♪ live from new york where business never sleeps, this is "squawk box. ♪ >> good morning, everybody welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with michelle caruso-cabrera. joe and andrew are off today we do have a guest host, steve grasso, a cnbc market analyst. >> good morning. >> good morning. >> ready to go >> of course i've been ready since 2:00 in the morning. got up early >> as we all have. >> let's look at the markets you'll see the futures are mixed at this hour relatively flat. s&p 500, those futures down by 2 points the dow and nasdaq are flat this comes after a day of record closes evens the major averages continue to hit new highs,

yesterday was a stand-out day. it was the best day for the dow since may 19th the best day for the s&p 500 since may 24th and the best day for the nasdaq since december 11th of last year. things are looking cautious at the open overnight in asia, the nikkei finished up by 0.8%. the hang seng and shanghai were weaker hang seng down by 0.3% in europe, some of the early trading that'salready taken place, you can see right now it looks like there are some modest advances for many major indices. the dax and cac are up the ftse is flat crude oil prices were under pressure yesterday crude settled at the lowest level since november of last year it was down 54 cents to 44.20. this morning it's down another 8 cents. testing that $44 level at $44.12 >> you got the beach on your

mind >> a little bit. >> okacean >> i was thinking ahead to stocks i have not had coffee yet. >> following a developing story in barclays. uk authorities filed criminal charges again the bank and four top executives under undisclosed payments to qatari fund raisers in 2008 after a five-year investigation into the bank's dealings with the country at the height of the financial crisis the stock not doing a whole lot there. the head of the bank of england says now is not the time to raise interest rates speak together london financial community this morning, mark carney warned of weak wage growth and a potential hit to income as britain begins talks to leave the eu. carney says businesses may need

to soon activate contingency plans. the pound, 1.27. off the lows we saw post-brexit. right now not budging that much. >> lloyd blankfein speaking to jim cramer last night on "mad money. he said the economy is looking pretty good he said he is not completely on board with president trump's agenda but tax cuts, infrastructure spending and deregulation would be good for the economy. he also weighed in on the roll back of banking regulation and the volcker rule >> the overall need to regulate activity is good for us. the biggest risk of goldman sachs during the financial cray sis is that our counterparties may not be good for us we were worried about our counterparties to the extent you have certain things like stress tests, higher capital rules, certificate ain e tests, that's fine but if you put layers and

layers, you bog down the system. >> blankfein defended ben bernanke and janet yellen. he said they may get the blame for shallow recovery but credit for avoiding a deeper recession. >> i like how he showed up in no jacket take off the jacket go with the shirt sleeves. >> you can't get to pick and choose when you want res regulation or more regulation. it sounds politically correct when he wants to advocate for social justices. >> that's probably the message that's gotten lost in terms of finance over the last decade because of what's happened with the financial crisis fewer people want to go into finance, fewer people think it's a a good place the evil mask that got put on the banks. >> same thing with healthcare. but with finance, the whole run after the election, one-third was from goldman sachs you do need these financials to

participate. they have lagged incredibly so >> when he talks about social mission, finance is the wd-40 of the economy. you need it. >> make sure people -- it sounds self-serving for a ceo to say this, but it's true. >> he goes back to god's work. >> difficult to resonate with middle america when you talk about finance. they think about high paid ceos. >> part of what is lost is this idea of that's how you can buy a home because you can get a loan for your home, get your kids to college. it does take and lift people up when it's used properly. >> sure. let's talk about some washington news. president trump meeting with tech ceos in the white house yesterday. eamon javers has more of the headlines on that. good morning >> good morning. it was an all-star cast of technology characters at the white house yesterday including apple's tim cook, eric schmit of

alphabet and google. a whole host of top executive there's with a market value of 3$3.5 trillion. the president joking with them that that's about the amount of market capitalization he generated for the stock market since he took office a little tease thereing there fe president of the united states ultimately the president made comments to the tech ceos on immigration. listen to this sound bite. it's a more conciliatory tone on immigration than we've heard from the presidential candidate who was famous for building that wall and a harsh tone on immigrati immigration. >> when it comes to what we're here for today, american technology, we're working very di diligently with everybody, including congress, on immigration. so that you can get the people you want in your companies it's been a tremendous problem that you've had over the past long period of time.

>> we'll see if that indicates a change in direction for the white house or if that was part of his welcoming tone to the tech ceos. they were there officially to advice the government on how to improve i.t. systems, government services to systems more broadly. we'll see what ideas came out of that session as well as that was happening, swirming around the white house were the rumors that sean spicer might depart as press secretary. i talked to the white house about that they gave us a statement we have sought input from many people as we look to expand our communications operation as he did in the beginning, sean spice ser managing the communications and press office. technically those twoare two different offices. the suggestion i'm getting is that spicer might be pulled from the podium but kicked upstairs to a more management role in terms of communications,

replacing mireplac ing mike dutke who resigned a few weeks ago. then also possibly bringing in somebody from outside, and that somebody is tbd. of course today there is no briefing at all scheduled at the white house. yesterday they didn't do it on camera this white house has been trying to dial back i briefits briefin schedule with reporters. one of which is they have not been happy with the results of what they're getting >> they may be dialing back on some briefings, but president trump is not stopping tweeting he just tweeted, karen handel for congress she will fight for lower tacks, great healthcare, strong security, a worker who will never give up. vote today that points to this election people are watching closely. >> the president has been tweet being that campaign for 24, 48 hours now.

we will see whether he can mobilize the base with those tweets they want to put pressure -- spawn spicer said yesterday the president from the white house can exert his influence in some of these companies we'll see if that has an impact. >> thanks a lot. paul ryan will give a speech on taxes this afternoon. he will wash against wa warn agg down tax reform and urge washington to complete reforms before the end of the year then he will join the "power lunch" crew at 1:30 p.m. he doesn't appear to endorse the controversial border adjustment tax, of which he was one of the original architects. >> keeps saying it's dead on arrival. >> he makes the case for evening the playing field and using all the words that were used around the border adjustment tax. there was a time when this kind of event would have powered the markets higher finally they get focused on tax

reform >> when you look at the market at all-time highs, it's difficult to see what will power the market with any type of rhetoric you need to get something passed we've seen this too many times before the fact we're hanging in here, tremendously bullish for the overall market this is almost the cherry on top. right now the market has been rallying for a host of reasons, earnings, pro growth policies, less regulation is the number one reason why the market has been rallying. if we get these new things, market blows through a lot of resistance levels to the upside. >> i wonder if part of the run looks like there may be an end game on healthcare reform. win or lose, the thing is finally going to come to an end some way, that was a big hurdle you had to get out of the way. regardless of what happens it. if they can put that to bed, they can move on to tax reform >> once you get a budget, you

can move on to tax reform. >> yep >> at least you have the money now when you start talking about it, especially now when you talk about the environment or the paris accord, how much money that will free up, now you can start allocating some funds going forward, even though we're talking about years out, you need to have these scored in a more favorabiliorgavavorable fan >> or scored at all. until you know what's happening with health reform, you don't know what's happening with those revenues >> you may end up changing those years for budgeting from 10 to 20 we'll talk to steve steve abomn later in the show about that. joining us is rick steinberg and mark lucinni from janney monte dei pascgomery scott good to have you here. mr. lucinni, same question i had

for mr. grasso paul ryan making a key speech about tax reform if there's anything market participants want wanted, it's tax reform. is this all baked into the cake? >> i think it has the chance to pull the market higher we've seen the congress cry wolf a couple times i think the market would otherwise be a bit benign in terms of the reaction to the prospects of ryan speaking on tax reform it seems the sequencing of thing that need to take place are finally in the front and center. as a consequence, plus the market having cleared through earnings season, it's desperate for new news, new catalyst to take prices higher, which i think the market wants to go is higher i don't think it's going to necessarily tack on 5% from here, but the fact they're talking about it in the leg legitimacy thereof ignites market participants interests. that is faded and has turned

from not only disbelief but perhaps also to pessimism. >> is this the catalyst that the market needs to move higher? >> i think it's one of them. the other catalyst that we saw last week was that the bond market participants have basically gotten on the liquidity train by keeping the ten-year under 2.20. the world is awash in liquidity. we underestimated politics politics don't matter now. to sooef's point if we get some foe ward motion in finally rhetoric turn nothing realiai turning into reality, we could get the boost. if we see some of those, we'll focus on 2018 earnings the rotation before the feeding frenzy yesterday in tech looked good to us, because money was going back into value, banks we think there needs to be some

churning here unless we get good news out of washington >> why do you think tech came back >> a couple reasons. one, the greed factor is there two, money flows into etfs are forcing money into big names three, algos, and the fourth is maybe a bit of window dressing for pcortfolio managers and mutual funds who don't own enough of the top 5 or names that are driving the market including these tech names so they show on their books. >> do you know anybody who could put money to work during that downturn >> a lot of guys put money to work when you think about what we're doing, you have to place a bet on what's proven already to work or what you think is going to work, which is the laggards, the financials, energy >> and dividends >> exactly dividends. we had an options exploration,

russell re-weight and quarter m. you have to, if you're a money manager, show you are owning these technology firms which are done great xlk, up 5% basically the xlf up 6%. so if you want to survive as a fund, you have to window dress a bit for quarter end, but then decide how you will do on the back half of the year. are you going to get another 10% of that tech probably not >> mark what did you do during that selloff in technology did you use it as an opportunity or are you looking back and thinking shoot, we should have bought some of that? >> no, i didn't think we should have bought some of that it's already 23% of the s&p 500 from the sector weighted perspective. it's almost one-fourth of the market at large. so you either have a market waite there as a big participation. the other side of it, we had been nibbling into the rotation we thought would occur eventually if we saw better economic momentum reassert

itself that's the rotation into finlts whi financials that took place we got a nice bid in june. as the rotation occurred and as a korconsequence the financials outperformed the market. the question is to steve's point is whether it persists or not into the second half deep enough that it rewards you for having stayed long or nibbled into the trade a bit. >> and -- >> we think it's likely to occur. >> you're positive >> absolutely. >> rich and mark joining us. steve is sticking around. when we come back, putting your money to work in your mattress target investing in casper and selling its product in its stores casper's ceo will join us. "squawk box" will be right back.

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website. joining us now is phillip krimm the ceo of casper and we also have an investor in casper phillip, part of the novelty of casper is that this was an online thing you didn't have to touch it or see it it would show up, pop up at your doorst doorstep what happened with this target investment since the beginning we thought about offering our product online and offline we thought that was a key part of the customer journey. we focussed on the retail experience of buying a mattress, which is generally a terrible experience so we thought this was a key ingredient for us to accelerate. >> do people want to lay on the mattress before it shows up?

