tv Squawk Box CNBC February 20, 2018 6:00am-9:00am EST
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♪ live from new york where business never sleeps, this is "squawk box. >> good morning. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen andrew ross sorkin is reporting live from the winter olympics in pyeongchang, south korea hi, andrew >> hello there >> good morning. happy belated birthday >> thank you very much i won't take too much time we'll talk about all the amazing things going on here in pyeongchang, i know you have to get to the markets >> we are watching the futures this morning they are under pressure. joe talked about red arrows coming in. you can see the dow futures indicated down by 136 points the s&p is down by 13 much the nasdaq is off by 36. the way we started the morning
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is not often the way we end. >> on thursday and friday -- you weren't here thursday and friday >> no. >> it continued. the bill murray bottom, which we were up 300 points on that friday, suddenly up 1200 points. >> we made back about two-thirds of the losses. >> if we were to close down over 200 today, the dow would fall under 25,000 so we're back to 25,200 again. the art cashin has the from a month ago where people were like, oh, my god it needs to be kept in perspective. 291 on the ten-year. you'll look at that later. that 2.6 or 3.0. >> what did he say >> he said that's the question 3.0 is more likely.
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in asia, some markets are still out now. they have been closed because of the lunar new year the nikkei down by 1%. the hang seng down by 0.78%. in europe, many of the markets are mixed. the dax is flat. cac is up 0.2% the ftse down by a quarter percentage point if you get to treasury yields, the ten-year is what we've been watching just below 2.91. >> home depot just out with quarterly numbers. retailer reporting profit of $1.69 a share. 8 cents above estimates. revenue exceeded forecasts comp store sales rose 7.5% the consensus was 6.5% u.s. comp store sales were above forecast for the full-year home depot
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says earnings should come in at $9.31 a share. that's about a dime above where the street is now. the company also announced a 17.5% increase in its quarterly dividend to $1.03 a share. more corporate news, albertsons is planning to buy the rest of rite-aid that is not being sold to walgreens. the deal would create a company with revenue of $83 billion and allow albertsons so go public after more than a decade of ownership. the ceos of both companies say the tie up is the best way for them to compete in consumer business threatened by amazon and walmart. >> amazon unveiling some new benefits for prime members people who use amazon's rewards visa card would get 5% back on purchases made at whole foods. card holders already get 5% back on amazon.com purchases.
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now with the whole foods acquisition you will get discount there's as well facebook's new verification procedure will rely on snail mail the social network is planning on sending postcards to potential buyers of political ads to make sure they reside in the united states. the recipient then would have to enter a card from the postcard to buy the ad. facebook said it is one piece of a much larger effort to address foreign electoral influence on its platform president trump tweeting a surprise endorsement of mitt romney for his run for a senate seat in utah romney has been a harsh critic of president trump until he wanted to be secretary of state. then he loved president trump. the president previously called romney a total joke, a choker. last night the president tweeted mitt romney announced he's running for the senate from the
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wonderful state of utah. he'll make a great senator and a wonderful successor to orrin hatch. mitt romney said i thank you for your support i hope over the course of the campaign i earn the support of the people of utah there's conjecture that he wants to represent a bran of conservativism that's common to his state of utah, which is an alternative to the populist conservatism of president trump. i don't know what would happen >> i was trying to figure that out. both have said horrible things about each other both have said they would never deal with each other romney said he didn't want an endorsement. >> watching over the last however long, to watch how people fall in and out of favor on the president's tweets, i finally said some of it is just like a big game.
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like little adam schiff, then it comes back then glowing if you make him mad, you get penalized. if he likes you, you get -- they play the same way, too corker is like -- calls it whatever it was, a day care center >> adult day care. >> then the press burns corker on that vote change. >> it's front no matter what you do he courted a different kind of person by attacking the president. now if you get the president's endorsement you tick off both sides. >> if reminds me of wwe. they are enemies, then the next week they're on the same tag team together. >> that's a really good analogy. >> for current politics. >> yes >> not very positive way to run a country. i don't know let's get back to the markets. here to talk equities and fixed
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income is phillip warko facing off against him, mark luceney. this is going to be ugly this will be -- maybe not. mark, more volatility, but i think you think the overall environment is positive. the backdrop for stocks, you have to stay long. is that where you are? >> that's exactly where i am the background is exceedingly favorable. the additional stimulus from the tax cuts and the budget act will add fuel to the fire of an already strong economic backdrop that is supported not only domestically but by global conditions even though we knows there pressure on equity prices in the futures market this morning, which is totally expected. we often have a retest, not necessarily to the lows we had a few weeks ago, but some kind of a retracement.
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it would be natural that it would occur at 61.81% recovery from a fstandpoint i think once again we'll recover and then some, the highs we put in late january. >> so, phil, i don't know. you can look at this as maybe the earnings, the markets went up without any multiple expansion based on the increased in earnings for whatever you want to attribute it to, tax reform or the strong global economy. the earnings will go up. the market goes up and maintains its multiple even if rates go up and the multiple contracts, you can argue it could stay flat based on earnings growth, couldn't you? where are you? >> we would argue they could stay flat. we are seeing them contract a tiny bit, but earnings will continue to accelerate
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the thing people have missed is the structural reforms in terms of deregulation and the more corporate tax regime is raising the potential growth of the economy. so we can withstand a bit higher rate now remember, real rates are just as low now as they were before, six monthses ag ago because inflati picking up this is a more resilient economy than in the last eight, nine years. >> phil, i'll start with you what do you think of the financial -- now you're both on camera whoever wants to answer it can do you think the financial stimulus -- i heard goldman sachs say over the weekend this we're at a point where what we're spending and the kind of debt that we have, the gdp, is
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problematic at this point. we can't do a sustained 3%, even if we want to. we front end loaded it too much to where it becomes a negative do you believe that? >> i -- there's something to that this is the first time we're really making a big stimulus like this, arguably the last third of a cycle but i would again go back to what is the potential growth of this economy i think the secular stagnation bear may not have been killed but wounded. simply because with deregulation and tax reform this economy has more potential to grow than before i think that higher potential growth really is going to take some of the heat off of that contention that they made. i think the economy is in better fundamental shape because of those reforms, and that's going to allow for a bit better
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growth >> mark, it's kind of frustrating. you go from 10 trill yocion to trillion, everybody is like we needed to do that. however they justify it. then you add 1.5 trillion for what might be structurally a positive for u.s. corporations, but it adds 1.5 trillion, and that's the straw that breaks the camel's back do you believe 20 trillion is okay, but 21.5 trillion we have overshot >> i tend to stitch out of your commentary there, joe, a bit of a facetious view on that i would agree. 1$1.5 trillion against 2$20 trillion is not necessarily nontrivial, but nonetheless seems diminutive relative to the damper the united states is having to cover in this juncture which is made easier because of low interest rates
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in times of higher interest rates, the problem is that it will crowd out or put pressure on what is two-thirds of our budget, entitlement programs between now and then, hopefully we do get stimulll stichl stimu allows to us accumulate momentum before we become incumbered by that increasing debt burden. it may be that we have a couple months of a tailwind before the manifestation of this economic growth raises an environment where raising rates do choke off chi choke off activity >> thanks. time will tell mark, i don't think i wished you a happy valentine's day or phil. that was almost a week ago >> little late >> a little late let's wait until next year
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i promise you. >> very good i'll take a rain check. andrew is in south korea now. he has an update on the big olympic events that happened over the weekend are you settled in there >> i am. last time you saw me busting into carl's shot he was here for a day and a half let's get you caught up on what happened over the weekend. it was a long weekend in the u.s., but not here in pyeongchang. a lot going on the highlights from the games. here's what happened the medal count, norway leading with 28 medals germany has 20 canada 19. the netherlands with 13. we're still in the top five. united states rounding out the top five with 12 medals so far france is just behind them brita sigourney earns the u.s.
