"squawk box". >> i could have made this song. so unfair. welcome to "squawk box" on cnbc live from the nasdaq market site in times square. i'm kelly evans along with joe kernen, andrew and becky are off today. let's check on the markets first. we had a rebound nicely yesterday after that deep selloff the preceding day. it looks like we're headed in that direction. the dow implied to open higher by 30 points. s&p up 6, flaz dnasdaq up 16. asia, europe, we're not seeing brazil up there. the nikkei. quiet across asia. shanghai barely higher. hang seng and nikkei up less than 0.2%. in europe, stocks reacting more

sharply yesterday. today a knock on gains, ftse mib leading higher in italy, 0.89%. the german dax up 0.3%. the ftse 100 up 0.50%. it's maybe a focus on brazil, argentina coming into the discussion of late. here's crude, up about 1% on wti, 49.84. brent up to 53 bucks. nat gas up 0.2%. the ten-year note at 2.118% has moved up nicely. now 2.247. you'll take it in this kind of environment. and the dollar which has weakened substantially over the past couple of weeks hanging around 97 1/2. it's down about 0.4% this morning. finally gold. see how the yellow metal is doing. when will we add bitcoin to the board. there's gold, down about 0.10%.

>> good question what color is bitcoin? >> i think it's gold. i have no idea. i thought it was an image of a gold coin. >> an image. it doesn't really have a color. it's a virtual -- >> there's all these other coins, there's icos now. instead of buying a share of a company, you can buy a share of a currency from one of these cryptocurrencies. >> we'll have one of our disrupters on. he'll tell us about how emotion associated with certain words can cause people to do certain -- he'll have to start at the beginning for me. >> you're supposed to know. >> he will start with the world wide web. what is that? www -- does it stand for world wide web? that's where i want him to started. >> as long as it's not just me. this is -- we have some things happening in our country.

but did they just impeach the last person? >> yes. >> he's the new person. he's on tape soliciting -- or saying bribes are okay or something? >> or caught involved with it. >> you could have two gone in a matter of months. >> the country can handle the transition once. i don't know if they can handle it again. >> when you say are we a latin american country? that's what we're striving not to -- any way. that's where it gets -- that's where it gets the bad rap. watching the markets in brazil closely after markets plunged yesterday, in yesterday's session following a deepening political crisis. the country's president facing calls for his resignation amid allegations of corruption. the bovespa down 9% it was halted. circuit breakers, they have them down there, too. the biggest daily declines since the 2008 financial crisis. 8% here or 9% here, that would get your attention. we heard about -- >> they had been down 15% at one

point. >> we're facing some exso steisl crisis here, it was down 380. >> 1%. i only know that because i saw it. >> you try to pretend you're not a genius. >> i so hard when you're so gifted. >> in the past, she said the nerd moniker does not apply to her. she's more of a dork you have said. >> you saw me trying to talk about bio mass energy yesterday and dna sequencing. >> yes. yes. >> wasn't pretty. >> you asked whether it was human dna or animal -- >> kelly, it's the same. it's the same dna. i'm still think being that. >> it animal chemistry or people chemistry? the country's currency, the real, posting the biggest decline since january of 1999.

in wall street news, leon cooperman's omega advisers settling with the s.e.c. over insider trading charges. 4$4.9 million. the hedge fund has admitted no wrongdoing and cooperman will not be barred or suspended from the industry. sounds like a reasonability way to get out from under this. he wanted to have a complete -- he's been on the show talking about how he wanted to fight it. in a statement cooperman says he looks forward to putting the matter behind him. last september the s.e.c. accused cooperman of insider trading after a five-year investigation. the next month he told us he would fight the accusations. >> omega was built on doing detailed fundamental research and complying with the law. we could have settled with the s.e.c. for an amount that is far less -- far less than i donate to charity on an annual basis. but i refuse to do so because i know we acted appropriately and lawfully. it took me 50 years of hard work, very long hours, playing

by the rules to get where i am professionally. i'm not going to let them basically unfairly destroy my legacy. >> reports say terms of the $4.9 million settlement were significantly below what the s.e.c. wanted. i don't know lee -- he's not like a member of the family, but the whole thing -- knowing him, just as from being on, the whole thing never -- i would take his word for something like this. sometimes regulators do seem to overstep a bit. >> how many big banks finally said take it. jamie dimon said look -- >> any government agency says we find joe kernen did -- >> he's another name. russ. >> let's go back to joe. >> we find that kelly evans -- >> you're lucky you're still at

blackrock. you have met his replacement yet? is his name c 3 p 0? who is replacing you? r2-d2? >> we have plenty of humans. >> you're all being -- larry was in here. he mentioned you specifically. who is the tall one that speaks language that you can understand. the taller one. not the little one. >> we have plenty of humans left. >> you better hope you're not replaced by hal. >> you know. >> we have to keep going. in washington news, president trump will leave washington today to begin his first foreign trip as president. eamon javers joins us now from the nation's capital. how would i describe the last 12 hours, quiet. too quiet. >> no major bombshells. no tweets. too. >> quiet. watch your twitter feed. that might be the next thing. though there were some good tweets yesterday from the president. >> yesterday we had an east room

press conference in which the president was asked if he ever asked former fbi director james comey to back off on the investigation into mike flynn. the president said, emphatically, no, no. and then he said next question. the president clearly wanted to deny it but incident want to go into detail. he was also critical of the decision to appoint a special counsel to investigate the russia scenario. here's what he said yesterday. >> i respect the move. but the entire thing has been a witch hunt. there's no collusion between certainly myself and my campaign. but i can always speak for myself and the russians. zero. i think it divides the country. i think we have a very divided country because of that and many other things. i can tell you that we want to bring this great country of ours together. >> the president's first foreign trip, he leaves this afternoon.

this is the agenda. this is an action-packed foreign trip for any president of the united states, particularly a president engaging in his first foreign travel. he starts in riyadh in saudi arabia. then he is going to jerusalem, israel. he's going to vatican city. he's going to brussels, belgium, sicily, italy where he will attend the g-7 summit. he will visit nato headquarters in brussels. had is a wide-ranging trip. he will go to the headquarters of three major relgigions. he will be engaging with military allies. that's a lot to to pack into one trip. the white house looking forward to this trip. they feel it's an opportunity to showcase the president on a foreign stage. and it's an opportunity to shift the subjects back home and look outward. >> a lot of guests on today will talk about this trip. the "journal" piece talked about how saudi arabia desperately

wants to reset relations. i'm thinking the saudis didn't like the last administration. i think israel desperately wants to reset relations. israel and saudi -- they seem not necessarily on the same side. who did we saddle up to? then i figured it out, iran. it's almost like we curried and appeased and brought in our enemies, but alienated our allies. one other thing, did you see yesterday peter baker wasn't there. the president -- the president called on -- i don't know who the other guy was. >> scott thuman of sinclair. >> okay. but he asked -- he was channeling peter baker. he asked a peter baker question. i love the question. hey, mr. president, since you've taken office, has anything you've done been impeachable? that's a question that -- the president -- i expected him to go, let's see, there was the --

i have about five things, actually that -- what was the i goi go's name? >> scott? >> what kind of answer do you expect if you ask list the impeachable offenses. >> that's what we say in the business is a self answering question. >> you wonder why i don't want to have those. i love that. i talked to him afterwards. he said it was not preplanned. that the president would call on him. >> but he had that one ready. >> but the president signaled at him and said peter baker. which was not scott's name. they handed him the mike any way. he stood up and asked the question. >> peter alexander nodded that he would get the question. he called on peert ater alexand

nodded at the other guy and give it to sid or scott -- >> scott. >> peter baker would have been proud of that question. >> a lot of headed noing goi en on in that room. everybody trying to catch the president's eye. doing one of these. >> i would figure it would be a lot of -- in that room, probably a lot of this -- new york you are not the legitimate -- no. you -- no. thanks, thanks for playing. >> happy to. >> i love the song you guys opened with. >> kelly recorded that. >> i didn't record that. >> you said -- you said i'm an alto. >> yes. >> i think i could hit these notes easier than you could. in other administration news, jared kushner reportedly called up the ceo of lockheed

martin and asked her to cut costs. the lockheed martin ceo said she would look into it. president trump is expected to announce one of the largest arms sales in history this weekend. let's check the markets after yesterday's rebound. following the worst selloff of 2017. with us now is jack caffrey. a global equity alpha portfolio manager. searching for alpha? >> yes. >> you don't deal with beta. >> some beta comes with it. >> and from blackrock -- at

least for today, russ -- >> a very small part of it. we use t but plenty of humans left. >> you've seen the movie terminator. >> i have. you think it's coming? >> if things get out of hand. so this rebound has legs or the selloff was just the beginning? >> i think the telloff is the beginning of more volatility. >> more volatility or lower lows? >> lower lows. we're 2% from the high. it's not like we can't go down a bit. we had a period where volatility has been close to historic lows. we looked past high valuations. we last past the fact that the pedestrian will be tightening and the vix is at 10. i don't know if that's sustainable for the summer. >> do you think volatileity is back or sell in may -- >> sell in may and go away?

>> yeah. >> if we pay attention to where the economy is going, it is getting better. not as quickly as wie would hav hoped. we've seen some negative economic surprises. i agree, valuations are high. earnings are getting better. earnings are going to be the drivers of markets over time. can that mean we have markets that move 1% today instead of moving just up 50 basis points a day in a straight line? i think, yeah, you can have more volatility. volatility creates opportunities for alpha equity managers. >> wouldn't you guys say you want volatility? >> yes, you want volatility. >> you do. you don't. >> you will get volatility. >> i'm saying, broadly speaking, the fact it's been so low is bad for traders and institutional investors, good for the general public. >> actually it's interesting while the volatility has been so low. one reason is you've seen for the first time since the financial crisis that the correlation between individual stocks has been going down. >> right. >> that's good news for active

managers. gives you a better opportunity set. >> but so -- but that has been happening even as volatility has collapsed. >> that's one of the reasons volatility collapsed. as you get more dispersion, as they don't move at same time, that damps volatility. >> so it's good. we have stocks going their own way based on their own stories. volatility going extremely low. that means we're not in an environment like we were stuck in for eight years where the fed will do this, the fed will do that. we'll buy and sell everything. >> you shifted from the narrative of bad news is good news. bad news would get the fed on your side. even if earnings don't appear, that's okay. we can support higher valuations. we have come to a more truer market in the as soon sense tha have better earnings. it's also helpful that it is not ashgstory, it becomes a

japanese story. you actually have better news on a global basis. >> but the fed is still around. >> the fed is there. >> but i fwes that's tguess tha inflection point, they passed the point of where there will be any -- >> they already made three moves. if i go back to high school math, i have a rule. >> where is the ten-year? >> 2.22. >> yeah, 2.22. >> better than zero. >> why is the dollar -- why is the dollar going down and interest rates going down at same time. >> because you had a lot of move up in the rates, and the notion of we'll see reflation out of washington. are you as confident about that today as you were four, five months ago? >> not in being disappointed with the pace of change in washington, just more on what some of these numbers mean in terms of domestic strength. >> how is the u.s. economy?