>> people today are traversing online and offline seamlessly. we also viewed ourselfs as creating one of the great consumer brands. to do that you have to traverse online and offline our product is something that makes a huge impact on peoples lives. so we love the idea of having products they can touch and feel >> i bought a casper mattress two, three weeks ago >> very nice >> couldn't use it for three days because it comes folded up in a box weighs so much i couldn't get it up the stairs. the u.p.s. guy couldn't help me, so i had to wait for my brother to show up and help me one of the appeals in retrospect, if i had gone to a store, they would have taken away the old one and put up the new one for me >> one thing that we're very focused on is listening to customer feedback. we heard that in the early days. we offer white glove delivery.

so we can set is up in your home >> i didn't see that >> new york you can offer it we launched it in new york, chicago. by the end of the year we'll be nationwide with that we're looking to improve the customer experience. >> what is your end game here? what do you want to do do you want to be the biggest mattress company a roll up? what is casper >> we think we're the next great consumer brand we want to have products in the maer k marketplace to help people sleep better and feel better >> how do y you build out that brand? when i search for a mattress, it's an assault on senses. then there's the add-ones. where do you start and where do you stop is it just the mattress? how much of the peripheral do you start to get involved with >> we think the key to building

that brand over the long-term is to take category defining products to market as long as we put best in class products out there in a variety of different product categories, we'll continue to build the brand in the way we wanted to do it we'll do a lot of that direct will you casper.com but also target as well and we'll continue to launch new products that help improve the sleep ecosystem. >> you've been an investor for a long period of time. you were part of the series "a" funding, this is now part of the series "c" funding you put additional money in. why? >> casper is still a young company. only three years old it's a massive market. the significant opportunity ahead of them gets us excited. they've done a great job with early product introductions, building a huge brand. it's still a massive market and we're early days in the innovation >> it's incredibly competitive you log in, you google mattress, all kinds of things come up. how do you differentiate i'm not convinced that casper is

any better than any other mattress >> so you sleep on a casper -- >> it's a long story i don't. but go ahead >> fortunately for us hundreds of thousands of people sleep on their casper, love their product and experience >> aren't you worried about barriers being so low? >> there's a couple things the brand that they developed is significant. it's built around the product. the product has a lot of innovation we think it's done a great job of winning on the product side there's the customer experience. you feel like there's salt on the wound. it's a terrible offline experience today so casper has been trying to reinvent that customer experience and make it focused and delivered on a great value proposition, which is what we know over a long time is what wins in the market >> how much of this is getting the word out is that why you're teaming up with celebrities trying to get them to help you get the word out >> definitely a part of it

building awareness is the biggest barrier now. we have to continue to let people knows there a better, smarter way to buy a mattress and other sleep products you need that's why we're excited about the distribution opportunity with target and why we love working with celebrities who help tell our story. >> all those celebrity endor endorseme endorsements, mattresses are like liquor, it's all marketing. i still don't see how you're different than 1-800-mattress. >> it has to do with the product innovation we have a team of about 30 people in san francisco working on products, constantly making them better. we were the number one rated mattress on consumer reports and reiterating on the improvement of the mattress from feedback from customers we make a substantial investment on the r&d side. all the products are engineered around helping you sleep better, cooler and longer. we spend a ton of time on them

does it feel like a race to zero you could get a mattress for 10,000, $15,000. people are bragging about mattresses that are 20,000 the ultra rich now everybody is bragging about how cheap and affordable their mattress is. does it feel like you're bargaining with time that's running out? >> we view this as a product category where people do research it's a highly considered purchase category. a lot of times cost is part of the equation of getting a great quality sleep. it's not an area where people are shopping on price alone. we don't view this as a commodity product where everyone has the same offering. >> there's talk you will go public sooner rather than later? >> we have no thoughts on kind of the immediate timing. but we think we are set up to do well in the public markets we're a young company, but we're going after big markets. we have markets that have not seen a lot of change in a long time we think we can continue to accelerate what we're doing.

>> phillip, tony, thank you both for being here >> thank you before we head to break, look at crude oil prices, they dropped sharply in the last half hour, hitting the lowest level since november 14. wti lower by 2%. a decline of 80 cents. $43.40 if you want it delivered in july. coming up, judy marks joins us on the president's job push and insensitives f s incentivc apprenticeships. and a look at yesterday's winners and losers are you ok? what happened? dad kinda walked into my swing. huh? don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital. there goes the airfair.

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♪ good morning welcome back to "squawk box. let's look at the u.s. equity futures at this hour things are flat, but you have to remember we were looking at major gains for the market yesterday. both the dow and s&p 500 at new highs. the nasdaq saw the best day it has seen back to november of last year. this morning things are flat we'll see where things go as we get towards the opening bell crude oil prices dropping again in the last half hour on oversupply concerns. now we're sitting at the lowest

level for crude oil since november 14th. wti down 76 cents. we have broken that $44 level that had been holding for quite awhile 43.44 is where wti is now. on today's agenda on wall street adobe systems and fedex both report after the bell today. address for da as for data, first quarter current accoun deficit will be released this morning and look for commentary from the fed with eric rosengren and dallas fed president robert kaplan, both scheduled so speak. evans yesterday cited the softness of inflation data as a reason for caution he will be joining steve liesman on "squawk box" at 10:40 a.m. eastern time looking forward to that. president trump talking up

apprenticeships recently in the heartland. it's a subject the president knows a bit about and it's an idea that some big companies are put flag practice. joining us from the select usa investment summit in d.c. is judy marks, the ceo of siemens usa. good to have you here. >> good morning. glad to be here. >> semens is a german company. familiar with apprenticeships which are extremely common in germany. more than half of all graduates or people entering the work force end up in apprenticeships there. is it translatable to the united states where our labor markets are significantly different? >> our labor markets are not that different we need high-tech skills we need manufacturing technicians. we need skills across the country right now. we have transferred this incredible dual program. we started in 2010 in our charlotte, north carolina energy hub where we build gas and steam turbines and generators.

we had a successful program going in four states we're doubling down. this year we'll announce the program in another four states >> if i'm a high school senior, what is the program? >> the program is pretty straightforward. as you leave high school, you join us as an apprentice you start working for us in our facilities, you get come pen said while working for us. then you get your associates degree at a local community college where we worked with the community college on the curriculum at the end of four years, you have no debt because we pay for your tuition and books, you had a job and you're guaranteed employment with us you get an associates degree and also have what we call a certificate that allows you to be able to be a journeyman, a welder, a manufacturing technician in other parts of the country. >> sounds great. explain to me something, if you're already doing it, why should the federal government as

president trump is encouraging now spend -- talking about a couple hundred million dollars to do what you're already doing it. >> we're doing it, several large companies in industry are doing it we had a roundtable at the white house to discuss this with other ceos to bring this to scale we need the help of the schools, parents and the federal government to create an ecosystem where this is viewed as positive, as a career for students, and generally creating the ability to fill all the job openings we have this takes more than a high school education now the advanced manufacturing needs create the need for a digital economy and for people to have digital skills they need to get past high school to do that. >> in light of the president's push on apprenticeships, there's a lot of writing about what's happening in germany for

decades. while the program is lauded, there's a lot of criticisms that the students end up in a tight track, when they get to the mid career range, they can't switch careers, there's not as much fluidity in the system as there is in the united states. and ultimately they end up making less money overtime than they would have otherwise. >> we have not seen that in germany. i can show you multiple examples where people have started as apprentices and ended up as chief financial officers it's a well accepted track so far the apprentices in the u.s. have made great contributions. >> another focus of the administration, of the country has been the mood for manufacturing in the united states how things are going here. how would describe the economy for manufacturing in the united states >> manufacturing is positive we're seeing demand signals across the country we're a manufacturer ourselves,

we have 60 plants in the united states and we're expanding we have a groundbreaking ceremony next week for a diagnostics facility, this week, we have a circuit breaker facility, and we announced a state-of-the-art manufacturing facility in a joint venture and investing 1$130 million in the south to make blades for gas turbines as a manufacturer, we're seeing demand grow and manufacturing clients are now investing more in software and in 3-d manufacturing as well. >> is it just the demand picture that brought more investment here from your company is it a situation where you see the environment changing here? >> the environment is positive for us which is why we can choose where we invest. we operate in over 190 countries in the world this is our single biggest market we want speed to market. that's why we manufacture here

we also want access to the digital economy and to the software skills. we have 7500 software engineers in the u.s. in our 50,000 person work force it all comes together in the u.s. >> judy, we talked about a skills gap you mentioned 3-d manufacturing. how do you see the participants over the years changing? how do you see the skill set changing what is the differences? >> the biggest is the digital advanced manufacturing floor if you go on any of our manufacturing floors today or our largest customers, you will see almost as many computers and control systems as you will tools and test equipment and lathes and presses so the advanced manufacturing floor of today looks nothing like it did years ago. because of that we've had the skills gap what's why we're working with community colleges we think the answer is local we don't think there's one answer for the whole nation the

way germany is doing it. we think in the u.s. we implement it locally, that's why we're doing it in four states now and moving to eight states shortly. >> judy, thank you very much good luck with that. >> thank you when we return, the ceo of akamai technologies will join us on set he was at the tech summit yesterday with the president and then a must-see interview with treasury secretary steve nuchmnuchin. and then amazon's bid to take over olwhe foods. stay tuned, you're watching "squawk box" on cnbc hi. hi. you guys going to the company picnic this weekend? picnics are delightful. oh, wish we could. but we're stuck here catching up on claims. but we just compared historical claims to coverages. but we have those new audits. my natural language api can help us score those by noon. great. see you guys there.

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welcome back to "squawk box. right now it's time for the executive edge goldman sachs ceo lloyd blankfein speaking to jim cramer on "mad money" last night. he explained his new found love for twitter. >> lloyd, you're tweeting. what is that all about >> you know, i agree, it's not for an institutional firm like us, it's not that usual. but you asked me about the financial crisis before. in the financial crisis there was no -- nobody knew anything about what goldman sachs did

the value we create, what we do in the communities also the important in raising capital for people who need capital, helping to create business, hire people, the circle of employing people i said if this ever happens again, i won't allow there to be a vacuum about what we're like i'm going to communicate to the world more of what we do which we've done institutionally, but also there's a personal element to it, too. though the financial crisis receded a while ago, we never picked up on it. >> he's not exactly somebody who is on twitter all the time he has tweeted six times since joining twitter on june 1st or since first tweeting on june 1st. he was out there for a while as a voyeur we'll have more of that interview throughout the morning. >> he makes so many tongue and cheek comments, but the way he delivers them are so dry, you can't tell he's joking >> which is dangerous on

twitter. you can't hear it. >> right because in print it's tough. all the context is missing >> how many fights have you had because of a text that went bad. tmi. president trump taking a shot at dnc during a meeting last night with technology executives happened as tom leighton was explaining what his company does >> we protect government websites from attackers. the majority of the government websites including white house.gov. >> the dnc could have used you >> it's an important job a lot of folks out there are trying to do bad things. >> you will hear more from akamai's ceo tom leighton coming up. taylor swift making a huge return to streaming services four of her five albums are back on the billboard 500 the pop star made her music

available on streaming services last friday. she pulled her catalog from all streaming services back in 2014. >> i miss her when she's not streaming. it's a notable absence when she's not there. . coming up, some of the biggest names in media day live from cannes. coming up, the ceo of hulu, and then we'll be joined by bob pittman and ryan seacrest. as we head to break a quick check of what's happening in european markets now they're positive across the board. but not by much. when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world.