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its 12th medal of the games in the halfpipe then the ice dance finals. tessa virtue and scott moir defending their gold they have been skating together for 20 years they've been winning olympic after olympic. it was something to watch. they beat a different group after a wardrobe malfunction in the short dance routine. the french pair took home the silver then this was a great story. the american shib sibs, maia and alex shibutani clinching the bronze big news here in south korea, outside the olympics, which is this, the top regulator of cryptocurrency in south korea, he was found dead in his home. south korea has been considered
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the world capital of cryptocurrency because so many people here have invested in bitcoin and other currencies south korea regulation plans for cryptocurrency have been seen as a bellwether for the rest of the world. he had talked about taking aggressive moesh sure measures currenc currency bitcoin crashed after they said here they would take extraordinary measures it's unknown if they will take a more harder or lenient stance since the regulator's death. we heard a heart attack. he was 52. given bitcoin and the cryptocurrency world, conspiracy theories all over the place. nobody talking about foul play,
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but talking about foul play, joe and becky, we talked about the virtual world of currencies going to the real world. don't know if you saw the "new york times" today, fascinating story about how bitcoin investors have recently become targets of thieves who have held them hostage to get paid in untraceable cryptocurrency it's the blurring of the virtual and real world so the idea that they were finding people that own bitcoin, putting guns up to them,having them go over to computers, sending them the currency and because it's anonymous there's no way to get it back. we talked about the potential for this over the past year, but now apparently it's real that's what's going on out here. >> hearing that about the idea they were holding people hostage hoping to get paid if you needed another reason not to buy bitcoin, that struck in
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my head, especially people on our show talking about how much of it they own >> absolutely. there's a grouch of wep of well people online who own hundreds of millions of dollars of bitcoin, there's been ransoms of all sorts. it's something that i know the cryptocurrency world and law enforcement are taking a look at >> andrew, the voice from god is telling me that this is directly from on high, that the canada dance team won silver in sochi, and that white and davis won gold in sochi. >> that's true, but if you go back to 2010 i want to say >> okay. where was it then? >> i want to say they won in 2010 >> okay. we will go back and check the record for you, joe. >> this is -- i'm -- the people that watch this show are pretty
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amazing. it's not god himself, but in terms of sports, he's kind of a god. thanks, andrew i didn't want to correct you, but, you know -- >> you know, when you need to stand corrected, you're corrected. and in this case -- >> we've been watching a lot of olympics >> we have adam rippon coming up later. >> with you? cool if i'm up, we're watching. if i'm not up, one else is watching >> you see the guy who got kicked out for doping in curling? of all the sports to dope in you got to be kidding. that's stunning. the russian guy who got kicked out, admitted it >> yes we will also talk about the american on the hungarian team who got into the olympics, effectively not knowing how to do this. literally qualified by doing all of these things. it's a fascinating story don't know if you saw that over
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the weekend. and ter rry lundgren will be hee in a few minutes we'll talk retail in a bit >> i know he has some involvement with the olympic athletes terry lundgren, the former chairman and mr macy's. we'll see you coming up. coming up, we'll revisit home depot's results, posting a beat on the top and bottom lines. we'll dig through the report with brian neagle, a frequent "squawk box" guest that's after the break
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home depot out with fourth quarter results beating expectations and issuing an upbeat forecast. brian neagle is retail analyst at oppenheimer what do you think of the report? >> overall, it's another great report digging through the results this morning, we're seeing positives across the board the most notable number is the sales. here home depot did a 7.5% comp gain, which is amazing in its own right, particularly for a
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company this size. wafrnlgts do y >> what do you think is happening? broader economic yissues, stronger economy or is home depot outperforming? >> it's all the of the above we have to give them credit for superb internal execution. what i think is interesting, this print today, the weather. so we had the benefit, if i will, of the hurricanes in the third quarter. this time around we had a more normal winter. colder conditions, some snow that should be a negative for home depot on balance. that tells me once again this company, they're able to maneuver think different weather environments and put up amazing results. >> average ticket sales rose by 7.5% customer transactions up 2%. they were getting people to spend quite a bit more money
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>> look, i think that's almost the same answer. home depot is selling more appliances that's been a big push for them in the cycle i think that's a function of where we are in the housing recovery we put a piece out last week talking about the extraordinarily elevated of home equity in the united states. i think we're seeing people take money out of their homes and taking these remodeling activities that's showing up in the results. >> what do you do with the stock today? are you a buyer? >> i keep buying this has been my call for a long time it's been a top pick home depot continues to perform well we'll see another good year out of the company >> brian, how do you look at a competitor like lowe's >> lowe's, they're much more similar than different home depot is a better run company than lowe's. when lowe's reports next week, i'm sure we'll see more evidence
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of that. >> do their stock prices reflect that the multiple reflects that if you look at the multiple, home depot trades at a premium there is the opportunity for lowe's they operate at a a 5% gap >> what do they need to do to close that gacp? >> i think home depot has better store locations. >> that's hard to change >> that's hard to change that's almost structural other than that, it's blocking and tackling in retail we talk a lot about this there's merchandise, store level execution, promotions. that's where lows needs to get
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better basically >> brian, thanks for joining us. nice to see you. coming up, walmart expected to report in the next couple minutes. we'll have reaction to the results on wall street. and new data this morning from cnbc's small business survey how companies view the company as we head to break, here's friday's s&p 500 winners and losers
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♪ live from the beating heart of business, new york city, this is "squawk box." good morning welcome back to "squawk box. we've been watching the u.s. equity futures, they are under pressure things have worsened right now the dow is indicated to open up down by 175 points below fair value s&p futures down by 18 points. the nasdaq off by 48 points. a lot can change between now and the opening bell right now it does look like we are in for rough sledding at the open >> we're watching the shares of chipotle the stock upgraded to hold from sell at stifel
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the firm's price target increased to 22. -- women, 275 from 250 >> it's at 305 >> i know. i was excited when they picked the taco bell uy i was hoping they would get a taco offering that was edible. then i read -- cramer has a mexican restaurant he thinks he's mr. real mexican food >> their food is actually real food >> i know. but -- real salmonella so you're getting really -- you know, i want -- but that's neither here or there. >> you want totally processed. fresh. >> i was amazed at the backlash for, like, organic food types.
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the new age people who thought it was heresy that chipotle would get that guy from taco bell i had the opposite hinking i was so happy to get some mexican food >> you are the anti-millennial >> yes even cramer was saying this. i was like, okay but i hope it turns into taco bell >> the one thing they can use is centralized planning >> i don't have it a lot if i do have tit, i want taco bell if i'm doing it >> walmart just out with earnings courtney reagan has the results. good morning >> good morning to you both. it looks like walmart is putting up a bit of a mixed holiday quarter. errings of 1.33, that's falling below the 1.37 estimate that analysts has put up.
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revenues of 136.27 billion does beat the street's 134$134.9 biln estimate for walmart key u.s. same-store sales are up 2.6 for the holiday quarter. that marks the 14 th straight quarter of gains traffic also growing at 1.6% walmart expects u.s. comp sales to grow at least 2% for the full-year. while a small portion of total sales, we pay attention to the e-commerce sales, those grew for the quarter. the retailer is forecasting u.s. e-commerce to grow 40% for this year going forward they have some in-store pick up items, that could be part of it as well as jet acquisition
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i did speak briefly with the cfo on the phone he says those wages and the tax benefit changes that we saw were really the first big investment from the tax reform. but the retailer is going to continue to invest aggressively and be thoughtful about those investments. >> that's why earnings came in below expectations, even though sales were better? >> right they told us they would have a little bit of that hit when they put out the new numbers for the new wages. so they gave us that lump sum. >> they're talking about for the full year, 4.75 to $5. that's quite a bit stronger than expectations of 4.44 >> because they gave us this guidance in october. we got the tax reform changes in january. the analysts were doing their best to work through what they thought would be the follow through, only knowing some small piece of it. >> if you're looking at the full-year guidance for this, if
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they're correct, you'll have a benefit from this. >> exactly before when they raised wages for employees, things turned out better for the store if they're not only giving a bonus but also raising wages -- >> we were up $4, now down 3 what is it >> it's bouncing >> the futures -- the futures weakened >> they were down before we got the numbers. >> they with down 1.75 i'm wondering why the stock was up on this news, but it wasn't >> i think the street is going to be wondering. they say we want to i venvest in supply chain, eshg commer-comme price. this tax benefit is not a one-time thing the bonus might have been one
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tile, but there's more money here that walmart needs to figure out what to do with >> okay. >> you wonder if that just means one of two things, knee jerk reaction an they don't like the earnings for this quarter or they don't trust the numbers, or -- i don't know we'll see what happens >> walmart is holding a live conference call, something they have not done in a long time they said they will do it for the fourth quarter, but the other three quarters will be prerecorded. every fourth quarter they will do the live analyst call >> i was looking at 4.44 pore t for the 2018 estimate. this number is missing the $5 estimate so maybe they hit those numbers, but more than likely they won't. 4.75 >> thanks. new results this morning from cnbc's small business
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survey kate rogers joins us now before you start, i want -- have you seen "darkest hour" yet? have you seen it >> i haven't i can't wait to hear why you're asking >> i bet it doesn't matter, you'll hear either way tell us about the small business survey >> main street's optimistic street continues post tax reform the small business confidence for the first quarter is out it saw an increase of 5 points, much of this due to tax reform 50% of respondents said they expected cuts in 2018 and those who did expect those cuts reported feeling more optimistic half of small businesses said they felt tax reform would be a positive for their businesses, 23% said they felt it would be a negative despite having extra cash on hand, when asked what they would do with the windfall, only 10% of them said they would spend it on raising wages this is interesting given support for higher wages
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the sur vvey also polled non-sml business owners, 37% said they wanted small business owners to raise wages for employees. and even though businesses are feeling more optimistic they are not hiring en masse. part of that could be because of a crunch with skilled labor. that's the number one issue for small business owners. even surpassing tax reform >> the reason i was telling you -- becky is hip to this too, now. in "the darkest hour" guess who plays the dignified king talking to churchill and gives him the go ahead to not enter into appeasement talks. guess who plays the king >> i have no idea. >> the dead brother from brood line >> i knew it would sh somebobe from blood line or sons of
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anarc anarchy. >> danny is great as the king in -- gary will probably win >> and he's in blood lines i have to check it out >> he's a great king terrible brother, terrible person, but a good king. that's why it's acting, right? >> very good >> yeah. totally different people all i really care about is their political opinions thank you. >> thank you coming up, terry lupd grndgn has handed over the reins at macy's he joins andrew next south korean olympics. then the ceo of fireeye unveiling a new threat. and chris hughes will be our special guest host at 8:00 a.m.
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eastern. he could probably refinance my mortgage he's loaded. you're watching "squawk box. alerts -- wouldn't you like one from the market when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.
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box. i'm live in pyeongchang at the olympics joining me now is former macy's chairman terry lundgren. you have made it all the way here >> i have. >> your wife is also here. good reason to be here she has a job. >> we should explain why you're leer wh here. >> i want to be around people who are the best in the world at what they do that's why i have come to the olympics it's my first winter, but i've been to a few summers. but my wife is a team leader for the u.s. skating team. you want to be associated with these extraordinary athletes they have got a few that have won medals i know the shibutanis are sponsored by ralph lauren, they won bronze earlier tonight the answer s yeah, you want to be associated with the best in the world. >> want to talk about the retail businessment wa men
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business walmart came out with their numbers. everybody trying to gauge what happened over the holiday season you're not in the chair but watching closely what do you think happened >> walmart is up 2.6%. earnings are up. everybody is excited about they didn't hit this number or that number their stock was $75 in november or late october. 102 now. i think they're a long-term focused organization they'll do what's right for them in the long-term we have had a definite setback from the last few years in our industry there's reasons for that i think no one is sitting still. we're all working extremely hard to correct the situation and be more responsible consumers >> what do you think the impact of the tax cut is going to be on the kochb tsuna the consumer >> it's a big positive for retailers. now they'll have ammunition to aim at the things they want to get done could be on subjects like
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refurbishing the top stores. like paying employees more on the sales floor. could be those types of things all business generating ideas. then back to the shareholders directly there's lots of ways they can be a positive thing for retailers >> jan kniffen talked about this idea that potentially the tax cuts from the strongest players will get passed on to the consumers as a way to knock out the weakest players. do you think that happens? >> what i know is when price is your only answer, it's a short-term strategy. i don't think that will happen across the board i think it will be in many cases -- i don't know specifically lou mahow macy's ws this money, but there's opportunities to do what i suggested, divide it up. go after things like technology that you need to improve your relationship with your consumer. buy online, pick it up in the store. make it easier, but it costs
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money to do that you want a bonus system for your employees do that on the selling floor to make them more responsive to consumers. >> we were talking about amazon earlier. becky was reporting amazon has taken the 5% discount they give you on the credit card, now they're making it available to whole foods customers. >> sure, why not >> is there any way to stop them >> i think there's room for others in addition to amazon i think they've done some aggressive moves and good things i think including getting into the brick-and-mortar business. i always believed that the biggest and strongest and most successful retailers will have both, a strong retail business and a strong online business >> so, i don't know if you can answer this. now that you're not an official macy's man, if the lundgren family had to put money into
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retail in terms of the stock market but retail companies, how would you allocate it? >> i've done that. i won't tell you the answer to that question, but i've done that you know, i never bought a retail stock ever until the day i retired. >> you did >> then all of a sudden i did. >> you have to give us a little sneak peek >> i'm a student of this business i learn a lot by walking around and actually having interactions with associates, looking at stores, watching their websites. i can get a feel for it. i placed some bets so far so good >> how about one or two bets >> i won't go there. maybe a year later i'll come back and tell you how i did. i'll have a race with jim cramer he's the pro he's the expert. he can do any field. i just do the retail category. >> terry luchndgren, thank you o
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being here she's here off the set and doing great things for the american team guys, back to you. >> thank you very much thank you to terry, too. when we come back, fast company has the list of the most innovative companies we'll talk to the ceo of one of the top businesses. as we head to break a quick check of what's happening in the european markets things are relatively flat ftse down by 0.25% cac slightly positive. dax slightly negative.
