please come back soon. >> next time, the golf not the persian gulf, okay >> fair enough >> keep us updated on your travels too. >> will do >> thank you. >> you're going to shoot your age. >> i'm getting there but i'm a little ways away. >> just an age. >> tom friedman, always great to see you. >> make sure you join us tomorrow right now it's time for "squawk on the street. >> good monday morning, welcome to "squawk on the street." i'm carl quintanilla, jim cramer is at one market in san francisco for the dream force conference this week a lot to get to with jim president in tokyo and ways and means begins the markup, 45 more s&p earnings this week yield curve is the flattest in a decade today oil is at a two-year high on this political turmoil in saudi.

road map begins with a meg amerger in the works, qualcomm considering but re, a deal with broadcom, plus softbank in the failed talks to get together with t-mobile, betting the wireless network will prove critical to support future growth and i'll have more on their future plans. >> 11 royals arrested as the crown prince moves to consolidate power. the news of the morning that was broadcom confirming the unsolicited byover bid for qualcomm they acknowledge receiving the offer and david has been all over it all morning long. >> the question now will be when not if they reject the bid because they rereject. the only question is how long they take. they need to review it and need

to be fair they have not spoken to broadcom, as i reported last night, there had been an attempt made by broadcom when it began some months ago to engage in talks with qualcomm. that was quickly rejected. there was never a formal proposal made, they were given the heisman so early at broadcom they wshts going to get anywhere and attempted to have a similar conversation about a potential deal before the nxpi deal was nixed. the thought was we have no interest this morning we get this enormous unsolicited bid at 70 bucks a share. it's going to be financed by consortium of banks who issued a highly confident letter. key questions will be when they do reject will be antitrust review they are going to say it will be

lengthy and frougt you'll hear a different story from broadcom and price, $70 a share they are saying undervalues dramatically often times when these kinds of things start, you know the initial bidder has got more room to go up the question is how much more room and whether that's going to get them in any way shape or form to get broadcom to engage jim, i'd love to get your thoughts on the price itself at this point we know it is an open tunistiis time >> saying in a key line he sent me, we would not be making this offer if we were not confident that our common global customers would embrace the proposed combination. now, david, you know that this is a war between apple and qualcomm i know the war will be settled

instantly the moment hawk tan ran both companies it ticked at $70 a couple times before they decideded to go scorched earth against the biggest customer david, jana put on independent directors and david these people are not to be trifled with mr. henderson, how about mark mclaughlin of palo alto, he isn't saying we can't talk to them, i think he'll say let's see what we can get for this company. >> you raise a great point they'll be relied on by broadcom, a hope to introduce that talk in the board meeting where they discuss this, but i fully expect that the initial response will be a rejection, jim, of course based at least on reporting i've been able to do thus far the question will be what does broadcom do?

do they go all out hostile here? do they undertake a proxy fight to try to place members on qualcomm's board and need to decide that within the next month. the deadline for nominating board members will come up very soon typically qualcomm has the meeting in march and that will put shareholders in a difficult position because you'll be needing to make a decision on board members without really knowing the decision on antitrust alternatively broadcom could wait a year and a half before they get the antitrust approval to go after the board if they want to go that route. >> go ahead, jim >> haq tan takes a long term view he crafted a company with unbelievable intellectual property i think in the end there is not a waste of time. look at the acquisitions he's had and amazing combination he's created and the man is loved by his customers.

david, i ask you, is mr. mollin' kof loved by his customer snz zblo >> no he's not deal after deal -- a lot of companies we have talked very positively about, mike pearson was a hero o and the deals go on and on and then they stop and then what happened >> are we disputing that mr. tan doesn't have the largest intellectual property in the new apple devices? are we disputing the fact that the broadcom wasn't a great company when he bought it. the evers charge is a little hard for me. you knew evers, i know hawk. >> i don't mean to imply that, for the record, worldcom used a lot of stock in all of this deal. >> how about we use brett. >> i do mean to make the kmar

son to an acquisition machine that needs to do deals to keep moving forward just like a shark needs to keep moving forward to stay alive. >> $25 a change. can we use brent saunders instead of evers this is bothering me. >> probably a good idea. all right, fine. so you like tan, you're a big fan. >> it reminds me there's so much going on. >> broadcom. >> what are you doing out there? because i don't think we could stay -- i would be punching you -- >> intel and amd teaming up to take on nvidia, another story today and a reminder of how busy things are on your beat, aetna, cvs and time warner and at&t and sprint t-mobile. >> we'll come back to nxp and the importance of that overall and that's a $38 billion deal

that could be in question. these guys don't want it but willing to let them pay 110 but no more. >> qualcomm needs it. >> qualcomm needs it and by the way it would be more highly valued with it and yet the price won't change if they get it at 110, which is kind of odd. >> i know. >> what do you think qualcomm is worth? >> 85, 90. >> okay. this company has got unbelievable intellectual property it deserves-- i'm looking at $70 as the base price over the couple of years. yes they killed themselves and moved it down. but they are incredibly valuable if you can solve these lawsuits, they would be everywhere it is such an important deal will hack tan pay 85 -- maybe they don't need it did you see how little stock jacobs owned >> how little he owns, yes

>> earn mollenkof doesn't own a lot but they are big talkers. >> at the same time, if antitrust is an issue, hell or high water we'll go to the mat, there's a lot to come here it's been a long time though >> ever going to happen? >> really? you're going with greg hayes earlier you went with bernie evers. >> there's come hell or high water and hayes never going to happen >> they can use antitrust effectively the same way that united technologies did in defending honeywell. we'll see. >> i would disagree because qualcomm combined with broadcom gives those companies a little leverage versus apple and samsung even as hawk tan has great relationship with both. >> i would hope tan would have joined us.

>> he is i'm his person fiction >> i know. >> we're going to do it later. frankly, it's everything we've reported about it. >> you're there, isn't john ledger there where i usually sit? >> no, he's not. >> he's spinning, he's doing some spinning and then he'll be there. >> still to come this morning, we have to touch on saudi prince al-waleed among those arrested in a corruption crackdown. we'll get a live report from riyadh there's reports they started to freeze accounts of those arrested take a look at the premarket coming off eight weeks of gains, haven't done that since 2013 back in a me mont ron! something's going on at schwab. oh really? mont thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms... again. and online equity trades are only $4.95... i mean you can't have low cost and be full service.