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welcome back the center of the media universe is in cannes, france this week julia boorstin is there and has a special guest. julia? >> thank you very much we're joined by the ceo of hulu, mike hopkins co-owned by disney, 21st century, time warner and nbc universal. thanks for being here. >> thanks for having me back about. >> a month and a half ago you

launched your streaming live television service how many subscribers do you have so far. >> we launched it on a handful of devices last month. we're updating applications put push together over the summer and we got a really fun ad campaign coming. it's safe to say right now we're happy where we are we've got a lot of demand and it's a lot of fun right now. >> you choose television bundle launched about a month before you. you've got directv which launched its dreaming over the top bundle last fall are you worried the stage is way too saturated? >> there's definitely a lot of competition. over the next three to five years you'll see a couple things happen i think the first is the experiences will evolve. and i think that's mostly where this is going to be won or lost is the actual experience the user has and then content you know, i think one of the advantages we have is that as part of your $39.99 package you also get our 3500 film and television titles that's in our subscription on-demand service when you put all these things together, the content and the experience, i think that's how

we'll win. >> you guys have been investing from originals, and making a lot of headlines but how important is it to invest in originals when you have netflix spending $6 million on content you have amazon doubling down on content. are you worried that jeff bezos is going to put your originals out of business? >> original programming i think for us and for them and others is really important. it is the one thing that you can have on your service that is exclusive to you, and it's the only thing -- it's really the only thing you have that is fully exclusive. for us i think it's really prn to continue to invest there. you know we've had a big hit this year with the handmaid's tale we have several more big high profile shows coming and we're confident that the path we're on is the right one >> can you give us a sense of how much you're spending on content? if netflix is spending $6 billion, how much are you spending >> we're spending an awful lot we're investing heavily. we're going to have about 15 high profile original programs this year. we'll probably take that up to 20 next year and so we're spending a considerable amount.

>> beyond netflix and amazon there is a lot of competition in the original space facebook is obviously here in cannes and they're starting to spend money on original content which will start to roll out how does the threat of facebook affect your business >> it's interesting. you're seeing a lot of people experiment online right now with the content. i think we're in this phase with advertising and content of experimentation and trying out new things i think ultimately, you have to keep an eye on what's the consumer want and are they consuming the content on these platforms. clearly there's an opportunity to provide consumers with content wherever they are and on whatever platform they're on >> michelle, you want to jump in here >> i've always felt bad for the ceo of hulu regardless of who it is, because you seem to have so many masters comcast owns 30% disney owns 30%. fox owns 30% i mean, different agendas. different ideas about the future how do you manage all of these owners >> well, you know, that's a great question you know, when i joined the company about 3 1/2 years ago, it was just on the heels of a

major investment that the companies made in the company and you know i have to say, ever since i joined the companies are all on the same page with what we're doing. they're aligned and we're really just in the execution phase. and so it's really not a challenge for me >> but, all those masters -- i'm sorry -- >> go ahead, julia >> not only do you have all those masters, you have to make sure, i would guess, that you don't cannibalize their core business which is a traditional tv bundle. how do you -- how do you manage not destroying the sort of their bread and butter >> well you know i think for us we have two products we've got our subscription on-demand product and this new service. both support that ecosystem when you step back and think about it we're the only place where you have an ad supported on-demand offering and our live service is really in support of the traditional tv business that all of our owners have >> but to julia's point did you need to see all those ceos evolve to that position because there was a time when julia's correct, they were precisely worried about that and they were trying to keep

content from you, because of those fears? >> you know, we are a healthy buyer of content across all the different regimes today. we're investing in past seasons of shows, films, originals, so we really haven't seen that become the case. >> so what's your biggest competitor then right now? is it amazon is it hulu -- i mean, is it traditional tv or is it netflix >> you know, it's interesting question we have competitors everywhere we look. you know, on the subscription on demand side you can name those ket tr fors and now on the traditional mvpd side we've got traditional, the four other otc providers. we're here at an advertising conference so we sell quite a bit of advertising so we have a lot of competition from the media sector, as well. and so, you know, for us what we really focus on is our experience and our product and trying to make the best service to our customers as possible >> and how are you positioning yourself in terms of these questions of brand safety? i would say google and facebook have been dealing with these, fake news and measurements are you trying to scale some ad

dollars over from youtube and google by saying you're the safe alternative? >> since the founding of hulu back in 2008 we've been a safe harbor for advertisers from the beginning. i think you know, our legacy is in premium content we've added to that with our acquisitions and originals, and i think you're seeing a flight to safety now. by advertisers we've got a lot of demand for our products and i think that's a good place for us to be. >> we hope you'll come back and tell us exactly how much demand and terms of number of subscribers you have for your new tv service >> sounds good >> mike hopkins ceo of hulu, thanks so much for joining us. guys back over to you. >> julia, thank you very much. our thanks to mike hopkins as well steve very quickly just looking at the markets, once again closing at highs, s&p 500 and the dow what do you do here? >> if you are in this market i think you have to ride it until it really fails. and if you're looking to put new money to work just go in 25% of it but see if you want to place those bets on the winners, on tech, or if you want to try and gamble a little bit and put some money on financials.

i think you're better off going into laggards, financial, maybe energy is a little too soon. definitely financials. >> that's what you're doing right now? >> yes >> any that you like because you pointed out goldman sachs was responsible for so much of the run-up we've seen. >> i think what you have to do is mute a lot ofs risk so the xlf is a better way to put abinary risk you can do the same with ibb bet on the etf i think that's a better investment >> steve thanks so much for being with us. >> thank you for having me back. >> great to see you. >> when we return a live interview with treasury secretary steve mnuchin. he will weigh in on tax reform the debt ceiling banking reform, and much more. that's all coming up at 7:30 a.m. eastern time. and a programming note for you house speaker paul ryan giving a major speech on tax reform he will be on power lunch right after that speech at 1:30 p.m. kestn da ma sure you don't miss it. [vo] when it comes to investing, looking from a fresh perspective can make all the difference.

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can tax reform happen by the end of the year? house speaker paul ryan seems to think so we will ask treasury secretary steve mnuchin about the latest timetable. breaking up dodd-frank and the gop agenda that is straight ahead markets look to build on yesterday's gains but with little data investors turn their focus to fed speak and big earnings a rundown of what you need to watch is just minutes away and the world's refugee crisis growing as conflicts in the middle east and africa continue we will get an update from the ceo of the international rescue committee david miliband the second hour of "squawk box" begins right now live from the beating heart of business, new york city, this is "squawk box."

good morning and a warm welcome back to "squawk box" here on cnbc live from the nasdaq marketsite in times square i'm wilfred frost along with becky quick and michelle caruso-cabrera coming off a big day of gains around 1.4% for the nasdaq, 0.8 the s&p, 0.7% for the dow. we were higher by about 0.2% about an hour ago but we just dipd a little bit. the s&p down now a fraction in the red, the nasdaq still holding on to just tleep points off gains. making headlines chicago fed president charles evans says it may be a good idea for the central bank to wait until the end of the year before considering any further interest rate moves evans who is a voting member of the fomc points to softening inflation data as a key reason we'll hear more when he speaks to steve liesman live at 10:40 eastern time crude oil is touching fresh seven-month lows this morning. oversupply concerns continue to weigh on the market with news of

increased libyan production. the latest to worsen those concerns wti crude touched its lowest since november november 14th in this morning's trade. oil down 1.7%. this morning check in on shares of home builder leonard. the company reported quarterly profits, 13 cents above estimates from the forecast. shares up 0.1% off this news the head of the bank of england says now is not the time to raise interest rates speaking to london's financial community this morning mark carney warned of weak wage growth and potential hit to incomes as britain begins talks to leave the eu >> before long we will all begin to find out the extent to which brexit is a gentle stroll along a smooth path towards the land of cake and consumption. but whatever happens, monetary policy will be set to return inflation to the target while

supporting as best it can the necessary adjustments in the economy. >> what in the world -- >> assumption -- >> the cake jibe which i've now picked up on was a veiled attack on bourse johnson who lost year said if we leave the european union we can have our cake and eat it >> oh, i thought it was going to be let them eat cake >> yes >> well, i think it's a veiled slight to boris johnson. either way the pound slipping a third of a percent off the back of this that offsetting around about the same size move that we got yet, not the pound, but barclays last week, after the bank of england meeting where we didn't get a rate hike but three of eight members did vote for a hike and so that was a little bit more hawkish than people were expected today more dovish. carney says trending on how brexit talks progress business may soon need to activityate their contingency plan >> david davis heads to spain today to meet with members of the government the uk brexit secretary began formal negotiations with the eu

yesterday in what's being called on early concession the uk agreed to brussels' demand on the sequencing of talks. meaning that trade negotiations will have to wait until other key issues are resolved. a develop storingry on barclays uk authority have filed criminal charges against the bank and four former executives over undisclosed payments to qatari investors during the financial crisis the sfo says barclays and four executives conspired to commit fraud. two individuals including former barclays chief were also charged with the provision of unlawful financial insistence barclays released a statement saying it's considering his position in relation to the developments down 0.3% >> do i remember back then when i remember reading about this when it first came to light that this could almost have been looked at as commissions for having brought the business, a finder's fee, that kind of thing. >> exactly right that's the charge against the company and four of the executives which is based on

over the years they paid a few hundred millions of pounds to another entity in qatar, which they didn't reveal at the time, so i.e., this is sort of sweetener to certain members of the qatari government or royal family in order for them to invest the four executives being charged for that and the company being charged. the other one in terms of unlawful financial assistance was based on the fact that did they also loan to the qatari government $2 billion of the investment, of course, is a big big no-no to make a loan to yourself >> right >> which would suggest what they're doing because of course it sort of covers up bank's actual capital ratio this is pretty serious the level of the charges >> fraud against individuals absolutely >> so i think this has been a five-year investigation. everyone's been well aware of it and also the fact that this decision from the sfo is pepding. the fact that the share price is not reacting is not so much of a surprise if you've got criminal charges delivered against these individuals that's a huge development and john barley i

have to say is seen as someone who was a sort of safe hand and quite liked. he wasn't one of the people seen as a court of casino ceo operator that led to the crisis. of course barclays not one of the banks in the bailout -- >> linked all the way up to him. >> exactly so they'll have to face i think in early july they'll have to plead to the magistrates court based on these individuals but the bank share price kind of not reacting much. and we'll see what the bank decides to do. because perhaps, we have no idea yet. perhaps the bank will come out and decide to plead guilty, because they might then get away with just a fine criminal charges. we don't know. the bank said they're deciding what to do clearly the focus would be on the likes of mr. barley moving forward if you get criminal charges brought against you it's very significant for them. >> all right meantime back here in the united states some of the biggest names in tech nothing meeting with president trump and senior advisers jared kushner yesterday. our next guest was in the room and made some headlines as people were watching tom layton is the ceo of alchemi technologies

the premise for this entire meeting is that the government and many of the branches are far behind when it comes to being up to date in the technology and that they could really use some help with those things what did you hear? >> that's exactly right. the administration is looking for help from tech to help modernize government i.t and make the services be better and easier to use for the citizens, and to help make it all be secure. >> where are we in that process? or do you have a good idea you're already doing some work with white house.gov and some other places >> yes, we do provide security services for most of the government's major websites, help keep them from being dossed or data being stolen >> dossed? >> denial of service where the bad guy just floods the website or the application with traffic, it crashes, and you can't conduct business >> and in terms of what yo think potentially kind of percolated, may have gotten started yesterday, were there conversations around the room that you had, okay, here are

some places -- >> yeah, i think so. i think there's a lot of room for tech to help i think the tech community really does want to help and i think there's a lot of progress that can be made. the administration seems very serious about doing that >> how is it that it works because i don't understand we've got divisions of the government that use -- i'm convinced that president obama didn't like that i'm convinced that president bush didn't like that. yet here we are and they're still using floppy discs what is it about the procurement process of the government that gets us to this point? because i have no doubt they would like to improve it i have no doubt you would like to help them and yet it doesn't happen. why? >> it's hard it has to do with procurement. it has to do with risk management the willingness to take risk has to do with regulations and certifications that are quite extensive makes it very hard to change they're different across various departments. makes it hard for a lot of companies to do business with the government has to do with education and training so a lot of these areas were discussed yesterday.