>> the u.s. economy is sound. >> but has it accelerated? has it accelerated since the election? >> no. it was assumed would have this acceleration, reflation trade. >> but you see a lot of reasons why things that people that make decisions, the ones that are in those positions are making decisions to do things that will be reflected in a stronger economy soon. you see small business confiden confidence, you see consumer n confiden confidence. >> the problem is you have not seen the economic activity yet. it may come. >> fwe are still back in the 2% environment. >> in the terrible 2s effectively. >> well said. >> come on, please. it would be nice, but we're eight years into the terrible

twos. we'll have the longest expansion but also one of the more muted expansions in terms of tremendous duration. in that world you make decisions and make them slowly. >> gentlemen, thank you. these guys were both talking in the green room, getting the story -- >> professional courtesy. >> getting your story together. what if they ask this. that's not way we design these things. separate the witnesses? >> china wall. so we can get you to argue if possible. before you got here, you should have heard what he was say being you. >> i'm sure it was compelling and interesting. >> he initially didn't want to come on with you. >> you sure it was about him. >> why you trying to stir the pot now? it's over. >> you have another two hours. >> are you on -- he's not on for two hours. >> you got an hour. you'll kick me off long before that. >> because wilfred can't get here until 7:00. >> thank you very much. coming up, a painting sets a new record for u.s. art at

auction. details coming up. stay tuned, you're watching "squawk box" on cnbc. hey. pass please. i'm here to fix the elevator. nothing's wrong with the elevator. right. but you want to fix it. right. so who sent you? new guy. what new guy? watson. my analysis of sensor and maintenance data indicates elevator 3 will malfunction in 2 days. there you go. you still need a pass.

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>> welcome back to "squawk box." a 1982 painting by jean michel basquiat -- i got basquiat right. selling for a record 110 million. 110.5. yesterday at sotheby's auction. the sale of the painting is the sixth most expensive work ever sold at auction. there were only ten other pieces that broke the 1$100 million mark. it was the biggest number for an american artist. >> i will keep my thoughts to myself. gap shares rising on better than expected results.

dana telsey joins us now. gap is up 4%. you can see if we zoom out to the longer-term chart, the narrative around gap seems to change every two weeks. >> right. what do you think is going on, given the broader struggles of brick-and-mortar? >> overall the gap has three brands. the core gap brand is trying to reinvigorate itself. old navy was the driver of the earnings beat. 8% comp is a good number. >> 8%? >> 8%. they haven't had an 8%. that's a terrific number. does that include online presence there from old navy? >> yes. overall the business did better in the first quarter and the gross margin was better. the aur was up. >> what's aur? >> average unit retail price. i do a weekly trend report, i look at prices week over week. the 40%, 50%, it did not accelerate from that. they've been managing costs. getting better margins.

working on the store base. it will be flat openings this year. not really any openings compared to earlier in the year, there was an expectation of up to 40. they're laying the ground work. they need to get better product for the gap brand to make it exciting again. >> old navy sounds exciting. i thought banana republic is the question mark. i thought i heard reports about potentially a sale, a spinoff, total -- what do you think needs to be done with the banana republic brand? >> they just put in a new ceo. mark breitbart returned to gach after being at gymboro. he understands the brand, he's a merchant. speed to market that they're putting in place in order to deliver new goods faster, let's see what happens come the holiday season. >> banana and j. crew, i speak from personal experience, these were the -- they were the -- they had the real estate. they had the product.

you could go into the mall go one to the next what is happening to this category? j. crew that gone private. comps have not been great. for women's work wear, whatever that category is, is there something particularly happening there? >> women used to buy clothing for four reasons, work, weekend, gym, party. with the increase in casu casualizati casualization, and the cash ral sooi casual environment, and then work, weekend and work are integrated. so you don't need more occasions. more people are spending their time on services. >> final question, your gap brands, what do you do in that environment? do you try to -- adidas has athletic. do you do something aggressive into athleisure? >> they're doing that. in each brands, they're a bigger active wear company than you

think. gap owns athleta. >> gap owns athleta. oh. there you go. >> art peck is putting the steps in place it will be interesting to see product, merchandise, experience. that's what you need to drive xiltme excitement. >> they own athleta, they'll be okay. >> you're going there this afternoon. >> i went there last week. dana, thank you very much. coming up, this morning's stocks to watch including the shares of salesforce, and president trump ready to embark on his first foreign trip as president. his first stop, saudi arabia. we'll look at the stakes. first before we go to break, yesterday's winners and losers.

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welcome back. you're watching "squawk box" live from the nasdaq market site in times square. good morning. welcome back to "squawk box" on cnbc. i'm joe kernen along with kelly evans. u.s. equity futures are up a bit. almost 30 points on the dow.

up about 5 on the s&p. up 15 on the nasdaq. yesterday looked like it would be a triple digit gain for a while, but things sort of eased into the close. but it was a pretty good rebound session from the 380 plus points from the day before. stocks to watch today, salesfor salesforce.com posted better than expected earnings driven by demand for its cloud based sales and marketing software. the company also rave elalso ra revenue guidance. gap shares rising on better than expected results. dana telsey joins us now. shares of ross stores are rising. this is an off priced retailer and beat the street.

and mackesson posted a profit beat. applied material reporting quarterly results above the street. the microchip materials maker, they are a semiconductor equipment company and had an outlook that exceeded expectations. auto desk posting a smaller than expected loss. reporting higher sales for the first quarter president trump heading out today on his first international trip travrli itra with more than a dozen white house officials. joining us now is john finer, he served as chief of straaff. what is at stake for the president's trip. >> a lot of people will be watching whether president trump can change the subject from the troubling domestic issues heats been dealing with related to the russian investigation and some internal management of his white house in terms of what's on the

agenda, the big sensitive areas are counterterroism. he will work with the israelis and saudis to see if we can build close relationships on counter terrorism. secondly iran. he will hear a hard message in riyadh and israel, his first two stops, about destabilizing activities that iran is conducting in the region. the third thing, the biggest challenge for the white house on this trip, these things are hard. people are tired. it's hard to get regular information. you said he has 12 white house staff traveling with him, but that's a lot less support around him during normal times at the white house. you have to walk and chew gum at the same time. focus on the trip and focus on things back home, which is particularly difficult in the rirnment he men virpme menmen menmen menenviron. >> the "journal" says mr. trump is guaranteed a win with the saudis because he's not barack

obama. >> he's guaranteed a win in terms of a positive reception. he will get that in saudi arabia and israel. these countries are excited about some of the new approaches that trump is adopting. particularly his aggressive stance on counterterroism and iran. the bigger question is if these are wins for those countries, the united states or both. that's still an open question. there's some risk these country also try to draw us into confrontations that are more in their interest than in ours. >> do you think that troops, u.s. troops will be welcomed back to saudi bases? >> i'm not sure they're looking for troops in saudi arabia necessarily. i think they're looking for both rhetorical and material support, for example the conflict saudi arabia is waging in yemen which has been going on more than two years now. doesn't get nearly as much attention as the conflict in syria, which gets more coverage in the united states and created a huge humanitarian catastrophe in that country.

we support t the obama administration supported it as well, but the saudis are looking for more support. >> the prince said to be ready to invite the u.s. military back. you're on the record as saying the trump foreign policy is that there is no foreign policy. since you were in the obama administration, in a sentence, what would you describe the obama -- just having been there, how would you describe that foreign policy? >> i think one key difference between the approach that the new administration is taking and the approach the obama administration took is the obama administration prioritized diplomacy as the tool of first resort. president obama's first stop after he came to the white house in the federal government was to go to the state department and talk about how he was going to use diplomacy negotiation to solve problems backed by military force. what you have in the trump administration is a preference for military advice and military

action as a tool for accomplishing american interests. he surrounded himself with a higher percentage of military officers, at the staff levels and at the senior levels. >> you didn't use the threat -- the red line meant nothing. richard haas wrote a book called "the world in chaos" in large part due to the lack of leadership, the u.s. exiting the world stage for eight years. i don't want to get into this, but it just -- to say trump has no foreign policy when you were part of the administration that sort of -- i'm not sure what that foreign policy was, other than -- other than sort of appeasing our enemies and hurting allies. how do you -- how do you worsen relations with israel and saudi arabia at the same time? >> that's a lot of questions all at once. what i would say is i would be comfo comforted -- i don't need to see a coherent foreign policy doctrine from the trump administration. that's a big thing to expect from anyone 100 plus days in.

the challenge is that it's hard to interpret what their approach is on any given issue, on russia, searya, iran. senior administration officials saying things opposed to each other and sometimes opposed to the president of the united states. even understanding where they are on any one of these things is a challenge. >> like a good cop/bad cop thing. apparently the new prince over there has his own issues and wants -- he wants to see this as a win. everybody might be sort of accommodative to everyone. i would expect -- they have the harlem globetrotters playing basketball. they have car races. >> toby keith. >> toby keith. toby keith. got love her. i love that song. sorry. >> i like the early ones. >> i got all ready for jon, i wanted to ask him some questions. jon, thank you for being accommodate i to ive to my ques.

>> no problem. >> thank you. >> hey, that's what i'm here for. >> unlike some other people. cnbc disruptors, we'll talk to a company trying to change the face of artificial intelligence. stay tuned, you're watching "squawk box." is my headquarter. this is where i trade and manage my portfolio. 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. what's critical thinking like? a basketball costs $14.

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been a big week on cnbc as we introduced you to our 2017 list of top disruptors. now let's meet a -- work with me on this. i will need some help here, too. a cognitive content platform that is disrupting the artificial intelligence and marketing sectors. alex ratskitis -- >> correct. fantastic way to pronounce it. >> the company's co-founder and ceo. i read with great interest, and i got done reading exactly what you do. it sounds great. but i need more help. i need more help. >> yes. >> how many -- you have algorithms that measure

emotional response to certain words using ai, which can then be used to target -- >> it's about coming up with the words that resonate. the words that inspire action. >> words that inspire action. we do that for brands that communicate to the audience. it's a general space. a huge space, but we chose to focus on business to skon supers. >> you raised $66 million. you are worth 200. >> 290 at last check. >> this can help whom? >> we focussed on business consumer markets, so we work with marketing departments. about 200 customers right now, fortune 2000 most of them. but there's wild applicability. anything from pharmaceutical adherence, reminding you to take your medicine. fitbit message that tells you to

run another mile, which can be useful to all of us. and all the way to the system messages a prompt on the iphone. >> you remade some of the mta transit announcements as an example. >> yeah. >> i see that comcast is a client. what is our parent company -- what are they looking for? >> so, at some point you're looking to basically connect with your audience, close the transaction, or your marketing manager has to think how to actually position this offer. say you want to sell a coat. you can say catch me a coat. you can see feel like a queen, wear this coat, or limited time only, 20% off a cashmere coat. there's millions of alternatives. >> how does this dovetail with somebody's dating profile, which i also see. thinking about launching a campaign if persado took over my

dating profile dot dot dot. >> it's not an area we're immediately going into. >> we're all just brands. >> we could be doing that. that's sort of like personal positions. >> so five, ten years ago this book "nudge" was talking about behavioral economics and you can sort of frame questions in a certain way and get people to be more likely to do it. is this taking it to the next level? is this the ai version of "nudge?" >> i'm not familiar with that. but the whole idea over here is to come up with -- we have an algorithm that comes up with all possible ways to phrase something. >> can you put "squawk box" through it? what should that phrase be? >> all the possibility emotions and selling features of something. then you have an algorithm that selects the best way to phrase the offer on a segment or the

particular individual. so, it's about establishing human connection. >> >> now i'm worried about you again. if you can get rid of these madison avenue guys -- >> you told me the first one is communications. i would be more worried about you. >> that's true, too. >> we make them more powerful. >> more powerful. >> yes. they're in charge of the customer. >> where are you from? >> greece. >> from greece. >> yes. >> excellent. wow. i was going to talk about what's happening there. you need to go back there, i think, and launch this and generate some economic activity in greece. >> we have a lot of people from greece working at persado. >> what words would describe sa santarini that means a certain thing to me. >> my wife is dying to go there. i've never been there. >> what? >> it's like -- it's like our

times square. the foreigners go there. there are so many other islands. amazing islands. >> such as? >> now i feel like such a tourist. >> mykonos. >> you would like mykonos -- >> how many greek islands have you been to? >> octopuses hanging there, you walk by, grab one and eat one. don't you? >> yeah. yeah. kind of like that. >> big octopuses just hanging there. >> you should see how they beat it up -- >> not anymore. these are free range. gently. alex, great having you. good luck. >> thank you very much. >> and when we go to break, i want to start at the beginning. world wide web s that where it all -- >> it's going to be big. yes. >> not according to kr ing ting. >> krugman? >> he said the internet would be

gone like the fax machine in two years. he's been right about everything. >> the dow transports have been down about 2%. we'll see what that means for the markets and the economy. stay tuned. you're watching "squawk box" on cnbc. >> right. but you want to fix it. right. who sent you? my analysis of sensor and maintenance data indicates elevator 3 will malfunction in 2 days. there you go. you stilneed a pass.

