carry-on. the tsa is testing new procedures. we'll tell you what it means for security lines. it's thursday, may 25, 2017. "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box." >> good morning. this is "squawk box," we are live from the nasdaq market site from times square. i'm becky quick, along with joe kernen, and andrew ross sorkin. the united kingdom is holding a moment of silence for those who lost their lives in the manchester bombing. [ bells toll ]

>> again, a moment of silence for the victims of the manchester bombing. political parties in the uk are expected to resume election campaigns this morning. new this morning the bbc is reporting that british police have stopped sharing information on the manchester bombing with the united states because of fears that leaks in the u.s. media could hinder the hunt for a possible bombmaker. at issue are pictures of the crime scene published by the "new york times," including photos of the remains of the bag that was carried by the suicide bomber. prime minister theresa may will raise the issue with president

trump today. this is one of the most important intelligence sharing efforts in the world. the expectation is that this will not last for long. if you see the picture on the cover of the new york times this morning, this is what has caused some of that outrage. pictures released and shared with the united states intelligence that wound up on the front page of the paper. >> the fella's brother said, yeah, we were both in isis, and there's a possible network bigger than one person or two people. and if the bombmaker is still around -- >> they already arrested seven or eight people. >> let's see what the markets are doing. mentioned earlier they were strong again this morning. 80 points. five straight days that u.s. equities are up. a lot of reasons, whatever you want to attribute it to. if you want to be simple, say corporate earnings have been strong. the dollar weak again today. but let's look at asia first. the asian markets then the

european markets. asia, green there. so we're going along for the ride today. europe as well. i saw the euro 112 or so. relatively strong. look at crude. crude prices have been moving above 50. as opec ministers are meeting in vienna to decide whether to extend production cuts. they turned around and are down. but 51 is sort of the high level of the range that we've seen. >> let's get you through some other big stories. digital currency by titcoin hast new highs, driven by surnsurgin demand from investors in japan. also by the coitcoin traded in exchanges will be easily convertible to u.s. dollars. one story that was fascinating. bitcoin has been used in

ransomeware cases, and corporations have bought up bitcoins to pay off these ransomeware attacks. >> wow. keeping them on hold in case? >> heard from a ceo about that last week. i thought that was one of the most surprising things. they were talking about the price of bitcoin going up. >> what if you don't pay? what happens? >> if you don't pay? >> you don't get your computers back. >> you can't. >> in some cases you h they lea film or content -- >> so people are paying? . the last time around, it was such a small amount of money, you don't negotiate with terrorists, but for 300 bucks, if you get your computers back -- >> this person said, there was a lot more paying going on than we know about. some went to law enforcement, but most said let's just pay and

get it back. >> for the new johnny depp movie, is there more pain if you don't see the movie or if you do see? i heard if you do see it, that may cause more pain. do you know? >> i don't know. somebody should make a movie about his whole lawsuit with his money manager. have you followed that case? >> yeah. >> that's fascinating unto itself. >> when iger said, look, i know you have a copy of it just keti. just keep it. we don't even want a back. you try to release it. >> you think that's straight to video? >> you try to release it. >> separately shares of snapchat are trading lower following a report that snap offered discounts to advertisers who buy ads through its internal platform. that's happening for the first time. two agencies confirmed the discounts to cnbc. also, we'll have to talk about this, the tsa is testing tighter screening of carry-on bags at ten u.s. airports with the

potential to expand throughout the country. among the changes, travelers will be asked to place electronics larger than a cell phone in a separate bin for x-ray screeners, that includes tablets and e-readers. it could be a more efficient way to depict problems. passengers may experience more bag checks, but more targeting procedures will make up for the extra time. there's been some reports that suggest you have to empty your bag into some of these things. bump it. with so many airlines charging to put bags under the plane, people are bringing more stuff on. >> these are all policies that the airlines have told us -- united told us they were reconsidering some of the policies, maybe charging you to bring bags on board so it was no longer an arbitrage on board. >> we'll have to figure out the right incentives. if you're tsa precheck, which i suggest that everybody get on,

apparently this won't affect you. >> i haven't figured out what's so great about tsa precheck, september i get to keep my shoes on? >> shoes on, laptop in bag. >> i wear slip-ones. >> not a big deal? what about all the electronics? >> i have an iphone. >> no laptops? ipads? >> no. >> generally a shorter line. >> generally shorter line. if you have global entry, which gets you precheck, you are right through -- >> that stops you from filling out a lot of stuff. but you're in and out of the country so much. you need that. you have to actually register for that. >> you do. >> i don't know. here we go the congressional budget office is out with a new report on the economic effects of the gop's healthcare bill. kayla tausche joins us now. the if million, the way they talk about it, not exactly correct. it's 23 million fewer people

would have it because so many young people wouldn't be mand e mandated to sign up for it. that's the number. it's not that they're actually losing it. the other thing is that the house was worried they would have to vote on this again if it didn't reduce the deficit. and by even reducing the deficit, even though it was less than the prior one, they can still use reckon sill yag, so they can at least send it off to the senate and play golf or do whatever. that was kind of lost in the analysis yesterday. >> not in our analysis, we did mention that a couple different times on the air. but it doesn't matter what exactly the house sends to the senate, it's what the senate decides to take up. we heard from no fewer than four republicans yesterday who distanced themselves from the score, the house version, and said they will be starting from scratch. i want to revisit those numbers for viewers who were not as closely in the weeds yesterday watching our coverage or watching other coverage on this.

compared to the prior edition of the house bill, the updated version would insure 1 million more people. here's what it would do. it would ensure 23 million fewer people, but would narrow the deficit by 1$119 billion. premiums would go down for the young, healthy people who choose to participate. but they could rise significantly for older, sicker participants, especially if those people live in states that adopt changes or modifications to the program. in response, aarp said premiums would go up to unaffordable levels. that group calling it an age tax. speaker ryan was the only person praising the report yesterday. the white house and the department of health and human services panned it as unreliable. gop senators distanced themselves from the findings, instead talking up the forthcoming proposal which we have yet to see.

nowhere was the backlash more visible than in montana where the gop candidate for today's special election lashed out at a guardian reporter who asked about the report. i want to play you that exchange. >> i want to talk to you about that later. >> but i'm just curious -- >> speak with shane please. just -- >> i'm sick and tired of you guys! the last time you came in here you did the same thing get the hell out of here! get the hell out of here! the last guy did the same thing. are you with the guardian? >> yes, and you just broke my glasses. >> the last guy did the same thing. >> you just body slammed me and broke my glasses. >> the gianforte said ben jacobs crashed another interview and aggressively shoved a recorder in gianforte's face. jacobs said he was body slammed. whatever happened, sheriffs say it was misdemeanor assault. it just shows tensions are

boiling quite high on this, especially on the republican side, because it's difficult to take up healthcare and now they're going to be owning it. >> when the republicans were -- i think you were said -- ryan was the only one that praised t the other republicans had a problem with the cbo. they're all saying we've seen previous cbo analysis, it hasn't been anywhere close. they were undermining the actual assumptions in the cbo report. lost in all this, you saw this yesterday. the "journal" has a good piece, the hhs released data showing that premiums in the individual market have increased 105% since 2013, where obama exchanges are in effect. and then also you saw blue cross and blue shield of kansas city withdraw. so the republicans, if they -- if they keep their wits, they can at least say this is a rescue plan. not a new plan.

it's not necessarily all about coverage. it's about access. coverage is not the only thing you think about. it's about getting access, affordable access, premiums going down. coverage is a tough one. if you don't have the mandate, obviously a lot of young people that don't want to sign up now for plans that are too expensive and that have too many things that they don't need, they won't sign up for it. that's how it works. >> all better than what he came up with. what's misdemeanor? let's say andrew starts on me today or something. what is misdemeanor assault? what's the distenk shinction? >> murder ser stiis still a fel. they are investigating. they're investigating it as a misdemeanor assault. >> kayla, that's the question. >> i have to say, joe, those are

not charges that i am personally familiar with. >> just, you know, when do you cross from a misdemeanor to a felony? >> i think i had a misdemeanor. not convicted. but maybe -- >> i imagine it depends on the harm you inflict. on the healthcare specifically, you can find a data point to illustrate any argument that you want to make. that's why politically this is so difficult. you've seen republicans go back to their district and it may be that it is favorable for the type of plan they want to put forward or for their district, but there are individuals and antidotes that come forward who say i will be losing coverage. this is what's happening to me. those are the stories that tug at the heart strings that make it difficult to turn their back on those people. >> and people have had real heart string pulling effects from the current aca. a lot of people on medicaid, but