>> do bureaucrats sometimes fight it because it means that the head count would go down >> change is always hard for a lot of reasons and, yeah it means you've got to educate the head count you have so they can adapt to the new capabilities and in some cases, you know, if you're going to be saving money, that means you'll be making changes sometimes with people's jobs or with contractors and that's a scary thing and so it is hard to make change >> the effect of this going to be tangible during this administration in terms of actual effects on gdp do you think in terms of getting the government acting quicker in a more efficient way, or is this something that will kick the can down the road? >> no i think you can make a difference in a very short period of time you know, the long range effect i think the estimate says $1 trillion to be saved here. more efficient practices and of course make government be a lot better for the citizens. and to make it be a lot more secure >> tom, it was not just a meeting for the government to ask for help it was also a chance for you and other ceos to kind of get your

concerns heard and one of the issues that was discussed was immigration. many technology ceos have pushed the point that h 1 b visas are very important so they can get qualified people for the jobs that they need filled. it was something that the president was not -- did not have a very warm reception for when he was running for office but he did seem to have a gentler tone towards this issue yesterday. what was your tone >> i think that's the sense we received as well it is very important i think for america and for businesses to get the very best talent to work for american companies and there was a sense i think that that may be possible with, you know, the proposal >> part of the populist trend in the country, though, has been that wait a second, if you paid more for this, for these positions, you'd be able to find qualified people here in the united states. is that not the case >> you know you want the very best people, and part of that is on a global basis. and part of that is also helping to train, you know, more folks in the u.s and something we do at akamai is

we have special training programs also with a focus on diversity with vets, with women, with minorities, to train them so they can take technical jobs here >> did any of the ceos bring up the president's decision to pull out of the paris climate agreement? >> no that wasn't a central point of the discussion yesterday. it really was focused on how do we make government i.t. be more effective, how do we make government infrastructure be more secure. >> having tax reform >> no again that wasn't a discussion really yesterday. it was pretty focused on efficiency, you know, making services perform better. and security it was pretty focused day. >> let's focus on the cybersecurity aspect of that how secure should we feel about our government agencies, and our government documents that are out there in these agencies? >> we got a long way to go there are a lot of very well-funded, very intelligent motivated adversaries, and so i would say, you know, there's a

lot of work to be done, and make our infrastructure be more secure and that's an area where akamai is making very large investments and growing business very rapidly to help secure websites and web infrastructure from very determined adversaries >> tom, thank you for your time today. >> thank you coming up, david miliband of the international rescue committee on national refugee day and of course, geopolitics and then a first on cnbc interview with treasury secretary steven mnuchin that's at 7:30 a.m. eastern time plus oil slipping this morning to levels not seen since last november we'll talk crude prices in just a bit. stay tuned you're watching "squawk box" on cnbc

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which, of course, is above the $88.10 a share in cash that's being offered. so obviously people already making a play on it. could be higher deal >> indeed. switching focus over 65 million people are displaced from their homes due to conflicts around the globe according to a new u.n. report. that's a new record. our next guest recently visited one of those refugee hot spots in south sudan where a quarter of the country's population is on the run from violent civil war. let's welcome david miliband, international rescue committee president and ceo, who formally served as british foreign secretary. david, thanks for joining us good morning to you. >> great to be here. >> this u.n. global trends report the record number 65, from 6 million people displaced globally how much of an increase is that relative to last year? and why are we saying -- >> it's a small increase compared to last year. about 300,000 or 400,000 more than last year it's a very big increase on four years ago when the number was 50 million. >> mm-hmm. >> about 65 million includes 25

million people who are refugees. that means they've crossed the border in their own home state into a neighboring state the country you mentioned south sudan a million people have gone into uganda in the last year and then the remaining figure, the 40 million, are displaced within their own countries and those are people i visited, too. because they really lost everything they've been driven from their homes. some of them have lost family members. and the causes are pretty deep they are political failure they are regional proxies playing games in other countries. they are climate change, which is driving part of the conflict over resources and they're also a weak international system we're living at a time when global institutions have rarely been weaker compared to the big issues that are being faced. >> so a big factor of political instability in the individual countries, where there's displacement, what more would you like to see from countries like the united states, to help? >> i think two or three obvious

things look there are people who are having their food rations cut at the moment for lack of funding for the world food program so in the uganda when i was there instead of 12 kilograms a month of sorghum, they get 6 kilograms a month for a family so there's a simple funding point. secondly, it's really insane that an issue like education gets hardly any funding at all less than 2% of global humanitarian fundi ining goes t education. across the middle east you've got syrian kids who have never had an education that's asking for trouble frankly. and thirdly you obviously need to invest in the peacekeeping and peacemaking upstream to try and staunch the flow >> are you optimistic that will happen >> no, obviously the u.s. having last september the previous administration got a 30% increase from other countries in the amount of money for humanitarian funding and on the basis of saying the u.s. will maintain its funding the trump administration is proposing a 30% cut in u.s. contribution to global international humanitarian and other foreign policy efforts

obviously the danger is that's a domino effect that hits harder to people who are dependent on international aid, literally to survive. >> david, we want to switch focus. you mentioned how global political institutions are weaker, so of course in light of that, brexit negotiations began yesterday. do you think that theresa may and her weakened government, following the uk election, can end up striking a decent deal for the uk in the 20 months remaining? >> i think one very significant thing's happened as a result of the general election two weeks ago, which is that this terrible phrase which theresa may was uttering, no deal is better than a bad deal, has been really thrown out of the water. the incentives for the uk now, and the relationship with europe is all about getting some kind of deal. my own review is we're going to make limited progress in the next 18 months and there's going to be a long transition. actually from a business point of view that may not be a bad thing. the safe harbor of a long transition may actually smooth this very dangerous process for business and obviously there

thereof for the british people as well. >> the uk election didn't go the way the british people expected, one of the surprises was jeremy corbyn doing far better than many expected. when you ran for the leadership of the labor party yourself you wanted to take the party in a more centrist position jeremy corbyn very much representing the opposite of that although you didn't quite face each other. is this a wake-up call for all political elites in the uk, whether they're from the conservative party or the labor party? >> we are now three for three. i didn't predict brexit. i didn't predict president trump. i didn't predict the election result that came so you know, who listens to the so-called experts anymore? i think that we're living in an age of extraordinary polarization not just economic inequality but polarization in culture, and a whole range of other factors i think that's being reflected in politics. and the fact that people voted for a much further to the left version of labor in politics, more akin to a bernie sanders politics in this country, says something important, and obviously for people who are of

my stripe more like central left rather than left of center we've got a job to do that people on the center left develop impactful progressive ideas that compete and show how they can make a difference to countries >> george osbourne said of theresa may she's a dead woman walking. how long do you think she's got left in power? >> i think the conservative party is not to have a general election any time soon so i think they have a well honed instinct for survival. so i don't think they're going to be wielding the knife too soon >> to the uninitiated in british politics, david cameron stepped down when he lost. i don't understand why theresa may still has a job, since she blew it so bad in this last election >> i think it's all to do with the incentives within the party. the conservative party a year ago after the brexit referendum, which david cameron called, the knives were out for him and he decided to go. now, the situation after a general election is that the party wants to stay in power so she's staying. i think there's a deeper thing going on here though the brits, look, we are the

pragmatic ones we're meant to be the ones who really have a commonsense approach, don't listen to radicals the conservative party has taken two reckless gambles reckless gamble number one was to have the brexit referendum. number two was the general election, which wasn't needed. but i think people are going to be looking for a bit of stability, frankly >> just very quick point on the uk still, of course, president trump clashed with london mayor sadiq khan, someone you know fairly well. at the moment still on the cards is a state visit from president trump later this year. what sort of reception do you think he would get in the uk if that went ahead? >> i think this is all about respect. it's about respect for a democratic process that has elected the mayor of london who happens to be popular. it's about respect for people who are going through trauma i mean london, which is a city so close to my heart, i live in new york, i run an international ngo from here, but when i see scenes from places you and i will know those places well, this is about whether or not not just the u.s. stands with the uk

in word, but in deed, and in heart. and i think that's what people are looking for. respect for the way in which the country works. respect for the extraordinary achievements of london which frankly is an amazing city >> david, thank you very much for joining us pleasure to see you as always. david miliband ceo of the international rescue committee when we return, treasury secretary steven mnuchin will join us live from the select usa investment summit ahead of his opening remarks there. that first on cnbc interview that's straight ahead. check out the futures. yesterday, both the s&p 500 and the dow finishing at new highs once again strongest day we've seen for the markets in quite awhile. in fact for the nasdaq it was the best day sinceall the way back to november right now things are relatively flat ahead of the open dow futures are down by about 14 points stick around "squawk box"ilbeig bk. wl rhtac

roy blankfein speaking to jim cramer last night on "mad money" said the economy is looking pretty good in his words. blankfein said he isn't completely on board with president trump's agenda, the tax cuts and deregulation would be good for the economy. he also weighed in on the rollback of banking regulation and the volcker rule >> the overall need to regulate

activity, the biggest risk of goldman sachs during the financial crisis is that our counter parties might not be good for us. we knew who we were and we were worried about our counterparts the extent that you have certain things like stress tests, higher capital rules, certain kind of leverage tests that make sense, it's fine. but if you put layers and laters and belts and suspenders and another belt and another suspender you bog down the system and don't get to accomplish your social purpose >> blankfein defended ben bernanke and janet yellen. he said they may get the blame for a shallow recovery but get credit for avoiding a deeper recession. when we return, the usa investment summit to hear from treasury secretary steven mnuchin on the economy, rolling back dodd-frank and much more. and later crude sitting at its lowest level since november. we'll find out, "squawk box" back in a couple of minutes.

