel retailer reported profit of 13 cents per share. while revenue also short of forecast shares down about 1.8%. restaurant chain jack in the box is jumping in the premarket trade after saying it's considering a spinoff of its qdoba mexican restaurant chain up about 9.6%. also rising this morning, shares of consumer products maker colgate-palmolive. "the new york post" reports ceo ian cook told investors he'd be willing to sell the company for $100 per share. seen a 4% jump to $74.3. ralph lauren has named patrice luvet as its new chief executive officer. recently the head of procter &

gamble's global beauty division. he'll take over on july 17th. shares up in premarket. a tax proposal today aimed at benefiting small and midsized businesses. joining us now senator john thune of south dakota, chairman of the senate commerce committee and member of the finance committee. thanks for joining us this morning. at some point we'll talk about the news of the day. let's start with some of the proposals that you're putting forth to try to loosen some of the shackles, i guess, or at least help out small businesses. what does it entail? >> right, joe, thank you. first off, we think that small and medium sized businesses are very interested in speeding up cost recovery, getting them to get capital deployed to invest more, and to create jobs. and so our bill basically gives them ways in which they can recover those costs more quickly, expansion of section 179 expensing, making permanent the 50% bonus depreciation

allowing start-up to deduct their cost at a higher level and expanding a number of businesses eligible for cash accounting. those are some things that we do in our proposal. we think it will serve as a sort of a marker out there. and we expect that the finance committee will enter into the discussion about how to create a broad-based tax reform bill here in the near future. and we wanted to get that discussion going. >> so basically, you're talking about some things that are important for small businesses that you want to put on the radar for the house, or whatever committee is going to write the tax reform bill? you want to have these things in front of the people that are doing it as suggestions for what should end up in the final bill? >> yeah, that's right. and we think that the finance committee in the senate, weighs and means committee in the house and the house has a blue print out there, the administration has put forward a set of principles. the senate hasn't been heard from much yet but we're starting to engage in that process and working closely with chairman

hatch and the senate finance committee. our colleagues there to try and put together, you know, the outline of a bill that we think we could move to the senate. and obviously we're going to be focused on the issues that we think will create greater growth in the economy, create better paying jobs and higher wages. these needs to be about growth and the two things we think achieve the highest growth is the reduction in rates and faster cost recovery and especially for small and medium sized businesses which create a lot of jobs in this country. >> you've got on the plate of the senate the obviously repeal and replace. and does that -- i mean do you foresee that being first before you do any of this other stuff? and where does that stand right now? i know you might not be specifically involved with that. but is the work going on right now with the senate? that you know of? >> actually, i'm very involved with that conversation, as well. and we've got a group that's meeting on a regular basis and every republican senator, all 52

senators are having input into what that health -- senate health bill might look like. obviously we're going to look at what the house has done. but the senate is taking a slightly different tack in terms of how we construct this thing. but we believe that the current, you know obamacare is failing. status quo is unsustainable. and that we need to move in a different direction that creates more choices, more competition, allows market forces to drive prices down in the health care market out there. and that's what our bill is going to be focused on. but to your point, i think we have to get through that discussion first. we need to do something on health care reform before we pivot to tax reform, because health care reform creates a much better, more favorable baseline to do tax reform later on in this year. so i think they have to sort of move sequentially but we're multitasking right now and working on both of these important subjects. >> senator, as i said, we really appreciate you being here today. i was, you know, twitter. not sure about twitner general.