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it's what saudi arabia is calling a corruption crackdown prince al-waleed arrested along with others. let's go to riyadh this morning. good morning, hadley. >> reporter: good morning, carl, this is the clearest sign yet from the crown prince of saudi arabia, that no one is above the

law. it targeted big business leader and foreign government ministers and members of the saudi royal family the big question is who did what and when there are possible charges of corruption, money laundering and even of course abuse of power and we're waiting to hear more on this. what we've seen so far in the local press reports that the saudi government has already started cracking down on some of those involved including the freezing of some accounts, as well as potentially arrests even more so than we've heard so far in terms of naming for these folks involved in this crackdown. one of them of which is saudi prince al-waleed, kingdom holdings has investments in apple, citigroup and lyft and twitter. what i can tell you is the interesting part of this kingdom holdings shares down for a second day even as the company released a statement where the ceo said they have the support of the saudi government. a lot of conflicting narratives

here one of the things that is really important to point out, in terms of the power struggle and power shift between the crown prince and potentially other members of the royal family, this is seen as a move by the crown prince not just to make a statement in terms that he is in charge of this country and in charge of the economic agenda but major statement in terms of where this country goes next. we saw this major investment forum one week ago lots of people coming in all around the world and trying to prove to them this is a country -- >> hadley gamble, we appreciate that before we lost the signal the implications here are multilayered whether it's oil prices or the foot you'uture of ipo and kingdom holdings and stocks they own. >> i'm wondering how much the war with yemen is playing a role here and how much the possibility that there's just --

that prince al-waleed was much more let's say on his own running his own thiefdom that said, i thought he was pretty synonymous. this is rather incredible. obviously he's such a westerner in that environment that if the regime really wants to be western, you would elevate this man not put him in the ritz-carlton somehow being a jail i don't know, we don't use -- we like the tombs or lirikers but he's in the ritz. >> they don't have the rule of law there in the sense that we have it. sort of can make it up as they go along is my understanding. >> we'll talk to andrew sorkin who was there two weeks ago -- >> spent a lot of time with prince al-waleed. >> where the tone for 2030 was different than what we're hearing this morning we'll look at the premarket.

knock stock exchange will hold a moment of silence in a few moments for the shooting in texas. we're back after a short break of out performance. where a rising middle class powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential. throughout my career, i've been fortunate enough to travel to many interesting places. i've always wanted to create those experiences for others. with my advisor's help along the way, it's finally my turn to be the host. when you have the right financial advisor, life can be brilliant.

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busy week shaping up today, we have -- and the president remains in tokyo before he leaves for south korea tomorrow. mentioned the saudi political turmoil and venezuelan turmoil which will cost goldman to the tune of multimillion dollars. >> and we're still watching the movement towards tax reform in washington don't want to take our eyes off that the progress or lack there of made. >> the new york stock exchange and nasdaq are about to observe a moment of silence for the

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so you can head into retirement with confidence. brighthouse financial established by metlife. we've got about six minutes before we get to the opening trading. let's send it back across the country. even though you were going to punch me earlier, let's get a mad dash from jim. >> andy drove is rolling over in his grave right now because intel is teaming up with amd, processor and graphics chips in order to take on nvidia. david, intel and amd have hated each other since their formation. this is amazing. brian krzanickrzanich, not as

aggressive as hock tan, soft spoken, he is determined to take them on. and the graphics chips are second rate versus nvidia but that's okay. just like intel, seeding no ground, whether for autonomous driving or gaming, this is incredible, david. and right before nvidia reports this week. gutsy. >> and so does it represent a real threat for nvidia, jim or should -- >> nvidia is much better. >> or sign of approval, how strong it is >> i would use the word desperation but i like brian krzanich much too many i do think amd is not as good at gaming chips than nvidia but intel has a lot to game. they should have been in gaming chips for years. i remember during the andy grove era there was talk they had to be in gaming, nvidia meanwhile went into gaming whole hog the nvidia chip in the nintendo

switch is the best chip. amd is in xbox i do like what krzanich is doing. intel moved up great quarter, processors are back for pcs and mobile eye will be a winner. krzanich wants to take no prisoners but hard to get nvidia do feed it i think they'll have a huge quarter. >> you think intel maybe overstayed or relied on pcs for too long >> yeah, i think so but krzanich is moving so rapidly to change it and kri szanich is a leading intellectu intellectual he understands what intel has to do amd and intel, there was a period i felt intel kept amd alive to get the justice department off their backs this is amazing. it's almost as amazing as david saying that hock tan is bernie evers. >> i did not say that.

you are going to get me in big trouble. >> let's not replay that moment. >> hey, ain't going to happen. ain't going to happen, david >> meanwhile, the new york fed confirming a report from steve looes man that bill dudley will retire and early retirement meant to ensure his successor in place before his term end. his run the new york fed since 09 he's going to be 65 next year and the number of potential openings on the seven member board, jim, could be as many as four depending on how others come along. >> this is rather remarkable i knew mr. dudley at goldman sachs. he is just the most sound level headed guy but you know what, i think jay powell is sounds and level headed the appointment of jay powell means don't expect to see wholesale change at the fed any time soon. i did like dudley very much.

i think this quarrels appointment was much more radical but dudley was someone who might say reason, not a dove or hawk, just reasoned >> jim, it does bring us to what the 10-year is doing this morning, 2.32. i mean, what does that suppression mean is it a reflection of some of these increased political uncertainties that we've seen crop up around the globe >> could be. i mean i just wish -- there's not enough loan demand to move the 30-year. jamie dimon will say that's because we don't lend enough with this new fed i think there be more lending. there's a lot of belief among the big bankers i talk to, you get a loan if you're rich enough that you don't need a loan and i think that's the narrative that they are trying to undo right now but do think a flat yield curve initially will not be bad for the stock market. usually the first few months work higher for the stock market as we're seeing with what you were saying, eight straight

weeks, it's a monumental rally still unheralded and not liked. >> i think the headline in the "times qult, a bull market should make investors happy. this one isn't despite all of the confidence numbers and sentiment numbers, still so much except skepticism after quadrupling '09. >> we all struggle as anchors with the notion there's more wealth created than we've ever seen in the fang stocks but also in far broader than fang but nobody really cares. i was at the eagles game yesterday and usually you know, when someone would have mentioned stocks no one, mostly focused on an 8-1 team no one asked whether you should own apple or trade it? there was a time i would go to an eagle game and yo, what do you think about qualcomm do i buy phillip morris here now they yet, what do you think of wentz >> let's get the open being

bell s&p at the bottom of the screen as jim said coming off eight weeks of gains, s&p is up four straight days. by the way, 51 record closes this year. the record is 77 at the big board today, celebrating the loss, franklin liberty shares and distributor of industrial and construction supplies celebrating its 50th anniversary. snapchat is coming this week and disney, nvidia, square we already got coor's not only a beat but raise on the guide, comps down less than expected. >> i think a lot of this is about -- there was remarkable numbers from jimmy choo, people didn't realize kors moved up the food chain

i don't know if you ever bought for your wives anything from jimmy choo but it's outrageous and helps the gross margin it was a great acquisition >> for the first time in a while, guys, ge is going to lead the dow out of the gate. >> that's not -- >> ten straight? >> no. >> that's a bit of a rebound this morning, jim. we're getting close. the 13th is coming up. that's going to be a key day for the company where john flannery outlines his plans and particular capital allocation will figure prominently in that. we know about the dividend and whether or not it can be supported at these levels and what level it will need to be cut to, jim. but the market seems to have adjusted to this $20 level for ge >> yeah, and i think you're right, david the stock is reflecting a dividend cut, maybe back to where the stock went yield 3.5 i think flannery is trying very hard to get his arms around what

the real cash flow is himself. this is a rather remarkable company and uses atraditional accounting and one of our largest companies. most companies use things like cash flow operate -- profitable growth, i guess what i'm saying that ge has never played by the rules and it will be interesting to see what they really earn if they do play by the rules. >> that's a good point guys, a proxy battle will be followed somewhat closely here and i know you have jim, adp we're going to know tomorrow morning but i think -- i believe bill ackman may be a guest one more time before the end of this he has an uphill battle to say the least. from what i'm hearing it's more or less already over we'll see. votes need to be counted but a lot of institutions of course make their decision prior to tomorrow morning's annual

meeting and does have an uphill battle if he wants to change the votes beforehand but right now, the only question is the margin of victory, jim, for adp and its ceo carlo rodriguez in fight with ackman over three seats. >> one of the things that is certain, when you go after a company doing quite well, there are shareholders pretty happy. he went after one -- undervalued and had a lot of value to bring out but does a pretty good job bill ackman has been on every show and been trying he's a good company and carlos was doing a lot of things ackman wants ackman has some great figures about what more it can do but it's just not bad enough i mean automatic data is not bad enough to merit a win by ackman.