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so that's the idea. what do you think? i don't like it. oh. nuh uh. yeah. ahhhhh. mm-mm. oh. yeah. ah. agh. d-d-d... no. hmmm. uh... huh. yeah. uh... huh. in business, there are a lot of ways to say no. thank you so much. thank you. so we're doing it. yes. start saying yes to your company's best ideas. we help all types of businesses with money, tools and know-how to get business done. american express open. today, smart planning is helping the new new york rise higher than ever. as the world leader in unmanned aerial systems, we're attracting the world's best talent to central new york. and turning the airport into a first-class transportation hub.
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"fast company" out with its annual list of the most innovative companies joining us is eric schernberg and marco zafacosta. he's ceo of thumbtack and number 23 on the "fast company" list. thank you both to coming on air. the top ten go quickly, then we'll get to 23. we've got to leave time for marco to explain his company because you're going to start with explaining like we talked about, kevin, you're going to explain the internet to me. >> that's right. >> it's a bunch of servers
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then you go to the cloud. >> now you can even get humans to the internet. platforms like thumbtack can get professionals to come to your home. >> like in "star trek" >> that's right. >> you can't actually go through the -- >> they show up in the real world. >> work on immortality for me while we get the top -- >> the number one company on the most innovative list is apple. no big urprise that's the only company that's been on the list since we began. the story about apple is that it's -- you know, it takes a lot of hits for not coming up with not a lot of innovation. nothing really new has happened at apple since 2010. 2017 was a big difference. the iphone x, a real break through with face i.d., glass all around 12 megapixel camera. plus the watch plus airpods they're everywhere
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apple was number one proof, they don't have to be a small company to be innovative another company on the list that i thought was really interesting is patagonia patagonia's been on the list before it was on because its innovation was really about its dedication to its social mission. every time it doubles down on social mission, which is protecting the environment, it seems to sell more stuff even when it does something totally counter intuitive as saying, don't buy this sweater because it wants to sell you used sweaters to take clothing out of the environment it's an amazing thing. when it does that, business goes up >> you can stop at the used underwear. but, all right used sweater, maybe that's -- you know, if it goes to the dry cleaner, i guess netflix, irritating to someone that loves comcast they're still doing really well. >> they are doing really well. >> hiring content guys for big
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bucks. >> what they did in 2017 is make a lot of technological improvements that allow them to lead to bumps. you have to be careful how you transmit data. >> ever watch dunnkirk on a phone? >> i don't think i want to watch it on a phone. >> i think you're showing your generation. >> better not watching it at all. >> i like the 75 incher. maybe samsung should have done it did you explain everything i still don't understand what your company does. can you help me? >> sure. sometimes you want to get more done whether you're trying to olympian a wedding, get your home painted, hire a professional we have a quarter million professionals now. we're active on the platform the thing that we're excited about being on the list about is it's about our pros. they're amazing. talented people all around the country. we've built a platform for their talent to come to the market.
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>> how did you test it >> ikea it was about furniture assembly sometimes it's about helping you hire professionals who have skills you don't have yourself, be it a plumber, wedding caterer. they have incredible talent. they've been held back because they don't know how to market online. >> do you know people that install computers, like the geek squad? >> sure. >> i can't get best buy to return my call can i actually find someone, so i'm not even going to bother -- >> absolutely. try us out >> and i can get people to come in and hook everything up? >> yeah. we work hard to ensure that the pros on thumbtack are trusted and appropriate for every need that you have. they have a lot of reviews ultimately what you see is their listing, their price and all of the reviews that consumers have left for them. >> marco, thank you. eric, thank you. this is it right here. i've got a copy if you want to stop by. >> i have the other one. >> yeah, you've got the other one.
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>> full stli when we come back this morning, the ceo of henry schein will join us stick around we'll be right back. stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker. that's the power of and. you or joints. something for your heart... but do you take something for your brain. with an ingredient originally found in jellyfish, prevagen is the number one selling brain-health supplement in drug stores nationwide. prevagen. the name to remember. gglobal bonds, and high-dividend strategies.
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futures pointing to a lower open on wall street as investors return to work from the long weekend. we'll tell you what's weighing on the markets walmart reporting quarterly results. the numbers and analyst's reaction are straight ahead. disney's "black panther" smashes box office records the look at the movie's major milestones and what it means for
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disney's bottom line as the second hour of "squawk box" begins right now live from the beating heart of business, new york city this is "squawk box. good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen andrew is in pyeongchang he's covering the olympics and much more. we're going to check in with him in a few minutes in the meantime, let's take a look at u.s. equities. at the moment things are under pressure dow down by 154 points s&p is down by 14 points and the nasdaq off by 39 let's get to our headlines at this hour starting with two dow components out with their quarterly numbers this morning retail giants walmart and home depot. it's a tale of two cities. walmart falling 4 cents short
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with quarterly profits of 134 a share. it was the outlook that they're talking about where they see 4.75 to $5 a share for the full year street's already at $5 so that is causing a bit of concern and you can see that stock is off by about 4% that is not helping the futures this morning also, home depot, the second dow component reporting quarterly profit of 1.69 revenue above consensus estimates. home depot announcing a dividend increase to $1.03 a share as well it's up by 53 cents at 187.50. qualcomm has increased the bid to $127.50 a share that is up from the prior bid of $110 this comes as qualcomm is being pursued by broadcom in a proposed $121 billion deal broadcom has said its offer was
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contingent on qualcomm buying nxp at the $110 price or terminating the deal the s&p 500 had the best one week gain since 2013 there's been a lot of up side momentum in certain parts of the market dom chu is here and he has a look at where the buying has been. >> we've lost $2.5 trillion in terms of market value in the record highs that we saw and the lows in the selloff. we've gained 1.3 trillion of that back again. a little more than half. where has the heat been lately here's what's been on the investor's shopping lift these are the biggest gains and notable ones at that alphabet shares, parent of google, have been at 10% ever since the lows that we saw interday back to the selling lows of february 8th, 9th. nvidia is up 12%, amazon up 14%, apple up 15% these are some of the biggest companies. in terms of market gains -- >> they're also some of the biggest losers.
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>> correct. >> where people are buying dips, they say, hey, i can get it at a 10 or 15% discount you talked about retail throughout the course of this morning here regional banks, energy, retail have been some of the big buying the dip themes comerica, hess energy name under pressure up 13% and macy's one of the retailers in the down trend as of late longer term is up 14% as well that's where some of the buying has been. >> dom, thank you. good to see you. let's talk a little bit more about all of this. joining us is karen cavanaugh. she is senior market strategist at boy yeah investment and hans is at stiefel. let's start with you since you are here on set. what do you think? did you miss your opportunity to jump in and get an investment in stocks if you didn't buy >> no, i think you're going to get a couple of chances to buy the dip over the years it's going to be a function of the economy essentially
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achieving escape velocity. the market is trying to reprice an environment where there is a bit more inflation and interest rates get a chance to normalize. >> suddenly we look at other places like maybe there are other places to put your money. >> precisely you've got options now. >> when you say you think we're going to be getting chances, we saw a correction of a full 10% pull back and then some. you think there will be more correction type of -- >> i do. it would not surprise me in a year like this where we're looking at interest rate normalization for you to have several instances of 8 and 9% pull backs over the course of the year we saw that. i keep begging on about 1994 which is a year that was a pivotal year just like this where you went from interest rate assistance from part of the central bank to more normalized. over the course of that year you had three instances of peak to tropp pull backs of 8 to 9%.