just looking at twitter. cbs news tweeted out we reached out to 20 republican senators and representatives, as well as the white house today, to appear today, and all declined. so, charlie rose and his friends at cbs this morning is that you guys are reticent, or afraid, or hiding, or not wanting to comment on the latest comey allegations from yesterday. but here you are, so we'll give you a chance to -- >> okay. >> what were your thoughts yesterday when, again, something else comes out after 5:00 p.m. that just shakes the whole political world? what were your thoughts and give us some comments? >> sure, joe. well, look, nobody likes what we're hearing in terms of the reporting that's coming out in the last few days. obviously we want to make sure we get this train back on the track. the president is the person best positioned to do that. he needs to keep his focus on the things that the american people elected him to do. and that's to grow the economy, create jobs, raise wages in this

country, and there are lots of issues that we can work on together to make that happen. and so these things end up being a side show. they end up being a distraction. obviously we want to get to the bottom of it. figure out what the facts are here, and there will be efforts made both in the house and the senate, various committees that will be at work endeavoring to do that. but in the meantime, we've got to multitask. we've got to work with the american people. and i hope the president can get his game face on, and go to work on some of these issues, and try and get away from the twitter activity and all the things that seem to get us distracted from the task at hand. >> did you see senator schumer yesterday? did you catch that sound bite by any chance? does that -- i mean is this going to be a reasonable, calm, discussion of what's happening? or, you know, is history watching as the very foundations of our democracy are shaken, and you know, i don't know how we come out of it? can you have a reasonable discussion in the senate at this point?

>> we can. we've got members on both sides committed to getting things done. i chair the commerce, science and transportation committee. we're marking up a series of bills tomorrow that we'll report to the floor and hopefully get some action on there. so there's a lot of other things that are going on. and it's too early i think at this point to determine what's ultimately going to happen with some of these allegations that are being made. there will be a time for that. and a fuller discussion. but in the meantime we've got work to do. >> because there's not a lot of wiggle room with 51 -- include vice president pence not a lot of wiggle room. some of these guys are up in two years. do you see in your walking around there, do you see some wavering, do you see some guys ready to, to cut bait and run? >> well i wouldn't say that, joe. but i think there are members who are concerned. obviously, you know, the reporting that we've seen the last few days we want to know, actually, what happened. >> okay. >> you know, this more recent thing last night about the memo, everybody of course wants to see that.

get questions answered by the white house, and the administration. but right now i would say that most of our members realize that we have an important job to do in the senate, and we want to get on with it. and we hope that the president will join us and you know the sooner he can focus on some of these important issues that the american elected him to work on, the better it's going to be for him, and for us, and for the american people. >> thank you, senator. that was not so hard. you know what, i don't know if i'd go on a network morning show either, though. maybe -- you know, that might be -- might not get the imsame interview. anyway, appreciate your time and thanks for coming on. >> glad to be with you. >> you should go on a network. >> you can read -- >> why would i? to face the nation? you can read more about the president's tax proposal. his op-ed is published on cnbc.com. >> taking stock of the trump economy. you're watching "squawk box" on cnbc. is is a story about mail and packages.

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welcome back to "squawk box." our guest host this morning, jack welch, executive chairman of the jack welch management institute at strayer university. jack, we just heard an interview with senator thune and he said that some of his colleagues are concerned, and the way i read that from a market participant standpoint is, that means that there is not republican unity, necessarily, and that might be even harder for the agenda to get accomplished. >> well, that is an issue.

that is a clear issue. can we get this agenda accomplished? the first quarter, we're seeing the confidence, the underpinnings of a great potential economy here. people are expecting the agenda to be delivered. and whether or not they can get that, i said that to jim jordan. i mean, they can't get everything each one of them wants. they've got to come together or else they'll be a minority party again. and they've got to make that alternative decision, can we come together around this? look the economy is poised to get to 3%, to 3.5% in the next 18 months. if you do it. if we just get these agenda items put through. >> so you're talking about being in these meetings with all these ceos. they're pumped. they're really excited about what can happen with the u.s. economy. >> right. >> if you're a ceo and you're making plans for growth, making plans to spend money, whatever

you're going to do, hire, are those plans on hold now? i mean, what do you -- how do you -- >> i don't think on hold yet. but continue to just stir and be a huge turmoil is not constructive for that agenda. but i'll tell you, if i take a month ago or a week ago, two weeks ago, i would be all bullish. all bullish. and the democrats are tearing the fabric of this economy apart. with this threat. this constant -- there's never been a battering like this of an administration. never. the republicans, the democrats, and the press have joined to get this guy. >> i want to get cnbc.com to write a story with that as your headlines. that the democrats are tearing the fabric of this economy apart and we'll see if we can offset some of the other stories that

