india from ancient times and i have used that example in germany. i used the same example today. >> but if i may, president trump might agree with that. but the question is whether it's going to cost so many jobs and hurt america so much economically and that it's caused outrage by other leaders. where do you fall on it? which side do you fall on? >> translator: i do not think that this subject -- in fact, it's not a question of taking sides. this is not the subject. what i'm talking about is thinking for the future generation. the generation that does not -- that is not born today. that the generation or the people who are to be born in the next year's -- that's the side i'm on.

>> and by the way, by the way, this -- it hasn't come into fact, it is supposed to come into a fact as of 2021. so we still have time. we are all constructive in what we do. there are things that we can agree on. >> and on that note, this week german chancellor angela merkel said publicly, including once to you, prime minister modi, that europe must take its own fate into its own hands. and the german foreign minister said they're putting them at risk, but he said that nato members must pay their fair share. let me start with you, do you agree with angela merkel's

comments? >> translator: we will see because we feel it for the first time that we are currently dealing -- >> all right, good friday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber and jim cramer. we'll watch for more headlines out of that. meantime, 138,000 jobs in may. that's below estimates. we are watching that. futures not moved by the jobs number really coming off that record high yesterday. europe is pretty green. ten year yield almost a full retracement down to election day levels. our road map starts with the unemployment falls which falls to the lowest level in 16 years. despite a drop in the pace of hiring. we'll get the white house reaction from gary cohn. >> the president is taking heat from major ceos after pulling

out of paris climate accord. elon musk and bob iger both resigning from his advisory board. we'll dig in on all the corporate blow back. >> and as we said, vladimir putin speaking to nbc's megyn kelly. we'll take you there live late in the show. the pace of hiring slows down and retailers and the government shed jobs last month. 4.3% unemployment is the lowest sense open' -- since '01. the ball clearly now in the fed's court, with its policy meeting set for the middle of the month. year on year wages 2.5. not that 2.8 or 2.6 we were hoping we would see later in the year. >> of course, the hourly not that much. given we're in a world where we know that costs do go up. what i'll say is that the bond market is signaling this would happen. that the bond market was right. it's always hard to quibble with the bond market. i know that rick made some good points this morning about how

our trading -- so-called partners in europe and japan have been suppressing our currency to take -- our currency goes down. but look, i would point out that i know this -- this is retrograde, but despite the unemployment numbers not being as robust, we got a lot of corporate earnings this week and including last night that they were so good and they tend to mitigate what the bond market is saying, where the stock market is very small, versus the bond market. but there's money being made and money being made if you don't pay attention to the slight decline in the job market. >> is that why futures are even with last night's close, record close? >> there's powerful earnings last night that will define a lot of the stocks that go up today including technology where we had some incredible numbers. apparel will be a great number, and so that there is a thesis that you could build, which says that there's some -- that may again was a strong month for areas of the economy that had not been strong. including retail.

and i think that we're trying to suss through how is it possible that retail jobs down -- because of -- >> fourth straight month. >> yeah. that's a bad number. that's what the government has to look at. but i come back and i say, i can name you a half dozen things that happened last night in the business world that counteract whatever may be going on with paris. >> i'll take that bet. what are they? give me three of the half dozen? >> thank you for asking me. >> i want them right now. >> broadcom last night signalled an incredible acceleration in technology for internet of things. and for apple. for the iphone. incredible. and for samsung. just saying that it's going to be much better than you think. much, much better. workday talked about -- inviva talked about 40% growth. for cloud. that the cloud has gotten much better. then one of the most heavily

shorted and biggest decliners of the period was lululemon. the business got quite good and got accelerated at the end of the quarter. i think these all matter because you've got retail, you've got cloud. and you've got pure tech internet of things. the read through will be as you see that the market is struggling to try to place and figure out those versus the bond market. and it is really hard. but those are very major. i'm not trying to -- you know, this -- david, this is not me saying tractor supply is good or that ollie's bargain store was good. >> but we are looking at a ten year, 2.18 i think is what i just saw. we've watched the banks certainly. >> right. >> not going to get leadership there. >> the banks will give you back. but what i'm saying is that the market is frantically trying to price in some very bullish earnings from big sectors with a

bond market that says ignore those. it will get worse. >> i have been talking to a lot of people who focus on mergers and acquisitions activity which has not been particularly heavy. i continue to hear from people that the belief on the part of the potential buyers that the sellers were asking too much. and it's because broadly speaking there's a belief that valuations are too high. which stands in some contrast at least to the bullish scenario you're painting there. now it may go one way or the other. live with it or the sellers' expectations change because the equity markets come down. but that's broad thing. that's why things are moving sideways when it comes to mergers and acquisitions. >> i met with the ceo of the major insurer yesterday. 31% tax rate. their stock's expensive. if the president is making it so that there's no tax reform or he's focused on other things and russia and megyn kelly and putin, it's cheaper if they cut the rates so i would come back and say, the sellers may have a point.

if you think that the tax rates are going to go down. >> but no buyer is willing to take that chance on tax reform. no way. >> no. i think that's again this kind of push me, pull you to talk about a book that i read to my kids when they were like 8. i sit here and i just say, oh, my, broadcom was the ciena yesterday, broadcom -- hop tan doesn't get enough credit. it's a huge company. >> it's still trying to buy toshiba's flash business. >> last night they took themselves out of the running. >> i didn't know that. my read was they were very much interested. >> they wanted to be in connectivity. and toshiba is sot in connectivity. it's storage and memory. that's why western digital took themselves out. it's a subtle read through. but i'm close to the situation.

>> you might have mentioned that to me so i couch made a call or -- i could have made a call or two. >> i don't talk to you before, because i learned the fidget spin -- >> you just learned this right now? your kids are too old. i'll bring one in for you. i think you'll like it. >> i was looking at it. 11 of the top 12 games. five below quarter. i was going to give you a positive about five below but so much was the fidget spin. >> you have a -- >> i have never spun a fidget. >> can you do it on your nose? there's guys who can do it on your nose. >> you can put it on your dog's nose. >> the decision to withdraw from the paris accord is facing backlash from iger and blankfein. this is how wilbur ross responded. >> i think they're wrong because what the president is not doing is saying he's not going to try

to improve climate. what he is saying is this particular agreement does not appeal, it was destructive of u.s. economic growth going out into the future. i think they're confusing the withdrawal from the agreement with the idea that he's against helping the climate. that's not the case. he is an environmentalist, i have known him for a long time. he's very pro environment. >> all right. so there's the whole discussion about whether or not they're right on this deal and the other is more political and whether the president is losing political capital relative to the ceos he's had in the white house repeatedly. >> look, the headlines are -- we're surprised that they were working with the president in first place. whether it be bob iger or elon musk. but when you go back and parse what the president is saying, listen, the works have been sacrificed by the big businesses

in our country that want to do business overseas. so you have this -- you have on the one hand you have principled people saying this is against climate change. when you have pittsburgh versus paris, since there's not a lot of companies now currently in pittsburgh that are headquartered there, over thanle of -- than alcoa -- >> and ed rendell said that pittsburgh has remade itself into the technology hub, so what is the president talking about? >> he has an older school view of pittsburgh. >> yeah, but that's not the pittsburgh of today. >> we have steve case on our air yesterday using its as a test case for bringing vc culture and carnegie mellon and uber driving -- >> but pittsburgh is like san francisco. >> right. >> although i think it was a metaphor. it was a metaphor. >> for what? a world that doesn't exist anymore? >> when we used to make a lot of steel there. when jones and lachlan -- oh, don't get me started. it was the dirtiest city in