how many people out of the 23 are coming off medicaid? there are millions that the cbo estimate from that as well. >> sure. >> depends on -- >> i don't want to insight a s misdemeanor or felony. have we talked about the double counting issue on how this is all being -- >> talking about the budget? >> yes. this is all to me related. maybe you already did this. >> the budget that was released on tuesday, the problems that have come up with that are counting -- >> reciting larry summers piece? >> yeah, basically. >> we talked about that. he has some serious tds. >> tds -- >> trump derangement -- >> the difference between misdemeanor and felonies. miss demeanors are crimes

punishable by a year -- >> but what actions? >> depends on the state. if i'm in an angry state or a furious state or a frustrated state or -- >> no, the state -- >> the actual state. >> the actual state you're standing in when you commit this. >> i don't know what new york's laws are. >> i appreciate becky putting a finer point on that and not leaving it to me to do that. you're in washington. are there -- is it a federal law or state law? >> federal misdemeanors are things for a year or less. >> maybe i should lawyer up first. >> kayla has something to say. what were you going to say? >> just on the double counting issue, healthcare plays a role in that as well. the budget released on tuesday, it accounts for a 2$250 billion benefit to the deficit from healthcare. that was the very first cbo estimation that came out in early march, but since then the cbo downgraded that to 150 billion which wasn't reflected

in the budget. so there is some math here that doesn't quite add up. now that the cbo has said for tit it would be 119 billion deficit, you have to subtract that from what was already counted. >> but as you said, this isn't the deal any way. >> looks very far away from the deal that we will have. >> so we won't look at it and say how horrible it is. all right. >> class a misdemeanors in the state of new york, assault in the third degree, hazing in the first degree, stalking in the third degree. >> hazing and stalking. >> personal touching. >> i see -- >> i may already be there. >> coercion in the second degree. the cops are right out there. there's a whole police station right here. we can -- >> computer tampering in the fourth degree. >> whose side will the cops be on in this? >> jostling, accosting. >> i'm interested in the city. you're from jersey.

we know where things will land. kayla, thanks for that. news just in from vienna. opec has agreed to extend the oil output cuts by nine months according to a new opec -- to the opec delegation. non-opec members like russia will join the latest production cut. crude remaining lower this morning. wti holding right now above the $50 per barrel mark. looking at 50.90 if you could buy it by the barrel. >> let's turn to the markets. the s&p 500 closed at a new record. joining us is steve parker, and doug cotey. gentlemen g to see both of you. it looks like the markets have decidedly turned positive since the big drop last week. the s&p 500 at a new high. what's happening?

>> on the economic front things look very good. not only the u.s. and emerging markets are marching forward, but surprisingly europe is marching forward. that's big. even japan is. that's showing up in accelerating profits, broadening manufacturing. consumers. >> not just the markets moving up, but the any oveconomy overa. >> the fundamentals are important, and that's why from an investment standpoint you want to be globally diversified. you are seeing it in the markets. emerging markets are more than doubled. international, europe than the s&p 500. this is a time where domestic is fine, but you want to broaden out into the international emerging markets. their time is here backed up by stronger economic reports and for instance germany and europe,

their leading indicators, all-time record high. >> is that what you think is happening? global economic resurgence or other things at play? >> that's the biggest thing. what we haven't seen since the crisis is synchronized global growth. it's largely a story about the u.s. recovery and other parts of the world becoming a drag. now everyone is moving ahead together and you're seeing that translating into earnings. you look back at the first quarter, u.s. we saw mid teens earnings growth. in non-u.s. markets you're looking at 20% to 30% earnings growth. that's getting people excited again. i think you'll start seeing that rotation out of the u.s., which has been the only game in time in a lot of ways for the last couple of years into the non-u.s. markets. >> is that why we're seeing the currency moves we're seeing today? >> we came into the year, everyone was convinced that the dollar would be stronger. it was a universal consensus trade because the fed would be raising rates. people didn't expect how strong the non-u.s. economies would be.

by a lot of measures, if you look at the euro, it's cheap relative to other currencies. but you had political headlines, you had the slower growth. now that some of those headwinds are beginning to abate, you are seeing the currency normalize. >> in terms of being diversified, can do you that through the multinationals in the united states or are you telling people to put their money into foreign indices? >> put your money into foreign indices unhedged. it's another way of diversifying, increasing return and reducing risk. the interesting thing is people don't understand you add a risky asset class like meaning markets, risk goes down and return goes up. that's the magic of diversification. investors don't quite get that. they look at emerging markets by themselves. and the other component to this is not only in the u.s., but you talk about healthcare, cut

taxes. that's all i want. tax cuts are going to help businesses. everyone talks about the productivity problem. it's because companies are not investing, but they're starting to because of deregulation. i don't care when tax cuts come here. i've been waiting 30 years, i can wait another three months. >> thank you guys for coming in today. >> last night at home i said andrew's back tomorrow. >> yeah. yeah. >> blake says, i love andrew. >> i love blake. >> what? yes, i love andrew. why -- what does that mean? why do you love andrew? i love andrew. i'm losing her. i'm losing her. losing her. losing her. >> growing up. she's growing up. >> showing her independent streak. go blake. >> showing how bright she is. you have raised an intelligent daughter. >> coming up, a new crash test.

a new study reveals the car models that give you the best and worst chance of surviving a crash. which cars passed the test and which cars didn't? and facebook signing a deal for original content. back in a moment. ♪ whether you're after supreme performance... advanced intelligence... or breathtaking style... there's a c-class just for you. decisions, decisions, decisions.

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>> are you a fan of the movie "love actually?" um, no, in a word. >> you're kind of blowing it. >> keep going. >> for those of us who enjoyed the film. >> okay. >> my kids. >> okay. all right. all right. so i shouldn't have just answered honestly. >> no. >> it was a set up? >> it was a tease? >> okay. let's start over again. go back down. let me start over again. >> you want me to help you? >> no, are you a fan of the movie "love actually?" i know i am. well, it's back, sort of. today is red nose day.

is it from the movie, the red nose? >> no, i don't think it's from the movie. >> i'm a fan of kids and charity. but what does it have to do with "love actually." >> i'm not sure. >> here you will see. >> in honor of the clarity event, the original cast from the blockbuster movie is reuniting in a 15-minute short film that airs on -- oh. it's a great movie. airs on nbc as part of the red nose fund-raising telethon. red nose day has raised over $1 billion globally since it started in the uk in 1988. proceeds go to the children's charities in america and around the world this year. red nose day is partnering with the bill and melinda gates foundation. >> 1 million bucks. >> it was rick from -- it was rick from "walking dead." >> i didn't realize that either. >> andrew -- what's his name. >> a british actor. >> yeah.

>> you can't bring yourself to put this on? >> i love props. i'll put it on. don't miss red nose day actually which airs tonight at -- >> this thing smells. >> on nbc at 10:00 p.m. eastern. everybody loves to -- you don't have to do the snapchat. you don't have to put the fake things on. you can actually have it on. >> you will leave it on? >> i'm done. >> it's hard to talk. >> yes. >> and it smudges my nmakeup. this is probably the no kidding story of the morning. believe it or not, the smaller the car is the more likely you are to die in these things. >> they spent a lot of money in this research. >> we will get and drew to say the name of the carmaker. >> says they analyzed fatal crash data. the results are in. two mini cars, the hyundai

accent and the kia rio had the worst driver death rates. here's the quote from the insurance institute for highway safety. if you hit something bigger than you are, you are more likely to die. physics matter. the bigger the vehicle, the safer you are in an accident. >> this goes to why everybody is getting a suburban and yukon. >> all the test rates, when they say in a head -- on crash, it w like this. if it comes against a tiny car -- put it up against a suv. >> we'll have phil lebeau on. there's a handful of cars between 2012 and 2015 that had zero deaths. what i don't know -- >> audi a6, and the bmw 535. >> a mazda.

>> the mazda cx9, the mercedes m class. >> is that a function of how great the cars are, are there less on the statistics, they pry try to normalize it as best they can. some cars have six air bags now. there are ways of structurally of making sure the engine doesn't end up in your lap. what are those things, where there's one person driving. >> little smart car? >> i seen one here that was parked yesterday. it looked like a clown card. >> might as well have a motorcycle. >> no, you're buying a real car. >> you are. a three seater -- >> three rows. now that we have a party of five. >> flying on a plane. that's going to be hard for you now. used to be two rows. coming up, i think felony is if you actually inflict damage. >> no, no there are misdemeanors

that you inflict damage. you can serve a year in prison for a misdemeanor. >> a year in prison for a misdemeanor. >> if you're convicted. >> if you're convicted. opec ministers will decide today whether to extend production cuts in an effort to support crude prices. wti at this hour off a little. been strong in recent sessions. now it's worsened. getting close to 50. as we head to break, here's yesterday's s&p 500 winners and losers. ♪ we've done well in life, with help from our advisor, we made it through many market swings.

