company ring also a scary movie "the ring." we'll break down the action with ed lee he's actually going to be here it's wednesday, february 28, 2018 "squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's look at u.s. equity futures. we're off the highs of the morning. the dow futures indicated up by 70 points. the s&p up by 6. the nasdaq up 17 yesterday the dow gave but 300 points, that came after a day of 400 point gains, but this is the

last trading aof a difficult month. this is the biggest declines we've seen for this month going back to october of 2016 for the nasdaq and back to january of 2016 for the dow and the s&p 500. we know what's been happening this month a lot of big s and downs right now you see green arrows across the board look at what happened overnight in asia. the nikkei ended down by 1.4%. the hang seng was off by 1.4%. shanghai composite down by 1%. in europe in the early trading there, you can see right now there are red arrows across the board. down by about 0.4% for the cac in france. all of this happening as we've seen higher yields look at the ten-year in the u.s. i saw 2.9% earlier right now 2.899%.

amazon is buying doorbell maker ring financials of the deal were not disclosed but reutersing reporting it could be more than a billion dollars. amazon said this deal was right behind whole foods in terms of trying to do some of the math. we'll talk more with ed lee in a few minutes. have you seen this doorbell? it has the camera on it? people deliver, it will tell you -- people can deliver the amazon packages. it all works >> makes sense for that. i was thinking it was funny it's come to that where -- i mean, you don't even need a bell. people can just knock. someone's here you go look. hi, how are you -- >> the point is you don't have to answer. >> i know. you don't have to be room. >> you can answer on your phone. you can let them into the house if you want remotely

>> it was originally on shark tank, a shark tank reject. >> that's why. it's a one percenter thing some day we will just be big fat people somewhere eating. we won't do anything at all. >> what do you mean some day look at us >> you know what i mean. really, we need a -- my doorbell problems go way back it's never been what i want it to be. the sound, having to get up. opening the door not knowing who it is. i needed this -- an answer to those solutions. >> there's codes >> this is the solution to a problem i didn't have, andrew. you like everything new. it's nifty in the old days, you remember you had to go out to a well, get some water, bring it in. >> >> i don't remember those days >> i know what you mean. maslow's hierarchy, survival,

food, shelter. now we're at a point where, oh, my god, i can deal with a doorbell >> i think they are advertising towards the wrong direction. the woman says i'm upstairs, i can't get to the phone i'm to the there and i'm thinking don't they think the criminals see these ads? >> how much does the doorbell cost >> $149. something like that. then you need the lock >> tell me >> you need a wifi enabled lock so you can control the door. amazon will have it. google has it. >> isn't all this with your doorman? does it matter don't you have a person that does these things for you? >> there are people. >> you didn't even say a person. it's people. >> people in the plural. let's tell you what's going on first revision of q4 gdp is out at 8:30 a.m. eastern time.

at 10:00 p.m., click chicago pm for february and january home sales. and then we have tj maxx and lowe's reporting before the opening bell and then sales force and l brands out after the close you almost said sales force. >> i'm still working on hooked on phonics >> when did he start sales force? >> i don't know. it's an amazing story. that's one of the most amazing stories. >> it is he started a new business a

couple years ago it's now a billion dollar business someone said it's not flying cars in space. >> it's a real business. a real enterprise business >> with so many opportunities to sell over the years, everyone is trying to buy that company he held out. you lock at 9 vok at the valuate company today. >> but he didn't let my friends in the party at davos. >> what? >> we'll talk about that later >> the ceo of palantir -- >> it was kind of bad. >> sitting down with a rare exclusive interview with cnbc. alex karp. >> maybe i'm going back to my old philosophical days, what made this company special is not that we're secretive

not that we're enterprise software, but we've been focused on fighting terrorism with data protection we're recently focused on as well on innovation with jobs why should we care well, because if you don't have jobs, you won't have democracy i think -- obviously we were born in silicon valley, we're of silicon valley but this movement of innovation with no jobs is hurting our society. >> josh lipton will have more of that interview at 11:00 a.m. on "squawk alley." lowe's just reporting earnings coming in at 74 cents a share, and that at this point is quite a bit below where the street was. an 87 cent estimate. revenue was above forecasts. comp sales increased more than expected we'll talk to brian neagle in a few minutes. >> looks like the operating margins are down 30 -- they expect their fiscal year '18