america. because it was a place that we made things. >> yes, it was. now it's gotten clean. >> cleaned up. >> and the tepper business school. it was a metaphor. should he have said detroit? it has no ring. >> it was alliteration. it was nice. >> don't ask what the country can do for you. it was like that. >> this is something that the corporate leaders are getting at, the world has changed dramatically since then. how many jobs are in coal? >> 50,000. >> 50,000. that's it. you said so many times about natural gas prices continuing down that -- >> under three. >> the marketplace is going -- is forcing the hand of those who produce power to use natural gas, cleaner, cheaper power. what is the point of talking about the old world that's not coming back anyway? >> i didn't do it. it wasn't me. i talked to the four largest utility companies and they hate

coal. >> you have tried to give voice to his decision. >> i think you can make an argument that the companies need those markets and have fired people here and are afraid of losing their markets there. they're afraid of a boycott in europe. they're afraid of tariffs. >> the ones who are coming out publicly -- >> does the president lose anything by not having musk or iger on this council? >> i don't think so. i think the president should have kicked it to the senate. why not kick it to the senate? he does so many things that are unwise. >> either ratify this or don't? >> yeah. then he wouldn't have been one -- but tactically this guy doesn't seem to understand congress at all. i'm completely concerned about tax -- about tax reform. i mean, everything that is being done is like, hey, listen, we don't need congress. congress -- i mean, there's

nothing we can do about them. that's like a lot of them. like 100 senators, you know? those guys matter and this -- and going -- of forgetting them, forgetting the media of tweeting, you need a buy -- the president needs a buy-in. when you're a president, you need a buy-in. you know doris kearns goodwin taught me that at college. >> he has murray energy. they're behind it. i have a couple of press releases from them saying yes. so murray -- so if you've got murray, you're at least somewhere. >> true. but -- >> murray sells -- apparently they also are locaal. >> i have one of the largest oil distributors on last night. is this really going to help? no. we're drilling like mad because we have got the permian down to 28 bucks and the oil price is $47 going to $43. not that oil is down today because this allows more drilling. no.

i mean, they're doing drilling wherever they can drill. >> yeah, they want to open up the atlantic -- the alaska wildlife refuge. >> good luck with that. that's silly. >> i think that's moving ahead. >> they drill in graveyards and schoolyards in some of the places in texas. you have to drill where it is. >> yeah. we'll keep an eye on all of that and putin in st. petersburg, of course. and gary cohn, we'll ask him about the jobs number, about the paris accord, about the progress for the tax bill and the economy. take a look at the premarket. s&p looks to build on its record close yesterday. the dow is 25 points away from its own all-time high. back in a minute. in these turbulent times, do you focus on today's headwinds? or plan for tomorrow? at kpmg, we believe success requires both. with our broad range of services and industry expertise, kpmg can help you anticipate tomorrow

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got some retailers moving this morning. lululemon surging after quarterly results helped by stronger than expected sales of new products. we're going to talk to founder chip wilson in the next hour. then there's restoration hardware plummeting, overshadowing the revenue beat. as for lulu, revenue -- some questions about that online shut down they had. >> online shutdown, i directly blamed it on ibm. ibm says there wasn't due to the

power outage, but yes, it was definitely ibm on the outage. i talked to loren last night. he was not happy with me because he thought i wavered. the ceo, they wavered because they missed badly. when they talked the last quarter the cadence was going up. they fixed the color, they had great supply chain management. if there was competition, it didn't matter. they don't wholesale into the department stores. i think we should go to st. petersburg as much as i want to talk about lulu. >> let's take you back to st. petersburg and listen to megyn kelly with putin. >> but all 17 of the united states intelligence agencies have concluded that the russians did interfere with our election. and these are nonpartisan career professionals. republicans and democrats alike on capitol hill including president trump's supporters and

some are your defenders who have seen the classified intelligence report, they have all accepted this conclusion. and even private nonpartisan security firms say the same. that russia interfered with the u.s. election. are they all wrong? >> translator: having read those repo report -- have you read the reports? >> i've read the nonclassified version. >> translator: well, in our classified version is null and void and who was your tailor? what about the buttons, did it have any claims about the suits or the buttons? no, they are firmly tight, but you can't wear this suit. can it happen? yes, it did happen with one of our stand-up comedians, mr.

icahn and you have been talking about the nonclassified versions and i have read those reports. even in those reports there is no specific evidence, no facts. just assumptions, allegations and conclusions based on the allegations, nothing more. you know? if there is something specific, concrete, we could discuss that. like one of the entities i previously used to work for. they said we need all the addresses, all the names and the surnames provide all that to us. well, there are independent sources -- there are no independent sources in this world. you know, the recent -- the recent appointments with your special services point to the fact that there are any likings or attitudes, so i believe that we should stop this idle prattle

which is harmful and i believe this is like transferring the internal bickering of the united states beyond the borders of the country, outside, on the national stage, trying to resolve it with the help of a foreign policy tool and national affairs and that is detrimental to the issues of global security and fight against terror which is detrimental. and i have just cited an example when the washington, d.c. did not recommend the professionals to go to a -- anti-terrorist event in the russian federation and that was nonsense. these very same people are now behind those reports. i believe that this should stop

as soon as possible. we should start and resume normal cooperation. while in addition, i can tell you that worldwide, there are not so many countries that have the privilege of sovereignty. i wouldn't like to offend anyone, but what has been said by madam merkel is conditioned by the long amassing grudge she's been harboring just -- just believe me no matter your response afterwards that the sovereignty is limited. and inside the alliances it's officially limited. the chart proscribes prohibitions and it's stricter, more stringent. nothing is permitted but for what is allowed and who allows that, the leadership and where is the leadership? far away. so globally, there are not many

countries yielding -- yielding sovereignty and we have been endearing our sovereignty, the fact that we have our sovereignty. we can enjoy that, but sovereignty is needed to defend our interests. it's not a toy. we need it to have our own development and india has their own sovereignty. they hold it and possess it and i'll tell the honorable prime minister i never told him although last night we had lengthy talks and one-on-one dinner. but i want to tell him right now, we know the position of indian prime minister and the indian leadership and the indian state with respect to all the attempts to inclining them to occupy a position that's favorable to someone, but not the indian people against russia. india basing on their own sovereignty and the character of

their leader and the national interests is not let us stray by those requirements. and those who give this advice. but there are not so many countries like india worldwide. this is true and we must be aware of that. india is one of such countries. china is -- may be cited as another example. there are some other countries. not numerous though. and if such attempts to guide someone to dictator, someone from inside or outside the country will continue, they will be detrimental to international affairs but i it rate in closing this response this would come to an end sooner or later. >> so the reason -- one of the reasons that the question is relevant is because the united states views this as a matter of its national sovereignty and as does the uk, as does germany, as

does france. so it keeps coming up over and over and what they say in response to the question of whether is the -- where is proof is that this type of disinformation campaign is intentionally difficult to find hard core proof of. it's other factors and what the experts say is that this couldn't have been faked. that it's not one factor, that it's a hundred factors that point to russia. they say it's the forensics, it's the digital fingerprints, the malware, the encryption keys and the specific pieces of code that all of them -- all of them point to russia and none of them points to anyone other than russia. >> translator: what fingerprints? of whose prints? what are you talking about? they can be invented, you know? there are many specialists that can be -- that can invent or

fake set-up. you know, a key of yours can send it through your girl -- your 3-year-old girl can perpetrate such an attack and they can present it like this. they can poz it like this and these specialists can blame someone else. these are not proofs. these are trying to show responsibility and we don't have the problem. the problem is inside the american policy. the trump team has turned to be more efficient during the electoral campaigns. sometimes i thought that well -- well he overkills i thought sometimes during the campaign, but it turned out that he was right. he's been able to find an approach and reach out to those electors whom he hoped for and they voted for him and they are a team. they made a mistake and they don't want to recognize this mistake right now.