>> yeah. >> certainly they manage to get media savvy in a hurry which according to carlos was an advantage ackman thought he had. >> he came out swinging mr. rodriguez very early and quickly, calling ackman here on the set a spoiled brat guys, jim, nxpi, the deal qualcomm has to acquire the company at $110 a share, which we have spent time talking about has added another layer of complexi complexity given broadcom $70 share a bid for quaulcom we don't mind if you buy for 110 bucks a share, we think it's compelling at 110. what they are not saying but what is being said as well though, don't pay more and so yet another thing for nxp shareholders to take into account. we've talked about they believe the stock price would trade at the higher value in the open

market given the multiples of peers and success since signing the deal with qualcomm and therefore they will not tender their shares and under dutch law the minimum threshold is 70% right now qualcomm still aiming for 80%. jim, you're throwing yet another thing in here. of course it does raise the possibility that qualcomm could then pay a lot more for this company in the sense trying to use it as a poison pill if you want to call it that it might open itself up to litigation on that front but this thing got even more complicated. >> you know, david, on friday, nxpi traded down really badly. and i totally got that people recognize broadcom didn't want the deal. the fact it is up today is extraordinary it really does confirm what you were saying that maybe qualcomm does a carter holy hail and pays way too much for something so broadcom walks away. the one thing i would say about

nxpi, i have felt that elliott partners one of the big instigators to say listen, sky works solutions trades much higher and oddly, broadcom trades much higher the broadcom price has been used against how little qualcomm is paying it's a rather extraordinary fight. these companies all trade together and what do they have in common? apple. everybody is involved with apple and nxpi is very much auto, which would allow qualcomm to get away from being apple but you're right, i think that reaction with nxpi is going to be one of those situations where qualcomm is using as a poison pill, which is rather remarkable you know how many times qualcomm has told us, no, no, we will not pay more than 110. >> and again, this is one of many different things moving parts of a very complex situation that is only just beginning, that being broadcom's fight to acquire qualcomm, again, if you're just joining us, $70 a share, 60 in cash and

10 in broadcom stock and very much expected thinking it will come out in time and fully reject this offer based on both price not being anywhere near adequate and concern about the antitrust impact and regulators may not look kindly on a potential merger of this type. but you know what is a positive for them broadcom stock is up >> yes. >> when they plan this stuff, this is what they hope for, they're shareholder base respondi responding poly -- >> you're not giving any credence to the idea that anthony's mark mclaughlin, that they might argue, we have to do what's right for shareholders and if they come with an $85 bid, i do not believe mark mclaughlin will fight that.

>> i'll tell you one thing, even broadcom's existence has a complicated life span and you can't blame some viewers from being confused on who were they again before in the fourth name change >> by the way, now moving back to the -- moving to the united states -- >> yes. >> which was a part of this entire thing. >> they want to get the bro cade deal done. i thought it was interesting they bought lsi and integrated that well. i know there's people that feel their acquisitions perhaps over and over again are too bold. perhaps hiding something i've always felt that broadcom had the best technology for 5g and that's why hock tan put together a terrific company that makes real money and not about pyramiding. >> let me get to sprint and t-mobile, the demise of those talks and what we may see from

so softbank it's important to do that. so -- there it is, can't speak it until i see -- >> the faber report. >> a faber report, jim. >> holy cow. i've got to switch notes then. >> the deal died as we thought it very well might at deutsche com officials did get on a plane, had dinner in tokyo, trying to see if they could find some common ground but they were unable to. the concerns that seemingly came later in the deal in a way of in terms being something that was a deal crusher about giving up control when communications and growth of the internet of things is such an important part of the overall strategy that he sees taking place was too much to do in terms of governance at the same time t-mobile was not there on the price range that originally was at least

outlined by t-mobile when these two began their talks as a likely ratio where this deal would end up so it fell apart the question of course now is, what's next for softbank what's next for sprint to a certain extent more importantly for many investors out there who have watched softbank pin ball around in terms of his desires, will they try to re initiainitiate t acquire charter communications here's what i can tell you at this point there is a willingness on the part of softbank according to people familiar with the situation to reengage on a purchase of charter if that company's management team were to indicate its willingness to actually negotiate this does not happen last time while there were plenty of talks about from softbank inquiring as to acquiring charter, those talks largely took place between

softbank and liberty remember liberty broadband 20% owner of charter that's where the talks took place in terms of economics and how the deal would be structured and what the consideration would be when it came to turning to tom rutlidge and trying to get them to engage, they didn't get anywhere and so it does appear that there is a willingness to reengage if charter's management were to indicate interest in doing so. thus far liberty had not been able to kind of push that man, tom rut ledge to do it will it change now charter stock price is down a good deal from where it was previously when the two sides were or charter and liberty were having conversations about a potential deal -- softbank and liberty were having conversations about a potential deal for charter let me give you some sense as to where those conversations went they did advance fairly far but again more importantly, they were not really participating in from the charter side itself but they did get to a $540 a

share price. now, keep in mind, that's 540 half cash, half stock. liberty broadband rolling in there's a very high level of complexity so don't jump out there and start buying charter seeing that number the back end of this meaning the stock ends would not have been worth 540 in part because softbank was contributing sprint shares into the new company that would have acquired the public charter shares at the value of ten bucks a share. that had the ability inflating the overall price of this new entity, which would include sprint and charter were to actually have happened and it would have exchanged his stock and cash for charter shares out there and liberty would have rolled in. liberty i'm told as well is also going to be given, a contingent value, a piece of paper, convertible and perhaps the ability to make sure that it's

upside was kept, up to $750 until 2022 it's very complex. the point -- the reason i mention all of this is because these were significant talks that did take place. they did not advance in part because of an unwillingness to negotiate on the charter side and seemingly unwillingness on the liberty side in the form of john ifmalone to put john rutlidge will that change now with more questions in terms of the industry maybe, maybe not but certainly we have to consider, jim, the possibility that this deal could see life again if there was a willingness on the charter side to reengage or if they were pushed by mr. malone perhaps to do so. so we'll see another thing we'll be watching very closely. >> well, david, one of the things that's been a theme here is cutting cord, charter has been a not great stock

by the way, of course the parent company we work for, comcast has been a not great stock it's interesting softbank wants to be involved in a business that younger people are rebelling against. >> there's also different reports about the interest in lyft do you see them as being scattered brained or do they have a focus on what they want to own >> you have to remember, you have the vision funds, currently at 93 billion, going to close at $100 billion, which is the lyft, uber, all arm holdings, put a lot of that in there and then there's softbank itself for the charter deal would not be using the vision fund is my understanding. it would have been making a large equity contribution to a new company which would have -- also would have contributed its sprint shares of roughly 10 bucks a share, maybe a little less than that, gone out, taken on debt and exchanged that stock for charter shares in addition to a large cash component.