operating margins down >> we were trying to get this out of the way before langone gets here. he doesn't want to talk about it maybe he wants us to talk about this a lot it's down $6 we may focus on this and why they're so much worse than home depot. he comes in at 7:00. do you see anything really -- >> given the rapidly evolving competitive landscape we're accelerating our strategic investments trying to leverage -- they talk about focusing on conversion, gross margin and inventory management. >> yeah. the first number they gave was 67 we say there's something in there. there was. the adjusted number was 74 that's not near where you needed to be at 87. it's weird higher than expected same-store sales and better than expected

revenue. we'll talk about that. we'll have an analyst on in a second etsy shares soaring. fourth quarter earnings topping forecasts. mer much fourth quarter earnings topping forecasts. mer mucandise sales came in aboe $1 billion they offered upbeat full-year s at 6:30 a.m. eastern weight watchers latest results beating forecasts helped by the launch of a new dieting plan in december the outlook for this year is also above estimates and the ceo mindy grossman will join us at 6:50 a.m. eastern i do have that interview, right? >> i read through it i figured it would be me >> it's you. >> me. so i can do it -- >> you think somebody is trying to --

>> is tlat ohat the one where ty show you you are able to eat >> it's like the free points that's winning them new customers. >> i heard an egg was zero points >> really? >> it makes sense. pure protein >> eat as many as i want, right? probably not have you heard that? >> i have not been doing my points, but i don't know about eggs >> why would you the hollow leg >> where are the bow nuts? >> you have a hollow leg is it from thinking? burn it off thinking >> all this thinking in my head. >> you know what i think it's from reading the teleprompter >> the energy expended >> just a lot of -- >> yeah. >> what's booking holdings >> priceline >> i forgot they changed their name why would you get rid of such a well known brand >> shatner all that branding over the

years. now they changed the name. booking holdings reporting better than expected sales in the fourth quarter shatner still my idol. i think he's 86. he's on some amazing race thing, running across the desert. 30 miles a day with hair. don't know whether that was the hair he was born with. amazing guy. just signed a country music deal too. what's wrong >> when did the booking holding -- >> just did it last week >> when i was in korea >> you hate when this happens. >> no. i think i was in korea that's my excuse >> that's the interview you're supposed to lead today >> i'm not >> you are >> i thought it was priceline. got a boost from rise in reservations and strong performance in international

businesses the ceo of booking holdings will be ber viewed by andrew ross sorkin at 7:40 a.m. eastern. i like glenn fogel stocks sold off yesterday after jay powell indicated that the fed could hike rates more than three times this year just to try to keep the economy from overheating. joining us now is andandreas gai and paul hickey. what do you think happened yesterday, andreas was this signaling from the fed? rates on the ten-year moved up that dragged down stock prices did he say anything that surprised you? >> he used some language that wasn't used before around potentially overheating economy. i don't think this changes the trajectory today i think he'll try to take

back some comments to not scare people ultimately the 2% target is not a ceiling. if anything, they're still trying to get to 2%. so three or four, i don't think the comments he made change that >> paul, how about you >> the key word is could if data pick the up, inflation picks up, they may have to do four rate hikes. there's a lot of time between now and the end of the year. a lot of strong data came in at the end of last year data coming in weaker than expectations over the last few weeks. you're seeing some slowdown of activity the economy is still on a solid footing. if the economy overheats, the fed will hike more than the economy thinks >> does four rate hikes matter over three does that extra rate hike matter

if the data comes in showing things are going well? >> if you see a strong economy the key is how inflation reacts. if the fed finds itself behind the ball, and inflation starts accelerating, then they have to start hiking rates more aggressively than people are anticipating, of course that will have an impact on markets we're not at that point as of yet. and they're still trying to get to 2two. fed chairmen when they come in always have a rough time in the first speech as the market gets used to them and the way they approach things. yesterday we were down 1% after two days being up over 1%. at this point we're making a mountain out of a mole hill. >> we are in a position where we're trying to figure out what to make of the big pullbacks maybe people think that's too big of a selloff and we've rebounded. where do you come down on this has anything changed from a fundamental perspective? >> i was actually here the day