they don't want to say that they were not wise enough. it's easy to say it's not our fault, it's -- it's the russians. they intervened. they interfered. it's like anti-semitism. the jews -- you're an idiot because the jews are to blame. you know what such moods lead to they will not end up with nothing good. one should work and think out how to rectify things and you have mentioned information. what information? one of the -- one of the stovepiping facts by hackers is that one of the leaks by hackers is that the -- the head of madam clinton's electoral office was not behaving properly against -- with respect to other candidates of the democratic party, but then when that appeared in

public she acknowledged it was true. and she handed in her resignation. so that was a truthful fact and who was the author of the leak? does it matter? it is important to have a look at that, consider that and apologize to people and say it will never -- we'll never ever do that again. but what did they do instead? they said it's not our blame. it's the russians. weren't the russians dealing with all of that trying to rush one of the candidates of the democratic party in prejudice of someone else, it was in between themselves. just stop that, please. >> even president trump -- >> that is vladimir putin responding to allegations of intelligence reports that say they meddled in our election

saying they contain only assumptions. nothing concrete. useless and harmful gossip that should be stopped. that's damaging international relations and the world economy and issues of security. of course, don't forget, megyn kelly's show is sunday night exclusive with putin. that's at 7:00 p.m. eastern on nbc. >> boy, that was a tough question. they have to really just hand it to her. she put it right there. i mean, not that she has subpoena power but this is one of the most important leaders in the world and she followed up. >> good to follow up. >> the janus henderson group is closing the merger. and then vh1 "daytime divas" stashing vanessa william -- starring vanessa williams begins on monday. >> i can't wait to get to gary cohn. this is one of those where literally i'm trying to figure

out -- i mean, are people talking about the government shutdown in october? are there many issues going on right here that the president is a lone gun, making decisions. i know the republicans don't seem to be against paris so far. but i just keep thinking all right, can earnings really carry us where we have to go with the president just seemingly not even having that proposal ready? where's the proposal? i mean, remember we had the piece of paper. >> yeah. no, we didn't get much. that was really forced in some ways on the staff of treasury at the last minute if you recall. introducing the idea they'd have something the next week. we called treasury. treasury said where did you hear that from? you're wrong. of course they found that we heard it from the president saying it and they scrambled and put a one pager together. yeah, we don't know any details about a lot of different things but let's get back to the jobs number itself, jim. what's the big outcome here? i guess it's bond yield's lower

and therefore the financials are lower and the rest of the market to if points you were making -- to the points you were making earlier seem to be taking it in stride as it has so many other things. whether it's economics, macro or geopolitics and technology is leading the way. >> in all the years that i have watched the market, i mean, you really have -- the interest rates could crater. they look like they could absolutely crater and the stocks that are leading in many ways are industrial and industrial tech. it's got to -- someone's wrong. someone has to be wrong. well, that's what -- now, if you just got in the business, you don't know any link an. hey, this is really great. rates are going down, so businesses will do much better so let's go buy caterpillar. and let's go upgrade deere from sell to hold because the rest of the economy and the world is a global economy. then the other force which says, wow, be careful. they're going to boycott us and

not buy deere using deere as a kind of an analog because of paris. you know, i'm not saying i'm confused. i'm saying i understand why the stocks can go up. i can understand why interest rates are going down. it's just the linkage is the least pronounced i have ever seen. this is the least pronounced i have ever seen. >> you will agree that narrative of extended goldilocks is what's working here. >> right. >> secular growth in large cap names with rates low. >> yes. i mean, whether it be -- everything but the financials. because the financials need rates higher, but you're seeing -- you will see f.a.n.g. stocks go up because they do well in the slowing economy. you're going to see the rth, the retail hit a high yesterday. the etf. you will see biotech continue to advance. that does very well. especially into asco, a big anticancer conference. utilities are it whatting highs left and -- are hitting highs left and right. you will see inflation not going

higher so maybe you see the companies that have minimum wage issues other than mandated do better. >> all right. do we care about the fact that job growth has been slowing consistently now for autos? >> autos should get hit. but autos weren't bad, but autos should get hit. they're directly related to employment. you get into the conference call, well, holy cow, western digital might get that because of the chinese falling down on toshiba, holy cow on nvidia, i was on the virtual reality, you don't have to go to the mall because you can look at how you look and press a button and then the suit comes. you laugh. we can't even go shopping anymore, david. we have to go shopping from his

house. >> he waited long enough to where it wasn't necessary. >> you never had to shop in your life. >> it's over. i can put my goggles on and be done. >> why don't we get to gary cohn and solve this. >> national economic council director to talk about the numbers. good to have you back once again. >> good morning and thanks for having me. >> 138. year to date average 162 is below last year's 187. are you worried about slowing job growth? >> no. we're not worried about slowing job growth. when you look at how many people we have brought back into the workforce and you look at the u-6 number the fact that the u-6 number is down by 1% since inauguration day we're clearly bringing people back into the job force. that said, look, we want to continue to grow the job force and the president has talked about that. that's why we're so focused on what we're doing on the regulatory side, what we're doing on tax reform, what we're doing on infrastructure. because we do believe that we have to create a better and better job market in the united states. >> we are going to get to those

topics. really quick on methodology, the president took credit for 1 million jobs this year. the white house appears to be pointing to adp to get to that number. do you believe bls is undercutting what adp is giving us? >> look, they're just two different sources of data. adp puts out their data, the federal government puts out their data. the federal government data was not out yesterday when he gave his speech. there's different ways of looking at data. >> mr. cohn, jim cramer, thank you for coming on. >> hey, jim. >> struggling with the bond market versus the stock market. you know all these markets as well as the job that you do. the interest rate -- interest rates are going down precipitously which means that maybe this is the peak employment and that employment -- you know, a rear view indicator. but the companies themselves are doing quite well. it's typical that we do not see this kind of decoupling. what do you make of the fact that the rates are going down so

precipitously? are they causing money to come here or the bond market is right and we saw a peak in unemployment or earnings? >> look it's a combination of things that you're talking about on the show. there's no simple answer here. but remember the bond market takes a longer term view of w t whattess -- of what's going on. and where they think we're going economically. it also factors in where they think monetary policy and fiscal policy's going over the longer period of time. and people are analyzing those factors and they're expressing their views in the price of u.s. rates and u.s. bonds. >> mr. cohn, david faber. are you concerned at all about the budget ceiling being reached in august and congress' inability to actually raise the ceiling? >> no, i'm confident the congress will get the ceiling raised. >> why?

>> i'm just confident they'll do it. at the end of the day, you know, the deficit ceiling needs to be raised. this is money that the congress appropriated. they chose to spend the money. we have spent the money the way that congress is determined to spend it and they need to raise the deficit ceiling. we're going to get it raised. >> but the treasury secretary seems to prefer a so-called clean bill to raise the debt limit whereas budget director mulvaney seems to want to attach things to do it to drive certain spending reforms. is that an issue in the cabinet right now that's going to pose problems for you guys? >> look at the end of the day, the congress has to raise the debt ceiling. the congress will decide what is done, what is attached or not attached. heavy treasury secretary would love a clean debt ceiling, i get that. but if we need to get things attached to get it through we'll attach things. in the end congress will raise the debt ceiling because they have no other choice. >> i completely agree with the sentiment of the administration,

we have to get more manufacturingb jos here and bring them back. at the same time, i know there are companies that are so strongly committed to the paris accords that you must be concerned that they're going to take action against the united states including maybe things that would hurt our manufacturing sector. what do we say to make the manufacturers in this country not concerned that there won't be boycotts, there won't be tariffs, because of the paris accord pullout? >> look, jim, we're in a global economy. if we can produce products at a competitive rate we're going to export products and we're going to consume them domestically. if we can grow our economy, we're going to consume more and more products. we have all of the necessary tools in our disposal to do this. as you know, we started out in this administration talking with businesses, talking with business leaders. they came in and they told us three things. they said, the regulatory environment doesn't work for them, the tax policy doesn't work for them and infrastructure

doesn't work. we have been spending our time working on all three of those. if we fix those three and we're going to get them fixed we are going to grow our economy, we're going to grow consumption in the united states and we'll need more manufacturing in the united states to deal with domestic consum -- consumption. we'll be more competitive when we get our tax policy fixed and we'll export more products because we'll be more globally competitive. >> you wrote an op-ed, america first doesn't mean america alone. some people said that leaving paris accord is america alone. what do you say to them? >> we're not america alone. we're part of a world, an important part of the world. world leaders look to us. i was with the president in italy last week, i was sitting in the room with him all the sessions, i saw the interaction with all the g7 leaders. we have an important seat at the

table. the other world leaders are involved with us, and we're involved with them and we'll continue to have that position in the world. we're going to the g 20 in another four weeks. and the posture we'll have is the same posture we always had. >> did you talk to -- have you talked to lloyd blankfein after his first tweet? >> i have not, but i got caught off guard by his tweeting last night. >> i think a lot of people were. >> when it comes to sort of -- well, the president's focus on coal i guess is one question. he comes back to it time and again and he did yesterday. 50,000 workers in coal. you yourself have said very recently and many times i know, natural gas is the preferred fuel at this point by many of the producers of power in this country. coal regardless of what is done in the market place is going to go away. why the continued focus on something that seems to be really a part of the past as opposed to the future?