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before investi, consider the fd's investment objectives, risks, charges and expenses. call 800-983-0903 for e prosctus containing this informatn. read it carefuy. diributed by iesco distributors inc welcome back to "squawk box." let's talk transports. joinings is now is donald

broughton of broughton capital. looking at some of the stuff you heads up maybe on retailers from some of the data that you crunch, right? >> absolutely. i mean, if you went back and looked at the d.a.t. truck data which is essentially the nasdaq of truck freight brokerage you would know ahead of time. >> oh. >> retailers are really having a big problem here. especially big box retailers. and if you look at that data it's one of those things again and again in the market where people say oh, we were surprised by, and i want to say, well not if you were looking at the underlying data. >> why isn't the -- so the data is the number of what? items on these truck -- why doesn't amazon send stuff through trucks, too? >> well, they do. but it's -- different lanes and different trucks -- >> really? so you could distinguish between a truck that's carrying

something from a -- that was bought at the store versus something bought on amazon? >> you can distinguish between all the different types of freight which is all the really clue you need. is it a flat bed. is it refrigerated? is it dry van? where's the origination point? where's the destination point? >> did you see anything that shows the other side of things? that things are cranking in some -- >> e-commerce continues to do extraordinarily well. >> you're seeing it there? >> flat bed is doing extraordinarily well. >> how about construction? >> construction is a different animal entirely. you look at the rail data for instance. >> how is that? >> it's not doing well. we're falling shy 1,000 car loads a week really of the materials you need to build a house. when you don't ship the lumber, i've got a client in london who years ago back in '06 i was trying to explain to him that the housing market was going down. and he says you all still make houses out of wood. i said, what do you make houses out of here? he said well we deforested hundreds of years ago, we started masonry. well in the u.s. we still make

houses out of wood, therefore if you look at lumber shipments you're going to know pretty quickly what's happening with housing markets. >> right now you're seeing weakness? >> the last couple months, monday the head line was for the second month in a row housing starts disappointed, surprise to the downside. i'm thinking not if you were looking at lumt beurre shipments via railroad. >> you need a pen? are you taking notes? >> i'm going to get the card in the green room. >> you have to talk to this guy. >> this is good. >> are the transports, the average itself isn't indicating that the replace is dead yet is it? >> certain transports are doing very well. fedex is doing very well. spl logistics is doing very well. plenty of firms doing very well. there's others though, you have to look at the underlying volume and say why is that stock still where it is? that doesn't warrant it. and others, on the downside, you say, well that stock ought to be doing a lot better. but that's what makes active investors capable of outperforming.

>> what kind of gdp quarter are we in in your view versus 1% in the last quarter? >> well, we could go off down the bunny path of how we calculate gdp. it's a keynesian model that misses often a lot of the grab u lairty of what's happening underneath. all exports are considered a positive. all imports a negative. inventory going up is a posit e positive. -- >> you don't sound like -- have we seen any pickup at all in economic activity? >> the economy is still in a relatively slow growth to no growth mode. but it can be completely depends on what mode you're looking at. it completely depends on what you're looking at. i mean you've seen it in retailers. you just had dana a few minutes ago, if it's macy's -- not so much. but if it's amazon or anybody else in e-tailing the sky's the limit. and the same thing's true in almost every other market segment. >> all right. well give me some home runs in the group that you follow that you'd be buying -- >> i've already mentioned a couple of them. the guys at xpo continue to do a

phenomenal job in execution. the guys at fedex -- >> xpl -- >> and we have a real turnaround story at the csx. >> is he okay? >> hunter shakes things up. >> i thought his health was -- >> let me -- >> we've got 30 seconds. >> i heard the question. the pictures that have been circulated with him on oxygen. when were those taken? a year ago when he had the 3r0b lem with pneumonia or recently? there are people who have an ax to grind because hunter is going to let people go because that's what he does. he rationalizes the structures. >> frank booth maybe from -- >> you know -- >> that guy -- >> no pictures out there of me with hair. because i was in high school. you know. >> thank you. you're not leaving, are you? >> not yet. >> we'll be coming back.

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♪ live from the beating heart of business, new york city, this is "squawk box." very good morning and a warm welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in times square i'm will fred fast along with joe kernen and kelly kevins. doesn't seem right. should have been you. >> i don't know -- >> it was an honor. >> you know what? if that accent of yours if there's anywhere we should use it, don't you think?

>> it's a great accent. >> and the weird thing is he's from hoboken. >> i have no idea where he got that accent. >> but the entire level of the show goes up a couple of notches. >> you're too kind. i didn't feel that it was my place to say the open but it was a real honor. anyway. let's have a look at the futures at this hour which are continuing yesterday's rebound. tepid rebound you might say, and a tepid bounce this morning. higher by around about 30 points on the dow, about 45 an hour or so, so we've slipped a little bit. five points on the s&p, the nasdaq higher by 15 points. yesterday the nasdaq led that rebound up 0.7%, the other two up about a third of one percent. headlines, crude oil prices rising this morning on increasing sentiment that supply cuts will be extended. wti topped $50 per pair earlier this morning for the first time since the 26th of april. today also marks the seventh rise for oil prices in eight sessions up 1.2% just shy of that $50 -- >> the producer had logged out

or something. and it didn't retake and so that was a-2. a-1 was supposed to be -- so they didn't actually -- >> it was a mistake. >> it was. but i don't think it was a mistake. >> i enjoyed it. >> i'm thinking in behind sight it was the right thing. i think it was meant to happen. >> once only affair it was enjoyable. >> i've been told what we missed there we're going to do at 7:30 because it's been written and we don't want to waste it. >> i agree. >> all right, good. >> is it still me now? >> i can't believe it but yes. >> it is, great. >> seems like you're show all of a sudden. it's called wilf box. british invasion since the beatles came over. >> billionaire invest her leon cooperman have settled an insider trading case with the fcc. cooperman and omega will pay nearly $5 million to settle the case and not have to admit any wrongdoing in agreeing to the settlement. the case involved trading in atlas pipeline partners and tips

cooperman received from a company executive about a planned asset sale. and earnings just out from deere and company. they beat estimates despite a revenue shortfall and increased the full year sales forecast. shares up some 8%. >> wow, i mean deere was crushed when oil prices first dropped. look, they're up 47% over the year now? >> that's unbelievable. that is amazing. >> especially because i thought crop prices were doing pretty poorly. and you know, farm income isn't that great. >> commodities. exactly. >> yeah. >> wow. >> 75 to 125 almost. >> they have that dealer model. that service model where, what -- you know, where else are you really going to go for the equipment? but there's a lot of people who have been short deere and i think that might have something to do with it. >> yeah, that's painful. nothing runs like a deere. that's their slogan, right? >> it's a great one. >> you mow your lawn, grass? >> don't i look like i do. >> you do. >> i know how to mow a lawn. >> so do i. >> i have mowed lawns in the past.

>> i have, too. been awhile. few stocks on the move this morning. sales force.com reporting better than expected earnings, driven by demand for its products. surprisingly. which are cloud-based sales and marketing software. company also raised its full-year guidance. gap saw a surprise rise in quarterly same-store sales. the latest indication that maybe the retailer's turnaround is gaining traction. the chain sales have been lifted by strong performance at old navy. you knew all of the different parts of that. >> no, turns out i didn't. >> you thought that -- >> i thought it was somebody else -- >> you thought it was -- >> the fact they do i think is great. >> so you got, what? >> banana republic. >> what? >> banana republic. >> really? >> that's not intentional, is it? >> no. >> you don't try to be pretentious. >> it's not pretentious -- >> it's not? banana. >> banana. >> i mean that's a classic. >> it is. >> tomato. >> but we don't say potato.

so you're right on that one. that's a fair criticism. >> the woman that bore you would be a -- >> my mum. >> i love this. >> despite the fact that she had an american mother so she called her mother mom. there we go. >> it's the same word, mom and mum. >> no they're spelled differently. >> sorry. >> anyway. >> don't ever lose that. i always -- >> i recorded that earlier. >> you have imitated me and said twitter -- you can do it. you look like you're going to have a hernia. how do you say? >> twitter. >> i've got stuff to do. >> he's done that like twelve times. it's still funny. >> this big morning here -- >> we must get to this. >> yes. >> bank of america ceo opening up the discussion on lowering down payments on mortgages on closing bell yesterday. moynihan said banks would be

able to supply a bigger share of funding if the standard down payment for buyers was cut to 10% from 20%. >> we didn't introduce that much risk. but would actually help a lot of mortgages to get done. and if you look at the statistics, the difference between 80 and 90 ltv isn't -- loan-to-value isn't that much different as it is between 95 and 90. that's when you start to see real differences in performance statistics. and so we don't want to wish people to borrow money that then they have trouble repaying. i think we can move some of those rules. that would move the cycle up. not in new york city but sometimes else a $100,000 condo, instead of saving $20,000 it's $10,000 on a $40,000, $50 of 50,000 income -- >> the interview yesterday. kelly the other thing we discussed at the closing bell as well was a sigh of relief off the back of treasury secretary's mnuchin's comment about glass steagall but a very clear point that they have more capital than they need. i suppose it's been a week of

slightly bullish news on the banks but negative share price moves given the general sentiment. >> i want to know do you have a problem joe with 10% down payments on a house? because i asked mike about this yesterday. he said, i thought i said do you have -- i don't know if the word is ethical but do you have an issue with that and he said well it might make home prices go up, in which case, bring it on. >> i think 10 is good. i mean, mortgages are expensive. you know, they're getting -- and so the more you put down, you know you monthly thing. if you can afford it, i think -- zero got us into trouble, didn't it? >> yeah. >> and you know -- >> zero is nuts. >> so where is the right level? somewhere between zero and ten, right? >> i mean -- >> the housing market is going to go up for five years. zero is okay. >> i mean it's interesting this perspective here because the idea in the uk the idea of below 10 is crazy. the idea of zero is 234nuts. >> are they shorter term? >> you can get shorter term.

it's priced off the short end of the curve. most in the states price off the long end. you get floating but it's the bank of england base rate plus the margin. i think the u.s. mind-set because you have that such understandable commitment to wanting people to buy homes has always been a lower loan value. >> that's so interesting because i thought that commitment was weakening a little bit. people were saying okay if you want to rent, if that's important to you, fine. you know, it will encourage people to own instead of rent if that's, you know, deemed as an important thing to do. >> but it's an owner's market in the u.s. rents are in percentage terms of yield again much higher than what you'd see in the uk. you pay 4%, 5% rent compared to 2.5% or something like that in london. anyway. >> all right. >> stocks are rebounding from the biggest sell-off of the year. barbara reinhart is here on set. voya head of asset allocation. that's a mouthful. our guest host is steve grasso, director of institutional sales. we got him out of the stock exchange up here -- but you go back and forth a lot.