where it was down -- we didn't know if it would be 10% for the pull back or more. at that point nothing changed. i don't think anything has changed today. the main thing that is pulling the markets in a whiplash is the risk-free rate what is the risk-free rate going to be. that's what everyone is trying to figure out. one thing i'll point out is that for years the u.s. was the only one having some inflationary pressures moving upwards the bashiig changes is that eur is seeing inflationary pressures and asia is seeing inflationary pressures. i don't think it's something that the u.s. is experiencing. so this time around we could get to 2% or higher. does that mean they'll have to tighten things up more rapidly >> it's one more variable that wasn't there before. china, 2011, china's nominal growth was 20% by 2016 it dropped to 6% talk about basically

deflationary pressures around the world. right now it went back from 6 psh6% to 11% china is one-third of the growth globally >> i hope we don't have to have selloffs every time the fed starts looking ahead we had bullard on. we all talked about it he's like if it ever does happen, in hindsight i'll change >> there's always the rearview mirror so maybe powell realizes the tax plan boosts earnings, because it occurs to the fed that growth is faster than they allocated for that should be a good thing if the fed finally comes in to the real world, right? maybe it means -- bullard said everything would have to be perfect to go 100 basis points >> so you have to look in the rearview mirror.

to know that it's perfect, you can't be looking ahead >> did powell make it seem like four is easy five is possible >> no, i think 4 is possible >> last year no one was worried about inflation. suddenly inflation backsecomes a worry, so it creates volatility. >> i have to interrupt you ed lee is in the house ed lee -- ed, every time we talk about today's show, every single thing we say, ed leigh wie will here from recode that's the kind of name you have now. >> i get the intro >> you get the intro you don't need a microphone. >> jacket on >> can you do one of those jcpenn jcpenney, you know how the guys are always in some action -- in the catalog. will you do that didn't want to embarrass him i guess i did.

>> i think you did >> gentlemen, thank you very much for coming in good to see you. okay someone's here to talk about -- someone besides ed lee to talk about lowe's and what is happening. lowe's was just out with quarterly results. a sizable miss on the bottom line has the stock sharply lower even though same-store sales and revenue were better than the street brian neagle is part of the street and a retail analyst at oppenheimer. that doesn't mean you say things that are really -- blunt and outspoken. >> i can be blount and outspoken. what the heck -- then do, in this case. it's come back quite a bit already. >> i was digging through the results. the initial reaction is it's messy. i'm on the show a lot. we talk about lowe's, i'll make the point again, home depot is a much better run company. home depot's results last week, and we look at these results, they're messier than home depot.

there's an activist investor now in lowe's. it seems that activist investor is having an impact on the company. this may reflect lowe's taking a much more aggressive tact towards investment and repositioning the company. >> interesting is this as simple as a market share story, they're willing to sacrifice profitability to try to compete with home depot or they spent so much money trying to refurbish stores? what are they spending money on? computer systems what did they need to do >> inventory >> envinventory, stocking? >> digging through results, gross margin down 70 basis points i'm guessing a bit here, but there could be something with regard to distribution or store level issues >> i think they mentioned inventory in their release

that's one thing they would be working on >> is their internet strategy effective? they're building that out without having orders to justify the expense. is there anything to that. >> i don't know. it's early to worry about that because online sales are so small. >> is lang one here did he get to you? you already said home depot is so much better run than lowe's. >> i've heard them say that before i agree with him again, home depot last week did a greater than 7% comp today lowe's, their sales were not bad, but they were still significantly below those of home depot the real issue is on the expense side >> so you think there could be positives when the dust settles, but the stock won't be positive today when all is said and done,

or is that possible? >> it's hard to say. in my view, activist sbr ve ifi intervention with lowe's is long overdue. lowe's are doing the same thing address home depot, just not doing it nearly as well. if we can get someone in leer to get the company to run better, that would be a positive i could see the market taking the view that lows is more and more recognized in this. >> lowe's, it was at 20 times forward pe home depot 25 times. which one would you rather own just in terms of valuations. you still say home depot >> it's two separate bets. you're buying the better company for more with home depot if lowe's can get this right, i talked about that 5 percentage gap in operating margins