>> so i think you guys know really well, i am a big free marketer. i believe in free, open transparent markets. there's a price for coal and natural gas and there's a price for crude oil, there's a price for everything in the world market should set that price every day. at some point in the cycle, coal will be competitive again. so we want to keep coal available. we want to keep our coal mines open. we want to be in the coal business because we know there's a cyclical nature to all of these commodity prices and when coal is the feed stock of choice, we need to have that feed stock to be globally competitive. this is all about making sure that the u.s. is globally competitive and we can compete with everyone in the world by having the cheapest available energy. i believe we need to keep our options available to have the cheapest available energy. >> even though you have argued in the past couple of days that coal is not the most efficient feed stock? >> i said it's not the most efficient feed stock today

because of the price. because of the technological advancements in the united states and all of the fracking development in what we have done to create the abundance of natural gas has what ed the -- has made the price of coal less favorable today. we have been and markets long enough -- around markets long enough to know that predicting the commodities is difficult in any long term scenario. >> we are being pressured to let you go, but we have to ask you, would you be interested in the fed chair job? >> no, i have a great job right now. serving the president has been a dream come true. i come into work every day and i'm very excited to be in the white house. >> all right. we're waiting for your tweets. >> i think you'll wait a long time. >> gary -- >> smart move. >> thanks for your time. see you next time. gary cohn from washington. what did you think? is the headline here debt ceiling? >> look, that is for me. just because -- look, we have to deal with the reality of what is

going to happen in congress versus the president. i really think that this is really underrated in terms of the world we're in because we can't have the -- go back to the days where we have gridlock between the president and congress and expect that we're going to get legislation that's going to make it so our companies are going to do better. they're doing okay. but if you ask me what gets the market up 10%, it's working together. >> it is. we didn't even get a chance to ask about tax reform. i'm not sure what answer we would have gotten. that seems to be being shepherded to certain extent, although mr. cohn is involved in everything, more to treasury to some extent. but we're still waiting. it may be at -- at some point we may see more of a plan from the white house as that begins. but we know that health care has to go first still. >> right. >> and the senate is working on something in terms of their own version of the repeal. >> yeah. look, i think we're all -- many of us know mr. cohn -- know gary for a long time.

he's a very sophisticated and shrewd individual who is not double talking. i mean, he's basically saying, look, he talked about coal. you know, it's one of -- it's certainly one of the pillars. i think the problem we all have is that if things continue to unfold the way they do which is that -- that there is not a lot of cooperation then the president has a good spokesman in gary cohn. but where does it go? i mean, it goes to the american people. but it does not go further -- it does not go to the other branch of government or to the supreme court. it just doesn't go to those. and in order to get something done beside executive order, it's got to go to them. we need to see tangible action. >> conagra? >> yeah, let's do -- >> huh, conagra? >> we want to get to dom, to the markets in general. but before we do that, i did want to get to a story yesterday that moved shares of pinnacle foods higher. much higher.

>> yeah. >> we spoke about the idea that conagra had engaged some point, this is a reuters report, indicating there's some conversation. >> a lot of people think it will happen. >> it's up 7%. i'm telling you it won't happen. >> the stock is up like 10%. >> yeah. quite a few of the people who are familiar with the situation indicate there had been an approach made by conagra some time ago to pinnacle foods about the possibility of a deal. it doesn't appear to advance very far either. and the key reason here is that pinnacle's expectations which were communicated fairly rapidly were for a price that is far higher than what conagra which sees itself as a discipline borrower is willing to play. they haven't engaged in weeks. even with conagra's move up yesterday, which sometimes can be an encouraging sign for a company and its management as they question whether to embark on a deal, there is no expectation from the people who are close to the situation that

conagra will try to re-engage with pinnacle. which i'm told is very much focused on remaining independent at this point and it has price expectations, jim. this goes back to the comments i made earlier about the m&a market in general that are far higher than what conagra was even willing to pay. again, it's not clear they engage for a particularly long period of time. the pass may have been made and it has since passed and it's not expected to be revisited in any way. so, you know, these are the kind of stories with eend up doing now. not deals happening, reported by others about conversations that took place. but -- >> so pinnacle is not for -- not for sale or that they -- this talk didn't work? >> this didn't go anywhere. it's not expected -- >> because it should be 60 -- >> well, you end up in the situations with the premium staying in the stock to a certain extent. >> yeah. but this company is very

challenged. conagra is very challenged. this is not a situation, nothing ventured -- no. something ventured here. pinnacle had a major spike. it was at 62, 63. people were hot money because they read the reuters story and figured it was good as gold. >> reuters said -- they didn't say there was a deal coming but the market took it much more positive than they should have and then we're adding color that whatever did occur -- >> is conagra trying to do an acquisition to grow? >> they certainly seem to be interested in pursuing certain acquisitions but again they're committed to being very disciplined i'm told. you know the multiples for these companies that are not growing their top line in any appreciable way. they're still fairly high. >> great reporting. you -- wow. you stuck -- a stake in the heart of that pinnacle. >> i gave it a hawaiian punch. that was from yesterday. >> yes. you had a bird's eye view of it

and gave it a little hawaiian punch. >> may need some bird's-eye peas to put on the swelling. >> so much for that stock. holy cow. >> regional banks are down and that's because of the ten year at 2.17. now to rick santelli. >> very briefly, it was at 2.15. look at the intraday of tens. listen, i was only one off for the prediction on the jobs market. 100,000 off, but one thing i was sure about even before the number came out a weak number we test what has been the low yield close from april. you see it on this april 1st chart, 2.17. we took it out intraday, but before the roller coaster stops i'm not sure where it's going to trade down to in yield. but i do know the close especially on a weekly basis is a prioritized number. and we try at 2.17 and we'll ramifications. look at year to date of some important ten years around the globe. if we look at our tens a couple

of things should jump out at you. we settled at 2.25 last week, so we're down eight basis points, 2.21 yesterday, so we're down four. we settle at 2.44 last year. we're down 27. but look at bunds, they're up eight basis points on the year. look at gilts and the may is getting lower. the gilt at 1.04. and look at the french, they came through elections. we just got lectured from macron with regard to the paris accord. let's see how he does with reforms in his own country. finally, same year to date, the dollar index. we're down in the neighborhood of 5% plus on the year. we're now under that very important 97, 97.05 area. tell you what, watch the dollar

you'll know which way most sovereign yields are going and that relationship looks to be intact at least for the moment. carl, jim, david, back to you. >> all right, rick, thank you. rick santelli in chicago. we'll get "stop trading" with jim in a moment. the dow keeping its cards close to the vest. it's up one point. cdw brought i.t. orchestration to printing, dramatically increasing print security with enterprise printers by hp. which is great, unless you're a corporate spy. unsecured printing makes your network vulnerable. enterprise printers by hp help prevent costly security breaches that can compromise your network and reputation. so i'm stuck spying the old fashioned way. hey. i'm not spying. secure printing by hp. i.t. orchestration by cdw.