we can see. that was pretty significant what you just said. >> i think it's true. >> trump derangement syndrome is a -- is a real thing. >> well, people aren't acting the way they've acted for years. i've nover chuck schumer for many years. he's never acted like this. >> right. >> he's never done this emotional stuff. >> right. >> he's a reasonable -- he was always a reasonable guy. >> he's got a base to satisfy now. >> pulling him one way. and bernie sanders, who couldn't get out of his own way is pulling him that way. >> jack in terms of the way you said you want to see president trump improve, the most clear you've been is on communications. >> no, i want him to put a team together that really is supportive in the white house. he's got a great team in all the buildings around the white house. in the white house he's got to get clear focus on his team, a

loyal team, to execute the mission. >> the other area throughout the show which i've heard you say a couple times, i'm not sure if it's a criticism or an observation of the president but you said that he's thin skinned. is that in its own right a problem for the president of the united states? >> yes. >> does he have to change that? or is it something that the president has to live with? can he change it? >> he's got to change it. he can't react to everything they put -- he puts a dollar out there and he grabs it. and he puts a dollar out there and he grabs it. and he can't do that. and spicer doesn't have to be angry at every press conference. i saw huckabee sanders, with a refreshing discussion of a smiling, reasonable person. now they beat the hell out of her -- >> if you face that press corps, the white house press corps every day you think you could stay calm? >> it would be tough. it would be tough. but that's his jobs. >> i know. >> that's his job.

>> these two things, improving the quality of certain members of the team and the communications roles, the thin skinned issues, are those easy fixes? or is the work really cut out now for this administration to get back on to the positive track that you said you would have talked about if this was a month ago? >> it's a hard job. it's a management job. it's a real -- i think his ideas are great. i think his foreign policy is great. we're leading not following. we've got better standing in the world. with israelis and a lot of people. we're just looking better as a country. this trip he's going to have, i hope it isn't marred by this -- he doesn't look as strong with democrats screaming at them every minute as he goes on a foreign trip. >> you mentioned your change in bullishness over the past month. yet the markets have continued to hit new highs -- >> no, i haven't changed bullishness. >> you're still bullish.

but it's -- >> i wish -- >> to a degree. >> i wish the democrats weren't tearing the possibility apart. i wish the resistance could realize they have an obligation to the country to get growth, jobs, higher wages, are good for everybody. and i want more people employed in better jobs with higher pay. he does. he believes that. every meeting we're at he talks about it. he has got to keep on that track. now, as they pick away at it -- >> right. but even as they pick away, and they've increasingly been picking away. the markets are continuing to march to new highs are you sort of surprised at the market ambivalence? >> no the market is benefiting from a global synchronous if you will. europe is doing well relatively speaking. 1.7, 1.8. japan is doing well. china has recovered nicely.

so the global role looks good. if we could get this thing through we would have the world by the tail. we would have the economy humming and jobs would be pouring out. now the result of that would be the democrats wouldn't be in power in 2018 and '20. which they're fighting against desperately. >> so the u.s. equity market's not overvalued at the moment? >> i don't think so. now, two months down the road, as the thing is shredding, there's more trouble. >> all right. jack, will be here for another twelve minutes or so. >> when we return we'll find out what is jim cramer fired up this morning. we'll join us from the new york stock exchange coming up. quick check on currencies. the dollar soft once again to the tune of now about 0.9% against the yen. the euro well above 1.11. so a lot of dollar weakness once again. futures down as well.