>> i do. i was on last night right from this very desk and i'll be on tonight. >> and you two were on last night. >> me and wilf, yeah. >> exactly. >> it's all blending together. >> it is. >> on a basketball court or -- >> on -- both of you can dunk. which is -- >> well, i don't know. >> should be able to. >> i certainly can't. this is -- >> but can you dunk, barbara? >> no. i don't have the height to dunk. back to your housing discussion. one thing that's very important, the demographics are really interesting right now, because you have very strong labor growth and the millennials are getting to that age where they're moving out of their parents' basement and they're going into that prime home ownership age of 30 to 35. so there's a very big tailwind behind housing that i think is not going anywhere, whether the down payment is 10% or 20%. >> donald brofman was talking about weakness. if that's new home construction that's just a small piece of the market. a lot of the housing stock in this country is old, it's not exactly what they're looking

for. it's not in places that they're looking for. were you surprised he talked about some weakness in the construction market? >> look, the weakness in the construction market can be very cyclical. the most recent drop you've had in rates do make mortgages much more attractive. so i think the underlying trend is you've got very strong employment growth. if you have strong employment growth you're going to have a strong housing market. >> it's the housing formation. housing formation just spiked higher, and now you see all those home builders, kb homes, pulte homes, lennar, i own all three and you start to see these stocks that are up 20, 30, 40 percent, and starts to really gain a lot of your attention. but story's not over yesterday. i think it's probably in the first three innings. >> sure. >> that housing recovery. >> don't forget. a lot of americans own homes. to see your asset value holding its level is a very important psychology. >> outside of home loans are there areas, barbara, that are showing some signs of concern? >> well, you know, so here's how the market's trying to square it. so, clearly the sell-off that you had two days ago was very

much related to the issues coming out of washington. but the market is trying to square another issue as well. so the survey has been very, very strong and the hard data has not caught up yet. the way we're thinking about this at voya, we think the soft data is going to roll over a bit and the hard data is going to continue to come up to meet it in part because our leading indicators of employment are very strong. and some of the headwinds that you've had over the past five to six years are really starting to dissipate. fiscal tightening is behind you at this point. europe is starting to grow. you had the best earnings season in over 15 years. a global synchronous recovery is something that equity markets tend to like. >> then what's with the yield on -- i mean the yields are so low -- >> so this is what's happening. so the equity market was going off into the soft data. ism, you know, consumer confidence. and the bond market was telling you this hard data isn't catching up so fast. do yields go up to 3%? probably not that high this time around. but it wouldn't be surprising

for us to see yields get to 2.5, maybe 2.6% yet again because the market is not pricing in the fed action, and you are through the rate on unemployment. those are very tight conditions the fed has to respond to. >> yesterday we heard this is once a year yellen and that he sees real weakness in the economy, and doesn't think the fed's going to raise rates again this year, and so, is that part of this whole -- you know -- >> i think it's very dive cult to do. you've got a 4.4% unemployment rate that has a dual mandate of inflation and unemployment and they've also said that they want to start to roll off the balance sheet they may start to talk back some of the conversation about raising interest rates for balance sheet reduction instead. but if you look at the leading indicators of employment, they are relatively strong and that's what we keep a very close eye on. >> and the housing market recoveries happen in a rising rate environment. it's counterintuitive. but they do. so if you look back at historical prices and historical levels of housing, they're

always in a rising rate environment because everyone feels better and growth is better. >> and financial conditions are very easy. financial conditions are the easiest they've been in over a year. and that is a very big, strong indicator for what the economy can do. >> all right. making the case. barbara, thank you. >> thank you. >> appreciate it this morning. barbara reinhard. grasso you're stuck with us. >> still to come -- >> you're taking us to break now, too? >> i am. it says -- still me. >> are you kidding me? >> when i was briefly in the production room i managed to change it all. >> you can get in there and change things. you do this? >> no. maybe. still to come, president trump set to start this trip to saudi arabia later today. we'll tell you about ties with the kingdom and what's at stake. and later rebuilding america, the president's infrastructure plan is expected soon, the coo of the carlyle group joins us to talk about the potential for infrastructure deals. "squawk box" will be right back.

finding time to get things done isn't easy. but we've got the digital 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 the first stop on president trump's first overseas trip is president of saudi arabia. our next guest says that the kingdom is looking for a reset

with the u.s. joining us bernard hinkle president of near eastern studies at princeton university. that was similar to the take on karen house's piece in the "journal" today. >> yeah. >> that both sides have a lot potentially to gain, just in having things go well. saudi arabia truly rolling out the red carpet for the u.s. president. >> oh, yeah, absolutely. a thick red carpet. and this has been -- this trip, and the agreements that will come from it have been in the works for weeks now. and both the saudis want to welcome the united states and they want to, you know, sort of underline that there's a break from the obama administration. they see obama as having been much closer to iran, wanting to cozy up to iran, and that trump is very clear that old strategic allies come first. iran is the enemy. and there will be big deals signed. $100 billion, $110 billion worth

of arms deals. $40 billion worth of saudi investments in american infrastructure. president trump is going to give a big speech. and, there might even be a deal, or at least the beginning of a deal, on arab/israeli issues. >> from -- the session of certain things come from the saudis. >> that's right. i mean the next stop is israel after saudi and there are rumors that the saudis and arab allies will offer something to israel, maybe overflight rights for the national airline of israel. or telecommunications connections. and relations of that kind. >> do you think that the prince, and the king's son who is not crown prince yet. >> deputy crown prince. >> is he in line eventually to succeed the king? or -- >> immediately, you mean? >> eventually?

>> well he's definitely in line. i mean he's number two after the king. whether he becomes -- >> but he's not crown prince yet. >> he's deputy crown prince. >> so there's not a crown prince is there? >> no, there is. >> how old is he? >> 57. >> but he's -- okay. will he be next for sure? >> well, if nothing changes, yes, he will be next. if things change, and it -- >> but this was a big deal for the king to make this very young gentleman deputy crown prince. and this gentleman has a lot riding on what happens as well. >> absolutely. >> he wants things to go well. >> absolutely. and this trip and trump's visit to saudi is a huge success for the deputy crown prince because he orchestrated and arranged and agreed to all of this. >> right. >> so sounds like there's lots of areas where president trump can sort of announce a victory or progress off the back -- where are the potholes? where could things go wrong? >> well, the things that can go wrong is, let's say the saudis in the gulf offer something to israel and israel doesn't offer anything in return. so then iran and syria, and will

say, see, you know, you give, and the israelis don't give back. it's very important for that to be coordinated. >> what happens when you get, how many arab states are going to be there with the intent of saying we're distancing ourselves from islamic extremism? and is that a big deal? there's like how many countries are going to sign on? >> there are going to be a majority of arab states are going to be there, as well as at least 50 islamic states. >> and they're all going to sign something? >> they're going to make a huge declaration and president trump is going to give a speech on this issue. and they're going to open a big center for fighting extremism, and islamic moderation. >> so how mad could iran get from watching this? >> well, there's an election in iran as we speak today. so, if the -- if the hardliners in iran win and that looks likely, then you know, the whole -- the whole setup is one for confrontation. and that's where something else

could go wrong. >> that could be bad. >> which is, you know, you know, now that trump is going to take a position against iran very formally, with the old allies, you know, what do you do next? i mean you can't take on iran militarily unless you provoke -- >> and with that in mind how strong is the current royal family in saudi arabia? how strong is the economy with oil prices around $50? >> yeah. >> just give us an update on that in terms of is president trump making a strong deal with the royal family that is very, very strong domestically, or there are challenges there? >> there are no challenges domestically to the rule of the royal family. there are economic challenges. and the deputy crown prince is involved in a huge diversification, economic reform project, because he feels that the low oil prices gives him the opportunity to do so. it's a very major, 15-year project, whether he succeeds or not is -- there's a question mark. but he's definitely trying. and a lot of the deals that he's

going to be striking with the u.s., and with president trump, have to do with this project. >> doesn't it seem like when you just said there's economic weakness but there's no problem within the royal family. don't they go hand in hand? as we've seen in the middle east before, don't economic problems lead to change of leadership? and obviously, this is a big, you know, big what-if and long off, but saudi aramco the ipo, why all of a sudden now? five percent seems a sign of weak frns iran so to start giving shares of their entity seems to me the indication for me that oil is never going to pop to where it used to be. i feel as if oil is challenged. >> yeah. >> and saudi aramco that ipo, you have banks that are bullish oil, saudis that are bullish oil, opec that's cutting. >> yeah. >> and oil can't get out of its own way. >> no, you're right that the outlook for oil looks like it's

going to be in this $50, you know, $40 to $60 band for some time. the saudis realize this and they also realize that there are lots of other technology that are coming online. which means that they want to monetize their oil reserves now. the ipo is about making money now from the reserves. >> okay. >> investing them -- >> professor, troops back in? or at least will we be welcome back on bases in saudi arabia? >> i don't think so. because we already are present in qatar and bahrain. >> all right. >> thank you. thanks for coming in. >> thank you. >> you mind if i -- >> i'll allow you just this one, joe. but only -- >> i'm going to do it really quick. i'm going to do it really fast. >> say it like him, though. >> no, i can't. i'll hurt myself if i try to do that. it would be hugh, what's the guy's name? >> oh, hugh bonneville. >> yeah, i'd like to read it like him. i want to be a blue blood so bad

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welcome back to "squawk box." okay. world is right again. facebook wants you to take -- wants to take you out to the ball game. it struck a deal with major league baseball to stream 20 friday night games this season. starting with tonight's match-up. really? between the colorado rockies and the cincinnati reds. who've lost like six straight and are now below .500 as we knew they would be. the games will air for free but the deal is not exclusive. facebook will piggyback on the local broadcast.

fabz says watching baseball is a perfect fit for the platform. why don't you take us out, capitol hill? but i'm suggesting that. i'm not -- go ahead. why don't you? if i wanted to, i could. but you go ahead. but wilf is mad. >> what private equity firm the carlyle group is expecting from the president's infrastructure plan. the coo of one of the nation's largest firms will join us after the break. a look at equity futures moving a little bit higher this hour. i count on my dell small bu aisor

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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 good morning. never stood here before at 7:30. this is because of what happened at 7:00, right? that's why you're putting me here. because we missed this. all right. it looks good. a market bounceback. global stocks rising today as investors wrap up a wild week of trading. and president trump is embarking, at least preparing to, on his first foreign trip as commander in chief. see how that goes. it will be interesting. and a 1982 painting by jean michel basquiat sells for a record $110.5 million. we will wrap up the day's -- the days of the auction and the bidding wars is robert frank actually here? yeah. he'll be here. those stories and more right here on "squawk box."

♪ welcome back. you're watching "squawk box," live from the nasdaq marketsite in times square. well, good morning and welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in times square. among the stories front and center today, foot locker the latest retailer to miss estimates. the athletic footwear and apparel seller fell two cents shy. revenue also below street forecasts. same store sales rose just 0.5%. that compares with the expected increase of 1.5%. nearly 8% drop for foot locker this morning. also campbells asoup which gave us our trivia question, the food company earned 59 cents per share for the quarter, five cents below estimates. revenue was below estimates and campbell has cut the sales outlook for the year. it did raise the lower end of

its earnings forecast. shares are down 5%. down about 16% over the past year. now, two power producers may be joining forces. vistra energy has approached dynegy. the history includes a strapped merger deal with enron and bankruptcy filing in 2012. you knew the name sounded familiar. >> i know dynegy. do you remember grassy? i think dynegy was like a $3 stock at the time. they were like both, you know, single digit stocks almost penny stocks when they were thinking about -- trying to hold onto each other. i'm going to get to this right now. did you see the euro is surging? >> it was up. >> 0.6%. >> so that's $111.75. what is that a six-month high? he loves when the euro goes up against the dollar. and your country didn't even adopt the stupid currency. but for some reason, you're such a -- >> we still have the great british pound. >> but you're such a globalist

that you root for the euro all the time, right? >> i don't know that i do. but, as you -- >> so i'm misinterpreting your -- >> i love the british currency. i'm always -- >> i'm glad you do. you should love brexit. but i can't get you to sign on to that. >> you just can't get me to express my political opinion. >> oh, please. another -- you're like the -- >> wait a minute. i think he just did. >> steve, steve, the rest of the media -- >> the currency is different. >> the rest of the media this that -- they think i'm the only one. someone said that yesterday that everything i say and they don't think they do. they think they're all right down the middle. the entire msn and they have no idea. >> joe -- >> that's the beauty of the intent to be impartial. >> you intend to but you can see right through it. we see through it. >> isn't it better just to admit it? >> it's better just to come out. >> hi, my name is wilf, doesn't mean you have to give up -- >> i'm not talking about you specifically. or exclusively. in other news -- in other news -- >> you meant the last remark.