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>> karen, do you agree with that >> absolutely. i think we will see some choppiness i think investors have to realize good economic earnings and growth, that's a great thing. we haven't been able to say this in decades where the market and the economy are both ripping a hid. so investors need to get into the market and ignore a little bit of choppiness. that's normal. that's what's going to happen. >> hans said people are trying to reassess. if you can get that, bonds are the best place to be >> 17 times earnings bond yields are still below 3% i still think bonds are, of course, an important part of a portfolio. why wouldn't you want to be in stocks when we see that earnings are continuing to accelerate and we're going to see even more growth going forward people are worried about this deficit, 1.5 trillion because of the tax cuts we're going to see economic growth and that's different than
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what we've seen in the last decade we're actually going to see some growth. >> that's the bullish case i guess many of the traders and investors that i talk to are looking for when that turn is going to be. so this idea that it becomes less of a buy the dip type of situation where you can buy on discounts and it becomes a sell the rally situation where every time there's a little bit of strength it's an opportunity for you to lighten up on i guess the big question for a lot of people out there is whether or not they see signs that this could be a change in regime with regard to whether or not the stock market is still constructed and that's the reason why for a lot of people out there i'm not sure how karen and hans feel about this, is it still constructive overall. >> i think so. i'm looking at this period as more of a portfolio construction issue rather than market time issue in the sense that this is the time when you are either shortening the durations of the portfolio if you haven't done it already, you should have ton it already, number one. number two, you're making sort
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of the pivot to more late cycle investing. >> such as >> financials, energy stocks, consumer discretionary these are the things you would normally think about as the economy accelerates in the latter part of the business cycle. >> if you are expecting at least maybe three pull backs of 8 to 9%, maybe even more, why not try and market time it >> well, you could, right? but which one do you play? and so, you know, i tend to look at this if the valuations are good, we've got earnings moving the right way, it gives you great opportunity to sort of start to reposition your portfolio. you know, once you get the stats back as we had this week and you're acting more from the position of strength rather than reacting. >> karen, how about you? which places within the market do you think are the best places to try and focus your attentions and your money >> well, i agree somewhat with hans, but i don't think that shortening the duration of the portfolio. i know that bonds are going to get hit as interest rates go up, but think about your long treasuries those are really a risk control
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and those are there when you need them. i would agree, financials. i think energy has been beaten up i also continue to like tech because we're still in a low growth environment if you take a look at tech you still see earnings growing at double digits. that's a good place to be. across areas where they have been beaten up everybody is worried about rates. they have been beaten up they are negative year to date we're going to see interest rates not continue to rise at a rapid rate we want higher interest rates but i would say overall investors should be diversified across sectors and also take a look at midcaps and small caps because they're going to be the biggest beneficiaries of these tax cuts and lower regulations. >> all right karen, thank you han hans, thank you. good to see you. right now let's get back to andrew he's way over in south korea and
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he's watching the olympics but he's still writing columns about gun control. andrew. >> i am, joe we are in pyeongchang but before i left i had spent some time working on a column and thinking about some really important issues i wanted to talk about this column this morning because it's probably receiving more feedback on this column that just has been posted overnight from the ceo community than anything i've written in my life it's been picked up by politico and axios and others it's a serious subject coming in the wake of the school shooting in parkland, florida, that claimed the lives of 17 people a lot of people, of course, have been calling for the government to do something on a variety of fronts the fbi identifying suspects in advance. then of course there's the mental health issues that need to be solved, then there's the issue of assault weapons i am in the camp of all of the above. the column tries to do something
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different. how can you make it okay to buy assault weapons, high capacity weapons and bump stops, there's debate out there this is not an effort to outlaw guns, just to make the sale of the most dangerous products a bit harder to buy. given that the business community is constantly talking about the corporate social responsibility issue, we hear it over and over and over again on our own air. i proposed an idea that the financial industry would have over the sale of guns. a number of companies have done this paypal, apple, stripe all announced they would not allow their services to be used for the sale of firearms the teal is that the big credit card companies like visa, master card, a.mex and jpmorgan and wells fargo could change the services that they have. that could change the dynamic of such sales there's precedent for doing this they have banned legal products
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before jpmorgan, citi, bank of america just outlawed the purchase of cryptocurrencies, for example, two weeks ago, but, of course, you can still by an ar-15. there's a real opportunity, i think, i want to say at least, for a brave executive to protect the children and families of their customers and employees. the scariest part of reporting this whole thing, i talked to dozens of ceos, many who have commented on the article since i talked to them, the ones that want to speak out on this, to the extent that they haven't yet, fear not just an economic boycott from doing so, a lot of them worry about getting to be part of the conversation would put their own employees in harm's way i put this column out there in large part to spark a bit of conversation and debate. i know there are people that agree and disagree i've been getting a lot of feedback this morning from a lot of different executives and i think this is a conversation that is going to go on for some
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time so i'd encourage you to take a read. >> i saw you tweet first thing in the morning, it's that they would sell -- it would cause gun makers to sell fewer guns and therefore it would result in less killing of our children, which was your conclusion from that when i -- i'll just read you from the national review there's a piece out today just to show you whatnot -- >> there's another side to everything. >> not necessarily -- but it's from the "national review. it starts with to understand the american gun control debate you have to understand the fundamentally different views. among conservatives there's a broad belief that the right to own a weapon for self-defense is every bit inherent as the inalienable right to speak freely and practice religion most forms of gun control proposed after each mass killing represent a collective punishment the rights of the law abiding are restricted with no real evidence that these alleged common sense reforms will
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prevent future tragedies in any meaningful way and i immediately thought, if you could get master card to not sell -- >> right. >> -- these guns to criminals, that would be great, but how would you distinguish between law abiding citizens that are not allowed to buy guns and the criminals that are not allowed to buy guns under this system? >> so under the system that i'm proposing is actually something very different i'm not proposing to restrict the broad sale of handguns and other guns. >> you're talking about ar-15s, i understand that. how do you -- >> this is talking about semi-automatic rifles, high capacity magazines and bump stops, which by the way, i think there's some agreement at least on high capacity magazines and bump stops that we don't allow people to buy bombs so -- >> the "la times" has an editorial just ban assault rifles just go for that i don't know.
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>> no, what i'm saying is, look, if you want to buy it in cash, you can buy it in cash the question is if you are a socially responsible company in this day and age, do you want to do business and effectively be complicit and encourage and be part of this one way or the other? that is to me the fundamental question do you need those type of guns on the street? again, you have to get to the other side and decide whether you want those type of guns -- >> you don't want to mins words. you don't want assault rifles. you should ban assault rifles. >> hold on i'm saying, look, the government is not going to ban assault rifles. >> right right. >> i don't believe they're ever going to ban assault rifles. >> in a perfect world that may be the answer. >> it may very well be. >> i'm saying businesses can decide whether they want to support the sale of those type of guns and i think that if you were to talk to most of the ceo community in america today, there's variation on it.
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i think if you were to talk to many of them, they would say that they would prefer not to. that they think that it would be safer for them not to. >> but the whole point of what this guy is saying is -- and what conservatives say is that's a collective -- you're doing it in a collective way. the law abiding citizens that for some reason want to own this, they're not going to be able to own them which is fine if that's what you believe. >> no. >> a lot of school shootings are done with handguns anyway so i know it seems that -- >> first of all -- hold on hold on. >> i know. >> we can go through the list. virtually every major mass -- look, when you have 17 people dead, you can't -- with one handgun you can't kill 17 people. >> then ban them ban assault rifles and see if that happens. >> that's a larger debate. clearly the government has decided for whatever reason they may not be there >> there are corporations that are stepping up and that have already done this.
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walmart banned assault rifle sales back in 2015. >> yes >> and other stores. >> they are one of -- they are one of very few companies that have done it the question is, if you wanted it done en masse in any more meaningful way, how could you do it interestingly enough, the financial community, the banks, the issuers of the credit cards actually decide what they're going to support and what they're not going to support the sale of. there are certain credit cards, by the way, you can't buy pornography. you can decide they're first amendment issues, whatever you want, but these are commercial decisions companies can or cannot make. i would argue if you are a socially responsible ceo today, there's a decision you need to lead today if you're watching and you believe this, i would encourag you to do so so that's where i land >> some companies like walmart have already done it
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>> that's one -- one company, becky. one company and i will also tell you just to be 100% clear that when you talk to the ceos in the banking community today about why they worry actually about something like this. it's careful they weren't looking at that >> whether that was done for a socially responsible reason.
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>> okay. andrew, thank you. we'll check in with andrew henry schein talks about it. cyber security, the north korean government i think that she's a very nice girl... you never got the brakes looked at? oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it-
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it's a new kind of network designed to save you money. call, visit, or go to xfnitymobile.com. ♪ ♪ henry schein out with better than expected revenue. joining us stan bergman. he's chairman and ceo of henry schein the highlights of the most recent report were in, what, top line, bottom line, tax reform? what was in here >> joe, it was a very good quarter rounding out a very good year we finished the year now at sales growth of over 8% and eps for the full year was 9%, around 9% positioning us to give
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guidance for 2018 of 12 to 15% internal growth, eps growth. >> what helps growth does stronger economy help does competitive advantage help? >> joe, the field we're in is the field of wellness prevention, whether it's in the medical world, dental world or animal health. people are understanding that wellness, prevention results in better life, better quality of life and are going to see dentists, veterinarians, others around the world. >> tax reform is affecting you and how did that play into this quarter and your forecast for the year we estimate that our tax rates will go from 28%, joe, to 24% this coming year so it's been relatively good for us and, in fact, we will be sharing some of those benefits with our employees. >> do you have -- do you spend money on r&d >> yes, we spend quite a bit of
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money on software r&d because we are the leading provider of practice management software to dentists and veterinarians so we develop software and also are investing in dental implants, orthodontic products and endodontic products. >> what is the state of that industry in the last five years strides have been made, i hear you, you you've only got one set of teeth, you better take care of them, and i've seen people that haven't and it makes life very, very difficult what's the -- >> well, we know that there's a significant correlation between good oral care and good health care take care of your teeth, you live a healthier and better life what we're seeing on the technology side is the digitalization of dentistry just like we've seen that in other areas. we're moving from x-ray to digital imaging and most importantly in dentistry we're seeing the digitalization of prosthetics. so the developments of a crown can now be made chair side
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within an hour you can have a crown milled in the dental chair and be out the technology's moving rapidly and our customers are adding this technology to their practices. >> how many acquisitions have you made over the past five years? >> we do about a dozen -- dozen to 15 or 16 acquisitions each year we are add new products, we expand geography and we add new services remember, our customers are seeking advice on how to run a more efficient practice while at the same time providing dental care. >> these are smaller companies that can benefit from being under the umbrella of henry schein. >> some of it is the rollup but a big addition is helping our customers operate a more efficient practice. >> who's your biggest competitor >> we don't have one globally but many in different companies. we have critical mass that no one has around the world in
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dental, medical and veterinary practice, either in software or in services to those customers. >> fair to say dental is growing more quickly than any of the other arenas like animal health? >> animal health is growing quite well people are investing in their pets, whether it's the baby boomers, next generation or the nextgen. they're investing in their pets. people are going to see the physician outside of the hospital to ensure that wellness is very much taken care of and at the same time of course there is an understanding of oral care, the importance of oral care which is growing throughout the world. >> henry, thank you. appreciate it. thanks for stopping by the studio this morning. >> thanks, joe thanks, becky. when we come back, fire and ice ceo kevin mandia is working with them. a group reaper is said to be working with the northern government take a look at the u.s. equity
