c "squawk box. >> good morning. welcome to "squawk box." we're live at the nasdaq market site i'm andrew ross sorkin, joe kernen is here kayla tausche is here. becky is off the professor is here, steve liesman, neil blackstein is here let's see how things look this morning. the dow in triple digits in the green right now. looks to open up 263 points higher nasdaq opening higher as well. 56 points higher s&p 500 up about 18 points let's show you treasury yields at this hour 30-year, 3.182 oil prices if you want to buy a barrel of wti, you can do it it will cost you $60.96. >> among the top corporate stories, cisco systems posting a net loss in the second quarter due to an $11 billion tax

related charge but excluding items earnings still beat the street cisco looks to s s to repatria$ billion in overseas assets uber's ceo plans to expand the ride hailing service beyond cars he says uber is to cars what amazon is to book stores he believes uber could be a marketplace for other forms of transportation, including public buses and bike sharing programs. >> i was with him in davos, he was sharing this idea that you would take an uber to a train,

and then get off the train an then get on a plane an then get on the plane, get in a car, he would do the whole thing that's the idea. >> uber eats, the leasing program, were those side shows >> to this idea that could you plug into the new york city mta public transportation system so if you're in an outer borough, the uber gets you, brings you to the subway, the subway takes you, you get off, maybe there's an uber pool that takes you to the office >> is this before or after flying cars? >> this would be before flying cars i think this is not completely unreasonable i think a tub of these cities are looking at the data uber has, wants access to the data and what's the trade maybe the trade is open up the system so you can be connected into it. >> i can already take an ub tore a train. i can figure that out. you look at when the train is, you take the uber.

>> so vintage. >> but then buses, i don't want to sound elitist, buses are an important part of transportation, but they're not my favorite way to travel for sure especially not more than -- >> but the idea is they could operate the buses potentially themselves >> you still get those fumes >> or smaller buses, because everybody would have the app, they would know how many people are waiting at the corner. they could make the system that much more efficient. the idea was if you could 5:gate everybody's travel data, you could move everybody around faster what about the senior citizen who may not have a smartphone and still wants to take the bus? >> it's a generational issue >> the bike sharing is huge in asia a number of private companies in malaysia and china with bike sharing apps do you think bike sharing will be huge here >> citi bike in new york has taken off to a certain extent. >> bike sharing is popular in

d.c. because the weather is more mild and the train is more unreliable >> and you're in a tighter area. smaller area you have to go. we'll see. >> sorkin is not going on a bike -- we have -- we have drivers. we're not going on bikes, are you? have you been on a citi bike have you ever done that? >> i've not. >> never all this time. >> i want to tell you why. >> you can't ride a bike >> nope. because of the helmet issue. >> you can't carry a helmet with you at all times >> what scares the heck out of me is seeing all these people riding around on these bikes without helmets. that's crazy town to me. >> we didn't have helmets when i rode bikes as a kid. >> that explains a lot >> okay. i played football without a helmet >> we're talking about riding these bikes on these city streets. >> i know. >> even with these new bike lanes -- >> it's not a new concept, by

the way. >> i got to get to liesman i do want to talk to liesman >> as fun as this conversation is, let's get to economic data there is something to watch today. the producer price index is going to hit the tape at 8:30 a.m. eastern especially after some of the glimmers on the inflation front yesterday. perhaps stronger than expected signaling faster rate hikes. steve liesman, you don't need me to tell you what they indicated. you tell us. bhafrnlgts >> what a weird way it ended the move in the ten-year never reversed >> no. >> but the move in the stock market totally reversed. >> joe, we had three dramatic minutes yesterday. >> right >> the storyfollowed the predicted script >> but itbecame good news. this is an unbelievable graphic. it was hotter than expected inflation report prompts a violent selloff. the dow jones dropped about 500

points in three minutes, and as joe said, rates spiked it was proof, right? stocks are scared about inflation, worried about higher rates. hold on. because that proof went away within minutes stocks came off the lows, then they rallied rallied more the dow finishes up 253 points suddenly this inflation story fear is in question. there's more doubt this morning. the yield on the ten-year up as high as 2.94 where is it now? 2.93 the highest level since 2014 the dow futures are in solid territory. chances of fed rate hike probabilities up pretty good this morning 93% chance for the first hike. 65% for the second hike. 57% chance for the third hike. you remember when stocks came off their highs last week, we were down in the 40s for that third hike all this happening with another inflation report on the way. the producer price index should show strong increases this

morning and test the market's mettle once again. maybe as some argued yesterday, inflation may be on the ride but yesterday's report was exaggerated proof or maybe stocks have decided it's not that worried that better earnings from the tax cuts, higher growth will outweigh the down side of inflation or one more thing, maybe we have reached the singularity and it's the black boxes that are in charge and they just defy a human narrative, they're trading on algorithms that even the guys who programmed them can't figure out. >> number one, if you -- if you're jonesing for 2%, and it's like all you think about for five years -- >> 2% growth >> 2% inflation. >> right >> and the fed is saying we'll keep our foot on the gas until we get to 2% then you get there, you're not supposed to --

>> freak out >> yeah. number two, what was the point that productivity gains in corporate america from the tax cuts could actually keep down inflationary fears >> i agree with that the timing is off because you will have this -- i think the front end of the tax cut is a kansian stimulus, there is a lot of research which shows when you introduce new technology to an organization, productivity falls. you give a guy new software, he doesn't know what to do with it. >> i'll add another scenario -- >> if you have an explanation, go for it. >> perhaps the short-lived reaction to the inflation data is because you got retail sales relatively soft. people didn't know what to make of those two reports >> i just want to take a victory lap, yesterday at 8:30, i said this trade is algorithmic, it's probably going to come back --

>> has before. >> because there is this moment of the machines. it's in the first -- i don't know what the time period is 5, 10, 12 -- >> the machines read the headlines. >> they make the trade and it's not a human driven logical thing. >> are we still in the bad news is good news the market sells off, but then we get a crappy retail sales number >> it wasn't necessarily crepey, but it rose less than expected >> you want an economy where people are spending. >> if you think that's going to cause the fed to move too fast, hasten recession >> if we keep telling ourselves that rate rises to moderate levels, if we keep saying it's for a good reason and the market goes down -- you have to live by what you said. >> my big concern is that this supply issue, it's more of a supply concern than an inflation

concern. there is research that shows markets don't care about supply. i think the treasury needs to be more proactive in talking to markets, explaining how or where it will place this paper across the term structure i think we need to see the market digest this paper, rates stabilize, and then see how the market reacts. i think there are challenges yet to come. clearly the market can live with higher rates and more -- >> we have shun shahave someones head >> our guest host for the hour, noah blacksteen. steve, noah likes to point out people who come from former communist countries, they appreciate the united states and capitalism you look down from up in canada at what we have here and you're envious at times, are you not? >> why wouldn't you be >> sometimes i think people that don't live here can embrace what we do here more than we do

sometimes. is that -- >> i learned to be a capitalist in russia. when i saw how successful communism was. >> okay. >> it destroys all of the inner good in human beings >> yes okay wow. james, you were ready to say something. >> i'm shocked about the comment there, steve, but you nailed it on the head with the uncertainty in the bond markets. we did not find an equilibrium yesterday. the cpi number was shocking for the bond markets i think there's a big open question about supply and where that new issue of supply will be along the curve. we know there will be rising rates. we know the collar dollar is we that's bad for bonds but the market does not know where the supply will come >> canada is a great place you love fossil fuels up there

i don't flow about healthcare, but some people love healthcare in canada, too at least everyone is covered >> as long as you don't have to use it, it's great what about the markets >> i'm interested because in terms of the inflation number, the fed doesn't look at cpi. the fed looks at pce, i think, as their preferred measurement of inflation my curiosity is as you look towards rates moving higher, today in the "journal" we read an article about one pension fund and maybe one educational institution that had a short vol trade during this whole collapse you wonder why some of these institutions are messing in that stuff. but so many investors have been driven out of the bond market into this esoteric -- i don't know a better word than crap that they start heading back not bond market now that they offer higher yields. the stock market can go back to returning award of equity

instead of on equity this is normalization, isn't it? >> i think the equilibrium we've been looking for what not been found yet but these are the yields the bond market has been looking for. >> my number last year, when they asked me where the ten-year would be i said 3% all i did was add 100 points on top of the two-year, so to me the story is maybe we didn't get here sooner and you had 70 basis points of tightening between the 2 and the 10 this number relative to the fed makes more logical sense in terms of a term structure of the bond market. >> that's a positive i've been running the same fund for the last 20 plus years stocks can go up with yields if it's stronger economic growth i know we've been in a model

since the financial crisis where it's been bonds up, stocks down, but if we're florm normalizing - >> how long does that pattern last >> until real rates get to 3.5%, 4% once you get there, you are getting into a problem >> you think it could have been machines yesterday morning >> can you put that chart up again? >> did humans take over? >> that's what i think happens >> you have to believe it exacerbates the situation both in the medium term and -- and the up and down side, meaning -- meaning that as the market was closing yesterday up, let's say human beings had sent things up, it has to be exacerbated there, too. has to be. >> i know a couple things. ph.d. in mathematics is one of the most sought after professions on wall street these guys are getting top

dollar on wall street. the second thing i know is i can give a general idea of how the machines are programmed relative to the data. i don't know how they're programmed relative to other machines and other trade >> exactly >> what are the signals being sent certainly -- this makes me nervous. what we learned about in '0 w8 a to fear a world where all the risk management programs are the same and how they react in sening all cosen sending all correlations to one. there seems to be a certain similarity across the market when it comes to these risk management techniques. when you think of what the market is doing at 10:00, then you get up on air to discuss it at 11:00 and the story changed by 400 points, i don't remember that before. >> it already changed by 400 an instant earlier. >> i don't remember that world >> 1.5%.