>> right in other news this morning, authorities in sweden say they've dropped an investigation into the rape allegations against wiki's founder julian assange. he can leave -- >> i was just reading about this. he's still in trouble for violating parole or something so he can't walk out and if he goes back to sweden before 2020 they could still pick up the charges. >> but he's holed up in that embassy. >> he is. >> so he's not leaving it yet off the back of this because of what kelli said but it's a step. perhaps he will be able to soon. >> interesting, though. is it a nice building? >> i've heard it's nice. my father interviewed him inside it. >> oh, really? >> people don't know your father. that's another little known -- you know his father, right? >> of course. >> yeah. not everybody does. that's pretty cool. the -- >> david fos -- >> you know this? >> i did. believe it or not i have seen frost nixon. that's like one of the five films -- >> which is rare for you. >> yeah. >> and then there was --

>> now films are so bad i can't watch them anymore. >> and then there was mum. >> i didn't know that he was kind of a more of a -- >> he's -- >> and this amazing interviewer. >> he started off as a satirist. sort of the equivalent of snl in the '60s. >> the pedigree is like unbelievable. and then you throw in oxford and eaton and everything else, right? >> well, i don't know about any of that. but my dad certainly i'm very proud to be his son. >> you've got to come out with the false modesty isn't working for you. >> well, off air i can at least maintain that if i can. right. we're going to move on the trump administration is looking to pass an infrastructure package that relies heavily on private sector participation. the group is already working with the state of connecticut to revamp more than 20 rest stops on interstate 95. our next guest is in charge of that and other public/private partnerships with the firm. glen youngkin president and chief operating officer of the

carlyle group. >> thank you for having me. >> i suppose on the surface there has been some skept touch about how likely ppps, publ public/private partnerships are to be taken up and this infrastructure spend from the administration is going to be very costly, going to lead to devastate expansion. how much demand on the private side is there for this? >> so first i'm not sure there's skepticism that the ppp con1e79 will be taken up in the administration. in fact, what you hear from the white house and particularly from secretary chao most recently on monday and leaders of congress is ppp is a critical tool in funding the ambitious trillion dollar spend plan that the president's put forward. so first of all, there is really strong support i think from the government for this. >> mm-hmm. >> the second point is that there is strong ap tied from global investors. infrastructure and spending is long-term, it's a steady return, and it matches returns to liabilities almost better than any asset class. and so, interest from sovereign

wealth funds, but more importantly, from state investment funds in the united states, is really high. >> and you said there's a strong demand from global investors. is this the sort of international sovereign wealth fund type investment as opposed to domestic u.s. investors getting involved? >> it's both. it's absolutely both. and what's happening today is because countries like australia and canada have actually progressed the public/private partnership concept much faster, that capital today is actually not coming to the united states in the same volume that it could. and it's going to other places. so a critical part of this infrastructure package is actually to open up this market. to provide access for that capital here so it won't go other places. >> i was reading yesterday, they said in response to what's happened with the comey issues, we expect the trump administration will respond forcefully by accelerating policy plans. investors shouldn't be caught off guard if they see an infrastructure plan in the coming weeks. are you getting wind of that? >> absolutely.

what we're hearing is that from the administration, and particularly from secretary chao, they expect to send principles to the hill in the next few weeks. and those principles will really lay out -- >> what principals? >> like school principals. they'll lay out what the hierarchy of expectations are for infrastructure bill. and then, of course, congress has to go to work. >> do you think that that's the pivotal point right there? will congress go to work with everything that's going on to kelly's point, with all of these other headlines that are hitting the newspaper? do you see any loss of traction? because it sounds like you stayed busy and you're staying in front of the white house and the staffers. are you losing any ground? >> well -- what i would say is that there's one issue that is bipartisan right now. and it's infrastructure. and so, doesn't matter who you speak with in washington, infrastructure is a very, very common cause. i mean just this week the american society of civil engineers comes out with their report on american infrastructure, and as you can

imagine, it failed. it was a d-plus. wasn't an "f." it was a d-plus. what they suggest is that there's a $2 trillion gap over the next ten years, and what needs to be spent, and the economic impact of that is incredible. >> dunkin' donuts is part of that? >> no, dunkin' donuts is not part of that. >> i love this because you guys are sort of behind a lot of the new dunkin's and rest stops we're seeing all across connecticut and elsewhere. in a way that is part of what we're talking about, isn't it? >> it is. it's the idea that there's a giant national need. there's private capital that actually wants to help solve it. and that private capital isn't just money. it's innovation. and so in connecticut, where the state of connecticut had 23 rest stops on 95 in the merit parkway and 395, candidly none of you probably ever stopped at. why? they were scary. all right. and you just waited -- you just waited till you got home. but, some smart cookie inside

the state of connecticut administration said, these can be more than just a -- something you drive by fast. and so we actually tendered or participated in a bid process, and won the right to invest in 23 of these roadside service plazas. to invest $180 million, to upgrade them, actually bring a whole bunch of new services, and food opportunities, make them nice so that people will stop. and the state of connecticut shares in the revenue. now this is pretty interesting, balls it's a new way to think about infrastructure. most people think in infrastructure is a spending program. right? it's a spending program. we need new stuff, let's get the government to fund it. and what we've seen out of the uk, in canada, and australia, is this new paradigm where, in fact, the private sector can invest in this stuff, and they can use the proceeds to go spend in new infrastructure projects. >> glen, just 20 seconds. which areas do you think are most likely to see this kind of

partnership delivered on first? >> airports. right out of the box. is the number one target area right now. why? because they are understood commercial entity. and there are airports starting to move this way. st. louis, kansas city, seattle taco tacoma. the great thing about air is ports is there's value. you can take that value in an airport and redeploy it in other infrastructure projects. >> glen, great stuff. >> duncan can help that. >> muffinkins. >> every airport should have a dunkin' donuts. >> and not the stumps? >> like seinfeld? >> nobody wants the stumps. keep that in mind. >> keep that in mind. >> you got to get the details right. >> thanks very much for joining us. thank you all very much. >> reubensteen? say hi. we want him back. coming up president trump's expected to announce one of the largest arm sales deals in u.s. history. estimated to be upwards of $100 billion. why did a million if you can do a billion? closer look at what it means for defense stocks and who the big

winners will be. check out the price of oil this morning. it's the second week of gains on expectations that exporters will extend output cuts. we'll be right back. your insurance company won't replace the full value of your totaled new car. thguy says you picked the wrong insurance plan. no, i picked the wrong insurance company. with liberty mutual new car replacement™, you won't have to worry about replacing your car because you'll get the full value back including depreciati. switch and you could save $509 on auto insurance. call

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welcome back. president trump is expected to unveil a huge arms deal with key gulf ally saudi arabia this weekend. morgan brennan joins us now with more on that. morgan, good morning. >> good morning, wilf. this is poised to be one of the biggest arms deals ever announced. it's supposed to happen tomorrow while president trump is visiting saudi arabia. those foreign military sales agreements are expected to be upwards of $100 billion with the potential, i'm hearing, to grow to as much as $350 billion over the coming decade. now, among the new agreements that will be announced, which will many of which will have to clear the state department and congress for approval still, terminal high altitude area defense like the one currently being installed in south korea right now. that's made by lockheed martin with input from raytheon. also precision guided missions, ships, tanks. so who stands to benefit from all this?

it's going to be the big five contractors, lockheed martin, raytheon, general dynamics, northrop grumman and boeing all of which have declined to comment on this. this is expected to be announced as soon as tomorrow morning eastern time and based on a draft agenda of the ceo forum that is circulating right now a number of ceos will be in riyadh, including lockheed, raytheon and boeing which also could potentially stand to benefit on the commercial plane side as well. so it's going to be an interesting set of news for the defense companies over the weekend. guys? >> morgan, thank you very much for that. joe, sorry just going to jump in, as well, just for a change. >> yeah. exactly. >> i think talk of we might get a deal on the defense side. interesting to note and steve and i were just chatting about this in the break ahead of all the rumors of the saudi aramco ipo that might come that reportedly lloyd blankfein, james gorman, michael korbat all going on this trip as well. bankers part of the business

delegation travelling to saudi arabia. maybe we'll get to see something in terms of timing and announcements on that front. >> so, the big fat cat banksters are going along with the -- really? >> according to reports, yeah. >> no longer -- >> delegation -- >> well it's -- >> part of the problem. that's different. >> if they were a big part of this ipo that would be a big -- another area of a coup that president trump could announce. but we don't know about that yet. but i think it's something that will be discussed certainly. >> all right. joining us now to talk more about this, and the effect on the defense secretary howard rubell managing director of equity research at jefferies. so all of it now, i think of you as a defense guy, howard. but you branched out. you're so good at that that they want you covering everything now, right? >> i wouldn't go that far, joe, but thank you. yes, we have a good sense of who sells what and what's needed, and missile defense is very important of any country's strategy today. >> it's hard on -- with any

single development to say buy the stock of a company. but can we do that anyway? i mean, who's going to benefit from what happens in the next, you know, in the next number of -- next week. who's going to benefit? all of them are some that would be benefiting outside? >> well, i -- we have been recommending raytheon, and we like it, because frankly, mr. kennedy has done a nice job of expanding the capability of its offerings in saudi among other places. and also, they have the premiere air defense offering and probably the singular best radar capability in the world today. >> we showed a screen of five -- four or five stocks. anybody else that you would, you know, write a buy order today for, or buy long-term? >> well, we continue to recommend boeing and we note this morning in something we published that air traffic in april could be up between 9% and 10% globally. i mean, those are stunning

numbers. now part of it's the easter shift. but part of it's also you look around the world, and we're growing again. >> are we in a secular bull market because of the trump administration? for defense stocks now or is this another thing that we ought to say we need to see the, you know, the proof is in the pudding. we need to wait to see what happens? or can you just say yeah, it's going to happen. >> you know, defense is never a single yes. but you know the momentum is fairly clear. fy-17 budget which was just passed. you know, gave the defense contractors, you know, a trajectory of 3% to 4% growth, and there's a lot of pent-up demand. we've been using a lot of munitions and we need to refill those bins. >> i know we need at least 59 of those tomahawks, right? not 60, though. >> you know, there's always training rounds. and you know, raytheon has, you know, a strong capability there. and they've done a number of

things that would cause that weapon to be useful again and again and again. >> yeah. >> i mean i do think there's one point we need to make, though. somewhere along the way we need to use these weapons to sort of figure out how to solve problems rather than just to create arm camps. >> all right. howard, thanks. we appreciate it. keep it short. >> thank you. >> coming up, it was a big week in the art auction bidding wars. there's the biggest winner of them all. we'll tell you all about it right after this. the show's about to start! how do i look?

like a bald penguin. [ laughing ] show me the billboard music awards. show me top artist. show me the top hot 100 artist. they give awards for being hot and 100 years old? we'll take 2! [ laughing ] xfinity x1 gives you exclusive access to the best of the billboard music awards just by using your voice. the billboard music awards. sunday, may 21st eight seven central only on abc.

a big week for the art auction market. robate frank joins us with a look at some of the big sellers. you've got to talk to kelli because she's not it. she's not down with this basquiat. >> if she now it in person -- >> no, no. >> she would get it. okay, so let's talk about the numbers. paint by numbers here for a minute in 1984 this painting by jean-michel basquiat sold for $19,000 to a long island real estate developer. last night that same painting sold for $110.5 million. that is now the most expensive painting ever sold by an american artist, and it's sixth most expensive painting ever sold at auction, period. now, it was expected to sell for only $60 million. but lots of bidding between two collectors. that's all you need is two billionaires who really want something that drove up the price quickly. and the buyer posted this trophy on instagram. yusaku maezawa the 41-year-old e-commerce billionaire.