but carl to your point, he's all over the place i mean, that's true, all over the place. seemingly uncontrollable in terms of what his appetites are with the vision masa has, 300 year vision. >> multiple layers of the vision fund to come, yes? >> yes, or more vision funds that's what they are talking about, doing another vision fund and another one. will there be a desire out there on the part of investors perhaps but this is all about the internet of things which does get back to his overall strategy when it comes to communications and why he was reluctant to give up control of sprint here despite the fact it is still a hoble property and many reasons to believe it would have benefited from merging with t-mobile that is where we stand right now. >> let's get to courtney reagan this morning with movers on the floor. >> good morning, right now we see stocks holding into the green but just barely, fluctuating around that flat line in the early goings of

trade. as investors are paying attention to what president trump is doing his movements and policy comments overseas and asia, also watching all of those deal developments you all have been running through all morning. we should note the stocks finding a way to hold pretty steady, even as we hear things like goldman sachs saying the gop tax plan may help corporate earnings but not as much as we may think. also you know how much the market pays attention to fed leadership we now know president trump has named jerome powell to head the federal reserve but also today we're hearing that federal reserve bank of new york william dudley will be retiring in 2018. you know market participants are paying attention to what that may mean to come for policy. let's look at the major sector groups we have a lot going on today energy prices because of crude oil heading almost close to $56 a barrel we've got that news overnight in the wake of the arrest of saudi

arabian royals and investors watching energy prices, that's the leading sector here today. look at telecom down sharply david was talking to us through there about those telecom deals happening or not happening as the case may be. and health care too, cvs with continuing better than expected earnings and deal with aetna in the chip space and not just broadcom and qualcomm, we have the philly index you can see up more than a percent today. we should note there's other reports amd and intel partnering to form a pc chip business and so that is also juicing the indext we'll watch that closely throughout the day we've gotten most of the reports for are t for the erngarnings for the quarter. we've got kors, look at shares up 12%, blowing past analyst's expectations for profit.

better than expected sales too we should note those comp sales still negative but less bad than what it could have been. the second quarter we've seen those negative but still beating past analysts expectations we'll hear from tapestry tomorrow, the new name of coach. when that comes out tomorrow, don't be fooled. >> no carol king jokes this time. >> that's right. >> rick santelli at the cme in chicago. >> good morning, carl, if you look at at a week, it tells you a lot what's going on in the fixed income curve the fed has been raising in sepgs of another rarz ise is inh chart. whether it's tens or 30s, they are pretty much just slowly melting and holding. today at 1.62, we're up a basis point and 10s and 30s are down a basis point. if you look at the ten-year

chart, hovering above 70 basis points, it's a ten year flat if we look what's going on in bunds, this may also help explain part of the dynamic of the long end bunds have continued to melt since the ecb eeting if we look at the two-day, the dollar index, it's acting like a two-year note. that also makes sense. it's not running away to the upside but it continues to melt higher and trading above 95. 94 was a big breakout. this is another threshold technicians are paying attention to and finally you can see it when you open the chart up to mid 2017 carl, jim, david, back to you. >> thanks a lot. rick santelli, a lot to talk about former apple ceo john sculley, the iphone cycle, qualcomm, broadcom, we have record highs on the s&p and nasdaq back in a minute

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this morning, as far as the nasdaq 100 goes, being led by chips and telecom on this morning where we're watching qualcomm and broadcommin what quitd be the biggest tech acision ever we'll get "stop trading" with jim in a minute. rting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

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let's get to jim and "stop trading. >> i could have talked about how great it is that marvell might be combining with cavium, but i'm going to focus on sky works which reports tonight. a lot of people feel if honestly, if broadcom can't get qualcomm, they'll go after sky works. i like the company i do not think they're for sale. >> jim, we mentioned you're there for dream force. benny off tonight? >> yeah, we have benioff, also dan schulman look at that stock it's been rather remarkable. he's done it all just internally except for he made a few acquisitions but it's been pretty sensational. >> you got a big week ahead. not just out there one market. west point friday? >> yeah, west point friday i intend to get some sleep thursday night i think that's important >> just one day is all you need. that's it. just one night's sleep for the

week >> you can store it. i store it you can store it i went to bed early saturday you can store sleep. >> right like a solar battery yeah, sure >> jim, we'll see you tonight. "mad money," 6:00 p.m. when we return, a lot more on broadcom's massive takeover bid for qualcomm accused of obstructing justice to theat the fbinuclear war, and of violating the constitution by taking money from foreign governments and threatening to shut down news organizations that report the truth. if that isn't a case for impeaching and removing a dangerous president, then what has our government become?

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to pursue consistent returns over time from over $120 billion dollars in real assets. partner with pgim. the global investment management businesses of prudential. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber at the new york stock exchange. markets setting some new highs, at least on the s&p and nasdaq for now. we have m & a talk all over the place. chips and telecom really moving today. >> our road map begins with a massive mega merger in the works. broadcom making a bid for qualcomm in what could be the largest tech deal ever details next >> billionaire saudi prince al

waleed bin talal arrested along with ten other royals. >> plus, wilbur ross is refuting allegations he tried to conceal an investment in a company with ties to the kremlin. what he told cnbc this morning, straight ahead first, let's get straight to that possible enormous deal that is in the works. at least in the works on one side broadcom this morning put out an unsolicited takeover bid to acquire qualcomm for cash and stock. a large amount of cash, not as much stock $70 overall a share. $60 of that is in cash and $10 a share in stock and it's worth roughly, let's call it around $105 billion or so particularly given the move up in broadcom's stock price. when you throw in debt, you get closer to $130 billion lots of moving parts here. bet let's first start with what qualcomm is likely to do in the face of this bid

and what it is likely to do according to people close to the company is reject it not right away, of course. typically, companies like to have their advisers at least review, even though they hadekd or less have a sense that this was coming and their board of directors finally sign off on a potential no thank you the reason, well, they seem to be focused at this point at least on price $70 a share, which is seen as an advantageous bid by broadcom for a company suffering with that significant litigation with apple that has depressed its stock price to a certain extent. and as well, qualcomm also expected to make note of the serious anti-trust review that would take place and the -- not necessarily likelihood, but the difficulty that review could pose to a potential dial for its part, broadcom and people close to the company indicate it did not begin this,

not to stay in there and find a way to finish it $70 is not typically the ending bid. it is obviously the starting bid. the question for broadcom will be, does it get even more aggressive by trying to place nominees on qualcomm's board of directors who will support its bid? and that will be a question that it has to answer in the near term, at least, if it wants toye annual meeting that will take place in the spring. alternatively, they could wait a long time to get the anti-trust approval and then come for the board of directors. that would require perhaps a very long period of time the question would be, if they do try to seize control of the board or at least get a significant number of seats, will qualcomm's response be why would we hand you the keys when we don't even know if you can complete the deal? that's one of many different iterations that will go on in the weeks and months ahead again, to step back.