>> we had the flash crash. the gold flash crash >> flash crash, though -- >> they're 1.5% moves. not 5% >> now we have the vix flash crash. >> they're not huge gaps they're 1.5% now not 5% we have to remember we're at 25,000 >> i feel like the flash crash was a different one that was a market failure we know there were issues in the market that didn't operate right. >> watching these machines do these things scares me about the future >> you saw the 1,000 on the 1600 >> when they have a billion times more knowledge than humankind, peoplekind -- you don't say mankind, but peoplekind when they have a billion times more -- they can kill you for no reason, right? >> let me ask this, with all of this stuff going on with the machines, can you step back from it and still make decisions based on your belief of the

macro economic environment and still profit from that there's all that oscillation that happens amid a trend either way. >> i think that as active managers who are still left in the business, it all hasn't gone to index product, for the few of us still around and who were there in the '90s and before the financial crisis, it's clear we're getting more and more evidence that a lot of this stuff is algorithms and quans trading. the best thing to do is move back you can see the lack of volume on those of these gap downs. the best thing to do is walk away it's like that movie "war games" in the 1980s a nice game of chess once the computer figures out it can't win, it defers eventually one of these computers will figure out maybe i should hang out in omaha and buy and hold for 30 years. but in the interim i will back away when this nonsense happens.

>> this is because more and more money is in index funds or some form of automatic trading. when you go into an etf, you say trade these stocks this way all the time it becomes not human decisionmaking >> the question is are there other algorithms trying to find those stops. is elon musk's words killing everybody beginning in the financial markets where they try to sniff out everybody's stops if they want to send the stock down for no apparent reason, take advantage of it >> ai is here on wall street before it's anywhere else. >> i'm worried about terminator, not war games. i'm worried about hunter killers, they won't need us. when we come back, the stocks to watch. big movers in early trading. futures pointing to a higher open on wall street. you're watching "squawk box" on

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the viacom representative to talk about bringing those companies back together. should we talk before the eaabo earnings or about the potential deal >> on the call there will be some updates on the quarter. maybe an outlook for the next year or two. the focus will be on viacom. and it's unlikely they'll comment anything on the actual deal it's the body language, what's the direction of that deal >> what is your sense of where things stand now >> on surface the doeal makes sense the it's about protecting the current business, the current environment with advertising and affiliate fees, but also protecting the future >> when you say this deal makes sense, this deal makes sense to me if you are shari redstone and

you want to control both companies and you're not willing to sell either of them >> right >> if you asked me if they made sense together in the grand sort of planetary that are media companies you might sell cbs to one company and viacom to another other do something different. >> if there are offers on the table. but we have not seen anything on the table. it's been a while. >> one of the reasons there's not offers on the table is because there's an understanding in the media ecosystem that the redstone family is not a seller at this moment. >> they're not, but if you look at viacom, they're trading at a significant discount relative to other assets the question is how much control can les have how much of a price is favorable to both shareholders and really control. >> if you're les moonves, you

had this remarkable run, this great career, this magic gut you're a legend in the business. do you want to take on what has to be described address a tu d job with viacom? >> history says no, but the world is evolving. over the past two years they have launched into the digital platforms. they have cbs alexis, cbs digital, cbs news, a sports platform the next generation is consuming, it v digitally. >> does viacom have the assets that can do that >> they have nickelodeon the paramount library, and effectively the mtv, which is comedy central, all that content. >> if you're a cbs shareholder, you see this as a dirt cheep

stock, do you want to deal with viacom or lion's gate? >> lion's gate is a higher quality asset but it's a financial deal lion's gate is trading 14, 15 times ebita, viacom 7 to 8 so depending on the synergies in place -- and there's not a lot of synergies with liolion's gat. >> the fact that cbs is entertaining this viacom deal, does that mean they looked at everything else they could buy or merge with and decided against it >> i think they're always looking. clearly they have another boss to answer to it limits their optionality. i think again, looking ahead, if this deal goes through, it's all about the price. >> we have to go, thank you. i had more -- >> the wheels are turning.

>> i could have gone on for a long time. we're a tv network, too. >> we have to pay the bills. >> thank you coming up, the ceos of iff and hasbro will join us in studio later on, don't miss boeing's ceo dennis muilenburg. catch his teinrview on "squawk on the street" at 9:00 a.m. eastern time

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visit esd.ny.gov. welcome back you're watching "squawk box" live from the nasdaq market site in times square.

good morning u.s. equity futures are in the green after a wild day yesterday. let's show you what's going on the dow looks like it would open 248 points higher. steve liesman made the argument yesterday after we got those numbers that the algos have taken over, but then maybe the humans took over at the end of the day. nasdaq opening up 47 points higher among the big movers, tripadvisor shares are surging after that travel site reported a higher than expected revenue in the third quarter sales from the hotel segment fell, that was more than offset by a 26% jump in non-hotel revenue. that stock up 18% this morning iff reporting fourth quarter results beating on the top and bottom lines joining us is andreas feibi fwshgs of int g o international fragrances and flavors. tell us about the quarter.

i'm curious about the forces in the market that lead a fragrance company to be strong or weak >> we can see the recovery of the economy is well under way, not just in the u.s., we see it in other areas of the world as well, which makes us optimistic for 2018 as well we see a trend that the raw material prices are going up, in particular for naturals. naturals is a big trend like vanilla or citrus. >> beyond havevanilla and citru where will it go >> every derivative of turpentine >> you don't generally think of that in fragrances >> that's true but even roses that's a big force on the fragrance side what about globy y you mentioned the u.s. strength where is the strongest growth

now? >> basically since 2006 everybody is predicting growth in all of the regions. what is important for iff is brazil brazil is a very, very big fragrance market, but also asia. we have good market position in india. we invested in two new plants in india. it's a market where we've seen solid double digit growth over time that looks good. moving to western europe or europe in general, europe has a good y good outlook it's good purchasing power it looks positive if we look at 2018 outlook >> tax cuts in the u.s., the company took 1$139 million charg in the fourth quarter. one-time i imagine >> it's a one-time and depreciation over eight years as well in general we see the tax reform

modestly positive for us as a company. for us the impact is lower than for companies which are predominantly in the u.s., because we do 75% of our business outside of the u.s. >> your tax rate goes to 21% from what? >> 22.5 that was the average >> so a modest effect. >> modest event, but still a positive >> but it was a blended rate for the tax. >> yeah. absolutely >> it wasn't that you were taking advantage of loopholes, the rates in all the foreign countries where you operate was so much lower than our 35% raid that your blended rate was 22.5%. >> absolutely. you need to operate over there because that's where you're selling the product. >> exactly >> would it induce you to bring any operations back here >> we have done actually a couple of investments in the u.s. in the last two years we acquired two companies in

philly, one in oregon. so our footprint in the u.s. is growing. whether we do more just because of tax reform i'm not sure it's good business for us. it's our home market we want to be strong here. maybe on the two acquisitions, we acquired two smaller flavors company in philly. >> that a cheese steak flavor or -- >> unfortunately not it's called taste point. we're serving the mid market customers from there we see smaller mid-sized companies are much more dynamic than the big ones. that yielded us good success we're growing double digits with this one in oregon we acquired a company called powder pure, we take food sources, dry them, take the water out, it can be used for taste or natural color solution. everything is 100% organic or

natural. that's something customers are asking for >> do you still try to innovate in terms of new fragrances >> what are you thinking about >> sorkin. like the cologne or something. >> yeah. >> people still introduce clones every day. >> what would be my scent? >> that's what i'm asking. >> can i ask a separate question -- >> do you still innovate are they natural -- >> perfume and colognes, i feel like it's not a growing market am i wrong >> it's a growing market >> what's happened >> what we see is that many of the bigger companies are revitalizing their good brands and we innovate them, even come up with new solutions. i can tell you -- >> is there a trend away from it >> no. >> we see more probably a trend towards naturals you see a buy fbifurcation of te

market everybody is having natural, tail tailor made solutions. >> what about all these kids spraying themselves with axe or whatever it is >> it's a fragrance as well. the control room has a name for andrew's -- >> too big to smell. >> i was thinking ars. >> can we work on that together? >> sure. what is the royalty arrangement? >> you could come to me -- >> if i have the brand and market, do you take a piece? >> we take a piece >> what are we talking about here >> it depends. >> let's get the deal going now. 5%, 10%, 50% do you have a co-op program in terms of marketing >> we put -- >> i need to know. >> we produce and then we just

sell it for margin which is discussed before >> great to see you. >> we're going to break. you should talk to him. >> we have done a lot of fragrances for specific people >> what do you think the "squawk" smell would be? >> that's -- since we have women an men on "squawk" -- >> coffee and hair spray >> a unisex. this person might be able to do this >> i can invite you. >> mikaela shiffrin was golden in the olympics last night highlights from the games next >> then the big business of toys hasbro's ceo will join us live there's a toy fair he was on cramer last week talking about results. we'll have more fun and look at the toys. at the top of the hour,

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welcome back u.s. equity futures, after a big turnaround yesterday what's today today thursday monday and tuesday, didn't we go up 600 points? what was the total gain on monday and tuesday it was a lot >> don't look at me. i was in washington then lock at andr look at andrew. >> monday it was down, it closed up 30 points tuesday it looked like it would be down. closed up 200. here we are again. i think this puts us back above 25,000, will it not? we're at 24,893. so we would open up above 25,000 again. >> should we have gone down on all that vix nonsense? >> didn't everybody say they wanted a correction?