welcome back, everybody. it has been about two months since the trump administration released its initial list of tax reform proposals for more on where this effort

stands we are joined right now byu.s. treasury secretary steven mnuchin he joins us from the select usa investment summit taking place just outside of washington, d.c. and mr. secretary thank you for your time this morning >> good morning, it's great to be here with you >> it's great to see you i want to start in sort of a roundabout way i know we're going to talk about tax reform and all of those issues that are there. but if you don't mind, i'd like to start with tax receipts, because just about a month ago the administration told congress that tax receipts this year are running a little behind what had been expected. meaning that we could run out of money sooner than expected obviously the debt ceiling, a lot of other things, come to that conclusion. can you give us an update on where the u.s. tax receipts stand? >> they're a little bit lower than we expected which is not unnatural especially in anticipation of tax reform there's certain individuals and businesses that are pushing off taxes to later in the year but nothing that we're all concerned about. >> that's what i wanted to get

at because we have had ceos who told us on the set they are holding off on spending plans because they're waiting to see what happens with tax reform they'd rather know what they're getting into before they actually do that is that what you think is happening? kind of a holdoff as people wait to see what happens with tax reform >> i think it's less of a management on holding off on investments, and it's a little bit more some companies do have flexibility in how they manage taxes within the year. >> where do we stand on the tax reform process and should we be calling this tax reform at this point or tax cuts because we've gotten mixed messages from some congressional leaders that we've spoken to here >> i think it's both it's massive tax reform. that comes along with tax cuts and this is my number one focus. critical to economic growth. as i've talked about continuously, our economic plan is a combination of tax reform, regulatory relief, and trade last week we were pleased to deliver our report on regulatory

reform, and we're moving forward very quickly on tax reform and expect to get it done this year >> i guess i asked for the semantics on that just because we've been hearing more and more frequently, including from senator perdue who was on set with us yesterday, that when it comes to a border adjustment tax that's dead on arrival when it gets to the senate that they would rather just see rates taken down across the board, lower rates, and then that's really the focus that they think they can get passed at least in the first go-round >> well the focus is lower rates. but i would say, it comes with that is reform which is broadening the base making sure that we take out lots of special interest deductions and simplifying the tax code and i say on the business side the biggest change we've talked about is the need to move to a territorial system it makes no sense. we have one of the highest tax rates. we tax on worldwide income we have a concept of deferral. we want to make sure companies bring back that money onshore to

reinvest in american equipment and american jobs. >> let's go back to tax receipts for a moment i'm just wondering if you have a date, a rough date that you think we may run out of money, a time by which you think the debt ceiling needs to be lifted >> well, we continuously update our estimate you know, i've said i want to make sure for the markets that people understand that we are fine through the beginning of september. having said that, i've urged congress to act before they leave. i think it's critical that we send a message to the world that the u.s. debt is the most important part of our credit and that we're focused on it and i'd encourage them to act quickly. but if they don't, we have plans to fund the government and that that shouldn't create concerns through september. >> nick mulvaney from the administration has advocated moving that debt limit ceiling as a way of kind of getting more of what they want when it comes to budget constraints, issues along those lines.

i realize that your first message is you'd like to see this get passed sooner rather than later but i thought i heard you say to congress that there may be times when that debt ceiling could be used. was i right in hearing that? or is that a different message >> no, a different message the question that i've got during my testimony is on a government shutdown, and not to confuse the debt limit with spending so congress has the right to control spending if they need to shut down the government for spending reasons, that's one thing. but the debt limit is about things that we've already spent, and we have to pay for >> house speaker paul ryan makes big speech on taxes today and tax reform have you spoken with him about what's in there? are you privy to that? he says in the comments that we've seen that he wants to get it done this year. is that still possible and are you confident that will happen >> absolutely. the speaker myself, the senate leadership, we are all 100% committed to getting it done

this year. it's critical to the economy with unique opportunity to do this it's been 30 years we have to fix the system. and our teams are meeting daily. we are meeting weekly. and we couldn't be more focused on getting this done >> have you consulted with him about that speaker or has he talked to you about what he's going to put in that speech? there's no records to a border adjustment tax is that because of you >> again, we've been meeting weekly we speak constantly. we fundamentally agree on what the principles are and working hard to get the detail ironed out. >> mr. secretary i wanted to ask you about the time frames for regulatory relief following your white paper that you've already mentioned released last week i understand, of course, that lots of that, perhaps even a majority of that could be done through regulation without the need to pass laws through congress however that does rely on many appointments and posts still being made posts being filled which hasn't been done yet. what is the time frame for some of that deregulation you

outlined last week >> well, rhett me first just comment on the post. i clearly hear about this and just want to completely dispel the myth here. so there's basically 26 positions in treasury that we need to fill i think we've announced 16 of those positions. we have another five of those positions that are going throughout background chex that need to be cleared and will then be released. and there's three or four positions that quite frankly we don't think we need to fill that are overlap in government. and just unnecessary and we don't. so we have virtually the entire team either picked or already in the process. and as i said before we have an unbelievable career staff at treasury so we have no shortage of resources, both within the political appointments, as well as in the career staff >> there's also 19 of 22 key regulatory leadership positions turning over, over the next six months have you got people ready to

fill those posts i come back to the first point of the question, when can some of these deregulation actually be carried out >> again, let me just first comment we're very focused on those posts. we've announced some of them we have a lot of people already in the process there and even without filling those posts we're already working on regulatory reform. so before the report came out i've been working at the fsoc with the other regulators. we have a lot of things we're working on in the process. one of them as i've talked about before is trying to fix the volcker rule there's a lot of consistency and that needs to be done. and we're busy working on this regulatory relief every day. we're also working with the house and the senate on trying to understand what the priorities are for legislative changes, and we expect to see the senate now move forward with legislative changes, as well >> and mr. secretary, with regards to the mesh european unions outlined in the white paper what do you say to people who criticize it for saying it

will benefit banks' shareholders more than the economy? >> again, we have a lot of people who have been focused on this we've reached out to literally hundreds of people not just bankers, unity groups, think tanks, regulators. we're focused on unlocking the regulatory system. we believe in proper regulation. we're going to make sure that banks are not too big to fail. that they're properly supervised but we're fixing issues to literally unlock billions, if not trillions in new liquidity to make small or medium sized business loans in this country >> mr. secretary, president trump criticized amazon and jeff bezos while he was on the campaign trial now with this news at amazon wants to buy whole foods there's been cries from the left primarily that amazon is too powerful and too big a business can you see any reason why this administration would want to step in to that deal >> well, again, it's not for us to comment on the deal one way

or another but i will comment that jeff bezos was at the tech council yesterday. we appreciate his involvement. he has a lot of really good ideas for the administration and you know, we had an amazing day yesterday with tech leaders showing us and helping us how we can move government into the next century whether it's cybersecurity, whether it's updating our aged infrastructure we've underinvested in technology for too long. we have too much duplication there's a lot of money we can save for taxpayers >> secretary mnuchin, when i spoke with you a few months ago, you had brought us this idea again that you were considering pretty closely the idea of trying to come up with 50-year or even 100-year treasury bonds. that that would be something that would be a great way for the government to lock in low interest rates while they're here in the last 18 months we've seen four increases at the fed. that's about 100 basis points over the last 18 months which adds up to about an extra 200 billion dollars that we are spending to just pay off the interest on our debt

have we gotten any closer on potentially coming to reality with either 50 year or 100 year bonds? >> yeah, we're studying, we've been working with the treasury borrowing committee. we're taking input for investors, and it's something we have very seriously under consideration. >> mr. secretary, we heard last week from chair yellen about potential shrinkage of the fed balance sheet going forward. what's your view on the likely effect of when that starts to happen and the including on issues like loan growth, will it suppress that because liquidity will be removed from the system and borrowing costs likely to rise >> well, let me just comment that that's obviously a fed decision and something that they do independently of us i have had conversations with the chair on what they're trying to do, and we understand that. and we think it's the right thing for them to get out of their large portfolio. it was -- it was something that they did in a unique period of time, and obviously it has to be rehearsed.

>> secretary mnuchin, we want to thank you very much for your time today we do appreciate seeing you. >> thank you very much and i just comment these aren't sunglasses my glasses turn colors automatically. >> i have a pair myself. >> i thought oh, he's in a bright place >> we get it thank you, secretary mnuchin >> thank you >> whether or not they had filled position the it shows the tension between what is the idea of conservative government, right? they don't want to fill all those positions. and from the outside, oh, look how behind they are. but maybe they're not at all maybe it's just the way it's supposed to be >> the reason i bring it up is every single bank's analyst assessment of that white treasury paper last week was very positive for bank stock prices if it's acted on. and yes, most of them point out that around about two-thirds of the proposals are regulatory changes as opposed to law changes. and that on the surface you would be encouraged by however most of these bank

analysts say look we're really encouraged but we're not sure when it will be delivered on because there's so many posts that need to be filled >> during this campaign we had steve munchage on when he was raising money and over and over again, the other side said look how small their team is, they're not raising nearly as much money, and he said, actually, we're running a leaner, and meaner machine, and we're going to be more efficient and he clearly believes he can do that at treasury as well. >> correct >> disthe positions to fill. they've announced 16 they have five being investigated by the fbi for background checks. three to four frankly we don't need to fill >> those are the positions within treasury. >> yes >> upcoming there are 19 of 22 informed regulatory posts -- >> i'm not disputing that. just saying they have a view of government that is smaller constantly runs up against this tension and this criticism among the press that they're behind. when, in fact, they believe that they are >> the regulatory posts are the key ones and those people have to step down from first and then new appointments come. so those have to be filled the question is, are they

already outlining people to fill them or is it still going to be a big delay six months on, twelve months on which i think is indisputable, because we haven't seen regulatory changes yet -- >> maybe it's because of the banking but with the cre, they've been rolling back regulation -- >> sure. >> continuously. i mean that is absolutely been happening. it's been happening at the congressional level rolled back all kinds of things that happened under the obama administration that weren't properly vetted based on rules and the way the law was written. >> i think it's also important to mention that for bank stock prices that irrelevant of the new administration we get the stress tests on thursday, and next week, and if as most analysts predict that all the banks get through those this time, it will show how the pendulum of regulation already started to come back but there's no real changes to the stress test this year. but all the analysts feel better prepared and i think that's one of the reasons we've seen bank share price pick up coming into this because analysts are pretty positive on their ability to pass on thursday and next week

and if they do that that's not because of the new administration it's just because banks are better prepared for this kind of thing either way. >> another big event today politically house speaker paul ryan's going to give a speech on taxes this afternoon he's going to warn against watering down tax reform, urge washington to complete permanent reform before the end of the year after the speech, speaker ryan is going to join us on the power lunch crew 1:30 p.m. eastern time >> still to come here on "squawk box," a quick check on the markets as we go to break. which is i little bit higher still. jason furman out with an op-ed in today's "wall street journal. he suggests abolishing the debt limit, the reason behind that mnacono evhis reti tste uchin's interview just out

among the stories front and center one of today's most widely watched earnings reports comes after the closing bell this afternoon fedex expected to post fiscal fourth quarter engs of $3.88 per share on revenue of $15.6 billion. stock is up about 13.5% so far this year. likely be asked on a conference call as well about this story in the journal that says u.p.s. is going to raise shipping costs at christmastime and are they going to match widely watched decision going to

come down from market index provider msci later today. we'll be finding out whether they will include chinese domestic stocks in its widely followed emerging markets index. china makes up more than 60% of the value of emerging markets but msci is mulling the very strict capital controls and other factors unique to the chinese market that make it very difficult to invest for foreigners, and whether or not it would put investors in that particular index at risk shares of lennar are jumping this morning lennar reported earnings of 91 cents per share bitting estimates by 13 cents. lennar sold more homes at higher prices during the quarter and saw a double bing it increase in new orders still to come, oil prices falling this morning on concerns of u.s. output growth which continues to persist we'll talk prices and where they could head after this short break and later ryan seacrest joins us along with i-heart media ceo bob pittman.