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. welcome back. you're watching "squawk box" live from the nasdaq market site from times square. >> welcome back. we're watching crude prices this morning. wti is actually lower at this point. i think it was higher earlier. down over a percent as we saw. down 1.5%. an opec delicate says the group reached an agreement to extend cuts for nine months. steve sedgwick joins us now. good morning. >> good morning, joe. i think some people in the market are selling down today because they expected a little bit more from opec as well.

this nine-month extension, which has been in the price for a couple of days now looks the best of it in terms of trying to get bull market story back on track again. the deal is 1.8 million barrels off the table for another nine months from 1st of july to the end of the first quarter which is the low period of demand any way in 2018. with the possibility some members are saying rolling it further -- for a further period if that is deemed social security necessary. i spoke to the saudi oil minister. let's listen in. >> we found out that nine months with the same level of production that our member countries have been producing at is a very safe and almost certain option to do the trick. >> so there are some ministers out there who are concerned it won't do the truck. one analyst today believes 2019

could be when we see the real rebalancing of the market. one of the x factors here, one of the concerns was around the iranians, whether they would abide by this. iran back on the oil market, looking to increase production, go beyond 33.8 barrels a day. i spoke to the iranian oil minister about this. interesting response from bijan zanganeh. >> it seems the european and asian communities are coming and signing agreement with japanese, chinese, french, even uk countries, but only u.s. companies cannot be in iranian market, and i don't know why. >> i have to sashgs ithave to s

the most amazing meetings as far as accord going into it tchlit. no matter what you get in the final communique, normally you get rancor beforehand from the iranians or venezuelans who want more aggressive price action, this time around, almost everyone from the iranians to the iraqis who have been low on come mrips as well over the period of the initial deal which started on the 1st of january this year, this time around nobody disagreeing at all. nine months has been the mantra for just about everyone the problem is, the longer this goes on is whether compliance will be good. where compliance dropped off the first half of the year, saudi filled in the gap and cut more. concerns about demand as well from japan, germany, the united states. those are three areas where they're concerned about the growth of demand and the demise in those levels. india as well.

but china looks strong. there's a lot of things they can't control. that's non-opec production, especially that shale production they're worried about. also worried about squeezing the consumer too much that may have negative effects on demand. for now, accord has broken out. we also have a meeting with the russians and other non-opec members this afternoon. we'll get more sound from minister novak, the russian oil minister. it's interesting to see whether he fully signed up to nine months or longer on these opec cuts. back to you. >> steve, thank you for that we'll continue this conversation. joining us is tamar essner director of energy and utilities. good morning to you. >> good morning. >> you said this is already baked into the cake. >> sure. it had been well telegraphed to the market for the past two weeks. we're up about 7% over that time period. entirely predicated on getting this deal done at nine months.

if it deidn't happen in mine months, oil was have dipped. so opec painted themselves into a corner. >> where do you see crude 12 months out. >> i see it at 60. it comes down to compliance, as steve pointed out. what we saw in the first half of the year is the reports of compliance had been good. those are largely self-reported measures on production. russia took longer to get there andar their exports went up. >> impact on u.s. shale producerers. i'm assuming they applaud this? >> opec has been shale's best friend since september. they enabled prices to hit over $50 back half of last year. that enabled a whole slew of hedging to come online. so producers in the u.s. were able to lock in production. shale has been the beneficiary of opec's cuts. >> we will hear from the russian minister later today. what do you want to hear from him?

>> i want to hear commitment to compliance. that's really the key issue with russia. they've verbally committed to these agreements, but then exports have gone up. so we need to see that they're going to comply. that's what the markets will focus on. they can say one thing, do another thing. >> how does venezuela's instability impact this? >> they're hurting. it's an example of how shale has been such a disruptive force in the market. the question is is shale more than a disruptive force? have they become an existential threat for opec? can shale continue to grow at levels that are lower than opec countries can sustain? with venezuela the answer is clearly yes. >> what's your bet? >> i think, yeah, they can continue to grow at levels that opec can sustain. they can't compete on price per barrel or on volume, but on growth, they're there. >> when it comes to the united

states and what we've seen in terms of our own production, how much does it make all of this irrelevant? that they can work around the margins but they don't have the power they once had. >> shale production is up about 800,000 barrels a day since the last opec agreement in december. so we're largely offsetting those -- >> just over that period of time. >> so really it comes down to compliance. an agreement of 1.8 million barrels a day cut for the next six months or nine months, that should take care of the inventory overhang. >> that must be killing them to lose market share. knowing they're cutting it, and we're picking up the slack. >> they cut, shale takes market shake. they don't cut, prices go back to the 30s or 20s. tamar essenr, director of nasdaq market energy. you just get to go upstairs to the office? >> easy enough. not complaining in this weather.

when we come back, the tsa testing new procedures for airport security screening. get ready to unpack your carry on. phil lebeau has the details. and then democratic senator chr chris coons will weigh in on the latest scoring of the president's healthcare bill. and edgar bronfman will tell us about his new capital investments. stay tuned, you're watching "squawk box" on cnbc. -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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welcome back. nearly 40 million americans are planning a road trip for memorial day weekend, that's a ten-year high even though gas prices are about 10 cents higher than last year. for more on gas prices and summer travel psychology, let's bring in jackie deangelis. >> it's that time of year again. even though it doesn't feel like it outside, this weather feels soul-crushing actually. but it is memorial day weekend so we embark on the summer driving season. it's important for gas prices and oil prices. aaa projecting the highest m memorial day travel volume since

2005, even with the higher gas prices. just under 40 million americans will go 50 miles or more. air travel expected to go up. almost 3 million vacationers will choose to fly this weekend. almost 2 million will choose boat, train or bus. the average price per gallon of gas is $2.37. consumer confidence is gauged higher as well, and that's giving travelers the confidence to hit the road. this is just the beginning. fourth of july is the peak of the season. several analysts told me they think gas prices could climb until then and oil could see the high 50s. that will set the range for the retail prices. aaa said it will engage in 330,000 rescues for stranded travelers. let's hope that doesn't include us. >> are you hitting the road? >> i'm not hitting the road. not for the whole weekend. just for a short period it will

rain the whole time. >> it's a two handle, 2.50, 2.40, so you're not hitting the price where people say, my god. >> if they want to go somewhere -- >> it used to be $4. maybe $3.89 they would slow down? >> if they want to go somewhere, they would go. i would say the weather is a bigger deterrent. >> i'm nostalgic and i feel bad for aaa. you remember -- you probably don't remember. remember trip ticks? >> yes. >> my dad, that was his life. >> they would do a -- >> they would map it out. >> map it out and do it with a felt-tip marker where you needed to go. you could follow. now we have google maps. it's sad. the trip tick guy at aaa is like the may ttag repairman.

>> i went for a map four years ago. >> what did they say, don't you have a fun? >> no, they were excited to see me. we were going to utah there are places where cell service doesn't work. any place you go in the national parks, where you can't get a cell signal, you need a map. >> sad. >> coming up -- >> capitalism at work. >> tsa is suggesting tighter screening. phil lebeau hat detais the deta coming up. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most.

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. the tsa testing tighter security rules. the new procedures would require people to unpack electronics from carry-on bags for separate screening. probably not a surprise. phil lebeau joins us now. we've all heard about the laptop issues in all these news stories. >> this is a little bit different. what the tsa told us is this is an effort by them to help their officers screen bags more

efficiently. think of it this way. they want to us declutter our bags. if you're like me, you've got a little carry-on bag and you throw everything in there. you throw your kindle, your ipad. they're saying we're going to be testing out people taking out all of their electron, other than their cell phone, anything bigger than a cell phone, putting them separately in another bin and that should help the officers better detect if there is a problem. though this is strictly talking about electronics that they're testing out with the new screening procedures, they did tell us some travelers may be asked by tsa officers to put other items, we're talking about papers, perhaps if you have a bag of fruit, they might be asked to put those separately in a bin. those people will be asked to

separate more items, the tsa believes the process should move quicker because the officers will be able to screen more efficiently and move bags lie through. this is also going to come at a time when the trump administration calls for cuts that will assist the tsa. bottom line is this -- do not be surprised if you see more requests at different airports around the country where you're going to be asked to take the electronics out of your bags. so it's not just the liquids right now. you're looking at potentially electronics and or items. >> is there any way to create an incentive system so people actually check their bags or do you think that's off the table? >> i think that's off the table. i don't think that's going to happen. this is what you get when you

have a record number of people flying and security checkpoints, where let's be honest, they're locked in. there's nowhere to expand in 90% of the airports. up have a tsa staff that is not trying to be overwhelmed and do a more efficient job. that's why they want you to declutter the bags. >> you can fee free if you check your bags. >> i check my bags. >> a lot of times if i have golf clubs, i have no choice. then up get rid of everything -- >> it takes the stress down. you can go to good airports -- not newark -- >> we got to go but there's a great service that will send your bags in the mail. >> coming up, we'll have