a huge deal. the incredibly aggressive ceo of broadcom who has grown this company. remember, it was avaga before it bought broadcom. he's grown it through acquisition and is continuing along that path with the deal that he says they have the commitments in place to finance. and that would, sara, be simply in the face of it enormous when you thinkabout it, with the largest customer of both companies being apple. i do want to make sure to end on that and how important a role apple could play here in that. >> well, i can't figure out, would apple hate this or would they bless this given their dispute with qualcomm? >> from one person involved, i have gotten that this basic thought, we wouldn't have gone into this without a sense at least in terms of where apple might be and in the belief that they will be constructive. read into that what you want apple could certainly pose a risk to it if they were to raise a ruckus on anti-trust, a, being the largest consumer of the

chips from both companies. b, they also, of course, could conceivably play a very good role if they were to say to broadcom, or broadcom were to say to them, let's get the whole litigation thing in terms of the patent and royalty payments out of the way and that will clear the way for qualcomm >> what's your reflection on the spread this morning in the stock price, and also considering jim thinks qualcomm is worth closer to $85 or $90 in his view? >> there are advisers who are not going to disagree with that, carl their own shareholders may also agree. this does not appear to be a bid that fully values the company or will get them to the table the spread is a result of a lot of the risk in here. hostile deals are by their very nature very, very difficult to get done and certainly, there is a good deal to go here. the anti-trust question is a real one, as is typically the case you'll hear very different narratives from both sides in terms of how difficult it will be and anti-trust, by the way, in

this day and age is hard to figure we have a new administration, a new anti-trust chief at doj. it's kind of hard to gauge >> one thing we know is the regulatory won't be as burdensome after the broadc broadcom ceo made america home again one day before the deal. >> convince dnls >> i guess not everyone was watching that brocade transaction. i guess that goes through now. >> the committee for investment in the u.s. had been looking closely at it. there had been perhaps some national security concerns and that move back to the u.s. and redomiciling here is seen as something to help that deal. and will be an important component for this fight that is just beginning, because you might imagine the anti-trust review for a foreign company trying to hostile takeover of a u.s. company has a bit of a different ring to it >> in america first. >> in america first trump administration, exactly. >> sort of brings us to saudi arabia this morning. a wave of arrests of businessmen and royals over the weekend in

what is called an anti-corruption probe. the arrests include a familiar name for thus, prince al waleed bin talal. our andrew ross sorkin was with the peninsula trince two weeks joins us your thoughts on what happened over the weekend >> good morning. we have all been as the business community has been trying to make sense of what's taken place over the weekend, trying to understand what it all means as you noted, we were just there two weeks ago. the crown prince had convened a huge conference with some of the biggest business and investment leaders in the world, in part, trying to make saudi a hub of investment, trying to bring money into the country and of course, this news over the weekend, the question, of course, is does that make that more or less likely? i should tell you that it cuts both ways. we have spoken now with people in saudi, a number of the participants that were there, big american ceos and others there's a view on one side that if in fact this is an

anti-corruption effort and it really is an anti-corruption effort, it's needed and there is still corruption in the country and this could be helpful. on the other side, there is a view that if in fact the crown prince is trying to take, you know, to take off his enemies list and whether prince al waleed was on that or not, but that makes this much more complicated. i know a number of people who know prince alwaleed he has been the face of saudi arabia he has a partnership, an investment partnership with bill gates and the four seasons people who have known him look at this and say maybe there's a real problem here. i'm now even more unsettled about what's happening in saudi. on prince al waleed, a couple quick notes and reflections on the trip i don't think i appreciated it while i was there. the prince was not invited, at least as far as we understand or did not at least attend any part of the conference that had been put on just ten minutes away at the ritz-carlton by the crown

prince what does that say about the relationship they have having said that, he made some very praise worthy comments about the crown prince known as mbs, and also praise worthy comment about president trump, who clearly has become close with the crown prince. i want to show you just some of that video i don't know if we have that video right there, but the larger point here is just whether in fact prince alwalid understand perhaps what was happening. i don't think he did i think this came as a big surprise the other thing i wanted to point out, and kingdom holdings has put out a statement over the weekend. the company continues to operate, they say, as normal prince alwalid has been the

chairman since twen 16 there was a new ceo put isplain and much of the day to day operations are run by a management team. do the assets get frozen can this company go on without him? the kingdom holdings says it can and that it will and we will have to watch and see how this plays out, but huge implications for the transformation of saudi and also, we should say, because we interviewed the ceo of saudi aramco, huge indications for saudi aramco's ipo and the profits of that, which are supposed to fund the transformation of the country. will investors flockto it or will they walk away? so a lot going on. >> indeed, andrew. as a lot of people said over the weekend, of all the news we got, this might be the most impactful turn of news, at least for the long term. we'll have to wait and see, obviously. andrew, thanks so much after working all morning long, andrew ross sorkin joining us from the times headquarters. for more on the situation, we're joined by simon henderson,

washington institute director of gulf and energy policy, and mohammed, atlantic council nonresident fellow mohammed, two questions. is this a corruption probe or a power grab and what is the imp pact on capital flow both in and out of saudi from here? >> so, i wouldn't call it a power grab, but everything that's happening in saudi arabia is political by nature today most of the steps taken by the crown prince after the power have overturned the system in saudi arabia they're all unprecedented. the political dimension is always there it's not a power grab per se because the vast majority of people who were detained are politically insignificant for all intents and purposes h what the common thread here is, public infamy for famous corruption issues. the key here is economics, i think. saudi arabia has enacted various policies in order to fix its

fiscal situation among them was cutting benefits for public sector employees. lifting fuel subsidies but if you look at the dollar amount that the saudi government is saving as a result of any one of these policies, it pales in comparison to the many billions of dollars that are lost due to corruption i'm talking about corruption from the top level as we have seen from the recent arrests throughout to more junior level corruption so cracking down on the corruption in these cases, the cases of the people that were detained,is going to inevitabl bring in needed funds for the government, but more importantly, it stands to change a culture of corruption in the kingdom that can only really be changed if a policy of cracking down on the bigwigs, if you like, without any half measures, is embarked upon this seems to be what's happening in the kingdom right now. >> that's sort of an interesting way to look at it. simon, i wonder if you agree with that characterization, as

we dry to figure out for global investors, saudi arabia in the last few months and weeks specifically, has been trying to send a message of reform and openness and welcoming foreign investors, especially here from the united states. and how you square these moves over the weekend with that >> it's very difficult to square them, in my view i thought it was a power grab. the most significant prince to be sacked was prince been abdullah, the minister for the national guard he was sacked from his government job, and then arrested on unspecified charges of corruption. he was a leader to an extent of opposition in the royal family to the rise of mbs, the current crown prince and if mbs is going to become king, which he will, i have

little doubt, probably sooner rather than later, he needed to bypass mitab to accuse him of corruption is a neat way of doing it but looking broader at the issue, this might have the reverse effect that mohammed bin salman wants in terms of business and commercial climate. he wants to encourage foreign investment in the kingdom. he's got grand plans to do this, vision 2030. it's not a great way to scare the hell out of potential investors of whether some of those saudi business partners are under suspicion or about to be prosecuted. i think they will, many foreign investors, potential foreign investors which the kingdom needs so much, are going to press the pause button for the moment and see how this one plays out. >> so, mohammed, do you agree with that?