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alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. crude hitting a seven-month low yesterday and this morning worries about u.s. output growth persisting joining us now is partner at again capital and a cnbc contributor. hi, john >> good morning, michelle. >> looking at oil at $43 why is it falling so much this week >> supply, supply, supply. we just can't get out of our own way. opec can't get out of its own way. the only country doing anything about the situation is saudi arabia, and they're just not doing enough either.

got a report yesterday from an independent tracking firm that show that even there, production rose in april. so, it's just not working for them >> so, how far does the price have to fall before u.s. domestic producers, redundant, slow down production because there was a time when everybody oh, if oil is below $50 it's not profitable. but they've gotten much smarter. they've gotten better on the technology curve and now a lot of the wells in this country are profitable at a lower price. so they don't have quite the same level of disincentives to stop pumping correct? >> that's correct. they've really driven costs down we are nearing the point where it's going to be a challenge for them, as well. if you break $40 a barrel. but also, there's been a lot of hedging that went on when oil prices got their heads back above $50 recently the banks have been working aggressively with these companies to sort of shore them up in times like this. and for times like this. and that does nothing but assure that the oil keeps flowing >> in other words they have hedged that they will get paid

50 bucks, even as it falls to $43 or $40 >> exactly right so they could care less where it goes they're locked and loaded and they're going to keep pumping it out. and as opec has cut back their output and cut back their shipments to asia, guess who's come knocking at the shale players' door? that is china. our exports to china have risen decently i'm not going to say it's a huge number but on a percentage basis it's big. canada, as well. so has brazil. owe specific in the process of potentially ceding market share, which could do a lot of damage to them for sometime to come >> john, are you increasingly more worried this week compared to say two weeks ago about the oil prices because the data now is much more on actual supplies being higher than expected whereas a couple of weeks ago it was just inventories were a bit higher than people thought, stocks were a bit higher >> that's a good point, wilf actually yes the situation particularly in what's referred to as the atlantic basin or the west coast of africa, we've

gotten chock a block pull of crude almost all of a sudden it was building. but now you're seeing tanker tracker data show this you're showing unsold cargos from nigeria again and that was the killer the last time prices really crashed so, yes, so not only do we have a struggle with production and an ineffectual opec non-opec production regime but you have this overhang again that is not clearing and so that is what this market is reacting to and now we're in the process of the market playing chicken with opec and non-opec in that they're going to have to react again in a significant way to get the price to stabilize and go back up >> john, looking for potential catalyst to rebound, does the issues that qatar is facing at the moment within the middle east suggest that things could bounce if supply -- i know they're primarily lng, not oil but if supply of lng from qatar is restricted? >> i have to say, wilf, to show you the strength of this bear market what's going on in the middle east right now, normally

would have sent shivers up the spines of oil traders. you had iran doing naval exercise war game type practice with china in the strait of hormuz over the weekend. you've seen attacks by u.s. on syria, planes, you've seen all kinds of back and forth and the rhetoric between iran and saudi arabia couldn't be any more tense, and enfuego the geopolitical it can't even inflate prices >> does that mean it doesn't go to 40 or you think it goes to 40 >> i think it most definitely go to 40. probably looking atomer 30s at this point now >> okay, thanks. >> thank you guys. >> when we come back time to abolish the debt limit former chair of the white house council of economic advisers jason furman will join us to talk about his latest op-ed in "the wall street journal" today and then back to cannes and hear from ryan seacrest he will be joined by i-heart media ceo bob pittman. check out the futures.

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on the trump agenda. the ticking debt bomb and the time line for tax reform >> massive tax reform that comes along with tax cuts. and this is my number one focus. >> big money, big media. we'll take you live to the industry's biggest festival in france media guru bob pitman and ryan seacrest going to join us first here on cnbc >> plus, corporate love at first sight. the ceo of whole foods compares the tie-up with amazon to tinder we'll tell you why as the final hour of "squawk box" begins right now. limp from the most powerful city in the world, new york. this is "squawk box. good morning, everybody. welcome back to "squawk box" here on cnbc we're live from the marx in times square i'm becky quick along with wilfred frost, and michelle caruso-cabrera joe and andrew are off today we've been watching the futures and of course, after another day of records for both the dow and

the s&p 500 we're looking at market that's relatively calm right now. looks like things are essentially flat but the s&p futures are down by about 2 1/2. the dow futures down by about 12 the nasdaq up by just over 5 >> among today's top stories oil prices are under pressure. crude touching seven-month lows this morning oversupply concerns are weighing on the market. wti is lower now by more than $1 that's a decline of more than 2.5% 43.05 we just had john kill duff on and he thinks we're going to high 30s parexelle has agreed to be bought by pamplona capital for $88.10 in cash the dole is worth a total of $5 billion. parexel had been pressured to consider a sale. can you see it's trading above that price expectations there's going to be more to come whole foods ceo john mackey loves amazon

we're not exaggerating the e-commerce giant announced that it would buy the grocery chain for $13.7 billion. according to a transcript of a company town hall meeting mackey spoke out about the deal saying it was love at first sight because a little over six weeks after we met on this blind date we're officially engaged he also said we can't consummate the marriage until we're actually officially hooked and this is not a tinder relationship so, full disclosure, john mackey endorsed my book very similar political views we had dinner once as part of that whole process and i have no doubt that this is -- he is a guy who feels nothing, this much, everything is this much. and i have no doubt that this is the way he talks about it. >> you're in, you're all in. >> we're going to hear a lot more about this. that's an interesting stock to watch, too since that deal was announced and what people are anticipating and seeing we are going to talk a little bit more about this later in the show in the meantime let's get to

politics right now we spoke to treasury secretary steven mnuchin about tax reform and the time line for that here's what he had to say. >> it's massive tax reform that comes along with tax cuts and this is my number one focus. critical to economic growth. as i've talked about continuously our economic plan is a combination of tax reform, regulatory relief, and trade last week we were pleased to deliver our report on regulatory reform, and we're moving forward very quickly on tax reform and expect to get it done this year. >> we should mention house speaker paul ryan is going to be giving a speech on taxes this afternoon. he will warn against watering down reform and urge washington to complete permanent records before the end of the year programming note, after the speech speaker ryan's going to be on power lunch at 1:30 p.m. eastern and michelle you pushed him a little bit treasury secretary mnuchin about what he thought we might be hearing from paul ryan today. >> yeah, and he didn't reveal a lot. only that he was very committed to getting it done this year

which -- >> keep hearing tax reform and maybe once they get past health care reform they can begin the process for real >> we also spoke to the treasury secretary about the ticking debt bomb >> i've urged congress to act before they leave. asked if we send a message to the world that the u.s. debt is the most important part of our credit, and that we're focused on it, and i'd encourage them to act quickly but if they don't, we have plans to fund the government and that that shouldn't create concerns through september >> our nest guest wrote an op-ed in "the wall street journal" about why they think it's time to alebosch the debt limit joining us now jason furman and row hit kumar, gentlemen, good morning to you both. >> good morning. jason i'll start with you. if we did hit the debt limit and failed to increase it would that do serious long-term damage to the united states? >> absolutely.

president reagan and president obama used similar words which was catastrophic would either be a default on our debt or a default on our payments and obligation either one of those would be a terrible self-inflicted wound. one we should never come close to >> rohit even with the current change of rules and course of action, is it likely that congress wouldn't actually incountries the limit? i mean at the moment they've only really used it as a threat. >> yeah. i mean, even in the sort of the height of the negotiations, when debt limit was seriously in peril, no one was -- no sort of serious leader was actually talking about de235u89ing on the debt in fact, always went out of their way, both senator mcconnell, and speaker boehner at the time went out of their way to say look, we are not going to default on our debt we think we need to rein in

spending of course, that was not a view universally shared but they were very clear that default was not actually on the table. >> despite that, jason, you both think that it is worth just sorting this out, reforming the process once and for all and removing this issue from ever coming up again >> yes you know we used to have debt limit brinksmanship about once a decade now we have it about every other year each time it takes a toll on confidence it takes an impact on markets, and i don't think we get any benefit out of it. countries around the world don't have the debt limit. i think no other country does. we should be serious about our debt we should be dealing with our debt but we shouldn't use the threat of default as a mechanism to force us to do it. once you passed a tax or spending bill you have to live with the consequences in terms of the debt. you can't get a do over. >> would there be a risk on the other side that the government would be able to just spend freely

>> sort of the constraints on spending freely are the sort of current political constraints. the vote that has to be taken each time a spending bill or a tax bill is considered and you're seeing now in the current environment every time there's a bill, whether it's a spending bill or a tax bill, there are concerns about the effect on the deficit and the effect on the national debt. and so you know, i agree with jason that the debt limit no longer serves the purpose that people think it does which is to somehow constrain the debt but it does create this existential threat to the economy that we have to deal with on a periodic, irregular, and frankly unpredictable basis and for that reason i certainly feel like it's outlived its usefulness as a sort of debt limiter and that has to be dealt with in some other more rational form. >> you know, i've never been convinced that if the u.s. was late by a couple of days on its t-bills that it would actually be as catastrophic as both president reagan and president obama have written about

i mean we had bill gross on one day one of the biggest buyers of debt in the world, bond fund, and when we were as close as we were, jason, you recall those days, one t-bill was pricing what, 0.25 or something? i mean, if we didn't pay a t-bill for a couple of days, what would all the pension funds of the world do? would they sell off the 10-year? >> you know, i'd much rather not try the experiment of the united states not paying its debt >> oh, neither would i but really, would it be so catastrophic we borrow on awful lot in global markets i really don't think the idea that it's okay that the united states doesn't pay its debt is one that we should -- >> i'm talking more about the actual dynamics of the market. there's not much else to buy with the yield that's out there. right? if you run a bond fund, and if you ran one, would you actually sell off -- i mean there's not

enough german debt out there if you want high quality debt right? if you're looking -- it's just, maybe the united states is lucky right now because of the dynamics of the bond market -- >> yeah, i mean, this strike me as sort of a -- i understand where you're coming from but this is sort of the argument that the land and the land of the blind, the one-eyed man shall be king. i think we should aspire to better than that >> i don't disagree i'm just not convinced that it would be the drama that everybody makes it out to be. >> jason, what's your latest view in terms of the time frame of the economic agenda of the trump presidency what do you think is likely to be achieved in 2017 in terms of tax reform and also regulatory relief moving forward? >> look, i'd be thrilled that we saw a genuine tax reform i would define that as something that's revenue, lowers the rate from the base. fixes the international system i think there's a lot of scopes to improve on the business side. and what i'm afraid of, though, is that instead of that, the

administration is going to push a tax cut agenda i think a tax cut agenda, without getting rid of the loopholes, would be something that was temporary, wouldn't be permanent, wouldn't fix the system, wouldn't be good for our growth >> gentlemen thank you very much for joining us this morning. much appreciate it >> thank you a big hour still to come on "squawk box. up next, titans of industry gathering in cannes. media guru bob pittman and ryan seacrest will join us live right after this break plus, senator mark warner's going to be joining us at 8:30 a lot to talk with him about including the russia investigation and the budget and later, food fight. meal kit delivery companies, traditional grossers and food start-ups all rethinking the way they do business after amazon's blockbuster whole foods deal ve will talk to a whole foods instor stay tuned you are watching "squawk box" right here on cnbc. [vo] when it comes to investing,