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♪ ♪ good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. among the stories that are front and center, morgan stanley and blackrock out with decidedly different views on the stock market today blackrock has upgraded its view citing strong earnings and saying the selloff made it attractive then morgan stanley said the selloff was only a taste and the real test is yet to come weigh that up, see what you think about things also supermarket operator alb t albertsons is buying the part of rite aid not being sold to walgreens. they'll have the chance to
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receive cash for the shares that they own rite aid is in the process of selling more than 1900 stores to walgreens for $4.4 billion albertsons is expanding. another supermarket chain may be filing for bankruptcy. the parent of winn-dixie chain is planning to close at least 100 stores as part of a bankruptcy filing. that's according to a reuters report sources say that the filing could come as soon as next month. walmart out with earnings. let's dig through the quarter with one of the guys on the street that follows the stock. joining us on the squawk news line, joe feldman, senior managing investor of telsey advisory group better sales the bottom line number a little light, joe the reaction is not positive will that change when people take a closer look >> yeah. you know, i think if you take a closer look, they did operate fairly well. the top line was good. they invested in prices which definitely hurt a little bit on the bottom line and there were
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definitely a lot of moving parts in terms of charges that they took the operating income could have been a little bit better i was happy to see their guidance for 2018 to have walmart sales up 2% which is a little bit better than what people were thinking. >> yeah. the outlook we had a little bit of confusion, are they guiding lower, guiding higher? how do you view it >> well, it's funny because guidance actually hit where the street is. the problem is i think a lot of us were a little bit lower, had a lower tax rate factored into our models for example, i was using 22.5% and the guidance for tax rate for this year is 24 to 26. so the top line numbers were a little bit better but that tax rate definitely had a bit of an impact on my number which was sitting at 5.19. again, we were all kind of playing the game trying to figure out what that might be. i think that's something you have to kind of, you know, take a pass at or give a pass to the
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company at just given that we were kind of -- we, the analyst community, were coming up with that number but the guidance for com site was pretty solid. they talked about continuing new investment price which is what you want to see walmart do they actually would have leveraged sales in the fourth quarter -- sorry, leveraged expenses if it wasn't for some of those like one-time items they had to take in terms of charges. >> so in terms of competing with the amazons and the dotcoms of the world, is walmart getting better and better? i mean, do you have a lot of confidence that that's -- they're going to be able to maintain market share and five years from now be even greater than they are today? >> i do. i think they're, you know, targeting a slightly different customer than what amazon is targeting. clearly their ecommerce sales decelerated in the fourth quarter which is a disappointment, i think, to people they talked about it kind of
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reaccelerating back to 40% i'm sure that will be a topic on the conference call for the next few minutes. over time, yes, they're one of the only other etailors, retailers if you will that has a marketplace like amazon. as that continues to expand, that satisfies a broader base of customers. they've done some good things with jet.com going after the other consumers. the customer coming in buying groceries, expanding grocery pickup, that will help them over the next several years. >> joe, thank you. >> great thanks, guys >> okay. coming up, we have the ceo of fireeye who will be talking to us about all kinds of cyber threats out there, including a new one from north korea a programming note for you, next monday it's our annual ask warren show. >> have you seen his 23andme voiceovers >> i have. >> this is the only body you're going to have. >> they took it straight from --
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>> did you know it was him immediately. >> i saw the voice they took that straight from the movie. no, they did from the movie. >> i thought they got him to do it. >> no, i think they took it straight from the movie. >> only one body you only have one set of teeth take care of them. >> as we just mentioned, henry schein warren buffet will sit down to talk the market, policy, he'll be answering your questions, that is coming up monday, february 26th, starts at 6:00 a.m. eastern time. "squawk box" will be right back. what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley
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cyber security company is out with a new report on a suspected group it believes is working to benefit the north korean government. they call the group reap er joining us right now is the ceo of fireeye, kevin mandia. >> thanks for having me. >> you call these advanced persistent threats this is apt 37. >> we're not creative. we could come up with other names here like flufly snuggle dog. >> all that means is you have 37 groups that you are following and you believe are acting on
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behalf of some foreign government >> that's exactly right. most of the 36 before 37 were china or russia. intere there's one or two iranian groups, one out of vietnam we have our second group out of north korea. >> how did you find this how concerned should we be >> you should be concerned it's following the normal progression we see normally you restrict your activities on government on government then it's military on military we've seen apt 37 since 2015 they've been operating since 2012 they decided just recently to stop doing military against military they're starting to hack the private sector they're starting to hacks off the korean peninsula their tier one targets they can operate beyond tier one and they're starting to hit other
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t tan againstal targets. >> they were focused on south korea first and now they're focused on others. >> their capability has gotten to the point where they can take on more targeting. >> what does the u.s. government do with information like this? >> you know, you need to be aware of it because you want to be able to defend against it but it's a tough one the anonymity on the internet and every modern nation is following different rules of engagement, you have to be aware of the threat intelligence, you have to be aware they exist. i'm not sure there's risk or repercussions. >> that's what you're bringing up there almost used to be rules of engagement that doesn't seem to be the case >> it's definitely different when i was responding to breaches in the military in the '90s there was -- you could expect what the russians would do they would hack military against military whenever we caught them, they kind of went away. that was the rules of engagement they may not have been written, they were followed i would say the russians, they
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strayed from their normal rules of engagement in 2016. >> so how do we as a nation, how should we respond? >> we're going to have to figure this one out >> do we stray from rules of engagement, too? >> i doubt it. from what i've opened, we're a nation of laws and rules, we tend to operate within some of the confines of those rules, but i've seen russia get more aggressive in the last two years. china's actually dialed it back a notch. we're kind of figuring that one out. north cokorea is one we have to worry about. >> why has china dialed it back? what happened? >> five years ago yesterday we released apt report 61938. >> i remember the front page of "the new york times." >> i didn't think anybody would care about cyber security, but they did what we learned from that is when you expose a group and you get modern nations to have bilateral conversations, you can make a difference. that happened with china they changed their targeting they changed their aggression. they're just different in how they target. >> meaning they go after other
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places or trying to go after u.s. companies >> it's a funded effort. they probably take down their targets. >> with north korea, just the idea that they used to focus on south korea and now they're focusing on us, is that a reflection of the heightened tensions between our two nations? >> it took me 18 years to figure this out, but it's absolutely the case as we respond to breaches around the world, they are absolutely tied to geopolitical conditions. no question about it. >> just a reflection of what we saw? >> absolutely. the silent intent of nations, you can see it in cyber space. >> i keep asking what the u.s. government should do what should u.s. companies be doing if they are potential targets? >> there's a lot of things you can do by the way, it's such a long answer i had to slim down a 700 page book to a quick answer for tv. most u.s. companies are not going to be targeted by north korea right now. there's a thing called crypto
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mining where the north koreans are trying to break in basically anywhere so they can get money they want bitcoin, some kind of digital currency. >> they want digital currency because it can't be traced. >> anonymous currency. beautiful thing for folks. >> a little bit different about the sony hacks which seems like it was a much more targeted efforts. >> sony was a targeted breach but these things for bitcoin or for some kind of cryptocurrency, they're spraying attacks. >> is that government based? is it because they are facing more pressure from additional constraints that we've been saying we don't want anybody doing trades so they have to find other ways to get money >> it could be they're restricted on capital markets so they have to get money other ways. >> of all the countries we worry about, who do you put on the list saudi arabia said iran. >> iran has been very active i can tell you this, russia is probably the best at it. when they want to operate below
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the radar, they can do so. but 2017 to me was the year of iran out of the blue we responded to more breaches from iran than any other year we didn't see them until about 2008, but when you get to operate unfett tered for nearly decade, you get better iran has emerged. >> thank you for joining us today. appreciate your time. >> thank you. coming up, we head back to pyeongchang and check in with andrew at the olympics later, disney's "black panther" is a monster hit mo on rethe record numbers in a few minutes. "squawk box" returns after a break.
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welcome back, everybody. security at the business is big business it's something andrew is digging into he joins us from pyeongchang in terms of keeping americans safe and it's a big job. >> hey, absolutely we're seeing the collaboration that goes into keeping americans safer. >> at the u.s. embassy in seoul, 24 hour security operation led by the state department's diplomatic security service. from its joint operations center, representatives from the fbi, homeland security and defense department monitor
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threats and run security drills for a variety of emergency scenarios. this team manages security for the united states personnel at the olympics, including athletes, media and sponsors. >> they provide us access to law enforcement authorities in the host nation and this starts probably like two years in advance. >> reporter: through its over seas security advisory council, the state department and 4,000 private u.s. companies exchange information on potential threats. >> there have been cyber concerns that have been known cyber incidents perpetrated by the north korea and so in our conversations with companies they have always told us that they're, you know, increasing their cyber defenses. >> for olympic sponsor visa which hosts over 7,000 guests, the private/public crowdsourcing is key. >> they'll put together all of the sponsors responsible for security so we create this ad hoc group where we exchange best
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practices, we benchmark about what everyone is doing. >> 40 field agents throughout the olympic venues are equipped to handle everything from political protests to attacks. >> for core cree a korea we dono deal with the crime threat it's winter olympics so you're dealing with the temperatures. >> reporter: the state department expects between 15 and 20,000 americans to visit south korea during these olympic games. security forces already on the ground in tokyo getting ready for the next olympics, guys, in 2020 i will tell you, unlike rio, it doesn't feel -- there's a lot of security everywhere, but it doesn't feel the same in terms of people walking around with machine guns at the same level it's not -- it's not as visible but definitely here. >> is that just because it's winter or is there something else that's different in south korea versus -- >> reporter: i think the
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distinction -- first of all, i think the criminal nature of what happens in south korea, there is very low crime in this country and so i think you sort of start there not to get back on the gun debate there are very few guns in this country so nonetheless, when you walk through, you know, any of the entrances you're getting wanted, you're going through the metal detectors. there are security, you know, even at this hour all over so you do see them, but it's not -- it's not the military presence in the same way as so many other olympics. >> andrew, thank you we'll check back in with you in just a little bit. coming up, a big win for disney at the weekend box office record-breaking numbers for "black panther." details after the break. "squk x"ilbeig bk.awbo wl rhtac
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panther received the highest critics score and a rare perfect five out of five score -- stars for com score screen engine's post score screen survey "black panther's" phenomenif hpn bodes well for it. it gives theater chains hopes that the box office will come roaring back after nearly 3% decline last year. joe, back over to you. >> okay. julia, thanks. julia, who's going to win best picture this year? do you know -- do you have any idea we're trying to see all of them. >> you know, joe, the voting ends tomorrow so we'll see voting ends tomorrow and then the oscars come up on march --
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>> what have you seen? you've seen almost all of them. >> i think i've seen all the best picture nominees except for "phantom thread. >> did you happen to see "the florida project. >> i haven't seen that one yet it's good. >> what's your pick, joe >> i haven't seen "lady bird" yet but my family thinks it's -- blake is going off to college. they think it's amazing. they like -- they're obsessed, my son, they like them all really they like "three billboards" okay, i guess. did you like that? >> i did like "three billboards." i think she should win for best actress. i think the one that's the favorite based on the total number of nominations is -- now i'm going to go blank on it. >> "shape of water"? >> yes it had the most going in you never know "get out" of course is a universal film and my husband
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worked on -- what could be the dark hours. >> "dunnkirk"? >> he is dpefinitely expected t get some attention they have another day to vote. >> let me know, would you? >> i don't know inside information on the academy and then change it >> are you doing an officepool >> no. that's an idea. >> alex crippen does one. >> march madness >> thanks, julia >> co-founder. >> 8:30 this morng icarndni
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stocks under pressure. the dow pointing to a triple digit decline at the open. we will get you set up for the week ahead on wall street. rigging up results two dow components out with earnings, walmart and home depot. the numbers and the stock reaction coming up. plus, i'm live at the winter olympics in south korea. this hour we hit the ice.