>> there was a dip to buy. >> but who bought? nobody >> maybe carl bought >> let's talk to him he's in korea. mikaela shiffrin was golden in the giant slalom carl joins us now from south korea. good morning how are you? >> what a night. what a day it's been for mikaela shiffrin, winning gold in the women's giant slalom back in sochi she came in fifth. this was an important race for her. had a hard start because of the weather delays she had an incredible run. so emotional at the bottom breaks down on her knees in tears. we had so much success on snow, it's fueling a huge surge in team usa merchandise fanatics says they're seeing 80% over what we did in sochi in terms of apparel the $300 nike jacket sold out.

the $800 burton jacket is hard to get hockey, a hard to get category snowboarding is number two, that replaces curling where we have not had as much success in these games. later today we'll talk to super chef david chang, the creator of the amazing restaurant franchise. we'll talk about his korean heritage we'll talk about his new netflix docuseries and also about the challenges of scaling a business >> how do you building the right culture to sale? it's hard to open up the same restaurant over and over and over again i don't know if that model works anymore. while you can, i voted opening up noodle bars now in hindsight could i have made a lot of money opening a noodle bar yeah, i probably could have. there were opportunities for me to cash out but it wouldn't have been right for me. >> had a great time with david

chang having some korean food. don't know if you noticed. after chloe kim's amazing gold medal run, he made some churros. i think he made them with the food he could find in the nbc commissary and served them to kim. i think he's headed back to the states soon. later on this morning you will hear from david chang about that netflix show and what it's like being a chef in this incredible age where years ago people didn't want restaurants, he says, in their buildings it was hard to get a lease now they've become anchor tenants. >> isn't michael rubin fanatics? >> yeah. >> he's a friend of the show we have him on all the time. we aukt ought to have him on and break down all the stuff you were talking about >> yeah. apparently this burton jacket, which is an inspired space suit-type look, it's hard to

find they've had to reorder these things >> are you going to be able to show sorkin the ropes? >> we hope to see each or tomorrow >> like ships passing in the night? >> no, we were looking at the plane schedule i might be on the air by sometime tomorrow, if it all works out. 14-hour plane after this show. >> carl, you have been -- you know your way around you know where the bathrooms are. you'll be able to at least get him acclimated >> yeah. >> where are we headed afterwards is there a cool, you know, cool place for us to go >> where do you do happy hour at midnight >> we have so much in store for you, andrew. there's no way i'm giving away what you'll go through in the next week. >> you looking to get in some trouble over there what are you -- >> it's going to be friday night. into the weekend >> karm, you'carl, you've been e

kinds of places? >> no, no, no. >> i didn't know what you were talking about. >> we're going skiing this weekend. >> all right >> coming up on "squawk box," our thanks to carl, by the way the toy fair is in town here in new york we'll hear from the ceo of hasbro about the state of the consumer, the latest toy buzz and the industry that's after the break

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welcome back to "squawk box. it's time for your executive edge amazon surpassing microsoft in market value for the first ama market value for the first time. the e-commerce giant served 73% over the last year >> that rise has made ceo jeff besos the world's richest person am is one of the companies more valuable than amazon you would think that chart is a 12 months chart. it's incredible. >> went through it like nothing. >> like hot butter. >> anyway. h hasbro, chairman ceo, you are on with cramer. to summarize, sales of "star wars" and "frozen" were not

great. they slumped in the fourth quarter. but nerf, my little pony. when people are fought looking they take money out of - >> cheater's edition well, we find about 50% of the people that play monopoly admit they will cheat on the game. >> 50% >> it's higher, those are people that had mit >> if you look at the fourth quarter, the franchise brands have been growing 10% last year. those were the owner and operated, transformers, my little pony, monopoly and magic the gathering. magic the gathering is a big one for us, we will launch this month magic and we saw "star wars" not meet our expectations, we would expect it over the next five years, it's more consistent in the "star wars" movie year it

increases, in a non-movie year it goes backwards, in this non-precedented, we're seeing it a brand for us >> do you want every year there to be a new film, that critical? or do you think the lulls actually create the demand >> i think it's the combination if you think about it, transformers and my little ponies had new movies, it increased our consumers product business dramatically. we will see that when we go forward. we want to tell stories about our blueprint. the brands don't have to have amazing box office they can have very strong box office so again i think that story telling is a critical element to us >> you seen them setting up. what did you say -- >> they use the "new york times" building >> oh, beautiful theater and the setup there. >> i've walked past, they have been setting up for days we talked to investors

>> you know it's really changed. it used to be where buyers would come through and place their orders now we are working years in advance. we are setting up all of our stories, our digital we are talking about our games business in the next five years. >> to rent that space out, i don't know how long the newspapers, you should try to run it, bring in some income. >> we do it all the time it's great >> it's good everything is declining with the print palestinian. >> i know, but the dinl stal up if you know. >> let me ask you, toys 'r' us, what does that mean now. >> short term it's a disruption, long term -- >> would you buy them? >> i would never comment on that. >> wouldn't it be worth it >> listen, here's the good news the good news is over the last ten years, we've tripled our company, last year we were the number one company for the first time since 1993. >> it's not whatever you want to

buy matel, if you prefer to buy something, do you prefer toys or a media company that tells stories? >> i know, it's a great question listen, it's a great question, i think what you've really seen from us around that blueprint is heave invested in tore testory . tomorrow morning we will announce something with nickelodeon. we've invested in the gaming business i think in the future we will be a games and toy company not just in semantic terms, but all terms. >> do you need to be more checked with a media company or a toy company? >> led me give you an example, we bought a comic book owned by neither of the comic book companies, because we felt that brand could be put into our

blueprint. we thought it could execute around the world we are opened to ideas we have been looking at transformational ideas over the years. >> it's extremely impressive when you think of toys 'r' us and the weakness in the category that you were able to demonstrate the earnings and that has to do with this core versus third party whether it's monopoly for the nintendo switch, owning your own ip, licensing that out, do you expect that to be 50-50 or 66-40? cone acquisition -- it would seem to me where the pock is kind of going would be own more of your own content? >> it's a great point. over time, we think our brands will grow if percentage terms, absolutely our franchise brands are twice as profitable as our licensed brands they enjoy 20%, games is north of 20% profit mav gin. those are areas growing. over time we see a slight

decline on partner brands. we will talk more of that over the weekend with analysts. we keep growing our business and reinventing our kane >> so black panthers this weekend. we got to go >> go out and see the movie this weekend. it kicks off an incredible movie for marvel black panther this weekend you have a big avengers movie, and "ant man and wasps." at the end of the year we have our own "transformers," bumble bee, a really family-friendly movie and an animated spiderman movie that i think is really great. >> thank you >> thank you, guys also, thank you for spending the hour with us and hanging out. blackman ceo steve schwarzman will join us in a second

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sidewalks news maker, billionaire steve schwarzman, live in studio he is speaking out we will talk market strategy coming up. plus, keeping time, we'll take you live to the olympics and show you just how the official time keeper has gone digital the second hour of "squawk box" begins right now! >> announcer: live from the beating heart of business, new

york city, this is "squawk box." >> good morning, welcome back to "squawk box" right here on cnbc. we are live from the nasdaq market in time's square him becky is off let's get a quick check on the markets. we are in triple digits in the green this morning after what was a wild day yesterday ending up in a big way after, well, things looked a little more negative earlier on. is it theal algoes or the humans overseas in europe, let's show you what's been going on overnight. you are looking at green arrows. the kak up all the questions about inflation taking place in the united states or not 2.935%. people aren't worried about inflation all of a sudden. >> we are close to 3, when it

happens you need to put it up. we have been waiting six, seven, eight years with the predictions. >> here's what's happening in this hour. four economic reports are due in 90 minutes and the one, the ppi, that could be the one that gets us the three theoretically >> that will be the one probably that will be most significant for the markets, the producer price index. it's expected to show a 0.4% increase for january and then core inflation, which exclude food and energy, would be up a more anemic%, also out, weekly official jobless claims and monthly indexes from the philadelphia and the new york federal reserve bank now, dow component cisco systems is seeing sizable gains in pre market trading after results the company beat estimates on the top and bottom lines and posted the first year over year revenue gain if more than two

years. if the gains hold up, cisco would have the best one-day increase in three years. that's making it back to the megacap that it was back in the late '90s. wow, up 7% so far today. and amazon is partnering with bank of america for a small business lending program that's according to sources that spoke to cnbc. the program helps businesses that sell on the website the partnership will help amazon reduce risk and provide credit to more merchants. amazon's market cap passed microsoft this morning. >> we are on the road now to a market recovery. don chu joins us now isn't there a day of valentine's day schtick you could come up with >> i could i decided to stick to more of the news of the day. i can do it that way we are, joe, to your point here, we are actually on the road to recovery

we are solidly there things have been trending higher whether we say that way okay is the big question let's look at parts of the market that have recovered ever since we saw record highs at the end of january of this year. if you take a look at the s&p 500 overall, 89 companies are just within 5% of getting back to their 52-week highs 79 companies of those 89 and 500 hit 52-week highs just so far in 2018 just the first couple of months. take a look at this, eight s&p 500 companies have hit 52-week highs just this week alone let's take a look at some of the big names to talk about. first of all, bf corporation, sitting right near it's 52-week high, estee lauder, same on the cosmetic side of things. northrop grumman joins defense contractors sitting at or away from the 52-week highs we can throw in re:theon, too.