his company is called zozo town. he's japanese. he said i was struck so much with excite and gratitude for my love of art. now it topped a week of very strong sales in new york, as wealthy art collectors shrugged off the market turmoil and all those headlines in d.c., sales topped more than $1.4 billion up from $1.1 last year. some of the others, leta and the swan went for $52.9 million. kel kelli, you're definitely not going to get that one. >> he's a lexington guy. >> that's the swan? >> that's leta and the swan. you can see both of them there clearly in that picture. now that is a sister painting to one of the most famous pieces at mome moma here in new york. this is another one $51.8 million. but jean-michel he is the new darling of the global art market. christie's had this basquiat being sold by a hedge funder, steve cohen, that went for $35.

the estimate was 25. all in all 16 basquiats were sold for $200 million. now maezawa actually had the previous record for buying a basquiat. he bought a piece last year for $57 million. what's interesting is that basquiat was mentored by andy warhol. war hole had the previous record for an american artist with $105 million. so basquiat suddenly just he's the new warhol. >> amazing numbers and amazing to see the market so strong, despite, you know, other concerns and other -- >> we were with the new christie's ceo, and he, during the market crash, when it was down 350 he was talking to clients all day. he said i'm not worried at all. they're all buying. they're all bidding. they don't care about this stuff. for now. >> well, it's proven with these bids. great stuff. >> well -- come on. >> it's not my place. i'm not an art critic. >> i didn't understand- >> she's more a monet,

gauguin -- >> no further back. >> i didn't like the guy that draws the line across the thing with the color up here and a color -- >> rothko. >> yeah. >> i kind of like this. >> at least rothko is prettier to look at. >> we'll be right back. customer? can we push the offer online? brian, i just had a quick question. brian? brian... legacy technology can handcu any company. but "yes" is he. you're saying the new app will go live monday?! yeah. th help from hpe, we can finally work the way we want to. with theight mix of hybrid it, everything computes.

trump on the world stage. the president kicks off his first overseas trip as commander in chief. first stop saudi arabia. >> brazil on the brink of crisis. stocks plunging as that country deals with another political scandal. plus thinking like a disruptor. we'll go inside the minds of silicon valley's biggest game changers 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." >> everybody thinks that. good morning, welcome back to "squawk box" here. on cnbc. live there the nasdaq marketsite in times square i'm joe kernen along with kelly evans and wi wilfred frost. futures have been up this morning.

5.5 on the s&p 500. 17 and change almost 18 on the nasdaq. oil prices, oil prices have not been the story in terms of a lot of movement. seems like they've been right around there for like a year. >> everyone gets excited when it goes above 50 -- >> and talk when it goes below 50 but it's been the standard deviation from the mean has not been so great. and it does all play in to this big trip that president trump is taking, starting in saudi arabia, and certainly oil influences everything in that part of the world. checking on currencies. you know, there's a real bounce in wilf's step this morning because the euro hit a six-month high. you know, and the globalists appear to be, you know, getting things populism seems like it's peaked. you know, even though the uk never joined the -- never used the euro anyway. it's like do what i say, not what i do with you guys -- >> the euro is fine for you. >> what i think it proves, joe, is that communism is the way forward. for everybody.

>> you can't even joke like that -- >> no? >> you'll get written up for that. you will. >> no, that's too much of a legitimate discussion point. >> right. >> it's -- >> not even a joke. >> just to say something on the currency, what i think is important today, these are luge moves again the euro is close to 112, the pound nicely above 130. dollar weakness back in vogue and yet futures higher. this is important for the market. >> it should be -- >> -- on a positive note. but up clearly on wednesday a lot of dollar weakness pulled the market down. >> we want to -- treasury secretaries always say strong dollar, strong dollars. >> except this administration. >> right. >> basically -- >> but trump, too. >> but you can't separate from the fact that post the election, these things were correlated since sort of the turn of the year the dollar's now dawn sort of 4.5% and equities haven't pulled back. that correlation wednesday was a worry. the fact we're ending down less than 1% for equity markets and

the dollar's continuing its slide is an encouraging sign that this was only a one-day sell-off. >> feels like it doesn't even matter. it goes up it's good for stocks. it goes down it's good for stocks. we have shares of deere higher after reporting earnings. the equipmentmaker beat on the bottom line despite a revenue shortfall. it increased full year sales forecast. deere shares up about 6% right now. and mobile carrier merger could be on the horizon. t-mobile cfo saying the company would benefit from greater scale in the industry if it were to merge with rival sprint. the cfo cited more than $30 billion in synergies over time between the companies. he said, quote, it's not a question of will talks happen. i hope i'm getting that right. >> not a question of will, it's when i guess. >> right. in february reports that sprint's controlling shareholder was positioning itself with deutsche telecom. this is the worst kept secret and rumor. and after they finish the

spectrum auctions they can get off to the races. t-mobile and sprint shares up 2% now. president trump will leave washington today to begin his first foreign trip as president. he'll kick off the journey in saudi arabia. it will continue with stops in the vatican before a nato meeting in brussels and a g-8 summit in italy. it's about a full week he's overseas. the president's first stop in saudi is critical. in other political news, the white house could be one step closer to naming a new fbi director. at the top of the president's short list, former u.s. senator vice presidential candidate joe lieberman, who has been an "squawk" many times. great -- i like lieberman a lot. >> no but that's the problem. >> i know -- he's a political entity and even the democrats are saying they don't need a political entity. >> this thing is a specific problem that joe himself likes him. >> maybe, that's right. i try not to say -- i try not to say that too much. >> but my point, the immediate

response from everybody is, you know, if the republicans are picking him because he's some sort of bipartisan figure, they're picking him for the wrong reasons. >> an impartial journalist said he liked him it wouldn't -- >> exactly. listen to me. i'm saying as an individual, he is a good man and a -- joining us now, former assistant fbi director chris swecker. chris last night i was watching as i do sometimes, i'm watching krauthammer and these other guys. he says we need eliot nest. i wanted to write in, he's not available, is he? what does he mean by that? do we need eliot ness? what does that mean? we don't need a politician? >> we need a law enforcement professional, someone like a robert mueller who is going to, you know, decorated marine, prosecutor, extensive experience. we really don't need a career politician running the fbi at a time when we want to remove the

fbi from politics and put as much distance as possible between the fbi director and politics. plus, you know, the fbi is a 35,000 person organization. at one time i managed about half of the fbi as an assistant director, and it's far flung. there's over 250 offices. they're all across the world. it's a complex organization and managing a congressional staff is about the size of a small fbi squad. so i look at this as, of all the names that i've heard, it's not the best name. >> who is the best name of all the ones? you like frank keating, or no? >> not necessarily. i, and i like mike rogers but that sort of contradicts what i just said. because he was in congress. >> right. >> but he like a guy like ken wanestein, i've heard his name bandied about. i like some of the fbi names that i've heard in there. i think maybe a successful big city police chief.

someone who has absolutely nothing to do with politics, but has managed a large, complex police department or a prosecutor's office that had a large scope like the southern district of new york. >> recently seeing some things about -- i didn't see the movie "hoover" because dicaprio didn't look anything like him, i didn't think. i couldn't see it. anyway, you think about the way he did things, and then i've seen parallels drown to comey where, you know, you can almost be more powerful than the president at times. i mean, hoover, the presidents were afraid of him. they were afraid to get rid of him. with comey, he had investigations of both candidates going on at the same time. he's allowed to -- you know, he disclosed one, doesn't disclose the other. i mean, that would strike fear into the heart, going to the very pop of the food chain, wouldn't it? so i'm not sure that was the right way to do it either. is that an unfair characterization of the way it was? >> no. i think you're spot on.

i know former director comey, worked with him as head of the fbi's criminal division, and i think that he got bigger than the organization. and that can't happen. the model for an fbi director would be again, robert mueller, louis freeh, people who stayed out of the press, out of lime light, stuck to the business of the fbi. the fbi is an organization where at times you have to get in the weeds and micromanage. you have to make sure that sensitive things are on track, and being handled properly. because after all those 35,000 people are human. so you need to stay on top of things and be more of an internal leader. and manager. and i think there's a difference between the two. but you have to have both. >> chris, was the president wrong to so loudly criticize the appointment of a special counsel, an investigation into this whole affair? because presumably this now will give a definitive and fair answer and response to the whole issue? why did he criticize that so

vehemently? >> i think it was a mistake. look, if there is nothing there, then he has absolutely nothing to worry about. and i would -- if he knew what i knew, he would applaud this, because director mueller will keep this out of the press. he will make sure that his team is buttoned down, and not talking. if there's any leaks, they come out -- my opinion it will come out of the committees -- >> some of that, chris, is specific to mueller, though. i mean -- >> true. >> special counsel, right? a special counsel might muck things up and go, you know, we remember god it started with a land deal in arkansas. next thing you know, there's a blue dress. we had no idea where we started by the time we finished some of these things. and they last three, four years depending on what you do. but mueller is specific. you think he's right up to speed, he could do this quickly? >> i do. i mean, i take your point about the whole issue of a special counsel. but you know, i was -- i opposed

it at first. when the memo came out, and look i've been critical of comey, but he's not a liar. and he has the utmost integrity. i think the time came to have a special independent counsel because of all the controversies swirling, and the public perception really needed to be addressed. and yes, i think that mueller is the person. he is -- anything that comes out of his findings, and he's not going to go far afield. he's going to stick to his knitting. he's not going to go running looking for dresses and scandalous things. >> right. >> he's going to stick to the facts. >> chris, at a guess, how long will it take him to complete his investigation? >> i'm going to go out on a limb and say this will take about a year. this is a mature, 8-month-old investigation. and really, i think the flynn investigation is separate from the potential collusion investigation. they could combine those two. i think that's one of the things they're talking about right now. but i say less than a year. again, because of i know how mueller operates. he will focus and laser in on

what's most important and not go far afield. >> hmm. >> all right, swecker, thanks. appreciate it. and we may need to come back to you again at some point. as things develop. probably going to be lieberman, don't you think? >> everything -- it looks that way, unfortunately. >> all right. >> some stocks to watch today. check out shares of campbell's soup. the food company earned 59 cents per share for the quarter. five cents below estimates. revenue was also below forecast and campbell has cut its sales outlook for the year but raised the lower end of its earnings forecast as you can see shares off 3.8%. gap seeing a surprise rise in quarterly same-store sales. the latest indication that the retailer's turnaround plan is gaining traction. the apparel chain sales have been lifted by strong performance in its old navy stores. shares up 4%. still to come here on "squawk box," banking on financial sector posting its worst day since brexit on wednesday. we'll talk to an analyst about why it may be time to buy back

in. plus president trump set to make his first trip abroad since in office. first stop saudi arabia. we'll talk to the former u.s. ambassador to the king dom at 8:40 a.m. eastern time. then later from a so-called crazy idea to disrupting industries, we'll find out what game changers say it takes to make it in business. stay tuned. you're watching "squawk box" on cnbc. ♪ ♪ ♪ i'dr. keey mcneely and some y you ght be calling me an ergy farmer. ♪

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welcome back to "squawk box." leon cooperman's omega advisers settling with the s.e.c. over insider trading charges for 2k4st.9 million. the hedge fund has admitted to no wrongdoing. cooperman will not be -- i'm glad about this -- will not be barred or suspended from the industry. in a statement cooperman says he looks forward to putting the matter behind him. last september the he was accused of insider trading after a five year investigation and a month later he told us on "squawk box" he was ready to fight the charges. >> omega was built on doing detailed fundamental vench and complying with the law. we could have settled with the

s.e.c. for an amount that is far less, far less than i donate to charity annual basis. but i refuse to do so because i know that we acted appropriately and lawfully. it took me 50 years of hard work, very long hours, playing by the rules, to get where i am professionally. and i'm not going to let them basically unfairly destroy my legacy. >> and -- >> but he has settled. >> yeah. for so much less than they wanted. and like we talked about, jamie dimon has said, you cannot -- you can't fight city hall. you get a shakedown and it's less money to just do it than it is to -- anyway, reports say that the terms of the $4.9 million settlement were significantly below what the s.e.c. wanted. this, in my view of lee cooperman, this is no way would i say, wow he had -- you know, would i say -- it's a good point, very philanthropic and generous, and that, you know -- >> but i wonder how is the s.e.c. going to respond now?