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>> ready go. >> we're going to hear from olympic figure skater alan ripon. "squawk box" begins right now. live from the most powerful city in the world, new york. this is "squawk box." >> i get it. ice for all the -- >> olympics. >> winter olympics >> welcome back to "squawk box." live from the nasdaq market site in times square. i'm joe kernen along with becky quick. andrew is live in south korea at the winter olympics. our guest host this morning, i know that andrew wishes he was here for this. co-founder of facebook, chris hughes i kind of wish he was here, too, because he may be able to -- he knows a little bit more about, what is it we're already in the future, aren't we? >> we are. >> according to me we'll find out even more what the future holds when we talk in
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a minute let's get a look at the futures. the futures are down but not as bad as they were down earlier about 150 points treasury yields on the ten year, when i got up i saw 2.91 i haven't checked them recently. 2.9. who knows. next visit, is it 3.5 or is it 2 2.6? last week we had someone calling on a one handle on the current quarter of the gdp. >> really? >> that's the liesman. >> you wonder if it's a 1% gdp do we go to 3.5% on the ten year. >> or if it's a 3.5% gdp what happens? >> you have the cpi/ppi. >> hotter than expected. >> did you see paulson's stuff he brought up the "s" word >> yes yes. >> 1% growth
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really >> i don't think so. let's get you caught up with some of today's top stories. walmart earnings came out and they did fall short of what the street was expecting revenue and same store sales beat the street. the retailer is guiding full year earnings per share at 4.70 to $5 a share. the consensus was at $5. you can see how that's impacting the dow stock. down 6.5%. trading at 97.9$97.90 home depot topping estimates on all of the major metrics and offering upbeat earnings the retailer now has a dividend that's yielding 2.2% and that stock had been higher as we've been checking on it through the morning. qualcomm in the meantime is increasing its takeover bid for nxp semiconductors that's up from their original offer for 110. all of this comes as qualcomm is being pursued by broadcom in a
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proposed $120 billion deal broadcom has said that its offer was contingent on qualcomm buying nxp or terminating the deal qualcomm shares down by 2.7% broadcom is down by 3/4 of 1 percentage point nxp is up. >> our guest host, the co-founder of facebook, chris hughes a new book "fair shot. he's out with a new on ed in "the guardian. it's called it's time. it's an interesting thing i want to talk about. we'll talk about some of the social aspects of your work, chris. i want to get back tojust what you see as the big trends in technology and i understand you get to -- how many water -- how many yachts can you water ski behind.
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how much money you can do all social, all philanthropy i'd also like to know your ideas about what -- where the seed money should go in silicon valley what the next big trends will be i'm hoping it's not more social media. >> no more social media for you? >> i know people who have left and some of them, kelly, off twitter and she feels much happier. twitter is -- twitter is a load. it's an alla trobatrosalbatross. i don't like it. it's taking us down a bad path. >> i don't have a crystal ball exactly where technology is exactly headed, but i do think it's going to continue to destroy work we talk about uber drivers, lyft drivers, post mads, the gig economy. that is up to the right. the number of people in these alternative work arrangements and part-time jobs, contract, temporary work is approaching nearly half the work force at this point.
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>> wow. >> is that a good thing? >> i think it fundamentally changes people's lives, not just how we use our phones but also the people who are doing that work because it means that their incomes are deeply unstable so some months you might do great if you're a lyft driver you might have a great day, week, month, the next month you do horribly with that instability is our ability to adapt to the new economy. when are the robots going to take the jobs and self-driving cars the future is already here work is already changing in america and we benefit from a lot of these apps but there's a work force of tens of millions of people who have very different kinds of daily lives and something that we need to address. >> you could be leading into it sounds like universal basic -- there's not going to be any jobs around have you talked to andy stern about this >> he's a good friend. he's one senior fellows. >> i've talked to andy about it. one of his good friends is glen
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hubbard. he's a big supply side guy they're trying to solve these problems from both sides of the perspective. there are some advantages to ubi. would everyone have to get it, even people that are wealthy get it so it's not seen as a welfare program, right >> i think right now the way the debate works is some folks are telling you the jobs are over, never coming back. >> others say it takes three people to fix the robots. >> exactly then you have more traditional economists i don't know him personally. they say that's crazy. that's the ludite way of thinking about it. my point is we don't have to figure out who's right to know what's already happening and that jobs in particular are coming apart in america. half of americans can't find $400 in the case of an emergency and it's not because they're not saving, it's not because they're not working. unemployment is at, you know, near record lows, it's because they don't have the kind of stability and the kind of income that they've had historically.
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the cost of living is going up so talking about the future of the robot revolution is fun and incredibly important to think about, but sometimes i think it distracts us from what's already happening now. >> let's talk about your proposal it's a little different than universal basic education. >> it is, yeah. >> what would you like to see happen >> i'd like to see a simple idea as long as you're working for your country, your country takes care of you. if you make less than $50,000 a year and you're working, you get $500 as a guaranteed income in the background every month via direct deposit or a debit card that you can use in any way that you want we already have this program the earned income tax credit >> why not expand the earned income tax credit beyond what it's doing right now >> so i'm making the case that this program called the eitc, earned income tax credit which is super popular on the left and the right. >> both sides tend to embrace
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that program >> exactly every president since gerald ford has expanded the ernd income tax credit. republican and democrat alike. my view is it needs to be expanded and modernized. provided monthly, made flat so people know how much money they get. right now it's a complex government formula finally, also recognize a lot of unpaid work, child care, elder care, study. >> that's the difference. >> it is a big difference. 30 million people work in these jobs already, we just don't recognize it because ever, you know, the way the law has been designed so with these changes what you end up with though is a modest guaranteed income, which is not exactly the ubi of $1,000 to bill gates i think maybe that one day will be necessary but what we know now is that people that are working hard aren't living stable financial lives and deserve to be. >> i don't know, bill's going to need the money because i think he's agreed to give all of his
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money to uncle sam after this interview with fareed. did you see this >> did you see this? >> he has agreed -- >> he can give all of his money to the u.s. government -- oh, no, wait a minute. he hasn't agreed to do it. oh, no, no, no, i've got that wrong. he just wants -- okay. never mind. >> he's giving a lot of money to the bill and melinda gates foundation giving that away. >> i like when people have a lot of money and they figure out what the rest of us need to -- >> in these interviews -- >> you're not like that. >> you've got someone that lines up with mr. gates here but, you know, you see him talking about the tax cuts from last year and there aren't a lot of very smart people, not just people on the left but, you know, entrepreneurs and business men and people on both sides of the aisle who do think that the tax cuts that were enacted at the end of last year are producing a sugar high for now but as long as they don't help put money in the pockets of working middle class and the working poor,
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they're not going to create long-term economic growth without consumer spending. >> people will look at the proposal you put out and some critics would say, look, if you just give everybody this money you devalue the value of money and it won't go as far, prices will come up it will be harder for people to make ends meet again. >> i'm a little skeptical. what i'm making the case for is people who make less than $50,000. is it household means tested >> if i stay home and my husband makes a lot of money -- >> it's household. however you file your taxes. it is distributed on a per adult basis. that's i think important for people who want to exit or enter relationships not to have that kind of hit, but what i was getting at is there was a study last year done by the roosevelt institute, center left think tank, that modeled through a sophisticated economic model what would happen if we gave $500 to people in the united states and what it found is it would add nearly a point to gdp
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based on the -- >> because those people would get the money and they would spend it >> it's sort of common sense if you give $100 to a middle class person or a working poor person -- >> they'll spend it. >> they're going to spend a lot of money on outstanding bills, their house, child care, health care, whereas, if you givea rich person an extra hundred bucks, i might spend a couple but the rest is going to go in the bank. >> how do you pay for it is it the top 1% you're targeting? >> i think so. i'm very up front in the book. my own experience through facebook and making a boat load of money at a relatively early age for only three years worth of work has shown me that the economy is fundamentally unfair, that a small group of people are being -- are able to take advantage of the current structure and i think it's okay to ask them to pay their share people like me so in the book i make specifically the case for bringing the top income tax rate back into line with its historic average, up to 50% from the mid
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30s where it is now. and i don't think that is about pitch forks coming for the rich or any kind of penlization i think it's rather what we owe one another, the kind of country we want to live in where there is broad based economic growth, where prosperity is legally distributed for the moral reason and the practical one. that's what's going to cause economic growth like what we saw for generations in the 20th century. >> what you made in three years is a little different than what the typical person may make. i think it's $450,000 puts you in the 1%. >> my case may be extreme but i don't think it's uncommon. most people are working very hard but a select few is getting very lucky i mean, the top .1%, not 1% but .1% controls as much wealth