cognizant is within a% tapestry, these companies noticeably hit 52-week highs or better just in yesterday's trading. i would also show you guys, this, andrew, regional banks thick e check this tradeout, the regional ticker kre is up about 7.5% in one year you see on the right-and side of the chart, we are back to its 52-week high also on that list i didn't show you fifth third bank, zions banks. these regional ones will be the ones to watch. >> thank you very much. in the meantime the story of the morning, a private equity pioneer philanthropist can i call you a ledge ends? steve schwarzman has a $25 million donation, it's the largest to a public school in america. he is the chairman and ceo of

blackstone good morning >> good to see you >> this donation, a lot of people have given money over the years to universities. very few have given them to public high schools. how did this happen? what was this about? >> well, it's not a part of our culture in america we just assume that someone else will take care of that and, you know, we give to private schools. we give to universities. we give to graduate schools, but we don't give to public schools. the reason i did is twofold, first, i was asked, it's always the way something happens. >> something has to happen. >> the superintendent of schools at my high school where i had a really good experience and they're expanding this school, physically and updating it from the 1950s and adding another grade that's going to go there so they wanted help. the school district could write

a $75 million check. they needed 100. they asked me to fill the difference what i was interested in >> so they asked you for amount that you gave in >> yeah, they did. >> wow >> it's a big ask. >> it's a big ask. >> you remember the conversation >> of course, i remember the conversation >> it's a bold phone call to have to make >> well, it starts with a phone call, ends with a visit. and what i said is, you know the renovation is important. wifi everywhere. that's interesting but what's important is doing something that prepares the students for the world we live in so all of us now, you know, from your reporting, what we do professionally, that if you are fought computer literate, if you don't know how to code if you're entering the work force, you're at a real disadvantage so what i wanted was to make sure students could get that they thought that was a good

idea i said that's a sinequon of thegy. they will start in the 7th grade, the students will learn all the modern skills. it doesn't matter when you are doing auto repair or working at google, you have to know these types of thing >> how much of this gift is about your own high school, your relationship with the school and the way you think about philanthropy and how much is hoping to begin a trends among other well-healed americans, dare i say, to think more about their own public school? >> i think it's both if i didn't have the appreciation of my school and the fact that it needed help, i wouldn't do it on the other hand, i realize that we need to change the paradigm we have a problem with income inequality in the united states, half of the people in the country live paycheck to paycheck our schools, public schools,

which have 90% of the kids in the country just don't have enough money to make them work right. and when i was younger, my parents are a part of the post-world war ii middle class there was plenty of tax revenue and we were number one schools in the world in america. our science grades are in the 30s. overall, we're like about 27 in the world. we're not competitive. so how do you bends that curve i think one way you have to do it is you have to start appealing to people who can help financially and the way you do that is you ask them and you have something that would interest them. >> well, so, here's the other piece of this. it almost feels crazy to ask the question because there were critics out there. you saw this people critical of the idea of donating money to public schools. they weren't being critical of

you, per se. they were saying, look, if we get into a world where public schools effectively become pseudoprivate schools, i grew up in scarsdale, new york there were relatively wealthy people if the community started donating money to that school as opposed to schools in inner cities, for example that would create even more inequality. >> well, i think you have to like address issues. we have a distributed system in the united states. there is no centralization every community looks after itself i don't know whether that's the right thing or the wrong thing it just happens to be the way we do it in the united states and so every community has some people who have done well. in normal communities, you have people who own real estate, car dealers, restaurant franchises it doesn't have to be someone of

substantial. >> you had mit you see the - >> oh, no. >> i know. >> they have admitted. >> it's like, no, we don't want to fix any of the public schools, because we got to wait around until the government fixes the public schools don't try to fix one him then you see the other one. >> joe, i think the tax base is the problem and so if you need computers, or devices for students to take home so they're connected with the modern world and the school district doesn't have the money, i think it's essential that somebody find that money and it was fascinating yesterday, this was what i did was, you know, sort of released in the "wall street journal" and two hours later, i got an e-mail from some person i didn't know saying, i know, i went to abbington high school. i'd like to give some money. i didn't realize that you were

allowed to do things like this is there that's the same argument with charter schools. >> that if you focus on, even if they graduate hundreds of kids that are really ready to go for college it's like, no, then you look at the half empty side of thing. >> or you think about mark zuckerberg's $100 gift the need is a billion dollars, how do we figure out the most effective way to use this? >> those are separate issues i think most people who give money to things, i happen to be one of them, respond to something specific so if you are running a school district and i'm speaking today, it's really exciting to the national association of school superintendent, 3,000 people who run school districts there will be about 90% of the public schools in the country that will be represented what i want to tell them is they have an obligation to raise money to fulfill the mission

that they define if they can't get that from their school districts from their tax base, they should go out and go to individuals and see what they can get. >> now superintendent versus a new job. they're fundraisers as well. >> well, we all do it. >> stockmarkets. you saw blank fein so bullish in davos now says the odds of a outcome given we are stimulating an economy that supposedly is at a peak that the odds have risen for a bad outcome. do you see it that way with rates now? 3%, would that cause you to do something differently at blackstone if he hit 3%. >> i think we have to look at what's going on in the world the real world not markets. markets get ahead of things, hein things the real world looks like it's in fine tape is at the home and economies are expanding all over the world it's one of the few times that

happens. the developed world will probably grow-at-least 3% the only question is, how does that relate to markets? if the interest rates go to 3%, if wages go a little higher than people think those wages are going to people who need the money that's not a tragedy that's a good thing. >> your cost of borrowing will go up. >> that's okay it doesn't go up a lot we have been at such low levels we have been stimulated in a really favorable way in ten years. whether you have 50 or 75 basis points, more of cost, it may slow housing a little bit. businesses will power through it >> there is an unsettling event. that's what the president decides to do with the steel and alluminum industry i know you have advised him and given him advice specifically. he appears to be between a decision between tariffs and

quotas is there a lesser of two evils in your view >> i don't know the answer, i know that there is a desire for normalization of trade to get tariffs from different countries on the same level and let competitive forces control o outcomes not artificial costs of importing or exporting i think our growth will continue markets will move around with some volatility in the sense that you know if we grow 3%, just make that up, not just u.s., developed world. how much should a market go up in a year? should it be 10? should it be 12? 8? i don't know but when you go up 7-to-8 in the first month of the year and you imagine compounding at that

rate, you will be up in the '80s or 90s with 3% growth. >> are there multiples >> excuse me >> are there multiples part of the issue is the multiple xrechlgs before we had multiples go up. now they come down a little bit. >> if you will have a year that doesn't have a huge amount of upside from where you finish january, you will go up a bunch, flatten out, or there will happen during year. >> you are out next week >> i will start now. so the state of the union the first time a president has not mentioned deficit. suddenly republicans it seems like they forlth they used to be wary of -- forgot they used to be wary of running up a big tap. i won't go there is there think of the way democrats used to be and how they are now think of the way republicans used to be, how they are now

it's a little bit strange, isn't it should republicans start talking about entitlement reform again at this point? >> do you think it's odd that suddenly republicans are seem like they're free spenders >> i think the whole world we got politically is pretty odd, frankly. you know, i think part of the problem is, we've got a lot of things to do in terms of fixer-uppers we don't really have the money to do it. >> we would be remany is to ask you about the transition at blackstone, quickly, before we go, public philanthropy. you do play political consultant on tv sometimes. how many years you have at blackstone >> geeze, i feel great the firm is really amazing imagine a life where you get to go all over the world, meet people who are making decisions. you constantly are learning,

we're constantly making decisions ourselves on investments all over, it's the most exciting time in my life. >> i don't see you hanging this up ever. >> it's a gift to be able to do this and just grow a great business >> they're playing us music. this transition has worked a lot of transitions where there has been a founder like yourself has not. >> well, it worked because we have a cohesive culture. for example, john grey has been at the firm for 26 years he's helped grow the biggest real set the business in the world and we're really careful and we're open and we're supportive of our people so it makes it a lot easier. >> steve schwarzman, it's great what are you doing >> do you need me for questions? tt ow was that one? >>hawas good you did well >> we'll be back with more "squawk box.

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welcome back a story we are following this morning, a that at that time shooting in a high school in southern florida, 17 dead, 12 wound. the suspect has been identified as a 19-year-old former student. he used an ar-15 semi automatic rifle. contessa brewer is here with more on this story are you our go-to story on

breaking news, this time something more harrowing >> this is a devastating story, there is no parent in america who isn't waking up this morning and dropping off their children at school and thinking, are my kids safe? the ar-15s are among the most popular firearms in the country. they're easy to get. they're easy to modify, they're easy to shoot. they have also been used again and again if mass shootings from the sandy hook elementary massacre to the attack at mandalay bay in las vegas last october. semi automatic rifles are manufactured by many companies, some of the big ones you heard of, six hour, colt, winchester, remington, mossberg, many others there are hundreds more smaller companies that you've never heard of creating not only the weapons but the accessories that go along with them plus, there are hobbyists and they make one of a kind firearms, they can be manufactured on 3d printers.

they would be untraceable. gunmakers enjoy protection that other makers do not the protection of lawful commerce and arms act was passed in 2005, which protects manufacturers and deemers from being held liable when crimes are committed with their firearms now, we have reached out to the national shooting sports foundation it published a report in 2016 showing the economic impact from firearms and ammunition industry grew from 19.1 billion if 2008 about when obama was elected to. >> 9 >> billion dollars in 2015 and this that time the report shows more than 100,000 new jobs related to gun making were added here there has been a huge spike since sandy hook, since the aurora, colorado shooting. what happened is people worry that all of a sudden there will be another ban on these semi automatic rifles so they rush out to get them. >> after the mandalay bay

massacre in okay, congress had set its sights on bump stocks specifically as a targeted issue. i'm curious how you see this playing out in washington. >> look, i think there is always increasing pressure on lawmakers after something like this happens. they stand up and they say our prayers and condolences, but we believe in the right to bear arms we want that right to be as unrestricted as possible you have others that say the way we have been aploeching it just isn't working. the thing is as you know, there is a strong gun lobby. they want to sell guns there is a vested interest look at the profits being made they want to protect as much as possible the sale of those guns. the thing is, there are people in the nra who have children there are people in the gun manufacturing industry who have children and this is a complicated problem and trying to look for one simple solution whether it's bump stocks a. gun band, whatever one simple solution will not

answer a complicated problem. >> the fbi apparently knew about this guy, too, as of, you read things, it's a fog you never know exactly what will stand the test of time but reportedly, there was concern that this person -- could -- on instagram, yeah. >> but there are hundreds of thousands of kids who grow up playing with guns. i was one of them. >> supposedly he passed a background check him if you know this guy looks like a potential -- are the background checks not good enough? >> i think we have seen in the past there are loopholes you can sift through the data -- i have no idea in this case, but the ba da base, there are questions about how timely they're updated and whether the mental health reports are submitted in a timely fashion i just want to point out the

ar-15s, we go back to a whole culture surrounding this, kids grow up, going to the target range with their parents, learning how to target practice with semi automatic rifles to say nothing of video games where you are basically practicing shooting every day on a simulator. >> all right okay >> contessa, thank you we know you will have more updates. coming up on sidewal"squawk check out the futures, the dow and the nasdaq has been in positive territory throughout the morning, holding pretty steady for the dow up 230 points "squawk box" will be right back. >> announcer: time now for aflac trivia question -- take a deeeep breath in... and... exhale... aflac! and a gentle wave-like motion...