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back from its food safety crisis stock is higher by a little more than 3%. another 52-week high for that stock. let's get back to julia boorstin right now who is at the cannes film festival in france she is joining us with a couple of special guests. julia? >> that's right. we're joined now by ryan seacrest, who needs no introduction a man across media platforms and bob pitm ceo of i-heart media. bob you're here as we see a moment where we can see a lot of consolidation in the digital radio space. you have pandora talking to sirius xm. what does that mean for you? >> for us it makes a lot of sense. i think it's validation of how pow powerful audio is. we reach 91% of americans every week we reach more people in the u.s. than google or facebook. and all the other audio players are much smaller but i think it's an indication people want to get into audio game, that there is something

happening here, and you look at radio, actually, as opposed to going down, radio has been adding listeners to broadcast radio. digital listening adds on. >> i heard struggling with debt issues do you think you need to sell in order to survive >> i think at the end of the day we have a fantastic operating business the operating business does almost $2 billion. we spend that money to service debt but the operating business at 16 straight quarters of year over year revenue growth, pretty good look at the other players. but we do have, this is one of the last of the big lbos it's got a lot of debt on it and the good news is that we're addressing that now. >> ryan you're involved in every part of the media business you have a radio show, you're co-hosting with kelly ripa you produce reality tv how much of a threat are the digital players that so dominate the conversation here at cannes? we have facebook, we have google how much are they a threat to your business? >> i don't feel that they're a threat to the business i think that we actually can be

allies with them in a way with creative content one of the great things about being here for me, being involved in so many different platforms, but i-heart being the priority is i'm delivering messages for a lot of the brands that are here on a regular basis to the audience. and it's effective to sit with the cmos to hear exactly how they want that message delivered and how we can do it with a great partnership. in terms of getting feedback >> you have a presence on snapchat, instagram, facebook, twitter. which is the most valuable for you? >> i look -- the reason i subscribe to being on the air in the morning on the radio and also on television, and digitally, i think that it's the sum of all parts game. and if we can create good meaningful content, for people anywhere, any time, then you're ahead of the game. >> do you feel like social media, it must be valuable -- >> certainly we have dash boards in the radio studio where we can see, as we're having a conversation, we can see how people react to it, and we can navigate the

conversation in a certain way based on the media feedback socially so i use it as a tool. >> if you look at that, in the old days, radio's very interactive. people called us on the phone. today they call us on social if you look at the social impressions we have, like the awards show, music awards show, was bigger than the super bowl, bigger than the academy awards, bigger than the grammys. why? because the radio people talk back and forth to us, social has been great for the radio business because you've got now they're calling us on facebook and they call us, they call all their friends, too, so the word spreads quickly. >> now you have facebook investing in original content. spending money to make these shows and you have apple also spending money to create new original content what happens to you when the biggest company in the world, apple, starts to get more into the content business >> look, i think it's smart for them and again, they're playing in a different lane than we're playing in and we put programming up on snapchat we put programming up on

facebook we use instagram we use all of them and as ryan said, they're not really competitors, they're part of our ecosystem. it used to be the telephone was part of our ecosystem, the concert line, the dedication line, now the social players are part >> but they're also the biggest competition for your ad dollars. google and facebook dominate digital advertising. why should advertisers go to you when google and facebook have this insane reach? >> well, first of all, i said they dominate advertising. i don't think it's loaded to digital. and why do they come to us because we do something unique what we are in radio, whether it's digital, or broadcast, is where people's -- the reason they come to us is because they hang out with us we're somebody's best friend sitting in the empty seat next to them -- >> you just announced you're going to be selling ads with fox. no one has ever sold tv and radio ads together why do they have to do it now? >> i think because we've all got

this data set now. and before i think what facebook and google taught us is that those data sets are wildly important advertisers. but look we've reached more people than facebook or google every month in the u.s we've got a big data set we're taking that data set, taking fox's data set, and for the first time ever, an advertiser can use both video and audio platforms together to go find those segments >> ryan, i have to ask you a question on everyone's mind, are you going to be co-hosting "american idol" again? >> i'm being -- deep conversations about coming back to host the show it's near and dear to my heart i love it. it's been a huge part of my life so we're in the process -- >> because katie perry has already signed on. >> she's going to be terrific for the show i've known her a long time it's a real score to get her to be on the show >> what do you think of the show moving over to abc >> it worked out for me okay i just started with abc syndication with kelly, and disney syndication so, it was a surprise that it

happened days after i started over there but seems convenient so promising >> promising i'd say we're in the process >> you're in the process >> okay, we will stay tuned very literally. ryan seacrest, bob pittman thank you so much for joining us here. >> julia, thank you. great stuff, thank you funny. >> coming up you may have seen a lot more of lloyd blankfein in your twitter time line lately. we'll tell you why the goldman sachs ceo has substituted some press releases for tweets. that story next. stay tedun you're watching "squawk box" on cnbc

lloyd blankfein spoke to jim cramer on "mad money" last night. here's what he said about the trump agenda >> i can't say i'm on all fours in line with the administration across the board as far as the economy is going, as far as markets are going, they represent stimulus in a form of lower taxes, spending on infrastructure taking away maybe some of the layers, and layers and redundant regulations, and that's basically good, certainly good for the market but generally i think good for the economy. >> he also explained why he's taken to a certain social media

network to sound off >> lloyd, you're tweeting. what is that all about >> you know, i agree, for an institutional kind of firm like us it's not that usual but you asked me about the financial crisis before. in the financial crisis, there was -- nobody knew anything about what goldman sachs did >> no. >> the value we create what we do in communities. also, the importance we do in raising capital, people need capital, helping educate business, hire people, a circle, you know, it's quite virtuous to know it. as i said if this ever happens again i'm not going to allow there to be a vacuum about what we're like, i'm going to go in, communicate to the world more of what we do which we've done institutionally. but also there's a personal element to it, too and in a financial crisis, you know, we ceded awhile ago we kind of never picked up on it. >> i mean, i think it's really interesting. because he's talking about filling a void where there was an empty one straight after the

financial crisis but taken him a long time to get to that to try and be able to better paint a picture in their eyes of how they'd like people to view goldman sachs. i'm not sure whether his tweets will achieve that or not but that's clearly the motivation behind it >> it's the reason the president goes directly to people because he doesn't want any intermediary between his thoughts and what he's trying to get out to people >> i'm sure his lloyd's company will be hoping he doesn't tweet quite as regularly as the president. what did we say six or seven depending on one -- >> six more than last year >> nestle is putting healthy meals at the top of the menu the kit kat chocolate owner acquiring a minority stake in freshly. a consumer provider of direct to consumer meals nestle said it's the lead investor in a $77 million round of new funding for freshly but didn't disclose its exact investment rival blue apron recently vowed to go public >> so many people in that.

every time i go home, 30% off. most of the time the meals are a little too weird >> i haven't given it a go yet nor do i think i'm likely. >> you're not going to you're not the target market >> i didn't think so senator mark warner will join us after the break. take a look at u.s. equity futures which were pointing higher by about 0.2% earlier today. a couple of hours ago but they have slipd so we're now down 23 points for the dow. 7 points for the nasdaq. of course, big gains yesterday over a percent for the nasdaq. we're back in a couple of minutes. at fidelity, trades are now just $4.95.

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good morning, everybody. welcome back to "squawk box" here on cnbc we're live from the nasdaq marketsite in times square among the stories front and center this morning, ancestry.com is planning to go public it has submitted a confidential filing to the s.e.c. which omits the number of shares and price range for the proposed offering. ancestry helps people trace their family history and also provide personal dna testing

satellite radio provider sirius xm and struck a deal with amazon its service is now available on amazon's alexa smart speaker for those who have streaming services included with their subscription and boeing has raised its long-term industry forecast for passenger and freight jet sales. it boosted the outlook by 4% for the next two decades evenas executives at the paris air show are forecasting that demand will fall -- will cool off a little bit over the shorter term. the finance committee holding a hearing tomorrow about the president's budget the senate finance committee joining us now is virginia senator mark warner, vice chairman of the select committee on intelligence and also serves on the finance and budget committees senator, good to have you here >> good morning. >> i want to get to those topics, but first, house speaker paul ryan making a big speech on tax reform today what do you think -- what are you seeing and what does your side of the aisle think of the chance of tax reform this year >> listen i'd love to see a tax reform plan. what we've seen are principles, we've seen a proposal that was

heavy on tax cuts, and not very heavy on tax reform. from the president which would have added, you know, estimates of $7 trillion to $8 trillion to the debt as somebody who was still one of the few that wanted to go ahead and take on entitlement reform and tax reform in a revenue neutral way, that doesn't really excite me if we don't do this in a fiscally conservative way. and unfortunately on the senate side we've not actually had any real effort to date. my hope is that we wouldn't see a repeat hf what's happening right now on health care where republicans are trying to do this all in secret if they have that same approach on tax reform it's not going anywhere. >> so when it comes to tax reform, you do agree that the corporate tax rate needs to be lower. you having run a corporation yourself at one point. >> absolutely. we are not competitive at this point when we have not only the highest corporate tax rate in the world i think we need to bring it down significantly. >> to where? >> well i would think mid to low 20s. the problem is this. we have the -- worst of both

we have the highest corporate tax rate yet if you look at the total amount of revenues we collect as a percent of our gdp, we are 31st out of 34 in terms of oecd nations. so we have this high tax rate yet we collect very small amount of revenue because this tax code is riddled with exemptions >> so you said we need what you've seen so far has been short on tax reform. what would you like to see -- >> what would get my vote is at least revenue neutral. remember every point you lower the corporate tax rate on a ten-year basis that costs $100 billion. you want to bring it down ten points that's a trillion dollars. you want to bring it down 15 points that's a trillion five. what we've not seen so far is any reasonable description of what those offsets would be. i'm not sure, as somebody who was a part of a so-called gang of six that tried to promote the simon bowles plan, i'm not sure at the end of the day we're going to be able to bring the rates down low enough just by getting rid of exemptions,

because when you talk about where the money's at, such as deductibility of interest and other depreciation, other favored fax treatment, i'm not sure people are going to give that up. we may have to look the way other industrial nations have, countries who've brought the rates down into the teens, those countries get there because they have a vat or a carbon tax or another large revenue raiser >> senator is there room for dynamic scoring when you start looking at revenue neutral >> look, there is dynamic scoring and dynamic scoring. what i -- i've seen some dynamic scoring that's simply magic dust and imagination. i've also seen some dynamic scoring that says if you lower rates you may get some additional growth. at the same time some of those same dynamic scoring formulas ought to also include the value of having government investing, whether it's in research and development or infrastructure, things that i think also grow the economy. unfortunately, this president has actually proposed, he says he's for infrastructure yet he

cuts the highway trust fund. he says he's for r&d yet cuts nih. that's not the kind of areas where i think we ought to be cutting. >> senator, want to ask you a little bit about the committee on intelligence. what do you put the chances of the president testifying ahead of that committee? >> well, that's way ahead of where we're at right now i'm not going to even guesstimate on that. i would say there's an awful lot of unanswered questions. what we do know for a fact is russia massively intervened in our election everyone in the intelligence community agrees i think every senator i know, democrat or republican, agrees the one individual in washington that seems not to agree is president trump himself. i wonder why i wonder why the president continues to have this obsession, and some evidence that interference with some of our intelligence officials, asking them in effect to back off the russia investigation, and we've got a lot more work to do with the committee on seeing

whether there was any level of collaboration, or communication, between officials with the trump campaign and the russians during the election >> and do you think, senator, it's very important that your investigation continues alongside that of robert mueller? is there any risk that each of them kind of cannibalized the potential gains that you could be making if it was just one investigation? >> no. i think we have very different purposes special investigator more's investigation is criminal. he's looking at charges that could result in arrest warrants. there's questions around obstruction of justice something that i think the special council will be looking into we are looking at a counterintelligence investigation. we want to see if there was some level of collaboration or communication between officials connected with the trump campaign and the russians. how, you know, for example, the russians were able to weaponize information with some of the internet trolls they had that created fake news that flooded