time for cramer and "stop trading." >> they laughed at me not unlike the way they laughed at kerry in the gym before i brought the house down. i'm talking about canada goose. said this would be real. they have exceptional revenue growth. predicted 25% growth for 2016 to 2018. canada goose is going higher. ha-ha to those who -- i'm going to grab them from the grave if i have to, that's how i feel so much about sissy spacek versus john travolta. workday, they tried to keep it down. and they have acceleration for their human capital and taking

share -- tremendous share in retail by the way. they got target. they got amazon. they got walmart and the stock was down three. will you give me a break? this was an acceleration and aneel bhusri is kicking butt. workday and canada goose is good and sissy spacek rests her case. >> huh? >> that can of blood coming down. >> i know. >> dripping -- >> we got it. what's on "mad" tonight? >> i have nutanic, and everyone says you have to get exact science. i got it. i will do the call in test right there. >> was it noninvasive? >> it has to do with stool. >> okay. >> it's as good as getting a

colonoscopy? >> it's not as good as that, but i'll do it in front of everyone maybe. >> that would be worse than sissy spacek. >> maybe i'll do it in a more private way. >> jim, we will see you tonight. >> yeah. yeah. maybe we'll have a smellivision. whole new thing. it's a stool test, david. that's what's so great. you don't have to do the colonoscopy. you just said, here. >> take this. >> thanks. thanks. >> no problem. >> i'm used to it. i'm picking up -- i'm picking up after my dog all the time. let my get the plastic bags. i'm sure i have something somewhere. >> jim, see you tonight. "mad money," 6:00 p.m. what a week. the latest ceo backlash against the president's decision on the paris accord and the always outspoken founder of lululemon, chip wilson. back in a minute.

and i'm being told it'll be another 15, maybe 20 minutes, and we will ve you on your way. ♪ runwaysurprising.the runy? what's not surprising? how much money evan saved by switching to geico. i would not wear that lace. hmm, i don't know? fifteen minutes could save you fifteen percent or more.

♪ good friday morning.

welcome come back to "squawk on the street." we have highs across the board, even with bond yields at the lows for the year. watching putin in st. petersburg talking about the u.s. election and gary cohn on our air talking debt ceiling, jobs and the paris accord. >> our road map for the hour begins though with ceos and world leaders sounding off after president trump announced he's pulling the u.s. out of the paris climate accord. we'll get a live report from washington. weaker than expected jobs number for may. analysis straight ahead. and shares of lululemon are surging. we'll hear from the founder and the current ceo as well. first up it was a weaker than expected job number for may have and the unemployment rate fell to the lowest level in 16 years and our steve liesman has more. >> yeah, carl, this disappointing jobs usual in along with the -- number along with the downward revisions, what's going on in the job

market and where the fed goes from here. nonfarm payrolls 138. we were looking for 184 in march and april together, revised down by 66,000 as well. the unemployment rate falling to 4.3%. down a tick. labor force participation rate is down 62.7. average hourly wage, are okay. but if the labor market was tight you'd expect better wages. here's the three month average. you can see it's gone down from 201,000, step to step down to 121,000 now. because of those revisions. here is where the jobs were. education and health, up 47,000. that may explain low wage growth because a lot of jobs were there. leisure and hospitality up by 31. construction. 11,000 thousand. retail continues to lose jobs down by 6,000. government also down, but that was state and local. federal was up by about 8,000 or 9,000. over at the dmo we suspect that most of the slowing reflects

increased difficulty finding qualified workers. companies are now creating jobs faster before they can fill them and labor force growth has declined. jim o'sullivan nailed this number at 140. we expect the fed officials will generally also dismiss the weakness as mainly due to volatility and that's why jim was down at that 140 level. worth remembering, the unemployment rate is below the average for what fed officials believe is the long run rate. many have said that we need 75 or 100,000 job gains a month to keep the unemployment state ready. that's why many economists think that the 138,000 even though it was disappointing is enough for the fed to go in june. we had that big reaction in the bond market. big reaction in the currency market as well. but not very much reaction in the fed funds market which was still pricing in now a 91% chance for a rate hike in june. david? >> wow. 91%. >> 91 despite this. >> yeah. steve, any thoughts in terms of gary cohn and some of things he

had to say about the bond market? i assume you heard the interview. and/or the debt ceiling which people are starting to focus on given that we're talking or so? >> it's amazing how in the foxhole the democrats and the republicans sound exactly the same when it came to the debt ceiling. gary's words were spoken by the obama administration. congress passed them for spending and they have to step inand fund -- step up and fund them. so that's the mantra of the executive branches of either party. >> i think he had a strange answer when it comes to the bond market. it reflects the low outlook on the monetary policy and fiscal policy and if that's true, it actually doesn't paint a very upbeat picture about what this market is expecting. >> no, a good point, sara. i know i told my producers i didn't want this, but if you can put the 210 spread up there. all of steepening of curve from

the 210 from the election is gone. i don't personally believe that a lot -- that the ten year reflects a lot of growth outlook. i think it reflects inflation outlook. i think that's what the bond market is mostly expressing here. when trump came in, there was a reflation trade going on. and gradually that reflation trade has worked its way out of the system and you have a much flatter yield curve. 90 basis points or so. 89 the last i looked, actually. >> even going out to the 30, i think it's 155. getting very flat. interesting, steve. finally we did ask cohn whether or not he'd be interested in the fed chair job. never expect a firm answeren those -- answer on those things but he said he had his dream job already. >> i think gary will be involved in trying to pick the person and i have seen more than once aka dick cheney the guy who heads the committee ends up being the guy in charge. i'm kind of on the andrew ross

sorkin trade when donald trump figures out who he wants in the job, that often the presidents chooses a person in the white house. remember they brought in bernanke in at cea. they try to get you on board the team and then send you over to the fed. he would be the one guy that qualifies. i thought it was interesting to talk to jay powell yesterday, the fed governor. i think he's a possible safe choice for the vice chair, for supervision job. possibly for the fed job, one that would calm markets. but let tell you something, guys. the average month over the past 30 years that a fed chair has been appointed or reappointed, want to know what it is? >> no, what? tell us. >> it's june. >> it's june. now sometimes it's october. sometimes it's a little bit earlier. but the average month is june. >> all right. >> so here we are. >> steve, thank you. by the way to your point, larry summers was also in the white house and he was a favorite of obama to replace bernanke but then of course you had yellen. >> have a good weekend. >> you too steve.

big business and world leaders speaking out after president trump announced he's pulling the u.s. out of the paris climate accord and eamon javers has more on the corporate response. >> good morning. the president yesterday in the rose garden very much painted this decision as being about the economy and protecting the jobs of american workers. here's how he described it yesterday. >> i was elected to represent the citizens of pittsburgh, not paris. i promised i would exit or renegotiate any deal which fails to serve america's interests. the process has begun from day one. but now we're down to business. >> but a lot of american ceos don't see it the same way that the'does including -- the same way that he does. take a look at the tweet from elon musk moments after the president spoke yesterday.