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good morning, welcome back to "squawk box" on cnbc i'm andrew ross sorkin becky is off today i have stories front and center now. president trump may be backing a 20% hike in the federal gasoline tax to help fund the white house infrastructure proecposal. the gas lean tax has not been raised since 1993. also, the international trade economics explaining its decision to reject boeing's call on tariffs made by canada's bombardier the icc says boeing did not lose sales wendell that ordered the canadian company c series jets

in 2016. the icc says the 110 series does not compete with boeing's max model, which has a higher seating capacity. then mcdonald's removing cheeseburgerers from its happy meals. >> i don't get it. >> it is also sinking or making smaller the serving size for its french prize to in its mighty meal so far the new plan to cut calories and make food more healthy. happy meals account for 15% of u.s. sales the sorkin family was on the highway over the week, we stopped off at mcdonald's, got two happy meals. >> what is on the maep e happy meals? >> regular burger and nuggets. >> are you saying just the cheese >> part of it. >> i think they must be nuggets, again as if those are the answer to everything. >> there is some chicken

>> chicken nuggets >> partly leftover chicken nuggets. >> believe me. >> the sauce is a great thing. >> fewer fries and no chee cheeseburg cheeseburger, this is not great news >> i guess it is >> less fries, no cheeseburgerers? for the happy meal i'm less happy about that meal. >> futures right now, we have jim managing director coming on, a cnbc contributor we got claims, too, right, jim >> we, do i also have a restaurant in chicago that serves big fat cheeseburgers that make people happy if you are sick of mcdonald's, come to our restaurant the story today, yesterday steve leishman was pathetic the cpi number came out. he said there are people out there selling the market on certain things

we thought inflation was the big thing the problem was when we started this correction a week and a half ago with that hint of inflation, it showed up -- what happened is volatility started to spike it uncovered this pocket of malinvestment, those people have been washed out now the inflation numbers are less important. what's more important is that huge rally off those lows yesterday. what is more important is the story about cisco repatriating $67 billion that came out yesterday. the fundamental story is still the same if the futures go above 2750 and feel comfortable there i'll call it over. right now, it's a simple garden variety correction that will be underscored by fundamentals that have been there fors. >> it was indicated lower until bill murray came on. then i watched the futures go up then it ended up 330 on friday

up 408 on monday, yesterday, jim, we were up 150 and down 250. so i added it up, it's like 1,200 points that's only getting back a little over one of those thousand point drops so it's like a retracement of the correction so it could go either way from here, right? >> yes, it can go either way from here. we are in a very wide correction the numbers seem amazing >> i know. >> they're amazing given the fact we had so little volatility exactly. is there 1.5% moves. we used to have those quite a bit. this to me is more normal. there has been periods where for years the vix has been over 20 i frankly think that would be better for the market and its long-term health if we did have some volatility. so i am one of these guys saying a correction is good for the market i know there is a lot of people

that poke fun. you trim the hedges every once in a way, it holds it to go higher >> i am old enough to remember when joe manville caused a massive crash on the stock market, it was down 27 points in a single day do you remember that >> when was that >> '80 or '81. >> who told granville? i was in college in 'yuvenl i didn't start until '87 i was in high school >> don't bury the lead you went to college >> i did go to college, yes. >> all right we'll see you. thanks, jim. coming up, why cellgene and apple ceo john scully are teaming up with a new biotech company. peter diamandis is year. we are in the grn,ee triple digits dow up 182 points. back in a moment

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welcome back cellularity, a biotech company raising $52 million to deliver innovative treatments for cancer and degenerative diseases. joining us now, peter diamandis,

the co-founder and vice chairman of cellularity and the x-prize foundation and went from molecular biology at mit and as a student you launched a space travel business. and bob herrera, the ceo both you guy, you are both mds you are a ph.d.? >> i'm an md she has the ph.d. and master >> hang out, anyway. so we're >> thank you >> thank you very much >> we were just talking about off camera was stem cells became like a buzz word probably almost ten years ago. >> 20. >> 20 years ago the mark cap of all stem cell companies are still very small but you've got a new approach with pla sental

stem -- placental stem cells this could be a multi-billion business how is that different? >> when stem cells first hit the airways the first thing was to meet the scale and economic requirements of a big deployable therapy. we, our company, which was acquired by cellgene and became the cell term division, pioneered the use of a postpartum placenta as a source of the cells if you can compare it to an embryo it's orders and orders of magnitude more abundant. so those cells are powerful for everything from treating cancer to degenerative diseasings. >> that's the part that is sort of novel to me io enif we knew this 30 or 40 years ago, as you age, your stem cell population declines and so in a 70-year-old person there are stem cells needed to do what for you? as the population shrinks, that

adds to your aging or -- >> so you know, we go through a process of continuing renovation and renewal. we morph from a younger to an older form we exhaust the reservoir of stem cells that drivers that process. plus the reservoir of stem cells becomes corruptive peter and i talk about this a lot. your stem cell is your master boot dig it contains the full uncorrupted genome and that's necessary to maintain your health >> wow so how do we it sounds like it's critical i don't know how it gets to the bedside. >> tom has a team of 120 scientists incubatted at cellgene, three amazing companies that you talk about backed us. and they, cellgene invested some $500 million to this point

the company is bob's research and team's research identified the placenta is the 3d printer that prints the baby those stem krals and the immu no logical cells can be found for using to fight autoimmune disease and regrowing organs my two boys. >> did you save core blood andrew in. >> we did. you say we need to do more >> when my children were born six-and-a-half years ago, we saved their placental stem cells with life bank, a division of the company, life bank usa i think it's a moral obligation to save the chord and the stem cells. >> because of the number of this i think so >> exactly right so placenta cells are far more versatile. peter points out, they drive the

technology to regrow our spare parts. i tell families, if your baby was born with an extra set of lungs and kidneys, we can throw them out at birth. the answer is no the placenta cells are the cornerstones from everything in or began genesis and stems cells. >> we don't know a year ago we didn't do that >> not only that, i thinks,. >> stay tuned. there is technology we are developing right now to even make chord blood cells act like stem cells cellgene, united therapeutics, sorrento therapeutics and human longevity came towing to create a toolset that allows us to do virtually everything with these cells. >> we got to go. we will talk more about this >> people can go to cellularity.

people with autoimmune and cancer >> maybe other ways to design therapeutics for people that are aging with you didn't save the pla pla t p placenta cells >> carl, what's coming up? >> did you know omega has been on olympic sponsor since the 1930s. imagine how much things have changed since then we will give you a behind the scenes look of the people that run the stop waups in pyeongchang. -- stop watches in pyeongchang

welcome back to "squawk box," carl is live at the olympics this morning. >> reporter: andrew, i don't know if you were paying attention to speed skating but u.s. women have not won a speed skating medal since salt lake city in 2002. today we had a pretty good shot at it. brittany bowe finished fourth.

heather bergsma who won in last year's world championship finished 8th so still the u.s. women have not been able to put some medal on the board since 2002 or so obviously, it's a big sport, where time keeping is key. if you managed to know how they split them by hundreds of a second the people at omega sponsored it since 1982, they helped us to understand how it can be so precise. from digital starting guns to finish line sensors. at the olympics, a millisecond can make all the difference. >> for athletes, time is everything. >> reporter: for sponsor omega, keeping time means a staff of 300 time keepers, hundreds of scoreboards and cameras that can capture 10,000 photos per second >> even though the athletes can provide it in a hundreth of a

second we can determine who finished 1st and 2nd. >> reporter: position sensors worn by skiers and bobsledders, measure athletes' position if real time. >> this is like 17 world championships in two weeks. >> reporter: it's also a global stage, where omega can show it has the technical chops to keep up with the smart watches of the world. the company's ceo says that's not what they want to do >> some people stop the instruments and go for a real waunks a mechanical one, one with emotion. >> reporter: despite the absence from the smart mark, the average customer's age is skewing younger helped by the james bond brand of watches and of course two limited edition olympic watches. here we are in the bobsled, guys, at the omega thfacility i

olympic park if you want to do this the two man or couple's skate. it's up to you decide your event. >> i thought we were going to do the double luge. no >> reporter: the double luge, that works, too. we got plenty of optionles this is cool though, right >> it's very cool. do you have, though, the skin tight outfit for the luge if we do that? >> reporter: we'll have to get measured >> you are taking it in a weird place. >> carl, what if someone honestly, think about that got on a single luges and someone who had never done it before and just started down that thing would you die? you can't do that right? you can't take it for a spin >> i think, don't you -- i think you pull 5gs on some of those turns. that's like a fighter jet turn. >> the idea. >> i'll give it a shot >> it's not riding a sled.