after they're entire campaign of insider trading and prosecuting people for it came to a screeching halt when they had the court ruling and other things and there are still other appeals that are going on right now from people, where does -- what do they do now? >> people are changing -- >> new administration, new appointments, it's a sort of reason to turn the page as well. >> might be the end of the era. >> right bank stocks taking a beating this week. they recovered a little bit yesterday. joining us gerard cassidy, managing director and head of bank equity research. good morning to you. >> good morning. >> you ever heard your first name pronounced cooler than that? >> very cool. >> how should i have said it. >> no, that was fine. that was ideal. >> gerard. >> what did i say? >> gerard. >> gerard. >> i hear that when i go to my london office. >> there we go. there we go. >> my apologies. >> no, not at all. >> there we go. >> better. >> exactly. >> names you've got to pronounce right.

i stick with banana. but i should have said gerard. anyway, banks this week clearly selling off head line kind of trump reflation trade stepping back but has in fact the news this week been positive for banks? i mean, particularly yesterday, mnuchin very clear there's not going to be a separation of universal and commercial banks. people perhaps didn't price that in fully but it was always a risk. >> it was a risk. so-called dodd-frank 21st century. we never really believed that was going to happen. because this administration wants to push deregulation and we know under the last eight years, this industry has been heavily regulated. that's one of the reasons the stocks have done so well is that we do expect deregulation to materialize in the next twelve months. >> clearly a big factor of stocks running up in the bank sector was that hope of deregulation. we saw a pullback this week on beliefs, whatever way you say it, that the trump agenda was going to get pushed back. reregulation, can a lot of it in the banking sector happen without the need for laws, as things stand already?

>> you're absolutely right. i think that's what the market truly doesn't appreciate. repeal or replace of dodd-frank, that's probably not going to happen any time soon if at all. however the new people that are coming in to these regulatory positions, the new head of the federal reserve, the vice chair for safety and supervision as well as the controller of the currency are going to be, we think, pro-bank versus the people they're replacing, and people are policy and they change a lot without changing the laws. >> one thing that we've heard from a lot of ceos, including from brian moynihan in kelli's interview with him yesterday is that they feel the banking sector more broadly is overcapitalized. is that a factor that is also underappreciated in terms of how much more capital they can either put to work in their businesses or -- >> i think you're absolutely right. we estimate it's close to $250 billion of excess capital and the reason that it's so high is that the regulators, the federal reserve in particular, has been very reluctant to allow the banks to be very aggressive to

give that back. we have coming up this june the results of this year's secar, that's the stress test and this is the first time we think that banks under $250 billion in assets will be very aggressive because they've been able to get the free pass, if you will, from the regulators. >> i suppose one of the bearish factors on the flip side is that in the last rate hike cycle we saw huge operating leverage come through for the banks. goldman sachs, though, everyone expected that to come through. one of the reasons why goldman sachs was one of the outperformers of the big names q1 earnings clearly that didn't happen. is there a concern out there that this interest rate cycle is not going to be as profitable as some perhaps? >> actually, no, actually i think it's the opposite. i think goldman sachs was an outlier. goldman sachs is not really an interest rate play. it's obviously a fee based play. they're great in advisory. but if we go to bank america. you mentioned about talking to brian moynihan yesterday. you go to comerica, jpmorgan chase they are very interest rate sensitive and because our

system is flooded with deposits, there's no rush to raise deposit rates. so the first quarter spreads were very good. we had revenue growth of almost 10% year over year. we haven't seen that in years. >> and just quickly some top picks. smaller banks versus bigger banks and your top pick? >> i would say we want to go asset sensitive banks so the big banks, bank america would be the choice. and then on the smaller bank said we would go with comerica. >> gerard, thank you very much for joining us. >> you're welcome. >> gerard cassidy. i've got it right. now you're confusing me. >> gerard. >> coming up, italy wants you to live like a king for free. they're giving away casts, and there's just one catch. we'll tell you what that is, next. this is a story about mail and packages. and it's also a story about people. people whoely on us every day to deliver their dreams they're handing us more than mail they're handing us their business and while we make more e-commerce deliveries

to homes than anyone else in the country, we never forget... that your business is our business the united states postal service. priority: you ♪ what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) at'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

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welcome back to "squawk box." facebook is teaming up with the mlb. they'll stream 25 friday night games starting with tonight's match-up between the rockies and reds. the games will air for free. but the deal is not exclusive. facebook will be piggybacking on the local broadcast. mlb also has a deal with twitter. those games are blacked out in local markets. it would seem like the twitter deal is more valuable. >> listen, i think this is a huge development. again, it's just a clear sign of more competition for content -- >> have you ever watched one of these games on like twitter or facebook or anything like that? >> no. because it's just been reserved to american sports which i try

to watch but not that much. listen if you look at the market in the uk for these things, theage lish premier league soccer rights are by far the most valuable thing that keep people subscribing to this content. it's just going to keep going in sports. >> when i was in london, got there on the sunday of what would it have been january, the open, must have been the australian open. >> right. >> and it wasn't on tv. but if i paid like eight pounds or something i was able to subscribe to something for 24 hours, euro sport maybe and stream it and the quality was excellent. and i left it up for four or five hours. i think it was when federer won. >> beating nadal. and he's dropped out of roland garros to focus on wimbledon. >> that kind of option doesn't really exist. but there was clearly a market or something like that. it's more on demand. i don't necessarily need to pay for the whole year but i was happy to pay for that sporting event. that's probably what people pay for a month. what does espn charge per month?

$6. and i would pay eight pounds to watch it for four hours. >> there's 162 games a year baseball and there's a lot of different teams. so, a lot of -- there's a lot of baseball on at any given time. >> right. >> i don't know if you've tried to watch like two teams you might not be interested in. >> mm-hmm. >> if you're not from that city. it may not be your, you know, try to speak your language, it may not be your cup of tea. >> exactly. >> but then i know how much you like soccer and it might be similar in terms of how interesting it is. >> right. >> watching an out of -- you know these two teams you don't care about for two hours, ball, strike -- >> what are you saying? >> i'm saying you're used to watching something very boring and therefore you might actually have a taste -- >> you should try tonight's baseball game. >> have you seen a goal this year? >> not enough for my team. but across our opponents, alas, many. >> tell kelly the name of your team? >> was it arsenal? >> yes.

there we go -- >> so close, too. when you say it people think they need to bleep -- >> you do, joseph. >> you're such a flaming arsenal. >> go to break, "squawk box" will be right back. remember here at ally, nothing stops us from doing right by our customers. o's with me? we're like a sports team here at ally. if a sports team had over 7... i'm in 7,000 players. our pls are a little unorthodox. but beat the big boys, you need smarter ways to save people money. we know what you want from a fincial company and we'll stop at... nothing to make sure you get it.

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good morning, welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in times square this friday morning. among the stories front and center, ibm is ordering thousands of remote workers back to the office. it's telling those workers to abandon their home offices, or quit. ibm says having workers together in the office improves collaboration and gets work done faster. french researchers say they found a way to unlock computer files that have been encrypted by the wannacry ransomware. the method, however, will only work if the computers haven't been rebooted since they became affected and if the fix is applied before the malware carries out its threat to permanently lock those files. the apple watch may be able to some day measure your blood sugar. sources tell cnbc apple ceo tim cook has been seen at the apple campus testing a blood sugar

tracking device connected to his apple watch. that would make the watch attractive to the millions who suffer from diabetes or are at risk for the disease. a new study wants you to log off instagram and snapchat for the sake of your health. kelly is way ahead on this. the young health movement found that instagram was the worst social media platform for the well-being of 14 to 24 -- >> is this mental or physical well being? >> so many different reasons i think. that study said that all major social media platforms, including facebook and twitter have a negative impact because they take a toll on body image issues. they worsen bullying, they can cause sleep problems. depression. and loneliness. the other day, two days ago i think, we had the gentleman that climbed el capitan. >> wow. >> the sheer face, the hardest climb ever, 3,000 feet. he actually said that he didn't bond as much with his climbing

partner because they both had the stupid phones with them. >> on the climb? >> on the climb. >> no. >> during the climb? >> well, you know, there's times where you get -- you stop for the night and you put on and they're both like on their stupid phones tweeting out or sending out -- >> did they realize this? or did he just realize when he was reflecting on it. >> he finally dropped his phone and didn't have it for the last ten days of the trip or something and just thought it was better. we did the segment because it showed how social media had put the climb on the map. people were following on facebook. there were a lot of good things about it. but just personally mentioned that, he extrapolated back to kids that are living and not missing out on certain experiences because they're head in that thing -- >> it's definitely, you know, takes control of your life, whether it's the work e-mails -- >> she's off twitter you know that? i show her things -- yeah, it's smart. it's good. i admire you. >> you know, i -- i think it's

somewhat they're talking about. it's just a lot of looking at this content that is put out there at triumphant moments in peoples lives. >> or whatever. >> right. >> i don't know, by the way i'm glad i did it before the election because that would have been -- if i hadn't done it before then it certainly would have been around. >> a lot of people just put up things because they want to make other people feel bad -- >> but you know what? there have been moments that i've wanted to share oh, i did this race and it went really well and i'd love to tell people about it. but you know what? did i want to tell anybody when it didn't go that well. i don't think you need to but because it's not a expression -- geez i'm tired and dinner was -- so you know, i like looking at some of the images, and of course i want to know how my friends' kids are doing. >> well i would -- >> i can talk to them about it. >> i'm addicted to twitter because i love blocking people so much. i just -- are so nasty and that feels so good when i actually

block someone. i think i blocked -- i've got a certain amount of followers, i think i blocked as many people. now everybody's really nice. everybody i've got -- they all say i'm the best. and that's -- >> so it reinforces -- >> i mean, i can block people. so some of my -- i'm not even -- what do they say? not even sure. they might even like that. i can't even tell. you block people? >> no. it's good to see both. the best is when you do a show and people from both sides of the political aisle are slamming you. because that means you must have been somewhere in the middle. >> it's never happened to you. >> it does. >> really? >> yeah, big time. >> and there you go. >> we've got some wackos, then. >> speaking of politics. the political scandal is sending shockwaves through south america's biggest market. brazil's president says he will not resign and will prove his innocence after the country's top court opened a bribery investigation. brizen's equities posted their

worst day. joining us from brown brothers, talk about any contagion effects you see here. >> well we had a lot of contagion yesterday. it's hard to jump on this. i think they were softening ahead of that and certainly about the u.s. and really geopolitically. but the markets calmed down today. i would say the risk of contagion is fairly low. the knee jerk reaction. i think it's really a wake-up call reminder that hey, you know what? investing in risky emerging markets comes with risk, high return, high risk. and really just a wake-up call more than had been serious contagion effect. >> it also hurt argentina's market yesterday. you know, and again this brazil is a huge economy and lately people have been talking about petrobras and geez look at the rally that they've had off the lows and things are turning around. so does this deal a major setback to all of that? >> absolutely. i think not to petrobras but in

general, pricing perfection. we had the brazil real down to 3.07. invesco up at 70,000. that was assuming everything was going to fall right. that is fiscal reform, pension reforms, central bank continues to cut the economy picks up. but to me that's been really thrown out the window. look is that too positive? yes. were we too negative when the real was at 4.25? yes, the truth is somewhere in between. >> okay. so if you know, it's the case now that they have to deal with political distractions, prance that undermines the economy, people you know, capital or what have you where does it go? does it come back here and boos the dollar which has been sinking of late? >> that's the million dollar question. the dollar, the sort of reflation trade, the trump trade has sort of been on the back burner. we've had some soft u.s. data. it really calls into question whether the fed can tighten rates and especially going with delays to fiscal and stimulus