he said, i'm departing the presidential council. leaving paris is not good for america or the world and bob iger, disney's chairman and ceo with the statement saying, protecting our planet and driving the economic growth are critical to our future. and they aren't mutually exclusive. i deeply disagree with the decision to withdraw from the paris agreement and as a matter of principle i have resigned from the advisory council. now so much speculation in terms of the inside debate inside this white house between the sort of globalist faction led by gary cohn who you had on the air, jared kushner and others inside the white house and the sort of nationalist faction represented by steve bannon. steve bannon was sitting in the front row yesterday in the rose garden watching the president make this announcement. jared kushner was not there. there's been some speculation about why he wouldn't have been there. i was told by a source that kushner was working yesterday in the white house at the time of the rose garden ceremony. but he had a long standing meeting that prevented him from

coming out to the rose garden where you typically see all of the top executives here at the white house all lined up and watching the president making the major announcements. i'm told kushner was here, but in a meeting. >> it was also a jewish holiday and he was spotted at synagogue by the daily mail. >> that's right. his wife, ivanka, was home with the kids for the holiday yesterday and that jared was working at the time of the rose garden ceremony yesterday. >> all right, eamon thank you. eamon javers outside the white house. let's get more on the president's ceo climate backlash if we can call it that. let's bring in cnbc contributor, former medtronic ceo, bill george. you have run an international company so from that perspective, try to explain to people, if you were running one of these multinational corporations why this in some ways is something you would be opposed to? why is it a threat if at all to your business? >> because i want to do business

globally and this is going to harm my ability to trade globally. everyone knows they're moving to renewalables and lower -- renewables and lower carbon emissions. i thought jeff imfelt said it best, from now on, industry has to lead and not depend on government. i think that's a highly significant statement. i can tell you in my over 40 years in business, i have never seen a time when ceos were so universally opposed to a sitting president of the united states's decision. i mean they're adamant. lloyd blankfein never did a tweet in his life before and he said this will hurt the u.s. being able to lead globally. and i spoke with the ceo of exxon he's concerned about us not having a seat at the table. and so i'm very concerned that business is no longer going to be able to depend on the government. we want to do business globally. immediately yesterday, two german auto companies said they'd build electric car plants

in china. we hurt ourselves. we did it with the transpacific agreement. we hurt ourselves again in this one. we have done it with nafta and shaking up our european partners and they have already said they wouldn't renegotiate. so the idea that trump is going to renegotiate is off the table. the u.s. has to lead in the world as we have for 70 years. so i'm very eager to see us get back in there. iger's resignation is significant. even the power companies -- >> jamie dimon didn't step off, but -- >> no, he didn't step off, but he's opposed to it. >> yeah. but it's interesting, i mean, we're talking about a white house bill that has been reaching out a great deal to the business community. i mean, i can't even -- >> yeah. >> i can't number how many times at this point we would -- we'll go to the round table in the white house where you see the leaders of business in this country. what was the disconnect here in your opinion in terms of the president and his team obviously not saying, you know what?

we don't agree with you? >> the president was not listening to business, i can tell you the ceos i have talked to, he's not listening to them. not even listening to rex tillerson, secretary of state, who is opposed to this decision. he wasn't there yesterday either. i think he -- i think he's gone a different direction and i think it will hurt the country. you saw it in the job's report. i think the economy peaked back in january and february. you see it in the auto industry, they're pulling back. you saw the carrier decision, now it's decided to close the factory and move everything to mexico. so it is -- unless we regain the leadership quickly it will go away from us. these big global companies know they have to do business globally, so if they can't get the support here, they have to go to china. if they have to go to europe. i don't want that. i want to see us lead globally. so that's why i'm very much opposed. even my friend david gergen said it's shameful. we have to get on top of the issue.

>> why are you so convinced that a foreign buyer wouldn't buy an american good simply because this accord is not part of our policy? has nothing to do with the innovation of the products or the technology or the quality of our workforce. is it really that big of a game changer for a foreign buyer? >> no, i just -- i'm going to have to -- first of all, we want the foreign companies, like the german auto companies to produce in the u.s. we want that. and this is going to push them away a bit. also, it's going to force some big companies like ge going into china and building there and exporting. i think business can go it alone but it doesn't have the support of the government it needs. i think it's pulling away from the tight relationships we have had. we need those close relationships. >> you advised corporate leaders all the time, if you were talking to a ceo that is opposed to this decision to pull out of paris, do you tell them to pull a bob iger and leave the advisory council or like jamie

dimon and stay engaged and voice your opposition? >> i think i'd stay engaged. i think that's more symbolic act, but they're getting a lot of pressure from their customers and their own employees not to participate in this white house. i know a number of ceos have turned down big jobs in the white house and in the cabinet for that reason. so that's my concern. this disconnect. it's one thing to give people an audience, another thing to listen to what they say. so i'm still advising them to work with the government and to try to get these policies changed. i think it's going the wrong way for america. i want to make america great. this not going to make make america great again. it will lessen our ability to be great on the great stage and so we have got to go this way. i'm encouraged with what immelt said, we'll go our own way and win anyway. that's encouraging. >> well, bill, to be continued i'm sure. but thank you. >> yeah. thank you. >> thank you for joining us. we have two bright spots in the retail space today.

starting with lululemon, jumping after the athleisure company reported better comps and revenues and gross margins and they raised their full year profit forecast. the stock is up 13.5%. we talked to the ceo last night. i asked him about the website outage recently. it was off 20 hours. he said ask ibm about that. they host their data and servers on ibm. he said i talked to jenny rometty. we were up 36 hours straight to fix this problem. we're not satisfied, and we're looking at the options. he said no impact on the sales or performance as a result of the outage. there were some questions about that from analysts. as to the current quarter, what worked? well, they made changes from the prior quarter when they blamed the color and the lack of as sortment. he delivered. he didn't blame the macro environment and he said that those changes paid off

immediately and to a greater extent than we played. we know what we needed to do. he says, we were light on color, didn't have enough depth. he also said they made some tweaks to online. i'm proud of how the brand comes to life there. 20% of lulu sales, guys, are on online. we talked about general retail weakness and how they're bucking the trend and whether it was peak athleisure. you see weaker stock performance from under armour. this is how people want to lead their lives. if there's nothing fickle about that, they talk about they lead in bottoms or legging which you know and they're coming out with high-tech bras and hoping to lead in that as well. they have an expansion story that's an opportunity for investors. so the stock is down from last year. jim cramer mentioned there are a lot of shorts in the stock that are getting squeezed this morning. but so far, the outlook from

lulu, according to new york and the analysts back this up, guys, it's pretty strong. >> been quite a wild ride for the stock as you point out. we're talking about where was it, last summer. in the 80s. last august or so. >> still double digit decline over the last year. when they have a bad quarter it's down double digits. we talked to laurent about this and he said it's an emotionally charged stock. this is what we're used to. we're going to continue to move forward. also, outer wear and apparel maker canada goose came out with earnings. first report since going public in march. a smaller than expected loss for the latest quarter, beating top line estimates by a wide margin. double digit sales growth, the stock is up 10% and, guys up more than 50% since the ipo. i talked to the ceo danny reese about this one. he said they're not experiencing the department store weakness. they continue to be a bright spot there. that's in the wholesale trends and the real strength is in direct to consumer which is about 30% of their business.

he's expanding into knitwear away from the jackets which they continue to innovate and it's a seasonal business. but that will be an interesting experiment come springtime. opening stores in chicago and in london. >> yeah. seemed like the other day they were here on the ipo. but the disparity and the performance continues in the sector. when we come back, the dow is up eight points. goldman jan hatzius will join us. the founder of the company, chip wilson, that's all straight ahead. i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay.