if so, does that apply directly to aramco, the ipo >> i'll have to disagree with that, actually while uncertainty inevitably has an impact on business, the main obstacle to foreign firms doing business in saudi arabia and to commerce within the kingdom was this type of corruption. people factored it into the risk when calculating whether they should do business in the kingdom or not it was the main obstacle to what's going on in the kingdom right now. if indeed this crackdown on corruption is going to have follow-through, and all indications right now show it is going to have follow-through, it's going to alleviate that uncertainty and promote transparency in the kingdom. now, what it has to do with aramco ipo, i don't think there's much relation to what's going on in aramco aramco is a separate company that is run within its own rules and contexts what we're seeing with this

corruption crackdown is a crackdown on construction magnates, on media magnates. the common theme among all of them is the scandals they were involved in are very public. >> fascinating to hear your disparate points of views on this we'll see what else we can discover, certainly looking for communication out of kingdom to the degree we can get it simon, mohammed, thank you very much >> thank you when we return, president trump kicking off his asia tour. we'll take you live to seoul, where he's headed next, and taking a quick look at stocks at this hour. looks like they are mostly higher, though barely moving the nasdaq gained a full percent 'sp aieek. it uagn this morning "squawk on the street" will be right back oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low?

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president trump is on day three of his five-country tour of asia. kayla joins us now from seoul, south korea, with the latest kayla. >> good morning, sara. the white house just about an hour ago putting out a statement on the progress made during the president's 48 hours in japan. where he is currently wrapping up his visit there appears to be something for everyone, considering trump ran on a platform of creating and bringing back more u.s. jobs, and abe on a platform of standing up to north korea the first line of interest on this press release, it says the two countries strengthened their

resolve against north korea and there would be an enhanced military capability for japan. the second to open up the indo-pacific region, the u.s., japan, australia, and india. the third bullet point is, of course, you probably guessed it, to promote u.s. investment in jobs in the united states. but there is one deal in particular that is singled out in this release that the president talked about earlier today. >> toyota, mazda i thought so oh, i thought that was you that's big stuff congratulations. they're going to invest $1.6 billion in building a new manufacturing plant, which will create as many as 4,000 new jobs in the united states thank you very much. >> the president taking a little bit of a victory lap on that announcement, except that it was an announcement from back in august the press release does say that japan made commitments in

automobiles and life sciences and space exploration. there just aren't any details provided on those. now, the president spent today pitching business leaders to do more business in the u.s he said come to america. you'll have little regulation. your projects will get approved quickly, or if they don't get approv approved, we'll ditch them quickly, at least you'll have certainty. it remains to be seen how many people will take up the bait on this and whether this visit will bear any fruit he does have a big ceo delegation joining him in china with a lot of prebaked deals so far, the japan delegation is a little short on details and short on deliverables for now. back to you. >> i know there was some tough talk from president trump on trade. did that overshadow what has been a very friendly relationship between abe and trump at all >> well, it's unclear what was really talked about behind the scenes we know that there is a lot of bluster coming from the president on trade it is his number one priority.

but it is clear that prime minister abe really wanted to get some substance together on north korea. whenever they were asked together what the meeting contained, what they discussed in the meeting, prime minister abe said we discussed north korea and national security. trump always said trade first. so clearly, thesis are two leaders who are approaching the table with two different priorities but they did put on a very congenial public face. lots of smiles, lots of pomp and statecraft and lots of flattery, which we know the president does enjoy. >> all right, we'll see what happens in seoul and then china. thank you very much. >> for more on the president's asia agenda, we're joined by myron brilliant, u.s. chamber of commerce executive vice president and head of international affairs. maybe we can pick up right there. we saw them feeding the coy together, eating what sounded like delicious meals, playing golf, and yet president trump accused japan of unfair trade

practices. why is he doing that >> sara, i think there are three priorities for this trip for the president, which i think is a very important trip on a number of fronts. two were discussed in the last segment. first, of course, pressuring for more diplomatic and economic sanctions against north korea, and he's doing that with every stop, including, of course, meeting with president she jun ping in a couple days as well as president putin. the second is trade. he wants to address the issue of trade deficits he wants to encourage more investment in the united states. and he wants to take on some structural issues we have with countries like china the third one that doesn't get as much attention but i think is very important, and underlines the whole trip, is the notion that the united states is very engaged in the region, the asia pacific region and that we have some strategy after the aftermath of withdrawing from tpp, i think a lot of countries ask, what is the u.s. strategy now in the

asia pacific region? and the president's lengthy trip through five countries, of course, a speech at apec will be very important to signal u.s. engagement going forward and what the strategy will be across the region as it relates to japan, no surprises. talking a lot about investment in the united states we want to encourage that, certainly, from the u.s. chamber's standpoint >> but myron, he was telling them to build their cars in the u.s. instead of shipping them over according to the japanese industry, 75% of japanese cars sold in this country are made in north america. the question is, is he doing damage on trade at the expense of what needs to be a strong military alliance to combat north korea? >> well, we have been very clear all along that the president needs to focus on exports and investment and that we need to find ways to send our products, our services over, not just to japan, but across the region. that's true with japan it's true with south korea, his next stop, where there are real

issues wit implementation of the fta, and china, where we have structural issues with how china has treated our technology firms, alic lack of access for internet firms, for food businesses, for manufacturing, for financial services there are a lot of issues to be dealt with they can't simply be dealt with by having more investment in our country. we have to deal with these policy challenges that we face in each of these countries >> you know, the president is a guest in some of these countries, and normally, traditionally, it is the guest that would be bringing deliverables so what are we prepared to give in return for some of these trade advantages is it about military equipment or something else? what's our carrot? >> well, look, i think in the case of china, xi jinping comes out of the party congress stronger than ever the most powerful leader in china since mao. no question he's a strong leader in a good position the president has a good

relationship with xi jinping that's not enough. we need to really press for structural reforms china sat on its feet, did nothing on structural reforms, whether it's dealing with excess capacity, with steel or cement, or whether it's dealing with market access concerns of our companies. or frankly, whether it's dealing with debt and other issues like state-owned sector development and reform so there's a lot that china needs to do. in our return, we need to keep our market open. the bottom line is we have to keep our market open, but we can't close our market to chinese products what we have to do is insist that china open its market or there will be reciprocity here certainly, that has been the president's message. >> so as far as the president's message and whether he's talking tough to japan or south korea or china on trade, which should the investor takeaway be, myron? it does feel like the bark is tougher than the bite in this