>> the conversation everyone has at home when you see the luge, they say, how did you do that for the first time >> exactly >> how do you get into it? >> how do you practice that? >> the ski jump. >> andrew, are you about to find out. >> yeah. okay >> andrew, c'mon, you are going all the way over there send us something. >> i say we get on that how far does that thing go that you are sitting in right now? >> it looks pretty stationary. >> reporter: not very far. >> yeah, exactly that's about my speed. carl, we heard ours in davos, we were curling, we hurt ourselves, so we may not be good with the -- >> how about the biathlon? we could do that, cross country. >> cross country >> reporter: the problem is slowing down yes. >> that's not bad. aboutpy speed. >> reporter: there is figure skati skating. >> no, speed skaters, when you watch them on tv it's one thing, they're going so fast, you can't

imagine doing that on ice. you can't. it makes me so nervous to think about it. >> triple axels, too >> i was asked for my skate size, my shoe size for skates. so maybe we will be doing that. >> you can choose that >> now that is a tease >> but the speed skaters, they also wear the very -- >> there you go, baaing to the tight fitting owe sew what's with you anyway? >> glad to see you >> you want to get in? >> no, no no >> all right coming up, this morning's biggest movers, as we head to break, here's a program note, don't miss boeing ceo dennis muilenburg that's a cnbc exclusive interview.

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take a look at some stocks to watch later on in the morning, management shares are higher in pre-mark trading the kane reported a profit of 85 cents a share. 85 cents a share i was two cents above estimates. revenue came in above forecast teva shares on the quarterly coming up, block rocks global fixed income rick reider will discuss the ten year treasuries hitting a four-year high we'll talk the fed and much

more a little steam coming out of the market, still set to open broadly in the green "squawk box" will be right back.

. breaking economic news a. key read on inflation. the market moving number just 30 minutes away >> a "squawk box" news maker the yield story a huge part of recent market swings we'll get guidance from a man with trillionsof dollars on th line block rock's rick rieder >> highlights from the olympic games coming up. as the final hour of "squawk box" begins right now. [ music playing >> announcer: live from the most powerful city in the world, new york this is "squawk box. >> good morning, welcome back to "squawk box" here on cnbc live from the nasdaq market site and "squawk box" scare our guest host this hour rick rieder, black rock's global

chief investment officer black rock and blackstone are so competitive. we just the had steve schwarzman on he just showed up. i'm coming in. i wouldn't say you were friendlies it's an offshoot >> family. >> it's nice >> a different business. >> some similarities >> anyway, we like representatives from both, futures right now. they've pulled back from their best levels up 250, 260 earlier. we were up 187 ia enone yesterday morning, we moved up from 150 to down 250. anyone that knew we'd close up 250 and another 180, great volatility if you like it. treasury yields, should be interesting when we get the

producer price index when it's hot. >> that number there on the left the 2 there on the ten year, that hasn't hit a handle in years and years. even though everyone thought we would. today would be a day i hope we do it before you leave sorkin >> not for me? >> you, yeah, sure equal time for you would you be excited about the 3? >> not really. i'd like to buy a house flu is can't buy a house at 3%. you remember the old days? rec you remember, 13%, i thought i'd never own a house. >> are you going for a mortgage? is that what you are do something. >> i don't know. >> anything under 6 is probably okay. >> people talk about 3 leak it's a cliff. we brought a chart even the inflation number, people talk, my god, you see this type of inflation you put it back to '70s, ''80s, this is nothing. >> banks are marketing on this stuff, sending e-mails saying rates are about to go up

they'll never be this low again. you need to act now. they are sort of creating this pandemonium about. >> rates are going up. the bond rate sensitivity is significantly higher than it ever has been before we will breach 3% soon these levels are extraordinary if you take a 50-year chart of rates and inflames you'd have to squint so hard to see the move >> the second derivative supposedly that people talk about. i don't think you are old enough maybe your ancestors and i'm telling you this, they are with andrew, there were municipal bonds available when i started in the business that were 13-and-a-half%, triple tax free for 20 years that's a 30% guaranteed return >> my father used to live off

those funds, no joke no joke. >> think about 30% when you will get that you know what my clients wanted? >> what's that >> floating rate bonds, they thought they were going up higher than that i don't think they had any call features you could buy them flu is didn't have to go that far off the curb, either the difference today, why is it harder to retire you can't count on that, a part of why monetary is easy, it hurts people's ability to figure out what is the future income. it moves up a bit, you get closer to equill lip bringium. it helps pensions, insurance companies, helps savers. this is why a modest move in rates we are getting, it won't kill the economy. >> is it moving up for the right reason him we tell ourselves that somebody the computer sells stocks even though we told ourselves, this is a good reason. >> it's what happens when you create short volatility and ways that people like to get return

some of that in a healthy way has gotten unwound that's why you have this increased volatility to get the transition for monetary to fiscal policy, it's actually the right thing. are we getbing a lot it's the right thing we move off of just monetary policy. >> if treasury ends up borrowing a trillion dollars, what impact does that have on the market >> it has a big impact it's a trillion next year net. by the way the feds are reducing the size of the balance sheet the ecb is extinguishing their quantitative easing program later this year and inflation is accelerating you are putting a tremendous amount of issuance into the mark place. a part of the reason, people talk about inflation is driving rates higher it's the amount of supply, it's too big. >> did you do anything today in terms of like trillions of dollars? i have cariously

have you deployed and if you did buy any bond today, did you have to check with larry to see if the bonds were involved with salt or gold rings, none were over 16 occupancys they were mandating bicycle travel were there any social things that had to be in the bonds for to you buy today, do you know? >> we always think of social conscience >> bonds, too, do they have to be climate change ready? >> yeah. >> okay. i wouldn't want to have bonds ready to fund business activities they better do something socially for larry. >> we definitely do. >> in the meantime, i will get you corporate stories. cisco beating the street on the top and bottom lines, networking equipment and software company posting its first year over year rise in revenue. cisco announced an addition to the stock buy back program you don't want to miss the

"squawk on the street" this morning. also, take a look at trip adviser shares, they are surging this morning after the travel site reported higher than expected revenue in the third quarter sales from bell. that was more than offset by a 20% jump in revenue. >> that stock is up now about 18, a little over 17% right now this morning amazon surpassing microsoft in market value for the first time. the battle in seattle shares of the e-commerce giant surged 73% over the last year the rise made jeff besos the world's richest person apple and alphabet are the companies more valuable than amazon. back to the markets after a sharp correction stocks initially have an initial bounce that fades for the lows to be retested with more than half of the index losses recovered in four trading days it's time to ask whether the market might escape a round-trip to the lows.

mike santelli is running the numbers. is the market fully normalized >> i wonder if you can sound the all clear. it's being, when you get a shock a. jolt in the market the first 10% correction in a long time. everyone becomes a technician. the conversation becomes moving averages, are we oversold? do we have to retest the lows? i think that's where the debate is after we had a good excuse. the faster the drop from an all time high to a 10% correction, which we had this time the fastest in 80 years, typically the fastest the recover, that's in the good news column here's a look a the s&p futures. everyone says you have to have a w. you have to have the late overnight into tuesday >> that being said, we are getting up to a zone make or break for the s&p 500 in getting back to certain levels, people say, okay.

we got to clear the 50-day average or above last week's highs. that's where we're at right now. i would go back to 2015. we had a correction in august. ep says it's chinese evaluation. investor shock we to the we were all clear in october. then you had a relapse of course a. lot else going on, oil crash. no macro stuff right now here's a final point was yesterday's rally, does it mean there has been a truce between stocks and bonds one way i look at it is the ten-year yield is now let's say ten basis points we've discounted a lot of stuff. the parts attune to dividend yields have been hurt. maybe the mark is making its piece with yields at this level. i think you have to say, who knows? a tremendous amount of

concentrating in selling happens this week. >> sets they that's a crazy ppi number does it happen again >> i'd be surprised it was a massive market. >> let's say it was a bigp pi. this is totally unexpected higher than that, that showed like core commodity inflation. is the market ready to take a tumble again on that or did we make peace with that yesterday? >> a, i don't think there is that much influence. this ppi number, wages are accelerating if companies can pass through the price. technology, can you pass through pricing today? >> yeah. if you can pass through pricing, i would argue, that's fought a negative if you run particularly a manufacturing company? to me that lab big best. >> especially we had schwarzman on, talking about his part. >> pages will keep accelerating.

as long as you keep your margins sincere the equity market can do really well. it will keep growing >> that's why i think the debate in the stockmarket, how is the growth dried i divide up between workers, shareholders, all the rest of it that's the question we have right now in high rates and inflation? >> amid yesterday's rally, you seen the dollar hit a 15-month low against the yen, fears about u.s. borrowing, $20 trillion in debt >> the weakening dollar has been loose global financial conditions people have been looking on the bright side of that. i think the stockmarket is taking that message away from it whether that's you know rose colored glasses, i don't know. >> that would act you, yeah, rick, if the $continues to fall. >> so i think one of the things we think of a lot is hurting the

markets. interest rates are actually the dollar appreciating. i think it will climb to where deficits will grow one of the things people don't think about, if the dollar would accelerate, that would hurt the equity mark. as long as the dollar is around here, markets will be in good shape. it's when the dollar accelerates too quickly, that's when you create a problem >> all right excellent. >> thank you, sir. great to see you >> okay. coming up, when we return from washington to wall street, we will talk about the early economic impact the tax cuts with the house republican conference, later, much more from carl at the olympic ex. >> reporter: guys, one thing about thee olympics, there are robots everywhere. we found the scariest one of all. it's all yours. wow! record time.