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russian president vladimir putin speaking this morning in st. petersburg at a forum alongside several world leaders. it was moderated by nbc's megyn kelly and our geoff cutmore is there and has more. good morning. >> good morning to you, carl. a number of issues brought up by her, not least the paris accord and what's happened with international reaction. president putin of course said he's signed up, but he was relatively gentle on president trump and just said let's wait and see what happens from here. the more critical question i think was around u.s. election meddling, and megyn kelly put the question to him that there was clear evidence that the u.s.

election had been meddled with by russia. let's listen to how he responded to some of those intelligence reports. >> translator: even in those reports there is no specific evidence, no facts. just assumptions, allegations. and conclusions based on the allegations nothing more. you know? if there is something specific, concrete, we could discuss that. >> megyn kelly followed up and put the point that there was a trail back to ip address, perhaps there was some evidence that russian hackers had been involved here. again, though, she draws a similar response from president putin. he wanted to see the evidence. >> translator: what fingerprints? whose prints? what are you talking about? ip addresses they can be

invented. you know? there are very many specialists that can invent or fix it up. >> so carl, what we had here i think was some classic president putin. we did not meddle in the u.s. election process, when asked about nato, nato he said is an arm of u.s. foreign policy and he went on to criticize america over syria and a number of other issues that he considered meddling in russian domestic affairs. so it's been a -- an interesting session here involving the russian president. of course the indian prime minister narendra modi was on the panel. he was drawn into the conversation about meddling, but frankly ducked out, saying i'm a lawyer, i don't think you want me to get involved in the process. so there were some lighter

moments here, but generally it was a focus one again on whether russia has been involved in u.s. domestic politics. back to you, carl. >> eyes of the world are on the room that you're in, geoff. thank you for that. geoff cutmore. quick programming note, sunday night, don't miss megyn kelly's exclusive with russian president vladimir putin. it begins at 7:00 p.m. eastern time on nbc. meanwhile, all three major indices hit intraday highs today. the dow is coming off the record close yesterday. the first since the first day of march. for more, let's bring in the co-ceos of the newly merged janus henderson. congratulations. >> thank you. >> we have been talking about the resurgence of actives versus indexes is this another arrow in the quiver? >> absolutely. i think it's our merger is really about having the active management is valuable to clients and we are committed to it. we have very talented portfolio managers and i think we're seeing evidence this year of

active managers doing well. >> walk us through what that is. why is the environment going in that direction? >> i think what we have seen last year was a very high correlation between stocks. therefore, it was very difficult to get any dispersion, and you saw very much the large companies do very, very well. what we see this year is starting to see a little bit more shift back to dispersion in stocks, volatility in the markets. enabling active managers to show their wares. >> what's the proposition to investors out there who think that indexing is outperform. listen to warren buffett, go with one of those, don't go with one of the active managers who has underperformed year after year and it seems the machines are taking over what the human beings used to do. >> right i think the proposition is value as opposed to cost. i think if you look at what we produce in returns after fees and compare that to what passive produces in returns after fees,

i think over medium and long periods of time we have a good chance to outperform. we have been through a period where low interest rates are sort of like intensive care for companies. in an environment like that, which therefore reduces the relative volatility of the companies driven by fundamental changes it's a harder environment for active managers. you have seen some of that in the numbers. but over time, especially with the normalization of interest rates you should see active managers do much better. don't forget all passive managers do is free ride on the active relative valuation. they don't do any work on relative valuation. they accept relative valuation as their starting point. and so if everybody went that way, all the stock prices would become very disjointed from reality. isn't that a reasonable outcome. it's not going to happen. so there's a great opportunity for active management going forward. it should get better with higher interest rates and we're excited to have better company between us to take advantage of that opportunity. >> they do it as well for a lesser fee amount than is typically offered by the likes of active managers.

do you see further compression in terms of fees and that is one of the key reasons why size ultimately will matter? >> i think that you have seen a lot more fee compression on the passive side than you have on the active side. now, i have been in this business a long time. there's continuous fee pressure. i think that's been good for our clients. that will continue. so i think that pressure is relatively constant. but i don't see it being as some sort of a peak extreme or turning point at this moment. i think it's an extension of a long term and constant pressure. that's good for our clients and we'll continue to react intelligently. >> andrew, what are you seeing in terms of client activity, how much participation is there in this market which notches record after record? >> one of the things we're starting to see europe come back as well. that's an area that last year following the brexit vote, following the concerns over the election profile, that was an area that people were steering

away from. with the french elections out of the way, having macron's victory we have seen appetite to come back to look at european markets. we have continued to see emerging markets being very strong in terms of client interest. partly because the u.s. markets have been so strong and the valuation relative to other markets have meant people are asked -- are seeking to diversity and looking for alternative areas at the moment. >> is the political risk going into may or the german elections less than it was going into brexit or macron/le pen? >> i think definitely. i think people -- the political risk that was factored into the market was very, very high at the beginning of the year. having had the dutch elections and the french elections be far more towards the more traditional parties or in areas that people were more friendly to, people were much more relaxed about that. the uk election is less than a week away and the polls are narrowing over there. there's still political risk out

there, but how much is priced into market had come off. >> people who argue we have seen a high water market in nationalism, you wouldn't necessarily disagree? >> well, i think that's probably correct. you know, we are seeing people recognize that the challenge with that doesn't necessarily lead ultimately to better prospects for the economy. >> something you said about the merger and the return of active management, they're waiting for interest rate normalization and waiting and waiting. do you think that is happening and when? we have another weak jobs report and there's questions if the fed can go another two times this year? when does it come back? >> predicting small rate rises quarter by quarter for the fed is not my business and i'll leave that to others but broadly speaking we're on a path of normalization of interest rates. something around the 3% mark for the ten year in the u.s. i don't know on a quarter by quarter or a month by month basis how we get there but i

don't think it matters that mitch. i think if we get there, i think that's a better environment for active managers and we're excited to participate. >> finally, co-ceos, you don't see that very often. you sat here waiting peacefully for us so that's a good sign. are you confident you can work together or is one going to emerge as one of the sole ceo? >> absolutely. i think to bring together the organizations that we are bringing together with strong histories and henderson in the uk and the european markets and in janus' case in the u.s., there's a lot for us to do. the experience that dick brings to the organization, coupled with hopefully my understanding of the european henderson side, we believe we're getting -- we're going to be more effective and i think we have seen that between the announcement and the close. where a number of the decisions we have made jointly i would argue very strongly that they have been better than the decisions i would have made on my own. >> most of the ceos in this business i couldn't have this relationship with, but ender is a great guy and that makes it

easy. >> gentlemen, thanks. thank you for coming in. >> i can never see david being a co-ceo. >> thank you. he's your co-anchor. >> when we come back, a bright spot in retail. lululemon soars today and the founder of the athletic apparel maker, chip wilson, will be with us when "squawk on the street" comes back. think again. this is the new new york. we are building new airports all across the state. new roads and bridges. new mass transit. new business friendly environment. new lower taxes. and new university partnerships to grow the businesses of tomorrow today. learn more at esd.ny.gov

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lululemon shares surging in morning after reporting results that beat expectations on earnings and revenue. for more on that company and the state of retail overall we are joined by the founder of lululemon and former ceo, chip wilson. chip, welcome back. nice to see you. >> thank you. >> in the past we have had you on the show and you have been highly critical as founder and current shareholder of lululemon of the current management. now they're outperforming with a quarter like this have you changed your view at all? >> i think as you ask that question that's fundamentally the entire problem with the --

with the whole structure. i mean, you're focused in on a quarter. and you know, i'm really a long term shareholder and, you know, i'm deeply invested in the -- you know, in the lululemon brand and the people and the structure. so when you talk about a quarter, i talked about years. and if you look at the last five years, the stock has dropped 100% to the stock market. it's dropped 50% to the athletic clothing market and yet you get excited about a quarter. so i would say that's fundamentally the difference and the problem within the system. i think the real -- the real value in lululemon is really going to come through on the agm that's coming up on june 8th and i think the board is smart and i think if they -- if they really

want to add value they can come out and say what happened in the last five years. what did we learn? what can we do differently in order to add a different type of structure to lululemon management and to the background in order to have lululemon regain its number one position in the marketplace. >> i think the argument from the company would be that it is still the market leader in its current categories in bottoms, it's making a move in bras and that the current momentum has shifted. they've become more profitable. they have managed to increase their margins and when you look at lulu over the past year you want to go longer term versus under armour who you compared it to in the past, they have outperformed. >> yeah. you have a very small context there though and i -- if you look at the entire market as i said it's dropped 50% to the growth in the athletic business that it had.

it has a hell of an opportunity to do much more with what it has and so i'd just suggest that we have different contexts as to what's possible. >> mr. wilson, the lament you make about quarter to quarter focus is certainly one that's shared by many out there and it's one of the rallying cries of private equity, but you were -- you were ceo, right, when this thing went public, weren't you? didn't you take it public? >> correct, actually i didn't. i was not ceo. >> okay. >> i was ceo before -- yeah, i was ceo until a year before. >> so you were not involved in the decision. would you not have chosen to go that route? i asked the question, because you know what you're getting when you make a decision to go public. you're getting what you're describing a focus on the quarter to the quarter numbers. that's the way the world works much to the lament of those out there.