circumstance are you expecting policies to actually correspond with some of this tough rhetoric? >> look, i share the concern expressed in your question i think there are going to be deals signed in china. the question is how much and how valuable but that's not going to go to the underlying tensions, the trade tensions and the relationship without structural reform in china, we're not going to get at that and meaningful trade deficit reduction isn't going to come. our priority, again, is creating jobs in our country, creating opportunities for our companies. for that to happen, there has to be material change in china. as well as in other markets. so the question becomes, will this president be able to get that done on this trip i think it's to be determined. i think there are still questions with not just china but also south korea in terms of their willingness to go along, because the president made very clear that a priority for him on this trip is also getting deeper cooperation on north korea and as long as that is a priority, the question is how much pressure is he going to put

on the trade front >> well, we do expect a lot of diplomatic pomp and circumstance we'll see if we get anything in terms of policy deals and what you guys want to see fairer terms myron brilliant, thank you for joining us from the u.s. chamber of commerce. when we come back, the commerce secretary, wilbur ross, speaking out against allegations he tried to conceal an investment in a company with ties to russia you'll hear what he told cnbc next record highs across the board, although very limited range in eseay urofhe session. back in a moment ♪

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good morning, everyone i'm sue herera here's your cnbc news update at this hour. authorities continue to search for evidence and answers in the wake of the deadliest mass shooting in texas history. more than 100 people, including texas governor greg abbott gathered for a vigil near the site of the shooting at the first baptist church in sutherland springs 26 people were killed. about half of them were children

>> defense secretary jim mattis hailing the strengthening ties with finland after meeting with the finnish president in helsinki he's attend a meeting of a dozen nations who are concerned about threats from russia. meantime, south koreans cheering president trump's visit and denouncing north korea at a rally near the u.s. embassy in seoul. president trump will arrive in south korea tomorrow as part of his asia trip. >> and the first lady melania trump visiting an elementary school in tokyo today with her japanese counterpart she wrote the japanese word for peace before posing for photos with the school children you're up to date. that's the news update this hour i'll send it back downtown to you guys sara, i think i'm sending it to you. >> yes, i'll take it sue, thank you very much just commerce secretary wilbur ross striking back right here after the paradise paper allegations that he tried to conceal an investment in a company with ties to russia. we have been following this story from washington.

he has more on it. >> good morning. it's a complicated story, and wilbur ross is now defending his interactions with a shipping company that itself had business relationships with a company that was connected to vladimir putin's son-in-law here's what wilbur ross told cnbc in london earlier this morning on the story >> a company not under sanctions is just like any other company period it was a normal commercial relationship, and one that i had nothing to do with the creation of it. i had nothing to do with the negotiations and do not know the shareholders that were apparently sanctioned at some later point in time. >> so here's what we're talking about when we talk about these paradise papers. another leak of a massive trove of documents similar to the panama papers. this is 7 million documents from a law firm that's global in scope but has offices in bermuda

called appleby these were sent to a german newspaper and shared with the international consortium of journalists which offer rare insights to the global deals, but more than 120 politicians and royal figures have been identified in the documents. how wilbur ross comes into all of this is that nbc news reported over the weekend that ross shares business interests with vladimir putin's immediate family he failed to clearly disclose those interests when being confirmed earlier this year. ross retains an interest in a shipping company called navigator holdings and navigator has a business relationship with a russian energy firm that was controlled by putin's son-in-law. so complicated stuff here, but we are getting a new look at these global offshore financial transactions that are often cloaked in secrecy the law firm in question has said it was the victim of an illegal computer hack, sara. >> really quick, how long is it going to take to get all of the documents that will be unveiled

to be unveiled, and how long do we expect this to take news organizations to vet >> well, it's clear that the consortium of journalists has been working on this for months behind the scenes and coordinated with nbc news, "the new york times," and other outlets around the world a big ruckus in london going on about this as well when you're talking about 7 million documents and complicated financial transactions, it could take weeks as it did with the panama papers before we know the full outcome of all this. the big difference between the panama papers and what we're seeing here in the paradise papers is these documents include a lot of americans we didn't see that with the panama papers case so this is something new. >> thanks for that >> markets are up this morning we have some record highs across all the major stocks steven gallagher is head of research good to have you both on set times runs this piece over the

weekend about how most bull markets make investors happy and this one is not. you argue that clients are still coming to you with a list of all the things that could go wrong >> it's literally every meeting i go to. tell us what's going to go wrong. it's politics, geopolitics nobody wants to buy into the fact that we're seeing the strongest and most synchronized groel growth story that we have seen since the crisis and that's what driving markets higher >> you have the same concerns? lack of euphoria >> i'm lacking all the uphoria but i think immediately ahead, we're all in good shape. i think we're in good shape for 2018 i think this lack of -- you know, the concern or the wall of worry is the other way of looking at it, maybe it's not the same after we have had this major crisis people's memory, of course, they're thinking what could go wrong. they had recent memory of extremely painful events >> so do you take what you're hearing from clients, steve parker, as -- stephen parker, excuse me, as a sign that the bull market can go further and

that there's enough healthy skepticism out there that it can keep running >> i do. i think it can continue to go higher, and i think it goes higher based on earnings growth. now, if we have started to see some of that euphoria begin to creep up, we would look to see that in the form of multiple expansion. this year, we're not seeing that 85% of the returns in global equity markets have been earnings and dividends that's exactly what you want, exactly what i think can continue, at least until we start seeing signs of an economic slowdown, which isn't in the cards near term >> but your approach is still targeted by sectors, right >> it is >> you would need more information to suggest a broader market is going to go higher again. >> i think specifically here in the u.s. where we are further along in the cycle, we think you want to look for a balance of secular growth stories like tech and health care and cyclical value like energy and banks, rather than owning the more expensive parts of the market, things like bond proxies, defensive, which have benefits from the search for yield. >> same way, sector favorites?

>> technology is the area that's doing very strong. you know, a lot of these earnings are pushed up by energy now. and to me, energy is a bounce from extremely poor performance that we saw late 2015 and '16, so i think that is capping off i think we're seeing that turn over when you strip out the energy, the earnings are about 2 pursage points down from the level so i think we're heavily dependent on one sector. you know, i'm not negative on anything i think we're -- the economic cycle is fine and it remains supportive, but i think there's a few things we need to be watching for and in my mind, it's the u.s. consumer, and as steve parker mentioned, the u.s. is much further along than a lot of other countries. i think the u.s. consumer is a big part of that i think we're seeing signs that the u.s. consumer is getting tired and we have to be careful of that. as for the tax cuts coming in. >> confidence is through the roof >> they're getting tax cults unemployment rates down and tax cuts, but if you look at the

savings rate for u.s. consumers. it's down to 3%. it was at 6% two years ago they're spending more of their savings, what they should be saving i think without the tax cut, and i think we'll get a tax cut, but i think without it, we have to be a bit more careful. >> we're definitely going to get hopefully more as the ways and means marks it up starting in a couple hours thanks good to see you both stephen parker and steven calgr. >> take a look at shares of apple on the move. higher again, coming off a big earnings beat last week and the release of its latest iphone the stock near a record high former apple ceo john sculley joins us next. don't go away.