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welcome back to "squawk box. the futures right now, the last i saw were 170 or 168 on the dow, which is not quite as much up ward momentum as we had

earlier. still strongly higher this mark pre market s&p indicated up 10. nasdaq indicated up 39 points. >> in washington we are taking a look at how tax cuts are taking a cut. kathy mcmorris, rogers, republican of washington state and the dare of the house conference i apologize. >> it's long >> i don't know what's happening. it's a lot question for you, this morning, we've had a big conversation over just the past couple days in the markets here about a potential for inflation. a conversation about how tax reform has actually been a short-term stimulus, overstimulate the market what do you make of these markets? >> i'm hopeful, encouraged by the impact of tax reform already. some said it was armageddon. it's reports individuals right now this month that are seeing

their paycheck increase, more take-home pay. the long list of companies that have been you know adding those bonuses and announcing more better lead policies and higher wages. i mean, that's a positive. we needed that for our economy and our hope is that this is just the beginning, that it continues. i talked to a number of businesses, small and large, who are still making their plans, but this gives them more confidence that confidence that we needed that our economy needed so that there would be a longer term economic growth for america, more opportunities, really getting at that forgotten men and women of this country, who want a better life. >> i don't know if you saw this. we have a conversation on this show and carried interests a number of hedge funds, did you see this story yesterday >> no, i didn't. >> have been moving to delaware to try to capture basically a

20% rate some guys from l.a. management and other places, our friends mr. sternwick is trying to do this, mnuchin says he will try to cut this out somehow. how worried are you finding people finding new loopholes and effectively abuse the new system >> clearly, our tax code was very large, very complicated our goal going into tax reform is that we would simplify the tax hole and ensure middle americans were benefiting, seeing larger paychecks. there will be issues that arise, there has been other's concerns or areas within the tax reform package that need to be addressed. so we will keep our eye on it. no bill is ever perfect. you continue we'll continue to look at this and this will just be the beginning of continuing to ensure we have a tax code that has really focused on people and

a tax code that is fair, that is pimple, that is not a burden, ewheth whether you are an individual in this country we want people to pursue their dreams that was our goal in this deal >> in the wake of the deal last week, house speaker ryan said fiscal discipline would have to be a part of the conversation going forward. but when and how do you see that becoming part of the conversation where does that come up in the agenda >> right, fiscal discipline is fundamental. we have a responsibility as the elected representatives of the people in the house and the senate in the house, to exercise the power of the purse to set the priority so the president just sent up his budget proposal. we will be taking a look at that and we must really ask the tough questions, make sure that these programs are efficient >> that they are really effective. >> that they're doing their jobs and maybe some need to be eliminated

that's an important aspect of this but i would also say we needed to get our economy growing and that's where tax reform was so important we needed to rebuild our military so these are all fundamental issues that need to be addressed, getting our economy growing. the rebuilding of our military also the fiscal discipline is absolutely on that list. we will be voting on the balanced budget amendment, for example, that will force congress to live within its means setting priorities we need proposals, something that will force congress to make the tough decisions. >> you saw i guess you were probably heartened by the latest gen eric polling do you see that? the republicans are up there down like 17%. amazing when you hear that it was going to be apocalyptic, these are crumbs i just wonder, i think some people just look at that and hear it for what it is it's just, i don't know what, you know when you hear nancy

pelosi say something like that i was wondering, where is your district how did you get elected in washington i'm not kidding. andrew, do you remember we had your governor on in davos? he was bonkers he was saying things -- >> he was awesome. >> he was saying things with a straight face. i didn't even try him did you see that, rec, i didn't try to counter what he was saying but are you in some rural area how do you -- do they not know you are a republican wherever you are there? how did that happen in. >> well, i'm honored to represent a districtin eastern walk spokane is the second largest city in washington state we have four out of ten congressional districts and you know these races are often close in washington state. because there is a battle going on, but what direction we're going to go. but i am proud of the work that we've done i think the key is focusing on people, not politics

this generic poll is going to continue to go up and down between now and the election but we will be served well if we keep our eye on the people and on policies that are going to improve their lives. as we're getting those result, we see where the generic poll is closing. last year there was a lot of grumbling the republicans weren't getting things done. >> speaker pelosi had her things moved, it may be early to assume that's going to happen it was a slam dunk before, i'm not so sure anymore. >> it's a long time between now and november but my encouragement to my colleagues would be let's focus on doing our jobs. on the people of this country and especially the forgotten men and women that want a better life. >> before we let you go, i do want to ask you about the school shooting in florida. where do you land on the ar-15 and gun control right now? >> it's heart breaking

you notice know, it happened on valentine's day, ash wednesday, i can't imagine what these families are going through with see high school shootings, suicides as a him mo, i'm asking myself, what is going on and i keep hearing that the kids have a tough time coping there is stress. there is a lot of anxiety. do i think we need to be having a conversation around what is going on in our society that is putting young people in this position and in a place where they're taking this kind of action it is so heart breaking and we need to be willing to have those courageous conversations >> okay. thank you. appreciate it. thank you for being with us this morning. >> thank you >> all right, coming up on "squawk box" the final countdown to major economic data hitting at 8:30 eastern time later, don't miss the ceos of cisco and boeing two incredible news making conversations coming up on the street stay tuned

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welcome back to "squawk box. we have been working on a lot of our own business opportunities of data. we have something going on with a toy guy. >> marks sorkin. >> the cologne deal. >> i think it will go places i looked at isf shares

that's what we're thinking about for the cologne. >> as a southern lady, i will say. >> oh, whoa, wow, that is hewee. >> technically the s goes in the middle >> yes >> then you can't say ars. it sounds like asr >> how much do you owe the marketing person >> we did it in-house. do you want us to farm it out? >> i may have to help you with this what are we charging for this? >> we got to figure out price points >> what's our price point? >> premium oh, yeah. >> is it a department store? >> it's not a macy's either. >> it's a business, i don't know, am i selling on amazon maybe it's a direct-to-consumer operation. >> you got to get the fragrance, first. what do we want the smell to be?

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second away now from the p -- ppi index claims. >> reporter: a bit of a disappointment 13.1 we were expecting closer to 20 last look. initial jobless claims, looking for a number somewhere around 228 to 230 that's exactly what we received. it is 230,000. that's up 7,000 from a slightly revised 223 originally released at 221 let's get into continuing claims 1.92 million down a bit, excuse me up from 9.127 how about the meat on this

our read on ppi up .4 on headline, up .4 on core. a little different than yesterday. really a little hot. especially on core we were looking for a number up .2. no revisions to our last look, which really put it in a pretty good context when you looked at our last look we were down .1 on core. we did see an unchange on headline let's look at year over year, shall we year over year ex-food and energy, 2.2. year over year final demand 2.7. so 2.7's hot it's up a tenth from our last look and the 2.2 is actually down a tenth 84 over year on core but that is still -- these are pretty interesting numbers to hand on both year over year. we didn't have that on cpi what's the response? you know the treasury market isn't ignoring inflation, but it's taking its sweet time

it seems to continue it's up ward march we are every whoing around 291, which is where we were we've had an interday high of 294 in our rush towards a test of 3%, first time, since the last date 2013 joe, back to you >> okay. rick thank you, steve leishman is back sow heard rick what do you add to that in >> it's an ouch, joe it's a 04 on ex-food and energy. we were expecting the hotter energy component to the push up the headline number 04 but doing that, exfood and energy, i'm not seeing again this is a bit like yesterday, i'm not seeing a huge culprit. we have final demand up 0.8%. a lot of 03s and 2s. it's an overall category i'm not seeing an out lieer

-- -- outlyer. if people are okay with this inflation. >> the yield was earlier >> here's what we know about the producer price index it doesn't feed directly to consumer there are things like competition and profit margin that can attenuate that growth right there. and one of the things you might look for here is what this the says about profit margins, if costs are going up faster than producers raise them you have a serious issue, not a serious issue, smaller profit margins. >> you change anything you said earlier or -- >> no, it's the same thing. >> yif you can have your phone, would you make a change? >> no, not really. this is just the world we will live in. we will have moderately increasing inflames.

we won't get gap higher inflation. people talk about the end of the world. people talked about yesterday core goods core goods inflation is not that much of an impact as it used to be it used to be 50% of when we talked about gpi we're in a service economy so part of our p pippi is import it will adjust to that >> mike santelli is here as well michelle meyers is joining us on set the global research head of bank of america, merrill lynch we will bring you into the conversation as well mike, you were going to say? >> i was going to say, are we going to tag the 3% on the ten year, i don't mean for good. i mean no for the moment everyone said there is nothing when the 240 and 250 and 3 that will slow it down. it seems to me people are pocked in this direction already.

maybe that's not why 23 are getting dramatic reactions in the treasury market is there people look at the round number effect i think when you actually take the component parts, inflation will accelerate. we think to the low 2s you say 2 and a quarter, 230 real rates, in this environment say 1 and a quarter. >> that gets you no the low 3s, in terms of the tenure that's where we are going. there is so much demand. >> i don't want to pile on the empire state and philly fed numbers shot up a lot and that suggests again at the producer level, manufacturing level, michelle, your thoughts on that? is that a bad seen of inflation? you take that seriously in. >> i don't think it's a bad sign as rick said we're seeing these tentative sides that inflation is building. which makes sense, we're at 4.1% unemployment rate, tightness in the economy. there are indicators pointing to the same thing we are seeing in terms of modest

wage pressures, in terms of modest producer price measure pleasur pressures. it's all coming to a trend out of the disinflation we had throughout most of the recovery to inflation i don't think it speaks to a run away inflation or a big spike in inflation that will be particularly disturbing. further markets to have to cause the feds to respond aggressively certainly it is a reflation environment. that's what people are accepting now, that narrative. >> we had the december to be revised to be flat it was previously down .1% we did see the futures come off a bit. they have gained 40 points from when that data first hit we sa you the ten-year yield lose a couple thousands of a basis point and has also since come back. do you think the narrative in the market is changing at all? >> i think in the past several weeks, that narrative is what's accepted presumably now that's much more well known fact that we're no

longer in disinflation the next big stage would be is if we actually get signs that there is real breakout inflation, which again is not our forecast i think you have to also realize, these monthly data points are so noisy, so we can come into march, we're looking at the february data we have some softening inflation. it's actually quite likely that we do see that the cpi numbers have residual seasonality. january gets boosted february looks softer. you can have an early numbers the workweek distortion reverses in february. so there will be these ups and downs i think creates some challeng challenges, guess for interpreting the data. always look at the trends. the trends is slowly moving higher i don't think 23 will see a difference in the next few months >> rick, don't you have to make a call on the investor on the theory of the case behind the tax cuts it follows