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good morning, everybody. markets surge. opec extends cuts. we have the latest on the market moves straight ahead. we'll talk about the possible defunding of the manufacturi manufacturing -- and the second hour of "squawk box" begins right now. live from the beating heart

of business, new york city, this is "squawk box." >> good morning. welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin along with becky quick and joe kernen. we're watching oil this morning after opec agreed to production cuts. here's what's making headlines that the hours. british officials have reportedly stopped sharing information with the u.s. about the manchester bomb attacks because of concerns over leaks. it's expected that will be

discussed at the nato summit today. and sears lost $2.15 per share, less than what analysts expected. ceo eddie lambert said they are committed to financial stability. the labor department will be out with its initial jobless claims. economists expecting a slight increase, 237,000 is the number to beat. becky? >> let's look at the earnings. take a look at the stock. it's already up 11.5%. earnings came in at 60 cents a share. that was 20 cents better than the street was expecting. revenue exceeding forecasts and just taking a look at what the

ceo is saying about this, they are very pleased about the strong top and bottom line results. they say it reflects the momentum. they say their second quarter guidance reflects the continuation of much of the positive category momentum we saw in the first quarter. for the second quarter, they're looking for growth in 1 1/2 to 2 1/2%. the numbers in this quarter are much better than expected. we'll have more on the numbers in the electronic retail space coming up with joe feldman. again, those share up by better 12 on the immediate reaction. >> what are they selling, sorkin. why are people not buying tvs on

line? >> the geek squad, right? >> are they now multi-channel? >> part of it is the multi-channel, part it have is better pricing. if the pricing is right -- >> if they'll bring it to me, set it up for me. >> i mean, people buy shoes online. >> that's because they don't have the shoes in stock when you go to the shoe store anymore. >> you need to see if they fit. >> when you show up at the stores and they don't have your size for anything? >> if the shoe fits, you must acquit. >> glove. >> glove. >> that was not always the case with best buy. clearly they have figured out some sort of customer value that works. >> people were going in. they got what's called like a magnolia or something, you get

what you want and you just leave. i bought it there, i said it was cheaper here and they go sorry, we won't match it, and then they had to take it back. >> this is interesting. they say their revenue was higher because of strong performance in gaming. i guess people are buying gaming consoles, a better than expected results of mobile and because of the delayed tax refund checks. >> let's move on from this, though retail is an important part of the overall market. joining us is tom lee, managing partner, head of research and keith banks, head of u.s. trust and head of investment solutions at merrill lynch. he's responsible for more than $2.5 trillion in assets. but you're in your late 20s now

but this is wearing on you. that's what happens when you're managing 2.5 trillion. you get some miles on you. >> you do a what you got to do. >> we had mark grant on, who had been very bullish on stocks, he said the swamp is pushing back. the swamp is not going to be drained. and what he used to think was going to happen, he has doubts as to whether you're going to be able to have any success in a lot of these pro growth things. he says as a result i have a totally different view of the equity markets. i think you're more there than keith it. markets moved on earnings. maybe future earnings growth -- we can't be as confident as we used to be because maybe those things don't happen. >> that's a great question. i do think the market's character really changed after

election day. it really does look more like the mid to late 90s, which means the low vix is encouraging rotating into stocks. it's encouraging washington locking more like gridlock because it tax away tail events that could come pr unpredictable executive action. >> you've gotten a level less bullish. and keith, you think you say a and that we did see great corporate growth and at that willi willing. >> i at this the expectations got high, joe, on what would washington do, especially with some of these key programs.

but what is been driving the market is you have this global synchronized recovery going on. for the first time in five years in the u.s. we see earnings beating, revenue beating and we think the market will move higher, not a straight line about beft and people are expec expects, the earnings growth will bite into the valuation. the risk-free rate is 1%. we're not overly concerned about multiples where this are and we think the market can go higher. >> some people point to the length of the recovery and say, wow, this is long in the tooth. but just the way people made the point that we had a muted recovery, because that extends the length of the the cyclical

rebound. >> none of the excesses that you typically see at this stage of a cycle we're seeing. that not in, one of the niece things for having only 2% growth over eight years is you can see it expand. >> the dollar -- all those sears of the dollars are going to parity, the yen, and none of that happened. it's reversed. >> i think one of the criticism the top tn stobs are up 10 percentage points, which means the other 409 are actually down

roughly 2% since march 1. so despite the narrative of many proving earnings growth, it is narrowi narrowing. >> it's hard to tell. it interesting because energy bank banks. >> how do you know it not going to broaden out instead of the top thing come back down? >> it would be important to narrow out. >> you should go back to work. we don't want to keep you here. you got other people? >> we have a great team to handle that 3 what's that coming

out to, andrew? >> i'll have to bring you guys back. >> 75 million. how much is that? >> annually? >>. >> at 7:30 this morning, you don't want to miss it, edgar bronfman jr. will be our guest.

. the cbo releasing the scoring of the gop health care bill. kayla tausche has the story. >> it improves compared to the prior iteration of the bill while still improving the deficit but 23 million people will not be covered that would have seen insurance under the affordable care act. large increases will be seen by older, less healthy patients and residents of states that opt out of coverage. the deficit reduction of $119 billion should clear the bill to be sent to the senate.

if didn't lower the deficit, the house would have had to vote again. the senate was awaiting this formality but it sees the cbo score as instructive. at least four republican senators responded yesterday by distancing themselves from the acha and the senate will put forth a separate proposal. but the cbo report had the most to say. here's the guardian's audio. >> in terms of the cbo score, because you were waiting to make your decision about health care until you saw the bill and it just came out. >> we'll talk about that later. >> but there's not going to be time. >> speak with shane, please. i'm sick and tired of you guys. the last guy that came in, you did the same thing. get the hell out of here. get the hell out of here.

are you with "the guardian"? >> yes, and you just broke my glasses. >> reporters say he asked a question and he was body slammed. this was not supposed to be a close race in montana but two newspapers have rescinded their endorsements of him and now people are wondering whether this could be a closer election than thought and perhaps the balance of the house in question again over what has become a very delicate issue. >> kayla, montana is a state where most of those ballots are put in in advance. it may not have any impact. not to mention i don't know what impact it would have. it's hard to judge the electorate these days how they would read some of these things. >> 36% had voted early in person who are submitted ballots by mail. so that is a very large percentage. but certainly quite an

interesting development overnight on the eve of this special election taking place. >> when we say body slam, k kayla -- >> he threw him to the ground. >> granted i wasn't there but the reporter said he was so started, he wasn't sure what happened, all of a sudden he was on the ground. but one of the witnesses said from the local fox news affiliate said what he saw and the crew saw he was basically grabbed by the neck and thrown to the ground. >> it sound like a wrestling -- >> i think we can agree it was a hostile exchange, joe. >> yes, yes, we can. i've never body slammed anybody. i would think long and hard about doing that, i think. >> i would hope that you would. >> i don't have it in my moves. my whole body is a weapon but i don't have it just ready to call

upon, do the body slam move. i don't -- >> never done it either. >> you know, andre the giant. >> when we disagree, we go -- >> that could be a felony or misdemeanor. >> no. >> i'm collateral -- >> you could be slapped or scratched in the middle of it. >> kayla, thanks very much. under the president's budget proposal, a 30-year-old program designed to help small and medium manufacturers defeat could be gone. joining us right now is delaware senator chris koons. he worked with a bipartisan group late last year to improve

the program. thank you very much for joining us today, senator. >> tank you. i know the have seen this argument even and again, why don't we try to be as apolitical as possible looking at that program. this was started in 1988. it's worked with manufacturers. i think it's worked with something like 25,000 manufacturers over the years. explain to us what that program does and why you think it's important. >> i'm someone who spent eight years in manufacturing before went into local as bosnia dozens and heard from them directly many pact that the.

it connects folks who are on the cutting edge of research, on how to improve, who have skills in kwaul control, as a and to improve their bottom loon, their workforce skills, in training and competitiveness this is a $120 million program. it has a remarkable current on invest pent. report say can grew 18 in new sales and $27 for federal investment. i think it demonstrated its effectiveness and i'm struck by the administration's justification for its elem nation. in all my time in the private and blacksector, can't.