the zone in effect in certain key states how did they figure out where to use and how to use that weaponization of information we want to get to the bottom of those kind of questions. not to relitigate 2016 but to be prepared for coming elections. and one of the things we're doing tomorrow is having folks in from dhs and the fbi because i have an urgent, particularly the department of homeland security, to reveal that there are frankly more states than two that the russians tried to hack into in 2016 >> senator, we go back to the tax reform question. when you talk about offsets, trying to get to revenue neutral, some ideas that have been thrown out and heavily suggested are get rid of the objection for what you pay for state taxes. >> i think if you're going to put -- i think everything should be on the table. if we're talking about meaningful corporate tax reform. >> is that something you would vote for >> listen, taking these in isolation is not the way to do it you show me a mix that's revenue neutral, get a good look from

me but what we've not seen so far is that realistic look at what are those offsets. for example, i don't think the border adjustment tax, i'll give the house credit for putting forward a bold idea at the end of the day, and integrated supply chans, again as somebody who ran a large business, but when i was in business, i don't know how you break up world supply chain when we've got the kind of global economy we've got right now. at least it was credit in terms of boldness. what i've not seen from the president and because there's no bill in the senate we've not seen either what's being offered up at this point >> what about the mortgage deduction? >> now we're getting into the whole question personal deductions, and that's, again, when we look at the simps simpson-bowles proposal i supported something that would cap mortgage deduction at $500,000 or $750,000 as long as it was part of an overall fix. what you can't do and one of the reasons why, you know, you get pushed back into these grander bargains, is that we all know you could do international tax

reform on its own. but that's hard to do on its own when you're just going to give the lead to multinationals -- >> you get the rate low enough all of this goes away, right >> just rhett me finish. if you do international fee, you then have to do all sea ports. if you do all sea ports it's hard not to do pass throughs that gets back -- >> all of those issues go away and the whole issue of international competitiveness you don't have to worry about any of that if you just get the rate low enough. right? -- gaming the significance tell because they just come to the united states. >> we're 20 trillion in debt at this point if you're going to add another eight or ten trillion dollars that's not a fiscally responsible approach because when interest rates go up, we won't be able to serve -- >> i've been hearing that for 20 years. >> let's be revenue neutral. reasonable people have found a way to do it revenue neutral other companies have done it >> if you have to put money on it, you think we'll get to a reasonable agreement that people sign off on or one that the republicans do on their own because they've got 52 votes in

the senate you think that happens by the end of the year? >> i think that the idea that whether you talk about health care or tax reform, if you try to do it with one party only, you generally end up with not a really good result the democrats -- >> kind of like what happened with health care reform under president obama, right >> kind of what happened with the democrats decided to do with one party alone. let's learn from past mistakes >> senator right now, thank you. senator warner >> thanks very much. >> when we return, grocery game changer. amazon's deal with whole foods is sure to shake up the industry but is another company looking to get into the shopping cart? we're going to talk to long time food writer and whole foods investor mark bittman. that is next

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welcome back to "squawk box," everybody. we've been watching the futures this morning remember the dow and the s&p 500 sitting at new records once again yesterday. this morning, a few red arrows not a lot of pressure but the dow futures are indicated down by about 17 points s&p futures off by 4.5 and the nasdaq down by 8 ford is investing $900 million in its kentucky truck plant. it is upgrading the facility to build new ford expedition and lincoln navigator models alsoannounced, a new version o

the ford focus starting in 2019 to be built primarily in china rather than mexico as originally planned. in washington news, treasury secretary steven mnuchin joining us on "squawk box" earlier this morning. among the topics that we talked about, obviously, tax reform the focus is lower rates i would say comes with that is reform which is broadening the base, making sure that we take out lots of special interest deductions, and simplifying the tax code and i'd say on the business side, the biggest change we've talked about is the need to move to a territorial system. it makes no sense. we have one of the highest tax rates. we tax on worldwide income with a concept of deferral. we want to make sure that companies bring back that money onshore to reinvest in american equipment and american jobs. the conversation on tax reform will continue on cnbc later this afternoon when house speaker paul ryan will join power lunch. >> voters in georgia head to the

polls today in what's become the most expensive congressional race in american history republican karen handel and democrat jon ossoff are facing off in an election that could set the tone for the 2018 mid terms. ossoff fell short sending the race into a runoff campaign. president trump barely won the district in november giving democrats an opening after tom price left to join president trump's cabinet. democrats checked into the floor last night to blast republicans for working on health care reform in closed door meetings. democrats lack the votes to try to change the republican process but in a series of speeches expressed their concern that republican leaders will jam a new health care bill through the senate will little debate by the end of next week republicans are using closed door sessions to try to resolve internal disputes over how to effectively overhaul obamacare senate leaders say they hope to vote on the bill before the july fourth recess. when we return, jim cramer live from the new york stock exchange we're going to get his take on today's top stories, and jim has

a big interview tonight on mad money. he's going to speak to ibm ceo ginny romatety at 6:00 p.m. eastern time ♪

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let's get down to the new york stock exchange. jim cramer joins us now. jim, great stuff with lloyd last night. he's tweeting. we know why now. >> yes, thank you, wilf. he doesn't want to be defined anymore by media i think he feels, somewhat like president trump, that if he doesn't get the story out himself, that someone else is going to get it for him. obviously he's got some three out of six so far, i would say are critical of the president. but he just says look i've got to tell the story the way the employees think and the way i think. >> jim, i think one of the most fascinating things in a sort of niche part of that interview is he revealed markets has crossed a billion and seems to think it would cross two billion pretty quickly. this is a sea change for goldman sachs. >> yes it is and i questioned the margins on that business. i think he feels there's big data which tells him which of the credit card debt that can be refinanced that they will pay they can keep it on their books. i don't know i mean to me markets is the exact opposite of the goldman i worked at. but i do recognize that if they can get a couple billion then it

could be meaningful one day to earnings i would point out that obviously he had a couple billionaires, they are better than a couple billion dollars worth of thousands of people who have credit card debt >> and what do you reckon in terms of the markets, jim, big rally, of course, that we just had -- >> wow, what is that >> excuse me a big rally that we just had in the tech sector, which are you more optimistic about for the rest of the week >> i'm more optimistic, what we have to have the adobe report tomorrow that could be a real tone setter. i do think that the market could be pulled down by oil here people are going to be a little freaked out that oil is breaking down they're going to start talking about demand again could affect everything. and then tomorrow is inventories. so i'm watching oil as more of a tell for every single kind of stock in the s&p >> you know, we had, jim, kilduff who said he thinks oil is going to the top 30s, below

$40. >> i don't know. every time we get to the low 40s people say it's going to go to the 30s, and then we tend to get some sort of rescue effort but i know it's in the wrong hands, it's in speculators' hands. i felt $24 was our target. it looks like it's going to tak seeing maybe a smaller growth in the rig count on friday. there's not enough to man and too much supply. people will say there's not enough demand, that's the issue. the economy is probably slower than we think and do a convoluted discussion about whether consumer sales are too low and you get the market rolling zbloeroll ing over. >> i was going to ask you about that is that relationship broken down or if we go back to the high 30s, we end up with all those predictions? >> if we go to the high 30s, people will question exactly not that there's a lot of supply but

is demand soft i think there's just too much supply michelle, market gets it wrong there's some algorithm that says 30s, let's sell everything i don't think it should go to the high 30s sec laters have to be flushed out. a lot of longs in there who are not actual, let's just say they're speculators and they're going to lose right here, big. >> can tech continue its rebound at all, jim? >> i think high-growth tech does well when we think there's no demand anywhere. we know that the secular growth story of tech, whether it be internet of things, movement to the cloud, what the government talked about yesterday with the tech officials, whether it be the new cell phones, new iteration from apple, they can do well without any help from the economy. that's the default place people go they're going to continue to go back. >> which of the big banks do you think is the biggest potential

winner from the stress test? >> look, i really believe that -- i love that article today about michael corback going on offense i think that they have a lot of capital but they're buying back 7% of the stock right now every year i think that's the one you get a big dividend in, it would be terrific i know everyone wants to say jp morgan is the one but they've been able to do what it wants pretty much anyway. >> great stuff great to see you in seven minutes time for squawk on the street don't minutes david faber's interview with alibaba's jack ma very quickly let's get a check of the markets top companies.s the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio

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new lower taxes. and new university partnerships to grow the businesses of tomorrow today. learn more at esd.ny.gov welcome back, everybody. amazon's acquisition of whole foods is a grocery game changer that will impact stores, grocery shops and tables across the country. how to cook everything author, also advised jana. what did you tell jana when you were advising them >> i was in an awkward -- not

awkward but unusual position i'm not a business person. i'm a food person i think whole foods' legacy is a mission that says let's try to get better foods into the hands of shoppers that's what drew people to whole foods. and that's what whole foods was supposedly about and my feeling is that in the last few years, whole foodshas to some extent, lost its way in pursuit of that mission. >> why do you think they've drifted? how do you think they've drifted? >> the why is hard i'm sure the why has to do with search for profits, demands of shareholders and so on and people like jana, for that matter the evidence is that when you go in, it's just not that much different from a standard supermarket anymore. >> is it that other supermarkets are catching up or they're sliding? >> everybody is moving to the middle. >> does whole foods part of

amazon's business now change, do you think? >> well, i don't mean to disagree, but amazon's business is to sell everything. certainly not specifically luxuries but they're there, too. amazon will sell anybody anything they want to buy, it seems. my hope is that amazon says we have a really valuable brand here, a legacy brand that says something that nothing else we have says. we can sell you diet pepsi we can sell you tide we can sell you all the classic american brands that may or may not be good for you. but now we have a brand where we can sell quality or we can say that we're selling quality. >> do you like this? are you happy that this happened >> i'm happier than i would be with a walmart deal. jeff bezos has shown he's not afraid to take risks he has shown he's not afraid to

spend money to take a brand like "the washington post" and really reject energy into it. i think we would all agree that "the washington post" is in much better shape than it was two years ago. >> how does a cookbook writer, food analyst end up as an adviser to jana? >> because people like you want to talk to me. as a food columnist i wrote about policy i do write about cooking i love cooking. >> i have several of your cookbook. >> thank you but i wrote about policy i was an opinion columnist for "the times" and the extent that food touches everyone's lives every day and really touches on everything we talk about from economics to politics to the environment and so on, it's a broad topic. and it touches on business also. >> what would you like to see the evolution of whole foods be? is it back to its old self or is there a new sort of standard for what getting good food to

americans means? >> i wouldn't pretend for a second to know what the possibilities are or what they're thinking at amazon i would love to talk to them about it. >> what would you like to see? >> if there were a smaller selection of groceries being sold under the whole foods brand that were, not to sound too precious, but carefully curatoed and really, really good. like this is food you can actually trust and i think we can hope that amazon does that while even reducing prices. >> mark, 30, 40 seconds, blue apron set to be opening next week. >> this bring bris everything to -- this is a big shakeup in food in general. blue apron may well continue with its ipo if amazon wants to do meal kits, amazon's going to do meal kits. >> fresh direct already does them that's the thing there's so many competitors. >> yeah. >> there we go

mark, thank you very much. >> thanks for having me. >> appreciate your time today. >> nicely energized. >> way to wake you up and get you going in the morning welcome, michelle. thank you for being here today appreciate it. the futures are slightly weaker we'll see where we go. dow down about by 14 points. right now it's time for squa"sq on the street. good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim kramer the best day of the year for the nasdaq plenty to watch including jim's interview with lloyd blankfein last night oil hits 43 and what lloyd blankfechlt in