on the one hand you have people arguing the u.s. xi was operating below its potential if you had the right policy and effectively, there was a free policy lunch on the table to be had by deregulation and lower taxes. if you take the other side, the u.s. economy, economic potential is 2%. you pump money into it you inflate that balloon, you create inflation that inflation ultimately takes off or otherwise erodes the benefits of the tax credit which theory do you subscribe to >> i think what you said is exactly right. i adhere to a slightly different thieves. >> that is, when you take all those effects and we have to fund the tax bill. it's a good tax bill the market will have to absorb when you look at the treasury funding. >> big numbers. >> they're big numbers the mark can absorb the size into the mark what's happening is inflation is accelerating we think mad rotly the markets got to absorb a lot of duration a. lot of interest

rate products into the system. by the way, to crowd out other products >> to things to think about a supply issue and an inflation issue. >> sorry, joe. >> the -- hold on. >> i want you to - >> if the lion's share of the inflation that we start to see is wage inflation, the kinder gentleer steve leishman that has been worrying about income equality so long, if margins are hurt a little or a slightest bit of wage price inflation, won't it be worth it because you'veped it for a long time can you not lock a gift horse. >> i see wage inflation, that's a negative and that says that people's wages riseing is negative saying wage increases. >> that's where it comes from, aren't you okay with it? >> i am okay with it would you had mit one thing there was a big difference economically between a funded tax cut and unfunded tax cut is

th this >> noch i kind of, we went from 10 to 1520 i ask you. >> from 10 to 20 with the initial thrust in the deficit. >> whatever. >> a huge stur deficit >> let these guys try with one-and-a-half. >> it's the growth. >> instead of redistribution >> they did it doesn't it change that >> instead of just spreading it around, can't you use one-and-a-half for growth to try it see what happens >> i think one-and-a-half. >> what is your theory of the case is this an economy at potential that we're shoving more air into this plan or is it an economy that was running below potential and we have a policy change that's going to bring it back to the good-given american 3% >> look. i think that clearly deficit finance, which is the spending is going to boost your economic growth maybe on the margin it does help

productivity growth and potential growths. you have demographics that are still what they are. you have a labor force participation rate that's lower and productivity growth, even if it accelerates modestly, it's a low level. my view is the risk increasingly you get a boom bust in the economy. this year and next year it looks economic growth. you do create inflation 18 modestly then what comes next now the budget deal you were talking ab issuance picking up, rick, because of taxes, you also have the budget deal that's personally going to ask that that's incrementally stimulus both this year and next year >> there are some questions about what tools are left in the bust seek to him stimulate the economy. i'm curious what you would say to that. i don't know that we need to have additional tools at this point. i think there is lots of natural

momentum building in the economy, not only here, but also globally on top of that we have this fiscal spending which is on the tax front creates incentives for consumptions, in terms of government outlays, that's dollars coming into the economy. to me the biggest questions is what are the tools that will hit when the next recession hits that's what i worry about. >> the inflation will go up quickly. >> mike, the marks are trading like there is a free lunch on the table, aren't that they >> i think it has to be rested rick talks about the rates three-and-a-half on the ten year, whatever it will be. market psychology has to adjust to the reality to prove it can handle it. >> do you think the new normal is we have no population growth and we've got no productivity growth is the new normal 2% or can we do 3%? >> i think we will grow and create nominal gdp

it's not just we're getting nominal. i think you get five nominal you could get. >> i think it's something really important. we're getting repatriatiation. that's bumped into the system you get a 21% corporate tax rate your certainty around your free cash flow. you get so much in all at once you will get a short-term burst. >> do you get up and worry the ten year is going to what level? >> so we have to position what we are doing the front end of the yield curve, we're not losing that much money this year we like to keep our holdings in the front inend. what's the back end? it's down about 6% when people get their statements, losing 6 >> they'll come back to the front end. >> you think it's a buy? >> we talk about the front end is zero. you have to go out the yield curve. now you don't. you keep the front end and get

yield. >> comcast 3%. >> you get a yield >> yeah, buy stock >> by a back stock >> it starts paying you something. however errant that may be >> you need that for diversification. >> not when it rips out both sides. >> rick needs it for diversity >> you can make money. you got to be positioned right at least for now >> i agree with that >> the ill to come, can you stay still to come, cpos of cisco and boeing but first, though, more from carl at the olympics chuck robbins spent time with him at an unnamed location, he goes on a different show including highlights -- it's still "squawk. including highlights and women ice hockey stay tuned

welcome back to "squawk box. and drew's gone, carl, before he left, actually afterwards, we were launching a fragrance it's called ars, ars we'll show you that a bit later. when he comes over, you need to congratulate him it's going to be very, very big, carl, who joins us again from the olympics it will be huge. >> reporter: too big to smell. >> did you see the billboard >> reporter: i saw it. >> okay. >> reporter: him on the sand

dune, unbelievable you guys are so creative >> we get a lot of milage. >> we are. >> reporter: i don't know if you are watching women's hockey, it's pretty good the u.s. women did fall to canada 2-1 in the round-robin. it looked for a while we might be able to come back from a 2-0. we were maintaining a 2-0 loss after mistakes in the 2nd period it looked leak a comeback would have been possible canada now has beaten the u.s. women in the gold medal match in each of the last two olympic ex. the other good one is snowboard cross. i don't know if you've seen this it's a wildly unpredictable event where the snowboarders catch some incredible air. a an returned with his 13-year-old son. some of the members, grinders, they are all olympians in their

spare time have pretty labor intensive jobs one is a licensed plummer and it was a reminder of just how hard these athletes work to become an olympian medal board still has norway in the lead, guys we are behind our pace at this point where we were in the sochi games in terms of medals with 8. i think we had 14 at this stage when sochi was going on, canada, netherlands, germany, with double digits. we will see if these al pine events now the wind has died down, we will catch up mikaela shiffrin had a great day on the slalom. she has several big events, not just on friday, on tuesday, wednesday, and thursday of next week. >> winning by less than half a second so incredible. we know you are working overnight because of the time difference i'm curious what the hardest and hottest ticket in town to get is what are people talking about

right now? >> reporter: curling is hard to get into i heard some people complaining curling was sold out you got to know a sponsor, you know anybody with a visa who can get in hockey is right behind me. can you see people over this shoulder they're they are going back in for the third period basically the passes they give us get you into any venue, which is amazing access, but a lot of times you go in and there's no seats so it's standing room only because attendance here has been pretty good. >> check out the monitor you know where apple puts up billboards, we quickly were able to go to the lincoln tunnel and people are going through and there it is, i don't know whether you can -- we've already got that so it's -- our p.r. department is working overtime to get as quickly as they got that up there and put it -- i think they use paste to put on -- there it is as we. >> if you lived here you'd be home by now.

>> yeah, you'd be home by now. >> just on saturday, villanova and xavier, put a plug in. only for a couple of hours i'm going to turn something elimination else on, okay >> i know you love your ball >> thanks, carl and you picking up andrew at the airport he's going to come here, i hope. i'll shabe talking to you. >> he won't be there for a while but if you get a chance, at the baggage claim he's expecting to meet you have one of those signs, too big to smell anyway -- >> we'll see you later on and see jim cramer le omivfr the new york stock exchange on the other side of this break let's builr world for investing. let's create jobs, build bridges, insure prosperity. as investment management professionals, let's measure up. cfa institute.

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let's get down to the new york stock exchange, as much as revile all things twitter, every once in a while i see something that strikes a chord from me this came from some guy, we're hearing wrong time to do corporate tax cuts because the economy is already doing so well it did occur to me, 30 years,

we've been trying to -- people have been talking about this even the obama administration wanted to try to get our corporate tax rate more in line with competitively with the world. if it's for the long term and it's the new structure for our corporate tax rate, does it matter where we are in the economic cycle now that we are able to get it done? is that real -- >> we spoke with the ceo of boeing in an upcoming interview and corporate tax reform neighborhooded him to compete to -- boeing to compete well against bombardier and airbus. it's about competition and that is something obama emphasized over and over again, we have to have free and fair trade and obama favored it because he felt it put our economy at a disadvantage now suddenly if someone wants to say politically this is a mistake, this -- chuck schumer was in favor of it and obama was in favor of it i don't really get where anyone

from any political spectrum would be against it. >> that's a negative action, i don't know, i'm befudled by it >> jim, last night, i don't know if you saw, providence is good, they beat -- >> i watched it. >> remember when '74-71 with seconds left and had visions of an upset. >> saturday will be great. >> saturday is everything. i think that villanova, i don't know what seed they are going to be if they don't beat xavier what seed? because providence love five games. >> blew them out in philly but we'll see what happens thanks, we'll see you in a couple of minutes. ha couple of big interviews that we just showed, thank you. we'll see you. experience lexus safety system plus standard.

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n rick, final thoughts as we head into the open >> what joe said earlier, the equity marketses can continue, we traded off 10.5%. we're going to see from here people are going to be cautious about rates but the markets can continue to grind higher and equities can grind higher.

i said earlier, you can make money on fixed income and funds making good money on fixed income, where do you own it and how much do you own it relative to where you own equities is the thing going forward. >> we should note the president will be making a statement at 11:00 a.m. on the florida shooting. >> make sure you join us tomorrow "squawk on the street" is righting up right now. >> good morning and welcome to "squawk on the street. i'm david faber along with jim cramer carl quintanilla is at the winter olympics in pyeongchang we have two special interviews ceo of dow components boeing, dennis mulen berg and chuck robbins as well. earnings news released after the bell yesterday let's give a look at