this has been the story for a long time. what gets me more excited now is we have an activist in the stock. >> brian, thanks coming up, amazon making a big investment in smart doorbells. recode's tom -- not tom lee. ed lee ed lee joins us after the break to talk strategy behind that acquisition. "squawk box" returns after this. gglobal bonds, and high-dividend strategies. sure, these are investments. but they're not what people really invest in. what people really invest in, is what they hope to get out of life. but helping them get there takes a pure focus. because when you invest their money without distraction, hidden agenda or competing interests, something wonderful can happen. they might just get what they want out of life, and maybe even more.

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you know what's not awesome? gig-speed internet. when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone.

now you can get it, too. welcome to the party. amazon announcing another big buy. this time the home security company ring it's a reported $1 billion joining us now to break down the giant company's third largest acquisition is ed lee, recode's managing editor and cnbc contributor. did this come as a supplies rpr you? >> no, because amazon has been trying to expachnd into the sma home security market they want to deliver packages better to homes. package theft is becoming a real problem not just for amazon but any e-commerce retailer.

i live in brooklyn, don't live in a big apartment building with the security guard or the front doorman thing, so neighbors on my block are always complaining about package theft. >> would you let some amazon delivery guy in your apartment >> do they do a wifi enabled lock >> amazon itself >> amazon or ring. >> ring does the doorbell. amazon has a lock system, they also have a camera system. it's a smart way to integrate these products into one thing. >> these guys basically -- why do you need this >> amazon can do this on their own. why do they need tospend $1 billion. >> this is not rocket science, apologies to the people at ring. >> i think amazon had their

product, but ring sales in 2016 were 160 million they have over 1 million doorbells sold >> there's already a market. >> they were using amazon's cloud service for their video stuff. amazon was saying these guys are doing well if they want to proliferate this -- >> back up for a second. you said they were using amazon web services, so amazon got a look at what they're doing amazon can spy on what traffic is going on in the cloud >> i don't think they can see the data -- they saw they were expanding the amazon web services usage >> they're not looking at the customers. >> they're not looking at the data they're seeing they're a bigger customer of ours they must be doing well. >> if everybody is getting packages constantly delivered and there's a lot of theft -- >> yes packages left on the doorstep or -- >> in urban settings

>> over the holidays it branched out to the suburbs >> the e-commerce company we showed you in south korea, they have an amazing delivery service, you tell them where to hide the package so you say, hide it behind the bush hide it here the driver takes a picture of where they left it behind this bush, and they remember each time >> amazon started taking pictures of delivery stuff on the holidays to say we delivered it somebody else took it. >> in south korea with that big e-commerce service, they have an end to end delivery. they own the last mile of delivery that's the area amazon is trying to get into, rather than relying on u.p.s., fedex or the postal service. that's another aspect amazon needs to build out for this whole thing to work. >> isn't the ultimate answer that you will have a doorbell with an electronic lock, they'll

enter your home, bring it into your refrigerator, maybe even unpack it -- >> especially groceries. you don't want groceries left at the door >> i would much rather see that than have strangers coming through my house i know one fedex delivery guy. i know one u.p.s. delivery guy there's 50 amazon guys that come through. >> that's the thing, they rotate through. >> the amazon guy gets to meet gunther. he'll never be back. he's a german shepherd there's no way >> but if they get to know them -- >> that's got to be the end goal >> have no dog >> no, to have a regular person you're used to that the house is familiar with. >> that's a leap >> you might like the robot better than the person >> how would like the robot doing it >> i would prefer it i don't worry about the robot going through your drawers >> they know if it's a robot