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well, there -- let's get down to the new york stock exchange. jim cramer joins us now.

i keep reading your tweets, jim, that, you know, nothing's happened yet and if it does happen with washington, here's some stocks that -- where it's not going to matter. i'm not convinced it's happening yet, although we saw triple digit for a while. these 0.2% moves, wasn't that long ago we were getting 100 point and 200 point moves three times a week. it's been very, very quiet lately. >> what i have been waiting for my friend jack welch to say how well the ceos are doing in this environment, that the dollar is getting weaker, it will be a wind at their back and we have to braise some of -- praise some of guys who have done incredibly well. and jack you know, there's a quality of a level of ceo that we have not seen in a long time. these guys are really navigating some incredibly difficult waters and coming out on top in the world. >> i agree, jim, totally. and in the first quarter we saw an industrial -- it in industrial businesses, so --

some earnings we haven't seen in a long time. i'm not talking high-tech, but i'm talking the grungy industrial businesses, growing double digit earnings and the s&p was way up 15, 16% in earnings. so i mean -- >> right. i mean, what we're seeing is that places to go on weakness, yes, i don't like turmoil in washington or whatever. but the companies themselves, jack, have really come on strong in europe, in asia. you know, the 3ms of the world. united technologies, guys we really like. it's amazing to see how well they're doing in this environment. >> there's one story i like to tell. i was at a private equity -- my private equity company that i work for. for three days. reviewing nine businesses for three hours each. the people were pumped out of their mind, the ceos have never been more optimistic. then i went to dinner that night

with some media people in new york. i walked in to the restaurant and they said to me the first words, what's the over and under on trump? i said what are you talking about? they said, the number of months he's going to be in the job. i said, get the hell out of here, i just have been with people that are creating jobs. giving people raises. growing the economy. we haven't felt this way in eight years. >> thank you. putting food on the table. and that is what you and i know matters and let's not lose sight. that's what we do in this country. >> god bless you, jim. >> just i want to let this -- you know, we have to go, but i want to keep going. been a while. you don't see that -- you don't see this in too many places. jim, thank you. see you in a couple of minutes. when we return, some parting shots from our guest, literally, jack welch. stay tuned. ♪ ♪

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as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average? our guest host this morning has been jack welch. if i had to summarize what you say, it's keep your eye on the ball, that we have a chance here to have more jobs, better jobs. more prosperity. and to really accomplish some

things if you keep your eye on the ball and not distracted. >> focus on your successes. talk about year success. gorsuch. the spending on the military. the border. focus on if -- the stuff you have done successfully against all of this. and stay on jobs, jobs, jobs. people elected you to do this and bring the republican party in constantly. make them one. we can't have mccain saying this and -- john thune said it beautifully today. focus on this stuff. that's what we've got to do. we've got to get this agenda through for the sake of the country. we've got to get his agenda. we were going one way and now we can get real growth. >> market's gotten significantly worse. yeah. 132 points. but we haven't had a triple digit move one -- at least down in quite a while. >> yeah. >> the dollar is a lot weaker.

do you agree with what jim cramer is saying, that it will help the businesses or it will drag the market lower? >> i don't know about, but it helps exporters for sure, big time. exporting to a stronger europe and a stronger asia is good news. >> the triple digit decline today concerns you at all that -- >> it's one day. it's one -- >> do you think the markets are undervalued right now, right? we can go higher. >> i think the markets are -- right. fairly valued right now. >> the repeal and replace is a slippery slope that needs to be managed correctly. no matter what i don't think it's going to be -- >> it's a loser. it's a loser. >> you have to do something though, right? >> i'm not hung up on repeal. i don't know if you need to take the name off of it. you can take the name off of it, leave the name on it and work

around it. >> you're talking -- for political reasons because you're taking entitlement away. >> you're going to get killed. >> and they knew that eight years ago. once it was done, they knew it was done. it was never going away. >> now fix what's wrong with it. because there's a lot of things wrong with it. >> i know. all right, jack welch. >> thanks. >> thank you. you're both here tomorrow. >> i'm not. i'm out. >> all right. make sure you join us tomorrow. "squawk on the street" is next. ♪ good wednesday morning. welcome to "squawk on the street" i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. the markets appear to respond finally to the turbulence in washington. the dollar's down, future's down, gold's up to the two week high as we await