>> i've also seen statistics for every $1,500 for federal inve investment in this cram program, he could was there any significant this would be eliminated from the budget? >> it was this is a program that hassin joyed bipartisan re sort. i like to legislate and it's got successful programs in states across the country represented by both republicans and democrats. and given the folk us that president trump put on manufacturing and restoring and strengthening american manufacturing in his campaign was generally surprised to see it completely eliminated. there are other programs that

workforce by 40%. those don't do the same thing, mep was targeted for complete ealmost nation generally surprised me. >> let's take a 30,000 view of this whole situation, which is to say this budget proposal in large part is dead on arrival. i'm just trying to understand from your perspective how you think it ultimately impacts the way the senate and to some degree the house, think about budgeting going forward? ? i this preents really stark joyces temperature temperature. >> the question is wa. >> on pushing, foshs, the senate or the house when it comes to putting a budget together, pushing it to the right or not.

meaning, is it going to be completelying north? i frankly think on many. >> and, senator, that's the way it always is. president obama's budgets were completely ignored, too, and that are written in congress. >> his most recent budgets were largely or in the last case completely ignored. but i don't think that's a healthy process. i think we should have consultation between the executive and the legislative. the executive branch runs these programs and in our and it was a budget that deserved to be taken seriously. sfli know we keep calling them cuts, we know it's actually a

slowdown in the growth rate of most of these programs. up would agree that we talk entitlement reform but every time we even scratch the surface of any type of reform, we hear from people that it's cruel or people are going to die or whatever. it going to be very difficult toe get neg done. >> this part is completely. >> senator, we appreciate your time. >> thank you. >> coming up, venture capitalist edgar bronfman jr., himself thoughts on mergers and he has not spotted the cinnamon rolls apparently yet. om going to go point those out and mabb just sample one. "squawk box" will be right back. >> announcer: time now for

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good morning, everyone. welcome back to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. best buy shares are taking off this morning. the stock was up over 12% the last time i looked. now it's up about 11%. the electronics retailer earned 60 cents a share, 20% better than expected. we're going to have more on best buy's quarter next hour with joe feldman. opec members have agreed to extend oil cuts for nine months. despite the news, oil prices are

falling this morning and have extended their losses since the news came out. we're still looking at oil above $50, $50.71. you could say a lot of this was ba winner-take-all in. and automaker tesla is under fire from a california worker advocacy group called work save. it says tesla workers have suffered workplace injuries at a rate of 30% higher than industry averages. tesla acknowledged it but said it is now among the lowest among the automakers. >> edgar bronfman is here this morning. he had bid on time inc. before. a lot of companies are facing merger mania.

edgar bronfman bid on that company. he is the former ceo of warner music group and seagrams, a business started by his grandfather. great to see you. >> great to see you, too. >> we have not seen you on the air so this is terrific. i want to get to some. businesses you're involved in right now but in terms of what's happening to media on the larger scale, not just time inc., time warner and at&t, verizon, charter, how do you see all this playing out right now? >> it's a little bit like the wild west. no one is quite sure how it's going to come out. the music industry was probably the harbinger of all of this.

it's unbundled. anything consumer wants to get in the way they want to get it, they'll be able to do. everybody is scrambling to figure out what business model they can pr sursue to catch up that. >> who do you think the winners and losers are? >> content and distribution have not lived well together. that's a tough marriage. >> you look at the at&t/time warner transaction and you say what? >> i say it's going to be tough to make -- to make time warner content increase value of at&t. i think that's going to be a tough thing to do. >> when you also hear similarly folks like verizon talk about whether they should be in talks of cbs and or content providers, do you think that's a mistake as well? >> well, i didn't say it's going

to be mistake. time warner and at&t can continue to do well but how much better they do together is a debate. >> if you were running at&t today, would you not want content? >> if i thought at&t as a distributor could continue to grow, i probably wouldn't own content. >> what was the lesson when you think back to seagrams and now in this context of all these big transactions that are taking place? >> well, i mean, i don't know, there's been 50 lessons. but i guess the biggest lesson was certainly at bavendi we had a strategy, you can have a strategy and be early but you can't have a strategy and be

early and be overleveraged. >> warren buffett said if there was one thing he would warn about it would be leverage, it always comes back. >> it narrows the window that you have to be right. >> i don't see for lack of a better word if you're a conglomerate, why you wouldn't want an interest in both. maybe it's not additive but part of your portfolio of things that you have as you go into a future of things so uncertain. i don't know which i'd rather have so why not have both? would that adversely affect of having both? >> no.

at&t has its distribution, time warner has its content, they'll both continue to do well. >> i like the portfolio the way it is and i think it covers all the bases. if i just had content or just distribution, i'd feel i'm not prepared for what might happen. >> i don't disagree with that but i will point out that at comcast, content is probably 10, 15% of their bottom line so it really not a balanced portfolio. >> and you look at stock prices -- i mean, it gone from a couple of years ago from 25 to 80 if you don't adjust for splits and a lot of that has been nbc, even though it only 10 to 15% the kaecable business ha been great and you have broadband and the turn around by

ge and it's reflected in the stock price. >> that was brian's bet. if he could turn nbc around, that's where the huge value opportunity was. >> it's not because this is "squawk box" and woe're part of nbc. >> but, joe, i would make the argument comcast was able to buy nbc at a very cheap price and was able to manage it better. there's probably some incremental benefit by being on the comcast boxes and some of the promotion that can happen but that's to some degree limit limited. brian roberts might take exception with what i'm saying but i think when you look at the larger picture of merging an at&t and time warner -- >> it might not be a complementary fit but owning both pays off for time warner. >> i want to talk music. music seems to suddenly be working. everybody wanted to get rid of

music. are you betting ultimately all of these guys we're talking about now are going to want to own music all over again? >> i don't know but music is probably as compelling a content story as there is out there. >> right now? >> right now and for consumers regardless of where the revenue line was going. consumers love music. >> that's the key. we do love it but somehow we've got i don't know around paying for it. i used to spend a bigger part of my budget on music, i think. now you can pick and choose songs, you can find ways of slicing and dicing. >> i think it's what's undoing a lot of the media plans and business models. and i think ultimately music is probably better off under a subscription or streaming model than it was even in the 80s and 90s -- >> because we buy more as a

result? >> because more people will buy music and each person spending a little bit less than the fanatics who are buying albums but at the end of the day, it broadens its distribution base and probably can grow beyond where it was in the physical days. >> does that pay off to the artist? because it seems like the distribution -- maybe that works and maybe there are other people making a lot of money on it. when talk to artists these days, they say they make the money on the road. >> spotify complains they're paying a lot of money to the content companies and they're not making a lot of money. >> so where's it going. >> until that subscription model grows further, it's going to be tough to throw a lot of profits in lots of different ways. at warner music, that was a great success. we paid our equity holders back

in the first nine month, we strengthened the company's competitive interest and rewrote the model in terms of creating 360 deals versus just record deals. and i think the music industry is back to a healthy growth and we'll see. but there's -- it's the most -- in a way, it's the most compelling consumer content. people sort think become and i think whether they continue to be independent or become part of a larger business is hard it say. >> what happened to spotify in there's been so many -- does it go public? >> i think it probably goes public. the deal they did kind of pushes them to go public and i think they probably will. >> you were one of the recall bidders on time ink. they decided not to sell.

what was your thesis about time? >> i think it is aing zeen company,ing about, on and on and on, all of which can and should exist well beyond the mag glon world and doesn't. so iy z a huge opportunity there but i think it going to be really tough to do it in a public context, make the kind of investment and the kind changes that are in. >> your bid is higher than where the stock price is receipt now. >> i'm not on the board. >> if we have this conversation two or three years from now, do you think they'll be independent? >> unfortunately, i think they might be independent and that will not be a good thing for them. >> we're going to tack a lot more about mergers and media.

>> let's check the markets -- or do you want to go straight to break? >> you can -- >> i'm just reading what they're telling me to do. we're up 66 1/2 points on the dow, up 6 on the specifi kkk -- >> i haven't seen it. 1 1/2 and didn't get worse from there. "squawk box" will be right back. ♪ it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation?