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as the bottom 90% combined. >> maybe that's an argument for targeting the top .1% very harshly. >> i think the top .1% is more or less the right group of people, but my point is to say income inequality has not been this bad since 1929, the year the great depression began if that doesn't give us cause for concern on a purely pragmatic basis not to mention the moral one, frankly, i think it should. >> you don't need to talk us into a tax cut to 50%, right, becky? if you could bring my taxes down 50 mers percent. >> you're counting state and local. state and local. >> all right let's lower it. >> he's talking federal. >> i'm talking federal >> oh, okay. all right. yeah, i would like that tax cut. got much more to talk about with chris he's going to be here with us for the hour and we have a lot of special guests coming up to talk with us, too. coming up in the next half hour we will talk to former cea chair
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glenn hubbard and the proposal chris just brought up with us, too. first we'll take you live to the olympics andrew, what do you have coming up for us? >> we've got adam rippon, outspoken figure skater. almost nbc correspondent and, well, he's now twitter friends with reese witherspoon we'll explain when we get back from pyeongchang in a moment
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welcome back to "squawk box," everybody. facebook's new verification procedure is going to be relying on snail mail. the social network is planning to send post cards to potential buyers of political ads to confirm that they actually reside in the united states. the recipient of those post cards would then have to enter a code from the back of the postcard on facebook to continue buying the ad. the new method is going to be applying to the ads that name candidates ahead of the mid term elections in november. facebook said it is one piece of a much larger effort to address the platform our guest host this morning is facebook co-founder chris hughes chris, i realize you're not
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involved in the decisions being made today, but when you look at how the platform has been manipulated, what do you think these weren't things you were considering when you were putting this together in the early days. >> that's for sure that's the big lessons coming out of the past couple of years. facebook has a responsibility not only to ensure that we are seeing content from friends and family that we might disagree with but to make sure that foreign powers are not hacking our election and i think, you know, i'm just catching up on the news around the post cards this morning but from what i hear it sounds like it's a step in the right direction to ensure that the 2018 election doesn't have that kind of meddling like the 2016 one did i think facebook is going through a maturation process where mark himself has said but the whole team is realizing that it's not just a place to go for, you know, fun entertaining content. you don't just go to announce a wedding or the birth of a -- it's an actual fundamental part
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of our democracy it's how we get the news it's how we learn. it's how we discuss. and with that comes a very serious responsibility and i'm heartened to see the news on russia it's one piece of a much larger set of changes that they're hopefully going to be making i'm watching like your viewers are to make sure they do. >> the broader issue becomes social media and being able to be anonymous on any of these forums and use it to taunt people, use it to be a troll, use it to spread misinformation. that is something that is kind of par for the course when you're allowed to be anonymous. >> yeah. i think historically, not just facebook but twitter and a lot of the other social media giants say, this is what we do. we can't control it. we're just a platform. i think increasingly across the board all of the social media companies are realizing that's not right. they have a responsibility to ensure that taunting and bullying are not common place on
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the platforms, that privacy settings that users understand them and can change them especially when it comes to elections and politics to be honest, i think they all have a long way to go but fortunately i think facebook at least is heading in the right direction. so it's heartening >> how active are you on social media these days >> some. i use facebook i use twitter. i use instagram. i've never really gotten into snap i don't know if you guys are big snapchat. >> oh, yeah. >> definitely, joe all the time is. >> snapping right now, snap, snap, snap, snap >> i use it a good bit my husband and i just had a son. he's only two months old -- >> there's no screen time right now. >> there's no screen time. we're already thinking about technology and how we want him to -- >> snowboarding. >> -- interface with it. >> chris, get him on a snowboard. >> on a snowboard. >> get him on a snowboard. >> that it have guardrails
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so i try to practice that. i can't say i'm always perfect in my own life and, you know, it's i think the only way to make sure it doesn't take over. >> i ask, we're told that chimea's kids don't get any screen time. >> when he was alive he had a similar approach. >> hopefully i've got a couple of years to figure that out. >> chris, thank you very much. we're going to continue with chris. he's our guest host for the rest of the hour. >> it is amazing and i know you guys didn't think about what kind of world it would be when we were doing -- when you were putting it altogether. you had no idea. it scares me and -- with the facebook founder that said we didn't have any idea and we wish we had thought it through my kids have no conception of what it would be like without an iphone. >> right i think back to how difficult it was being a teenager growing up without having these influences and then having all of these additional pressures on you. >> i think it comes with a lesson for entrepreneurs today, too. that's all true.
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we -- not just in the early years but throughout facebook's rise there should have been more attention paid to the responsibility. >> right. >> i think if you're starting a new company today you have to think about, yes, how am i going to get a lot of users, maximize the bottom line, but you have to think about what's the ethical responsibility have? i think uber, lyfts are thinking about that and smaller companies, too i think there's a sense that you've got to think about it, not just because it's the right thing to do but had facebook thought about these things earlier, i think its share price would go higher. we would be doing better. >> i hope it's not like smoking, chris. >> say that again? >> i hope in 25 years everybody's head doesn't explode that have been on screens for 25 -- just an example. we have no idea because the again n generation of kids that grew up with, we don't know. hopefully we'll be okay. makes me wonder though i want to grab that phone -- but then i'm looking at the phone,
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too. >> yeah, i know. practice what you preach. >> physician heal thyself. tracking poverty in the united states. rachel snyder. she'll explain that next check out the futures for the 1 percenters this morning down 157 points on the dow jones. we'll be right back. for your heart... your joints... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally found in jellyfish, prevagen is now the number one selling brain health supplement in drug stores nationwide.
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welcome back, everybody. our next guest tracked more than 200 low and middle income american families and their financial habits for a year to try and learn more about american poverty rachel snyder is the co-author of "the financial diaries, how americans cope in a world of uncertainty. thanks for joining us today. >> thanks so much for having me. >> what did you learn when you tracked the 235 families >> so much, but a core learning was an economic indicator. the big thing was volatility they don't get the same thing every two weeks. we saw huge swings from the highs to the lows, even among people who worked full time. >> how does that change their behavior what do you end up doing if you are not sure what's going to happen two weeks from now? >> yeah. the big thing is your focus
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comes further in, right? you stop thinking long term and you start thinking can i pay next week's rent. >> which means you stop investing in 401k or college funds or things along those lines? >> i think that's part of it you spent a lot of mental energy it takes a lot of cycles we have this image in our head that you make in your life a few big financial decisions and they matter whether or not to buy a house or invest in a 401k what happens to people is they are making constant financial decisions. how much can i spend on gas at the station? how much can i spend on food right now at the grocery store so budgeting becomes a real-time constant activity instead of something you can sort of set and forget. >> i would imagine that adds a lot in terms of stress. >> i think it does >> to the daily lives. >> it does you see that in health outcomes, right? you see the resulting stress creates health problems, create challenges at home
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like it bleeds into everything if you have financial stress. >> so what do you think we're to do in this situation >> well, a number of things. i know some of it you were talking about already today. the core problem really does come from the structure of work and the way that people are being paid so i think there is -- there is work we need to do to make sure that if you work full time, you are earning a living that can support a family so some of it is about the ways that people are paid it's not only that more people are working in the gate economy, but we have a lot of variability of what hourly workers make. so you're seeing companies start to do more, for example, to give workers control over their schedule, control over how many hours they work. >> i was going to say, what role do corporations play in this and how much of it is just a change in the economy >> corporations play a huge role so, you know, when i went to school way back when, we learned a lot about how just in time
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manufacturing is and how important it is to be efficient. what does that mean? it means you're flexing labor costs with demand for your services and goods we didn't really think through the down side consequences, like -- or the downstream consequences of those productivity improvements and think what is that going to mean for the labor force? what is that going to mean for family's economic stability? >> can you talk about how people save there are a couple of anecdotes which i found really powerful. a lot of people wonder, you know, all these people can't find $400 in case of an emergency. why not just save it >> it's not about saving we did see phenomenal and fascinating savings behavior so, for example, one woman that we got to know put her savings in a credit union that was an hour's drive away. she cut up her atm card. >> figuring that's how i won't use it unless it's an absolute necessity? >> exactly exactly. >> another woman we got to know. she would stock her freezer.