>> it was definitely my decision. i was the largest shareholder, i knew what i was doing and the reasons for it. and that's -- and i think that did i know it was quarter to quarter. i don't know if i knew at that time. i'm a product brand person and i'm not necessarily a business person from that end. i think there's the business of the company and then there's the business of finance and i think these are two very, very different things that most people in the media don't understand. so i'll leave it at that. >> when it comes to product since you're a product guy, what do you see out there that you like in terms of retail? it's a different period really across the board among a number of categories, traffic is down for brick and mortar. i know you're experiencing that yourself with your newer company. what do you think lulu is missing specifically in the market and what's working? >> well, those are things that of course i have multiple ideas. i mean, i think that who i am in

the marketplace is someone -- and the value i add is being five years in the future and of course it would be ego, you know, for me to kind of tell you what that is. but then, you know, i want to be able to give that to lululemon and to be able to have them act on those ideas. so i can't tell you in public. >> so are you still 14% -- you still own 14 of shares outstanding in lulu? >> yeah, that's correct. >> are you planning to hold the shares? i mean, what is your long term play here when it comes to affecting change? >> well, my long term play is to again have the board of directors, you know, analyze, you know, what's happened over the last five years and to figure out, you know, how they can be different and how they can add value. i think if the board can figure out their responsibility in the -- in what i would say

$10 billion in the stock value over the last five years then i think -- i think investors will come rushing in. so i'm going to stay if i see that. >> how much has retail changed since you first -- since you first founded lululemon? i mean this year in particular we have seen a wave of bankruptcies and store closures. it feels like we're at some sort of inflection point. we saw more retail jobs lost in today's jobs report. how different is the environment? >> well, you know, i look at how when i came in at lululemon we -- you know, we invented vertical retailing so we eliminated the middle man of the wholesaler and e-commerce has come in the last six, seven, ten years and eliminated the bricks and mortars. so you know i think what's happening is the industry is finding out what the right combination is between bricks and mortars and e-commerce and trying to figure out what is experiential retailing. what will have a customer

actually walk into the brick and mortar store, if they will at all. as the new millennials are spending on experiences and travel and food and maybe shopping online -- or shopping for clothing and commodity products will be a thing of the past. >> you know, chip, i wanted to ask you about the paris climate accord. it's the story of the day. business backlash towards it. just got a comment from the founder and ceo of under armour, also a comment last night from nike. they both disapprove of the decision to exit the paris climate accord, they're going to go on their own in terms of business when it comes to meeting these environmental standards. would you weigh in? do you think this is a big issue when it comes to retail in america? >> well, i'm trying to figure out donald trump and of course in order to do that i'm listening to the "art of the

deal" from him right now. i'm listening to this in context of how he -- you know, how he operates. and so -- looking at the statistics, you know, china has 30% of the pollution in the world and the u.s. has 10% and so there is so many details involved in an agreement. i wonder if trump is just coming like, yeah, i mean, we're totally into the paris accord, but is china and india going to pay their fair share of it, and if not we'll go our own way. maybe it's -- everything i kind of see about trump seems to be a form of negotiation. and i don't think we're going to really see whether trump has been successful for the u.s. economy or not until four or five years, you know, go by. >> sounds like you're open. chip wilson, thank you. thank you for joining us on lulu retail. >> thank you. >> state of affairs.

he's the founder of course of lululemon. david? >> yeah, a large shareholder still. thank you. when we come back we'll have more on today's jobs report. goldman sachs's chief economist jan hatzius will join us. ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected. that's the power of and.

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joining us this morning goldman sachs chief economist jan hatzius is here. >> good to be here. >> the number itself, does the trend tell us anything with this additional data point? >> i think a little bit. the trend does seem to have slowed somewhat. but my interpretation is we're still above what's needed to keep it stable. month to month anything can happen. i think the trend for the unemployment rate is probably still gradually down. >> any concerns about bls versus adp at least over the last couple of months? >> i mean, adp has been quite high this year. it hasn't just been the last couple of months but generally in 2017 i would put more weight on bls than i would on the adp. but, you know, they are of course different sort of series. but bls is ultimately the go to source. >> why the wait for an acceleration in wages, given all the anecdotal evidence we have

about labor shortages? >> i think in the most recent report there's a calendar effect, the timing of the survey week was something we had sort of looked at before this report. so i wouldn't put too much weight on that. in addition to the usual month to month noise in the numbers. but generally it's a little softer recently that's true. i think the trend is still up. but it's up by a little less. to us that has also suggested that maybe the fed makes, you know, a slightly -- you know, slight change to the sort of timing for the interest rate moves. we do expect the hike at the june meeting. that's very likely. we think 90%, but we did push our hike from september -- the final hike of the year from september into december on the back of this. >> on the back of this report? >> it's never just one issue. that was already something that had become somewhat more likely given the discussion in the minutes of our balance sheet

adjustment. we think the new balance sheet in september and then hike -- >> but you had pulled forward? >> yeah, it's just a timing change. but at the margin if you think that balance sheet adjustment is going to be a relatively smooth kind -- i think it is think it will be relatively smooth and what the markets have done since the fed started talking about it suggests that but that also means that september move the balance sheet adjustment is a slightly smaller tightening step. >> put this employment report in the context of some of the other economic data we're getting right now, which suggests rebound from a very weak first quarter. it's not exactly all that great. auto sales, for instance, continuing to decline. the flattening yield curve. david rosenberg says those are big warning signals that the cycle is turning. >> i'm more upbeat. i think that we're still growing at a pace that is above what we need to keep the unemployment rate stable and quarter to

quarter, there are moves in that. we are probably on trend in the 2% or maybe a little more than 2% range and i think that's still -- i think it's pretty good at 4.3% unemployment rate and 8.4% rate. i don't see that. although i do agree that auto sales have a further downside. >> a lot of people are paying attention to the difference on what the message is from the bond market versus the stock market, which continues to widen as we go below the year's low on the ten-year yield this morning. how do you read what the bond market is showing, in the yield and the ten-year? >> there's a strong view in the bond market that inflation is below the fence target and will stay below the fence target. there's been, i think, a big impact from the weak couple of inflation readings we've seen in april, in march and april. so, you know i do think that the bond market is very focused on the inflation numbers. of course, low inflation isn't

bad for stocks. that would be my splexplanationr the discontent. >> 2.16, did you think we would see that again when we start this had year? ten-year yield is 2.16. >> it's surprising. i wouldn't have predicted that at the start of the year. see inflation move gradually higher over time. >> .5% wage increase year over year? >> when you take a broader view, it's probably 3%. think of the eci, employment costs for the first quarter, which was stronger. there are also a couple of other indicators, compensation per hour. i wouldn't put all the weight on the average earning numbers. >> policy? have policy expectations retraced the way the ten-year

has? >> i think they have retraced and what we like to look at is baskets of stocks that are particularly sensitive to one type of policy or another. it does seem that most of. >> a lot to talk about today and in days to come. jan hatziuk. let's send it over to john fo are. t for a look at what's coming up on squawk alley. john? >> particularly in tech not happy about this decision on the paris climate accord. also, joining us, ceo and meg tirrell is at a research conference where we'll get an

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check out broadcom the chip ma maker, company also gave upbeat current outlook driven by, quote, solid growth. shares are trading at a fresh all-time high. remember, avgo and broadcom did merge in 2016. stock now up more than 40% so far this year. with that, i'll send it back downtown for the start of "squawk alley." guys, happy friday. >> same to you, morgan. thank you. it is 11:00 am at u.n. headquarters in new york, on wall street and "squawk alley" is live. ♪