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get symbicort free for up to one year. visit saveonsymbicort.com today to learn more. . welcome back, everybody. we are with edgar bronfman jr., this morning, the former ceo of warner group and seagrams, to find out where he's putting his money now. what we did not talk about is accretiv accretive. it's a capital venture firm. >> my partner and myself, we

create companies from scratch. we create ideas where we can help major companies improve their companies. the first consumer bess we did was fandango. >> sold to comcast. >> sold to comcast. >> and comcast was our anchor customer for that business. we're very grateful and it's been a great combination. >> for those who don't understand it, accolade is something where if you have health care issues, if you have needs, if you have issues, you can call these accolade service members at any point, they'll call your doctor, they'll get your health issues resolved. >> it's to help consumer navigate when a completely messy health care -- >> is that the theme with many

of these businesses? fanba fandango, you can buy tickets marree moarreesore easilarreesorarreeo. >> i can't believe accretive was available. >> i can't believe how many people have said to me "what does accretive mean?" >> i can't believe that's available. >> well, it's not available any longer. >> i know, you're a genius. >> global thermostat, what is that? >> it's a system that removes co 2 from the air. it's actually the first technology that is carbon negative, that actually removes co 2 from the air. you think about a dehumidifier

that takes water out of the air. this takes co 2 out of the air but it does it in industrial quantities and will supply it to industries. if you think about a raw materials business, it has to find the raw material, turn it into a sellable product and then it's got to transport it to the end user. co 2 is in the air. what do you use scrubbers to bring it down? how does it work? >> we don't use scrubbers. we simply pass a through filters, filters capture the co 2 and it's taken off the filters and sold. we only use waste and -- >> don't take too much out. please. the plants would be -- >> that's why we call it global thunderstorm stat. we can turn it on, we can it

it's a mott modular system and we're bringing our there are some that, you know, lawn mower, and it might be able to deal with the future problems and therefore very expensive solutions, paris, whatever you might want to talk, about that might hurt lesser developed countries, instead of saying let's do this now at the cost trillions, who know, if it really is a problem at that point, then you take it out of the air with technology. >> what we're doing now i think augurs in a huge new industry. co 2 is not available for industry in large quantities. and large industries need co 2?

this is not an irn. >> but the thermostat name implies you're trying to modulate global temperatures, aren't you? >> i got the name right with accretive, maybe i got the name wrong with global thermostat. the point is anything you use oil to make, you can use co 2 because it's really the carbon molecule necessary. plastic can be made from co 2, carbon fiber can become cheap enough to sell buildings. >> you can sell it to soda stream, they use it to make water. >> i was kidding the guy, i said you're putting pollution in water and --

>> i don't know if you followed this dupont-dow deal and what dan lowe has recent will said about it. he doesn't believe that the transaction has structured -- he thinks leave him like $20 billion on the able. >> well, i mean, dupont's always been a great company. i was on the board there as a result of being on seagram investment. after we sold dupont, it was a flatliner, probably the worst performing stock in the dow for the next 15 or 20 years. so all these chemical companies are cyclical businesses. my guess is that at least dupont was pretty overcosted. it certainly seemed that way to me at the time, and but i don't know enough about the transaction to know whether this is good, bad or inch different. >> wa other types of things are you working on right now?

if you're looking for areas that it tough for people the first thing i'd say is ever since i became chairman of the philanthropy called endeafor, which supports fiphilanthropist all over the world, the way and we've now created over 75,000 jobs and our goal is 2 million jobs by 2020. what that thought pao not on can we do good would would be otherwise there as no economic con isn't to throw it.

my thesis is they are necessary to work together. we do that in lots of ways, accolades being one but global thermostat being the first one to come in. >> tank. >> "squawk box" will be right back. the future isn't silver suits and houses on mars,

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>> revenue is exceeding forecast. that stock is up over 12% this morning. we'll speak to an analyst in just a minute when squawk rushes. dp

. the president meets with european leaders on the fourth leg of his overseas trip. >> opec leaders extend oil cuts again. >> and amazon wants you to buy look likes it's 1990. the final hour of "squawk box" continues right now. ♪ >> announcer: live from the most powerful city in the world, new york, this is "squawk box." good morning. welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square. we're here waiting for spring someday to come to the east

coast. i'm joe kernen along with becky quick and andrew ross sorkin. it's may 25th. we're going to have a nice day. it's coming up. the futures right now, take a quick look. this could be five or six straight days higher. up 63 now on the dow. up 6 the s&p and nasdaq indicated up 19. opec has agreed to extend its oil output cut for nine months. it's expected that non-opec members like russia will join this latest production cut. oil prices right now, though, down 1.6%. maybe it was already in the price. >> they're pretty widely telegraphed heading into this. >> share of best buy are surging in the premarket. that's not an understatement. the stock has been up 11 or 12% after the electronics maker beat the top line. right now it's up by 14.5%.

that's a posted increase of same-store sales. all of this is countered by what you hear from so many retailers. >> shares of sears are also higher this morning. the retailer reporting a quarterly loss of $2.15 a share. that was a smaller loss than it had been expecting. the street was looking for a loves $3.05. with all those expectations, that winds up with sears up by about 13%. >> and president trump is in brussels this morning. the european council president said the eu and trump have different stances. we go live to brussels right now. hadley. >> president trump is certainly playing to a tougher audience here in europe today. he met earlier with members of

the european union and he met with the president of the commission. it's interesting that not only were there questions about that future relationship on russia, you have to remember this is a president who on the campaign trail once called brussels a hell hole and suggested that nato was obsolete. so basically signaling support to the nato alliance while not necessarily signaling support for the union project. things on the agenda to, not only combatting islamic terror and making that 2% of gdp going forward. one awkward meeting is u.k. prime minister theresa may is expected to me with donald trump and intelligence sharing and

whether or not it's actually secure. guys? >> thank you, hadley. joining us, kurt volcker, former ambassador to nato and director of mccain institute for international leadership. one thing we've seen, ambassador, is love him or hate him or like what he said or not like it, there has been something that previous presidents have been unable to do, we're talking about that 2%, we're talking about ways for countries, what's going to be the method that they take to get to the 2%? that's new, isn't it? >> right. good morning and it is and it's not. so nato has been talking about reaching a goal of 2% of gdp by defense spending by every country at least since 2000. prior to that it was 3% and nato was never close to meeting that. in 2000 nato had a wales summit

and it would set a deadline to reach the target by 2024. the problem is that nobody ever believes it, that nations make their owe decisions and own finances and nobody thought anybody was ever going to do that. but president trump has turned up the pressure a lot and a lot of nato countries has responded. it haeps that the pressure coming from the u.s. has caused european allies to feel they need it respond now. >> so we still don't know how it all plays out but -- i think what we've got, five got 5 countries that are already at and then there are a couple of hold-outs that will probably be doing so bit end of this year. >> the -- nato doesn't have a lot of assets really if it were

to join the fight against isis, i guess. so is that -- is that certainly to strive for? would it make a difference? is it symbolic? >> the way nato works is you have very few things that are common assets. you have some command and control architecture, you have communications, you have some air-to-ground surveillance. those are the common thanksgiving that nato has. everything sells in the inventories of the individual member states. so when you have a nato decision that says we're going to join the anti-isis coalition that, means first off you've got access to those common assets, the command and control architecture and surveillance and so on. secondly, it provide a little bit more political cover for allies to contribute. that iing -- and you go and i

think that's a useful political symbol. >> how do you expect the russia issue to be broached and, you no, is everybody going to be holding their breath? how is that going to work with president trump being and the backdrop of everything health insurance of happening with bob mueller and everything else? >> there's a big difference with what's going on in the u.s. and the fights over firing the fbi director, comey, getting a special prosecutor and that's going on here. as an international security iss issue, there has been a growing concern across europe and including among u.s. national security experts that russia is presenting a growing threat. it's more authoritarian,

reininrevig rating, so people are getting worried about russia. what nato has done is to place forces forward in the baltic states, poland and romania to deter russia from thinking about doing anything against nato territory. what is something that will be reaffirmed at the summit today. collective defense matters and it. >> so far this trip has probably, as far as optics, been a successful one for president trump. i would expect given, you know, some of his previous comments about nato or members' previous comments about the pope and then suddenly it's like, oh, god, everybody loves -- that probably is going to happen with nato, too. >> absolutely. >> and things are already going better in europe already. there's a lot to be excited about in europe and for the future, i think.

>> well, it seems as though the president has developed a knack for setting low expectations and then beating them. and that's certainly what i expect to see happen at nato. remember that the secretary-general of nato visited president trump at the white house not too long ago and in the press conference the president was asked about his own comments saying name owe is and it's hard to and try to steer nato on doing more on counterterrorism. >> last but not least and we got to go, this horrific -- they're all horrific but teen-agers and tweens and the whole emigration issue and the way europe finally deals with that and how that relates to the alliance. any comments there?