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her pantry was full. she joked. she said, i'll never need to buy toothpaste again but it was a way of saving saving in cash in your account is really hard it requires discipline, it requires not dipping into it when some emergency comes up so the woman who put her money in a savings account an hour's drive away she said, you know, i know i'll only access it for really, really needs big things like the beginning of the school year when her granddaughter might need new shoes. >> wow rachel, thank you for laying this all out for us. we're going to continue the conversation we appreciate it. we are back to the markets, the fed and the economy. just the over arching philosophy we're really talking about joined by glenn hubbard, dean of columbia business institute. he penned an honest federal budget would help control spending and debt. i don't know if we can talk about the budget we like our viewers. we want to keep them
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but we'll talk about it in a second let's start with -- because chris is here and we're talking about income inequality. we're talking about trying to make a fairer system and we're back to the age-old question, do you do that by growing the overall pie, for lack of a better word, supply side, trickle down versus raw redistribution as leaf vied by government we're back to deciding what works better we've recent bely done some pro growth stuff in terms of the corporate tax cut. we tried eight years of what i would call redistribution and income inequality got a lot worsz because the fed had to stay at zero because we weren't growing fast enough. do you have an answer for what we should do here? >> well, i think there's something in between your two choices. we obviously need to have the economy grow but i think we have to help people more with
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opportunity and that will require spending money on training, on work support. i'd rather see us talk about that rather than redistribution. it is spent. >> chris's idea has to do with a form -- i mentioned that you and like jack klugman and tony randall, you're diametrically opposed. is there some universal income that makes sense or does that take away from, you know, earning a living does it take away from the dignity of work? >> i think you just put your finger on it to me the problem with the universal basic income is it addresses income but not the satisfaction work can bring. everybody wants to be part of a productive society we need to help people with the skills to work and support people in low wage work. i'd rather do that than do a universal basic income. >> chris's idea is different
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>> why not tie it to work? take the itc, i'm sure it's a policy that george w bush and many others have supported why not take the itc which is tied to work, make it monthly, make it flat, make it a more powerful an at the dote? the idea that you have to have a ubi or nothing, we can have a guaranteed income for working people. >> i am in total agreement with that i have argued we need an eitc, earned income tax expansion particularly for childless workers. in a society that believe what i just said, work is important, often wants to be in the system. we need to help. that's about fiscal choices. that is a budget issue spend money there and take a look elsewhere and decide where we should spend less i agree. >> if we get higher growth, glenn, and the first quarter is not looking too good, let's say we do -- i get hit so hard by
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the holdovers from the obama administration i'm sure we can only do 2 1/2 to 2 3/4. they beat me into oblivion, larry summers. we can't do what we used to do, 3, 3.5 will 2 3/4 give us enough leeway from the skills gap that we need to narrow? society is changing. we want everyone to be prepared for whatever jobs are available and they don't necessarily need to be just, i don't know whether liberal arts helps at all. can we spend the money training people effectively do you have an idea how to do that >> i think we can. the skills gap and growth are not the different subjects we have people with more skills and engaged in the economy, we can grow faster. there's a lot of evidence to suggest that more individualized training matters, government training programs are perhaps a little bit less successful there have been ideas for years about personal re-employment accounts to help the long-term
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unemployed and the eitc expansion we were just talking about to help people who are already attached to the labor force. if we want to do these things, and we should, we need to ask ourselves are we spending too much on some of the entitlement programs that rob us of the ability to spend on these programs that's an honest budget conversation we're not having it. >> yeah. i mean, i think that's an area where we also have agreement my view is we should just invest in what works job training sounds great. there's in my view a really checkered history there. a lot of money has chased after very bad training programs eitc, there's an immense amount of evidence shows education outcomes improve, health outcomes improve if we're going to invest new money, make sure it's where we get the bang for the buck. i think the eitc by far is the stronger candidate. >> i agree the best job training is on-the-job training at work. getting people on the ladder is important. when you take people out of work, you're not just depriving
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them of income but you're depriving them of advancement and gaining skills that happens in the workplace. >> we have to go, glenn. long term can the 21% corporate rate, can it be more than just a flash in the pan in terms of helping growth or do you think that it eventually wanes as we get further away from enacting it >> the way i think about it, joe, it's a big effect on investment, on productivity and the level of output. for a long period of time growth but ultimately to your a nal will he guy before, we're going to have a bigger pie that's the reason to do it. >> yes, we hope so i'd like to see you and chris agree on things. that means that maybe there's hope for us as a society. >> there's always hope. >> buddies with andy stern, too. thanks, glenn. up next, big tech's global impact union square ventures albert
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i help customers with their bills. there's different rates to fit different needs, so listening is a huge part of my job. because customers want to know that you hear them. they have kids, they have families, they have priorities. i definitely understand that. i have three children, i was a stay at home mom, i didn't have money to pay the bills, and so i put myself in their shoes. and i'm going to do all that i can to lower their bills and to help their situation. to choose the rate plan that works best for your family, visit pge.com/rates. together, we're building a better california. welcome back to "squawk box," everybody. we're continuing this conversation that we've been having over the course of the last 40 minutes or so. joining us right now is albert
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wenger he takes a look at income inequality through the eyes of a venture capitalist albert, thanks for being here. >> thank you good to be here. >> let's layer this on chris has laid out his thoughts. we've talked to glenn about this we've had conversations all morning long you have your own perspective on how this should be dealt with, which is what? >> which is that we have hit the jackpot with all the breakthroughs in technology that are being made. >> when you say we, you mean the country? a certain portion -- >> i mean society, humanity. we can make machines do things that required humans to do either really hard labor really boring labor and we now have the power of machines to do that in a way that's kind of hitting the jackpot. i think what we have to figure out is how do we take that huge gain and give it to everybody in some measure. >> you believe in a universal basic income you also have some other things that you layer on to that including internet access for everyone and then also the idea
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of rolling back property rights. i'm not sure how -- intellectual property rights. i'm not sure how they work together how did you come up with that? >> they all work together in that, you know, we had a really harsh transition to get from the agrarian age to the industrial age. we had two world wars and that's because it took us some time to figure out what it meant to build an industrial aged society. we had to come up with a new social contract. we had to change a lot of different things we went from living in the country to the city, large families, nuclear families, no families so i believe digital technology is as foundational a new thing as the invention of industry was. it lets us do completely new things for instance, it lets us stream video all across the world it lets us access all the world's knowledge in the form of wikipedia and other resources. >> so i understand you want everyone to have internet access what i don't quite put together
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with all of that is intellectual property roll backs. >> the transition from the agrarian age, we had a lot of communal properties that people took very good care of in what's known as the cummins we had the enclosure movement. that led us into the industrial era where we enclosed a lot of physical property in terms of country and then we also really doubled down on the enclosure of intellectual property. today we have the idea is that somebody is going to hold a patent and then once they hold that patent, that's going to be a reward for invention but we have lots of fields like mathematics where stuff gets invented all the time with no patents. the problem is we take biology, everybody is trying to get to the patent so they don't publish things because they don't publish they're working on the same thing in many parts of the world. they're not helping, they're working against each other. >> i understand your point but i
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can't help but figure out your angle. as a venture capitalist you like to see fewer intellectual property rights so the companies starting out using the building blocks can do it freely. >> yeah, i think it's good for innovation what we invest in is we invest in innovation. i think when you have areas where people can access -- open source has been a massive driver for innovation in software. >> there has to be a middle ground you look at the history of the earth until property rights and patents, i mean, inventors would work for the royal family and they'd get a stipend to do things because they couldn't own the ideas that they were coming up with and gdp for 10,000 years stayed flat. then suddenly the minute you were able to commercialize an idea and own it, all of a sudden we're up to 50 -- 40, 50,000 people >> drew, i think -- >> i can see you pulling back a little bit on it, put some guardrails on it i think it's absurd to pretent
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that that -- and we have the luxury of living -- we're not worried about survival, food, everything else in this country. we have the luxury of not owning ideas. >> i couldn't agree more with you. >> what do you -- i don't understand. >> capitalism has been amazingly successful look, my job is called a venture capitali capitalist i love what it does. it turns out it can't solve on all of our problems. >> can you focus on immortality. singularity at this? is it 2045 or not? i want to be an avitar. >> i like it, too. joe, coming back to your point, the explosion in productivity had everything to do with science. it had to do with chemistry -- >> yes. >> it had to do with building machin machines. >> right. >> electricity. >> a lot has been commercialized a lot of that invention was done in many ways that didn't necessarily require the property rights assignment. a great example is when the british wanted to invent a clock that worked at sea, they had a price. >> right.
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>> the condition of winning that prize was that you would publish a design so everyone could use it we have other mechanisms for incentivizing innovation that don't necessarily require the current -- we've gone too deep on the patent system i'm not talking about abolishing it, you can take everything too far. >> right. >> we've taken it too far. >> to piggyback on your point, let's remember that so many of these inventors, entrepreneurs and artists who were the most creative people for centuries were paid something like a guaranteed income just from the crown. >> right. >> so they had the opportunity -- that's hundreds of years ago today think about -- >> i would love it if you and mark zuckerberg were paid a universal income to come up with facebook and the equity and the ownership of that idea you might not like it quite as much. >> we're saying that to be able to have the ability to work on facebook -- >> you would be a person that didn't have the $400 right now in an emergency if you had been paid -- >> we have those kinds of advantages >> lots of rich.
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>> >> around the edges. >> there are certain immutable principles around the edges i agree with you. you can do some things let's remember what got us here in the first place. >> what got us here is people being innovative give people a basic income, more people can -- >> i want to do the earned income thing if it's good with glenn hubbard -- >> when we come back, a live report from the winter games god almighty, andrew, if you had been here today, you probably couldn't have slept tonight you'd be so excited. >> reporter: i've been listening so intently to everything you were saying. hi, chris, good to see you you guys are having a great conversation in the meantime, when we come back we had a chance to sit down with bronze medal and outspoken
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speaker adam rippon and got his comments on the comments he made about vice president pence you'll want to hear what he has to say in a few minutes. back in a moment what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley
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today, a focus on innovation in the southern tier is helping build the new new york. starting with advanced manufacturing that brings big ideas to life. and cutting-edge transportation development to connect those ideas to the world. along with urban redevelopment projects worthy of the world's top talent. all across new york state, we're building the new new york. to grow your business with us in new york state visit esd.ny.gov.
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we had a chance to sit down with bronze medal winner and outspoken figure skater, openly gay figure skater adam rippon. got his take on his response and comments about vice president mike pence that got a lot of attention here. comments to vice president, mike pence, got a lot of attention here. >> i mean i guess i like to talk i am having such a blast here at the olympics i feel that as an olympian, i have this platform where i can speak out for things that impassii a am passionate about. i can share my story, that's what makes this olympic more personal for me. i have had so many people reached out to me and the response have been absolutely incredible >> when we are talking about the conversations started about our vice president, mike pence, how much, what were you thinking
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before when you made some of those first comments >> when i did that interview with usa today, i knew what i was doing. i thought about what i was going to say and i spoke from the heart, i am really passionate about, you know, being openly guy athlete, impassi am passion represent my country and what i said i completely standby. i did not let that distract my job here we have a lot more coming up from adam rippon in just a little bit we'll talk to him later on he had some provocative things to say the next hour, guys, we have another legend of the ice, yes, i am talking about carl
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all right, folks, when we come back, we'll wrap up with our special hour with chris hugh and mark your calendar, next monday warren buffett will be answering your questions, you can tweet us or ask warren or go to our febacook page and give us your questions, stick around, we'll be right back. professionals, let's measure up. cfa institute.
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our guest, guest hugh, the cofounder of facebook. we were just talking about one thing that we have talked about inventions and science and innovation, unbelievable of what we take for granted now a day. if you study the curving, these big quantum leaps, the time between them are getting shorter and shorter, i don't think we can understand when machines have a billion times of knowledge of human kind/people kind we don't know what's possible on the other side of that i hope it is more than social media and snap or twitter.
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>> i am always a little skeptical of that. all that may be true but it acts like an invisible hand of any kind of technological process. >> i thought you believe in you. >> if we have to make investment and getting to college in the first place, the more that we talk about, well, we are naturally going to head in the direction, it relieves us of the responsibility >> i don't want to be in wall-e where everybody is traveling and eating all day long, we don't want that either >> what we need right now is a guarantee income for working, $500 a month is not much money where anybody is going to put up their feet and play the video games. maybe in 2050 when the robots are here and it will be a different story. today, we need a guaranteed income and we can expand the
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definition >> did you know whether robots will be like us, be ambivilant or destroy us? >> do you know >> what do you think >> i don't know. >> thanks for being on it is great having you on. >> make sure you join us tomorrow, folks, right now it is "squawk on the street. ♪ >> good tuesday morning, welcome to "squawk on the street" i am david quintanilla and melissa lee and david faber. a big week of retailer, the other big story on better results.
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