speculation swirling that amazon and apple are looking to move into health care. john sculley is from a cloud based medical company. he joins us this morning good to have you back. >> thank you, carl

nice to be here. >> let's talk health care first. this has been bubbling, percolating for a while now. how much of amazon's would-be plans do you take seriously, and what would the impact be on the business >> well, i think the way you have to look at amazon is that amazon is the big innovator in cloud computing. obviously, aws is an amazing story. health care hasn't had cloud computing, particularly in the pharmacy benefit management space, before, until rx events came out with the first transactional automation platform so i think that it may be a year or two before amazon actually gets in. they either have to work with someone like us who has a transformative platform or they have to build one themselves, but it doesn't exist in the pbm industry today, except with rx advance. >> i'm not going to ask whether you want to be bought by amazon, but is this something that given their arsenal of money and

intelligence that they could do on their own or not? >> i think we would be very challenging to do it on their own because it's all about the deep domain expertise of this very granular health care industry that is largely shaped by special interests a lot of people look at the traditional pbms and say exactly what is the added value that these middle men provide given that they have no transparency in terms of the drug economics, they don't tell anything about what the spreads are and how they make money, and i think if amazon were to come into this industry, that they would want to disrupt that. and they would want to take it obviously to the things they are very good at, which is being able to move it into the pharmacies, into mail order drugs and things of this sort. but it's really an industry that is ripe for innovation, which is why we created rxadvance >> so given everything that you're predicting, it sounds

like, and if we do see this merger between aetna and cvs, amazon potentially entering the space as well, disrupting the whole model, is this all good for consumers? >> well, it can be good for consumers because there is going to be, i think, by the government, a spotlight on the pbms in the case of cvs and aetna, they're going to be questioned asked, i think it will be approved, but there will be questioned asked, exactly what is the added value that these big middle men who are largely opaque, really add at a time when drug prices continue to go through rapid inflation. so i think actually that spotlight will be good for the industry because it will put a higher priority on this industry needs to be disrupted. >> speaking of disruption, we have been talking qualcomm/broadcom all morning long now intel and and are confirming

their partnership to take on nvidia there's so much happening in the chip space what's important >> i think what's important is we're moving into the era of internet of things becoming real it's estimated by 2020 there will be 23 billion wireless devices connected over the internet and these are mostly sensor-based products. so when you see intel buying mobile-i for $15 million, smart move you see nvidia growing increasingly successful, obviously intel wants to react with that. so working together with amd makes sense. you see broadcom wanting to buy qualcomm makes sense because of the incredible growth we're going to see ahead with 5g broadband combined with internet of things >> what do you think it all means for apple? i know you're not there and haven't been there, part of those discussions, but i'm curious how you view it through the apple lens with

broadcom such a major supplier >> apple is pretty independent from qualcomm now. they have come up with their own technology they're going deeply into chips. i believe that you have to look at apple kind of like the perspective i have going back to the years i worked with steve jobs steve was fascinated by music. he loved wyndham hill. he was dating joan baez when i knew him he loves the beatles and he was fascinated by anything visual. think of apple through a lens of not technology but think of apple through a lens of experience innovation. so when tim cook says the next big thing may be ar, augmented reality, i take that very seriously because augmented reality is one of those areas where these amazing developments in chip technology and 5g technology is going to become very practical and probably very affordable in the coming years

>> they definitely are pushing the a.r. element, john running short on time, but we'll talk to you again soon john sculley on health care and chips and a bunch more >> as we go to break, a quick look at shares of sprint and t. mobile, the wireless carriers calling off their merger talks a lot more ahead on "squawk on the street" with the dow up 25 it's a small finger...a worm! like, a dagger? a tiny sword? bread...breadstick? a matchstick! a lamppost! coin slot! no? uhhh... 10 seconds. a stick! a walking stick! eiffel tower, mount kilimanjaro! (ding) time! sorry, it's a tandem bicycle. what? what?! as long as sloths are slow, you can count on geico saving folks money.

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dow's up 21. let's get over to rick santelli for the santelli exchange. good morning, rick >> good morning and chuang, sara i'd like to welcome my good friend peter, thank you for taking the time this morning, peter. >> great to be here, thanks. >> well, let's jump into the

conversation everybody seems to be having. we learned over the weekend bill dudley will be retiring and even though in this instance that is not a pick of the president, it's a pick of the fed board members, there's a lot of openings how is that going to turn out? is it something we should be paying attention to? is it something that could change the course of normalization that was on track under janet yellen >> well, certainly hugel important, but i get the impression that the complexion and belief system is really not going to change that much. i mean, powell isn't going to be that much different than yellen, and i've read the reason they didn't want taylor is because they didn't want higher interest rates and the taylor rule initiated, so i think they want to keep this low interest rate environment going as long as possible, putting aside whether that's the right thing to do or not, i just don't believe the thought process is going to be that much different when all these seats are filled,

unfortunately. >> got ya. well, now you really read my mind, the unfortunately, i think many believe that, but we have to take a wait and see attitude, give people a chance a lot of talks these days about the flattening needle curves tens minus twos, ten-year flats, in your opinion is this something equity investors that are fully loaded with positions being long pay close attention to, or is it a bit of an anomaly considered the quantitative easings and securities >> they should certainly pay attention to it, not necessarily the level, but certainly the trajectory after the election with all the enthusiasm between twos and tens, now down to 71, if no one is paying attention to that, i think thermos taken. it's saying something. what level the curve needs to get, i have no idea, but it's certainly sending a message. look at the last rate hike cycles, typically paid to

flatten a curve because we know how these things play out. last 13 rate hike cycles put us into a recession i don't think this is going to be one that skates by. granted, part of this flattening has to do with what's going on in europe and the drop in yields we've seen over the past couple weeks with draghi being more dovish than even most people thought, but yeah, you should be paying attention to the yield curve. it's sending something, but what level does it matter, who knows? >> got ya. listen, always interesting to get your thoughts, peter, and i agree with you, boons are getting closer to 30 than they are 40 basis points and that's going to also push yields down in the u.s thanks again now we're going to go back to sara >> yes, we are seeing it rick, thank you. let's send it out to john fortt with a look at what's coming up in the next hour on "squawk alley. good morning, john >> good morning. this is a huge story, broad co e looking to talk out qualcomm does this make sense and under what circumstances

we're going to break it wndo for investors coming up on "squawk alley"

when we come back, norris mark weighs in on the tech

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welcome back to "squawk on

the street." i'm dominic chu. stocks holding on to fractional gains. health care in the headlines as shares of mylan are gaining ground, despite a somewhat disappointing earnings report. valiant is selling one of its units and a report teva pharmaceuticals will be. that does it for this hour of "squawk on the street. let's send it back downtown for the start of "squawk alley." guys, back over to you >> dom, thanks very much good morning, it's 8:00 a.m. at broadcom headquarters in irvine, california, 11:00 a.m. on wall street, and "squawk alley" is live ♪ ♪