infrastructure spending. so that's really up in the air. my feeling is that emerging markets still has some good spots. it is, and i think i would advise investors not to look at em sz a big blob, trade up and down. some good stories and bad stories. unfortunately i think brazil is one of the bad stories right now. plenty of good stories in emerging markets, as well. you've got to check under the hood. and not just dump money into risky assets just to expect returns. >> since wilf is here we've got to ask you about the euro and how much stronger you think it might get? >> again that's really reflecting the low irinterest rate outlook. again, the soft data, you know that q1 outlook, q1 growth in the u.s. was soft. and that is transitory. but as we start going through april and may the data continued to be soft. so that's really to be determined question. but i think europe could go up as high as 1.15. i think that the u.s. needs some

strong data to turn this outlook around for u.s. interest rates and the fed. but we're not seeing it yet. >> quick comment on china just because one of the sort of supports of the u.s. market has been this idea that global growth is picking up. but chinese data the last month or so softening. is this something we need to be concerned about? >> no, it's interesting. you know, china's been such a market mover the last several years. right now it's really on the back back burner i would say. i think the muddle through scenario for china remains in play. look we know that china's still leveraging. we know it's rebalancing from exports to domestic consumption. so some slowdown is to be expected. authorities seem to be managing well. managing expectations of the markets well. the yuan has been fairly steady. so to me it sort of, something to keep an eye on but i don't think it's as big a worry as some of the other potential flashpoints around the world. >> win, appreciate it. win thin from brown brothers harriman. >> thanks very much. >> wow. now i'm liking a lot of people

because they're saying, you know, don't buy -- you're thag, you know, it was like i was fishing and that works with me. i love all of you, too. i think i made -- did you tweet -- do you know how to retweet? >> i understand modern social media, yes. >> i was one of the first feel on twitter. not first but you know, early back -- never mind. >> why weren't you just @kelly? >> i was almost going to say what gmail address i had but i realized that would not be a good idea. >> please make kelly -- >> do i even want to -- >> no. they love you. up next we're going to talk to the former u.s. ambassador to saudi arabia about president trump's trip. president trump's trip and what's at stake. "squawk box" will be right back. [vo] when it comes to investing,

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president trump's first stop on his overseas journey to saudi arabia. our next guest knows firsthand the critical nature of president trump's trip to the king dom. joining us now robert jordan, former u.s. ambassador to saudi arabia during the george w. bush administration. he assumed the role after 9/11. ambassador jordan is currently diplomat in residence, and professor at smu. southern methodist. and author of desert diplomat. inside saudi arabia. following 9/11. so much to talk about. i was tass natured when i was preparing for this ambassador jordan. wasn't quite as knowledgeable

how much things have really soured. and i don't really understand how they soured. i guess mostly has to do with iran and both areas trying to assert themselves in the middle east. and i guess we chose iran for a few years and that ruffled a few feathers in saudi arabia. is that why we're in this position now? >> i think it goes back further than that. i would trace it back to the fall of hosni mubarak in asia. the saudis were reflective that the obama administration allowed mubarak to go down. that they espoused the cause of the muslim brotherhood and morsi, and they felt that if the americans could do this to mubarak, they could also do it to the saudis. so i think that was the beginning of the decline with the relationship with the obama administration. we then saw the red line in syria that was not enforced. the saudis, and i think even the israelis lost respect for this administration on a number of levels. the iran issue then was the

icing on the cake. and i think it has led to a real deterioration which they have high hopes now can be restored with the trump administration. >> well, ambassador, that seems to set up a situation where both sides would really like some good press here. and some good things to happen that could benefit both countries. i get scared when the expectations are pretty high, then. is it possible to meet or even exceed the expectations for what's going to happen? or are we setting ourselves up for disappointment? >> i think we've got to keep our expectations in check. every new president comes in with the saudis with high expectations. and in some cases they're disappointed. the george w. bush administration came in with high expectations but we didn't get very far with the israeli/palestinian peace process. likewise with obama.

they thought he would be a favorable figure. so expectations are high. we'll see what can be delivered. but i do think there's a sense among the saudis, i was just la last month, that this is a new opportunity, and yes you're right, also a great opportunity for the saudis to show the world that they are now really part of the international family of nations, a major economy, and a major player. >> does this trip make it impossible to recover relations with iran and perhaps other countries in the region? >> well not necessarily. but it certainly set up to create a defense mechanism to resist iran's incursions in the region. i think what will make it impossible to reset things with iran is more up to iran than it is the gulf cooperation council and the gulf countries. they've got to stop assimilating themselves in every conflict, every corner of the middle east, and i think this is an area that may well show some progress.

i'm told that iran's mischief has subsided somewhat since trump's trip has been announced. >> ambassador, we hear that the president's going to make a speech more broadly on the topic and religion of islam. is that a potential pothole for him? what are you expecting from that? and is there a risk that he disappoints people in the region? >> i guess there's always a risk with this administration and this president. but i think it's important for him to clarify and perhaps set a new tone going forward with regard to how he views islam. he's going to be speaking at the opening of a new center for combatting extremist ideology. and so it's also a chance for the saudis to show the world that they also are committed to combatting the extremist forms of islam that have, in many ways, hijacked the religion. so it's a win-win opportunity for both president trump and the saudis if they can pull this

off. >> there's no -- none of our allies or enemies in the middle east seem to be perfect. it's nuanced. and we hear, wow, you're, you know, you're great friends with the saudis. and then you hear a list of things that the saudis have done, whether it's human rights, or some of the extreme forms of islam or 9/11. whatever it is. you hear all those things. are the saudis genuinely friends to the united states? and it's not just about the -- about oil exports and everything? i mean shouldn't we -- is there a risk to cozying up to saudi arabia do you think? >> well we've had a longtime strategic relationship with saudi arabia going back to 1945. i think it's probably the longest standing strategic relationship with any developing country in the world. so yes, they're not perfect. and i certainly during my time as ambassador spent a lot of time trying to deal with them on human rights, women's rights, and other issues. but you have to, when you raise these issues, you have to make

it clear to them that they have to act in a way that they believe is in their self-interest. they're not going to do it with our wagging our fingers at them or at the point of a gun. so you've got to, it's almost like fly-fishing. you've got to work your ally, work your relationships the best you can. they have by and large been steadfast allies. they have allowed, i think, a toxic brand of extremist ideology to propagate around the world. and this is something they now realize at the highest levels, they've got to do something about. we have to help them. but we have to also -- excuse me -- we also have to remember that they have their own national interests, and any ally we deal with is, at the end of the day, going to work in their own national interests. we go in to these crises. we go into these conflicts, not with the allies we'd like to have, but with the allies that we do have. and i think we have to make the most of them. >> thank you, mr. ambassador.

you read for whom the bell tolls? you're not that robert jordan, are you? >> i'm not that robert jordan, no. >> what a cool name, though. i would like to be robert jordan. anyway, i guess i could do that, our wilfred frost is my other choice. ambassador thanks for your time today. >> thanks for having me. >> when we return, jim cramer live from the new york stock exchange. it's over. i've found a permanent escape from monotony. together, we are perfectly balanced, our senses awake, our hearts racing as one. i know this is sudden, but they say: if you love something... set it free. see you around, giulia ♪ we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage.

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welcome back. let's get down to the new york stock exchange. jim cramer joins us now. the thing i want to ask you about, we have some retailers bucking the trend. >> yes, we have. we have gap stores. this walmart number -- this stock is going straight in. i usually i don't say that. but e-commerce number was great. if you listens to last night's salesforce, you understand why e-commerce is taking off. everyone is like amazon. they have the same back office and more importantly, the walmart advantage, the achilles heel, fresh food. i love the autodesk quarter last night, the applied quarter's, nvidia is moving up. gap stores i can't believe it. geez, farm equipment

internationally for deere incredibly strong. we had no misses last night. >> we look forward to your deeper analysis coming -- >> footlocker, be careful. >> still to come here on "squawk box," cnbc's new class of disrupters play a game of would you rather. we ask them if they want the ability to fly or be invisible. their responses coming up. -what? -we gotta go. -where? -san francisco. -when? -friday. we gotta go. [ tires screech ] any airline. any hotel. any time. go where you want, when you want with no blackout dates. [ muffled music coming from club. "blue monday" by new order. cheers. ] [ music and cheers get louder ] the travel rewards credit card from bank of america. it's travel, better connected.

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this week cnbc took the wraps off the fifth annual 50 disrupters list and now we're looking at the entrepreneurs behind the winning companies. for some insight into what it takes, julia boorstin. >> good to see you. so the entrepreneurs on the disrupter 50 list have taking crazy sounding ideas an turned them into fast growing, sustainable companies. one thing they have in common, they're not interested in following along with the status quo. crowd strike said you have to break the rules and be prepared to remake them. another one said, to be a successful leader you need to know when to take risks, when to play by the rules and when to set the standard for others. another thing the disruptive entrepreneurs have on this list, the issues holding back their

growth are hr related. 44% of respondents say the greatest challenge has been hiring qualified talent. in second place, delegating responsibility getting a vote from nearly 16% of respondents. when asked what their superpower would be, they say they'd rather fly than be invisible. 56% picking flight, only 19% picking invisibility. a lot of this all comes down to practical reasons. it's about beating traffic and getting around the world more easily. you can find more from our survey results at disrupter 50.cnbc.com. >> there were 20 or 30% -- did they give you other options? >> some would present their own options. >> like what? >> i have to go back and look at the results but i mean, a lot of it was sort of saying, well, for me, i really want to understand people better. you know, sort of ceos trying to be high minded. >> sitting on the fence. i go for fly i think. >> i think i'm with elon musk on this. why do the whole fly -- we can

go underground. you know? we don't have to worry so much about getting in the air. >> i feel like we're much closer to jetpacks than to invisibility. i'm optimistic. >> if you're propulsion fails -- i know we're talking about superpower so this isn't totally relevant. but if you're up in the sky and if you're underground. >> you need elon to build the tunnels -- >> under the whole country. that's my whole infrastructure plan. >> sounds hard to do. have you ever tried to dig the ground recently? have you ever tried that? >> or do you read about -- like the subway systems, for example. >> right. >> when you realize they're sitting on mud -- the paris subway system, oh, my gosh. >> go down three feet. ever try -- i know you haven't. ever. i don't think. this next story -- thank you. the next story is about wilf too. if you ever wanted to own your own castle and don't actually

currently already own one -- >> or inherit one. >> or have inherited several -- >> nope. >> here's your chance. the italian company -- the government is giving away more than 100 castles for free. there's a catch. entrepreneurs who apply for the nine year $0 leases have to restore and open them to the public as restaurants, hotels or spas. the government hopes that the initiative will help relieve pressure on some of the country's overcrowded destinations. and entice tourists to venture to other attractions in italy. >> over a hundred, i think it's a great idea, but how do you come up with a story, a relevance, to stand apart in history? >> i don't know where they're located but it's a good ask to generate tourist traffic. it's a $0, just take one, i'll

restore it, oh, it fell through. >> did you say -- >> no, i said something else. >> because you have an accent. >> a white castle? that'll probably -- >> no, if they have great -- these little sliders. >> oh. >> all right. that's where we're going. >> anyway, make sure -- really? we're done. make sure you join us on monday. i may go to white castle right now. "squawk on the street" is on next. ♪ good morning. welcome to "squawk on the street." i'm david faber with jim cramer. we are live from the new york stock exchange. carl quintanilla has the day off. let's give you a look at futures here. we are set up for a higher open after of course a nice rally yesterday following that significant decline on wednesday. european markets you ask, and we answer. by telling you