>> yeah, several things there. they are going through many of the same things we've gone through politically. they have people on the populist side, the right of the political spectrum looking at their established political elites saying you're not dealing with the problem. that has caused the rise -- helped contribute to the brexit vote, the rises of the le pen party in france so that's the domestic political content in the european states that mirrors ours. i think some of the establishment political leaders are starting to come to grips with this and saying we better take these issues more seriously and beat this back or else we're going to suffer the same kind of electoral fates. >> ambassador volcker, thanks. appreciate you coming on the show this morning. >> you're welcome. ged. >> about plus, amazon, the

e-commerce giant, want you to buy books from an actual store. and we'll talk to ceo been lerer. you are watching "squawk box" on cnbc. at the right moment. ♪ ♪ and when you filter out the noise, it's easy to turn your vision into action. ♪ ♪ it's your trade. e*trade. start trading today at etrade.com

. hormel out with earnings just now. the maker of spam and turkey products missed revenues by a penny. they say challenging circumstances in the turkey industry have affected results. and guess revenues beat estimates but gave weaker-than-expect guidance. one of those who has struggled

amid the retail carnage. >> best buy beat on the top and bottom lines and posted an increase in same-store sales. joining suss joe feldman, senior researcher for the telsey advisor group. joe, what happened here? >> yeah, the expectations were quite good. expectations were to be negative and they turned out positive. they had very good results from gaming. i think that was helped by the nintendo switch, as well as mobile phone was a little bit better. i think the samsung launched helped there. they commented as tax refund checks started to hit people's mailboxes, it translated into

better sales for them. ium -- momentum was good and continues to be. >> do you think they tend to be conservative? >> they tend to be conservative. their guidance for sales the second quarter was definitely better than what the street was expecting, same-stores sales up 1.5% to 2%. they're feeling decent by the business. i think you'll see earnings healthy for the second quarter as well. >> you say they're great operators. how are they managing to not just survive but thrive? >> they're very good at controlling costs and generating efficiency both from the stores and from their supply chain. there as still a lot of room for them to do better but they've done a very good job at that. they've beenable to reset their base model over the past two

years, and it's because they've enhanced training in the stores -- >> so the sales associates know what they're talking about when you walk in the door? >> absolutely. they're doing much better job with that and their focus is on sales and solutions and trying to represent the customers. >> so a real value add. the stock is up 15% today. is this a position that you'd be buy sfg. >> you know, we've been outperformed on this one. and the momentum is there. and you, know, i think there's a few retailers out there, bernie sanders buy, like a home depot, mike a costco where you get in this from a competitive standpoint, they're among the last few standing and there's room for them to continue to take share and to grow and to be more efficient and continue to reward shareholders with dividends and buybacks. i think the valuation is going

to support, especially when you see numbers go up on an earning perspective. >> why did that guy have to be here? you don't need that. >> value add? thinking you. >> joe feldman, not you. i was thanking him. >> amazon is coming for the retailer again but not the way you might think. we'll take you inside the e-commerce joint giant as first book store. >> "squawk box" will be right back. i was wondering if an electric toothbrush really cleans...

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welcome back to "squawk box." mickey drexler speaking out saying he underestimated how technology would up end the retail industry. he said, quote, if could go back ten years, i might have done some things earlier. drexler also said we have been a little too elitist in our attitude, referring to his plan to emphasize the lower prices and adopt a more accessible image. we've always loved mickey on the show but j. crew has continued to struggle, especially in women's wear. >> his point is technology coming in such a rapid change,

he's never seen anything change so rapidly. >> folks, what's old is new again. amazon's latest bet, physical book stores. morgan brennan joins us from the e-commerce giant's new store in new york city. good morning, morgue amorgan. >> good morning, becky. >> i'm standing here in the same complex that once housed a borders, remember those big box retailers that amazon helped put out of business? it is the seventh brick and mortar store for amazon in the u.s. you might be wondering, why is the e-commerce giant doing this? amazon will tell you it is to sell more books temperatu. amazon did start as an online

store. experts say this is one more way that amazon with sell consumers its prime membership. to that extent, you can soun son prime, when you take a look at these books, they are incentivized in terms of you have to scan the book or the bar code associated with it on your amazon app, which i'm doing right now and of course it live television so it's not working quite the way i would like it to. but when you do, the book will come up as amazon prime members, $7.07. if you're not a prime member, it's full retail price, it's $18. so we're here talking about books. but this is part of an emerging strategy to create more brick

and it will really to continue to transform the way we as consumers shot and potentially threaten further the hard-hit retail sector, like borders and businesses that used to exist in this building. back over to us. >> isn't this just so sad in that way? no in and -- and now they make them themselves? >> what's that as long no one reads books. they watch netflix. they binge on netflix. >> we read books. >> but i buy them from amazon when i buy them. they come right to my house.

>> what do you read? >> i'm rereading eye shoe dog" by nike. >> a business book? >> yeah. i've been i'm in all reality things. >> i've watched "the housewives." go ahead, morgan. >> i would note that shoe dog is right here and it tiend part of the high line raise had had when and from online, they put these displays together. half of the books in the u.s. are actually claimed by amazon. so it makes sense of them expanding more into -- no, there could be -- no. and you ewhat, there that are

all business books. there as no chance anyone will pull these out. >> why and it's a great book. >> shoe dog? >> he wrote it himself. >> he really did write it himself. >> that's an amazing thing. >> that's telling to say he wrote it himself. nobody else does. >> did you write -- >> i had lots of editors and help. >> you never see a ceo who writes. >> no, you don't. >> coming up when we return, we have breaking economic news to tell you, weekly jobless claims about to hit the tape. and later, the news are in the cbo's scoring. we'll get some reaction from andy slavic. he oversaw blake from the

federal government dp

♪ ♪

noet get your motor running, head out on the highway ♪ >> we're just seconds away from weekly jobless claims. futures have been strong all morning. rick santelli is tat the cme in chicago. >> jobless claims moved up slightly. 1.923 million on continuing claims. that's a bit higher than the slightly below 1.9 million last look. on the trade balance, which is the deficit, it's definitely getting more negative. very interesting dynamic to ponder. minus 66.6 billion and last month as read slightly revised, not much. still hovering a bit over 64

billion. that's 67.86. it the second biggest of the year, the first biggest was 68.6 in january. that was the worst deficit since march of '15. doesn't end here. we have april preliminary read on whole sale inventories down 0.2, we were expecting up 0.3. and inventory for april, it down. so all of that synthesized into the marketplace, 225 before the number, 225 after the number. the dollar index a bit negative. keep in mind what happened after the fed yesterday continues to be a dynamic in the market. lost some in the dollar index, didn't really get it all back. grade slipped, a bit lower. the wek wit markets, i can't

tell you what part they picked but let keep it oosy. >> let's bring in steve leaseman who, well, you're here. so no fed guys. >> you should talk about a discussion we had off camera where you said i was dumb for going to d.c. >> what i said was you've been living off this whole fed thing. your whole career is based on this fed -- >> i have a music career outside of this where i make tens and tens of dollars. >> you're playing to tens of people. >> exactly. >> my point is sooner or later -- >> you can't make more fun of me than make of myself. >> sooner or later the fed might not be as prevalent in our lives. >> i generally agree with you. i think the fed effect is wayne.

i w -- waning. i knew there would be interesting stuff about the runoff but then saw how the market reacted. look at what happened with the 2 and the 10-year yesterday. stocks got about 3 points in the s&p in the wake it have and you had the 2 and 10 which came out and you saw those yields go down a little bit. here's your fed effect, joe. it not look it inconsequential. and what they did yesterday was talk about, among other things, the runoff. and i'll show you what the three points you need to know about it. it's set it and for get it. they're going to set a monthly limit for the roll off of the balance sheet, increase it every three months and this was estra

george's idea. you look at what's happened to the june fund futures, you have about 80% chance of that rate hike in june with some discussion as to whether they do not want in december. which brings me pack to the bait data. i'm a little worried about this data. a higher trade deficit and these lower inventories also. what the feds said in the minute is we wanted to stop in may because we wanted evidence at that tlts a these claims numbers are ridiculous. you have like five weeks in a row of under 240,000 in claims. so jobs is doing great. the other data, the econ activity data is a little bit more mixed right now. >> if you look at the euro, it about and we're starting to sell down down the balance sheet and rom roll some of that off, ma e

maybe. >> that stops -- -- both because the data has been a little better, the profit data has been better and the egone data has been better and there's this anticipation. what do they call dramatic irony when there's a guy in a horror movie and you're looking at him and there's a guy with an ax behind him, everybody knows he's about to at tomorrow moment change this massive but that's sort of how we look at it. i think people are getting in there perhaps in anticipation of this change in ecb policy which which could come any day, any month now.

>> what's onmonopia? >> what do you call a world when it's spelled the same both ways? >> pal lepallenthome. >> i could do without the shuttle honestly. >> the asecela. >> no, i love the shuttle. >> they say it would result eventually in 23 million people being insured over that time versus if the aca stayed the way it was. joining us now andy slavitt, the

form are acting administrator of the centers for medicare and medicaid services. we're in a real strange time in history right now. i don't know which way we go and like so many things, there's two sides to this and it looks like never the 'twain shall meet. what do you make of the numbers that you saw? >> some part of the report want very surprising. we saw 23 million people are going to lose coverage, rates but there was a part of the report which i thought was a bit surprising which was about the ceo suggests that basic services won't even be available, so coverage for mental health,

substance abuse, pregnancy, those services are going to be priced out of the insurance market. so the instability that we see added is really a new part to what the cbo said. >> well, some of it, i mean, we understand and we should expect that if you go out ten years and you take away the mandate for young people to buy it. even now young people don't want to pay for, you no -- you know, expensive policies that have things in them that they don't need. and medicaid, 14 million fewer people would have medicaid because of the block grants but that's on a 17% drop in the enrollment after the obamacare expansion and 17% doesn't seem like a large number when you consider so many are able-bodied

working aej people. and it seems like medicaid has gone too far, being used by people that maybe the program wasn't initially designed for and taking 17% away from that doesn't seem necessarily like a terrible number. >> i couldn't disagree with you more. half of medicaid recipients are kid. 70% of the medicaid program goes to cover people who are living with disabilities or in nursing homes. th this. >> 25% of the increases over the next ten years. >> no. >> and that's a cut in the rate of growth. that's not a cut -- it's not a 25% cut of what we have today. >> it's both a cut of what the total budget is projected to be

and then a cap. so, look, you can argue -- you can ask me but what you really should be -- if you look at the march dieps -- >> i understand. you can go to pa point but the other point in the journal piece today is that individual market, premiums have increased 105% under obamacare. the other thing, you know, you talk about no coverage, now in missouri because because they're exiting, you're going to have a large part of missouri that have no coverage whatsoever. the other part, most of the state, has on so you can talk

about how bad, the republican plan is but it even. >> if this were a bill about increasing competition and making health care more affordable, i think you'd see -- you'd certainly see my support and you'd see a lot more support for this bill. that's not what the bill does. it does the opposite. it reduces tax credit, which makes products less affordable for most but if you're a little built older or lower income, it makes health care less available. and if that's the case, insurance will offer less products not more inclined. how to increase competition, how to increase affordability. it actly what woo you know, the

tax cut, it reversing the tax increases, the ut tra so i'm not sure that's a way to describe it either, right? >> they're probably both accurate ways to sky it. >> that's why i said never the it's never going to happen, i don't think, in this world. >> look, i'm not here to be optimistic either. i think you're right. but the good news is there are very responsible republican senators and democratic senators receipt now who actually do want to do something productive. they are trying to get --

they're saying to themselves why do we have a bill that was put to the without consulting an actuary? why don't we have some experties and some open hearings? if we're going to solve this problem, if this is a "rescue ms.ish" look you with who i'll say this is bad. it might actually be in -- you have some senators looking at the house bill and saying this isn't what we need and maybe, just maybe we can get some power behind those folks and this can help us get something done. >> thanks for your time for us. thanks for joining us. >> coming up, what media giants can learn from snapchat and facebook.

but first, ed monday joined us about time warn are merger and the bet on content. >> it's going to be tough to make time warner consent increased value of at&t. i think this dp work they connect to. with this, won't happen in the future. thanks, jim. there's some napkins in the glovebox. okay, but why would i need a napkin? you could have just told me a bump was coming. we know the future. because we're building it. the power of innovative thinking. the power of 100 of the world's top companies. the power of an etf. the power of qqq.

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♪ i'm dr. kelsey mcneely and some day you might be calling me an energy farmer. ♪ energy lives here. . welcome back to "squawk box." facebook has signed deal with mel enial focused content creators to make shows for its

upcoming video services. joining us now to talk about it is the group nine media ceo, and we should mention coup nine is among the companies providing content to facebook. help us understand where you think this whole facebook deal is going and what it actually means. >> i think in general we're at a pretty interesting place right now where the social pipes, facebook, snapchat, instagram, twitter and youtube are modern day versions of what the cable pipes were for our generation and older people. i think there's an opportunity to build huge media companies on these platforms and facebook is realizing they need to create an opportunity for publishers to make money on their platform. >> in the short term they're going to start paying you for

programming, scripted and unskru uncryu unscripted. >> that's what is being reported. we are not privy to speak of such thing. >> long term, do you think they'll be a subscription model or whether they'll go off and do it themselves? >> facebook has a public payroll so they're selling advertising into video content and delivering money to publishers for the first time ever. now reportedly with spotlight there's going to be more ways to make money. i don't think facebook is getting into the content creation game any time soon, but i think they are valuing content and premium content and understanding this's $70 billion in tv advertising and they want it and snapchat wants it and instagram wants it. >> is that what it takes to make this successful for so many

publishing companies out there? as you just described it as cable, i hadn't really thought of, it the cable companies going and they get distribution fees from the other side of it. so as a publicer, -- blusher pu it, doubles your revenue. >> yes. the audience is there, the dollars are going to have to move where the eyeballs are. >> that means the audience is going to have to start paying at some point, too. >> if you go back and look at tv, advertising dollars go through to the content creators, whereas in digital, they go to the platforms. >> but in cable you pay a subscriber fee, too, so you're getting it from two sides. >> i think at the end of the day, digital media brands are going to have to find other ways to make money, commerce, subscription, licensing.

it's not going as clean and we're not sure what it's going to look like yet. >> do you think facebook is a good partner? the reason i ask is over time they've changed some the algorithms and some of the rules of the road and caught certain at certain points about sort of what the relationship is supposed to be. people who have invested in the certain type of approach that then had to change tacks, if you will, when facebook changed its own tack. >> i think facebook can be a challenging partner but i think that they are focussed on being a better and better partner. the conversations they're having today don't resemble the conversations that they were having a year or two ago. i think they honestly want media companies to be able to succeed on the platform. they haven't figured out exactly how to do that. i don't think two years ago they thought about it at all. they would talk about themselves we are a platform to connect with your friends. >> right. >> they don't talk about themselves that way. they're a video distribution platform and brands -- brand

publishers need to make money. there. >> do you think there's a certain type of content that works better on facebook in a different way than on snapchat, in a different way that works on netflix? netflix has been better with scripted programs. for some people, people with a remote at home may not want to watch that, but on facebook they do. >> i think netflix is a different beast. i see netflix as linear programming. i see facebook and snapchat and youtube as a different kind of consumption. so people who have grown up with the smartphone in their pocket have a difference relationship with media, different relationship with tv. i think these -- there's a generation that consumes in fits and bursts so figuring out how to get that consumption it's going to be doing that. >> would you be long snapchat now. they may have changed the way

advertisers pay, there's going to be -- >> offering some discounts to try to get some more advertisers in which has spooked some investors thinking if you're offering discounts to get in -- >> at this point -- >> so we have a great presence on snapchat. we have two discover channels. i'm very long snapchat. i'm long facebook. i'm long google. i think these are the most important content -- >> you don't think the instagram is taking snapchat? >> i think instagram is doing things that are challenging for snapchat but i think snapchat's audience is a decade younger than instagram's. i think it appeals to a different generation. we see that bear out in the numbers. i think that they're setting themselves up well for continuing to grow their audience in a demo that facebook doesn't necessarily reach. >> ben lerer. >> thank you for having me. when we come back, jim cramer joins us live from the new york stock exchange. we'll get his take on today's top stories. when you booked this trip, you didn't know we had over 26,000 local activities listed on our app. or that you could book them right from your phone.

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let's get down to the new york stock exchange. jim cramer is joining us now. i'm looking at a s&p, we had a technician on saying there's something coming up -- was it 2420, you get through that and it's like 2650 is a possibility. i mean, we have had -- this is going up again it seems like, right? >> well, look, we are presidents

away, we're looking at the jobless claims that are pretty amazing. we have best buy which was just a knockout quarter. a lot of that happens to be some new video games. but so what? you don't want to look through that. pvh had good numbers. the u.s. wasn't that good, but not that bad. we had such a good number from hp last night. there's a pc rebound in all regions. i kind of like this set-up. oil is not going anywhere because the united states keeps pumping more and more. this is benign environment. as long as the president is kind of -- you know, look i think the president is not being under attack right now. that's good for the market. >> he's actually done pretty well over there too. >> it's good for the market. the market likes it when there's not endless leaks about bad things at the white house. >> you get 50 sunni nations to say that, you know, maybe we need to do something about -- you know, what's happening in the world, i don't know. that hadn't been done before. >> and europe so far not been

bad. everyone keeps saying it will be horrible. where's the horror? i haven't seen it yet. maybe it's coming. >> thanks, jim. see you at the top of the hour. , but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data- so, multiply that by her followers, speaking engagements, work experience... credit history. that more accurately assess a business' chances of success. this is a good investment. she's a good investment. get ready, because we're helping leading companies lead with digital.

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even if it's chasing squirrels, synchrony financial can help you get there. welcome back, everybody. let a get a final check on the markets this morning.

the futures have been higher all morning long even after five consecutive gains for the markets. the futures for the dow up about 68 points. the nasdaq up by 23. another day off to the races at least so far. energy prices are down by 1.5% for pti. >> okay. make sure you join us tomorrow. i think i'm talking to this guy right here. "squawk on the street" begins right now. ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. futures are up solidly on day that would take all three indices of three straight days of gains. mnuchin is on the hill again. europe is mixed. the europe gdp was revised down a bit. and oil is down as