>> if you're a retailer, that's the future the future is more people are getting stuff delivered to them any way. >> it seems like a -- >> the other question i had, by owning ring, does this givalson a specific benefit meaning will walmart be able to take advantage of ring will be an open platform so that all sorts of deliveries, you can benefit from everybody or by getting the ring doorbell are you going to only be able to accept -- what is the advantage on an amazon package relative to a random fedex package >> i don't know what the plans are for amazon in terms of how they integrate it. the smart easy play is to bundle in ring to an existing prime subscription, that's probably the easiest upsell whether that prevents walmart or jet.com from making use of that same service, i don't know amazon has been getting into the

more of a delivery as a service business, so they could work out a deal with other retailers. >> can i ask you a totally off topic question you were talking about amazon using the cloud and knowing other peoples business as a result of it, not inside business did you see that story last week that apple's icloud operates oftentimes on google's servers so -- >> google's cloud service. apple pays google for use of its cloud cover. >> so all your pictures are not on an apple server, but it may be a google server >> google server licensed out by apple from they still own that content and that service you know, there's always potential for conspiracy theories or concerns on these things a lot of these business are above board in terms of how they operate, going hall more servers

available. they are widely proliferated i wouldn't be too concerned about that >> ed, thanks for being here >> you seem relieved >> apple's made a big argument that they are somehow so much more private than google, that google basically is taking information, reading all sorts of things, and they sort of have this lock box, to hear they're using google technology complicates the issue a bit. >> maybe put pang cackages in t garage >> some of the newer homes are being built with package delivery doors >> i was thinking the shed >> goes back to the practical. >> ultimately amazon will know we delivered the thing, you bought this thing. talking about privacy, amazon knows what you're buying all the time any ay. >> that i'm okay with. >> you don't want them going through your closet. >> exactly ed, thank you very much.

when we come back, the ceo of online retailer etsy will join us. the stock is soaring after the mpy posted a fourth quarter earnings beat. as a business owner, you need to comply with countless regulations and laws to keep your workers safe and happy. but if things go wrong and an employee takes action against you, legal fees to defend yourself can be huge, even if you're not at fault. employment practice liability insurance helps cover these costs. trusted choice independent insurance agents represent multiple insurance companies and customize coverage to help protect you and your business. announcer: to find an agent, visit trustedchoice.com

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welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning welcome back to "squawk box. look at u.s. equity futures at this hour. dow looking like it would open higher by 57, 58 points. nasdaq looking to open higher as well s&p 500 looking to open up about four points.

shares of etsy are soaring after the company reported a big beat for its fourth quarter you can see that stock up about 15%. joining us now from san francisco is etsy's ceo josh silverman. good morning to you, josh. >> good morning. >> thanks for waking up early. tell us what went right. >> you know, when i joined in may i expressed confidence for the big market opportunity that etsy has in a sea of sameness with the same xhod tidz etidz commoditized brands. we had our first billion dollar quarter in the fourth quarter. we had our first billion dollar year where the international business did a billion dollars of gms in 2017 we grew faster in q4 than in q3, so you're seeing accelerating growth >> let me ask you this there's been some concern about

both improving -- trying to improve search and discovery elements at etsy where are you on that in terms of progress? >> we made progress. it's still early days. etsy sells over 50 million unique items from over 1.9 million sellers. that's incredible in terms of the offerings that we have for consumers. mi finding the right six or eight items to show on the first page of your mobile phone for a query is important for us. we're making good progress i think we have a lot of continued upside >> let me read from barron's to you. investors wonder how etsy can get more from merchants with each purchase. you turned to offering sellers more valuable services noting the integration of payments deals with shipping. what will that do to your mar n margin >> we saw revenue grew faster

than gms in q4 revenue grew at almost 24% gms grew at about 18%. that's because our sellers are adopting our seller services more they're opting in to more services for example, promoted listings is a way that sellers can get more visibility by investing to get their items visible in front of more consumers. it's a great way for sellers to invest in their success in a way that makes the marketplace better and delivers revenue for etsy what is the overlap between sellers on your platform relative to those that are also -- that are exclusive to you, relative to those also on services like ebay, amazon and others >> the majority of sellers are multi channel. yet for the majority of our sellers, etsy makes up the vast majority of their sales. in fact, if you look over the past few years we account for a

larger share of their sales. for etsy sellers, the number two place they sell is craft fairs after that a broad range of different platforms. etsy is accounting for a larger and larger share of their sales. >> josh, how do you think about acquisitions in terms of your own, meaning acquisitions you may want to make and the independence of the company itself there are some investors and analysts who say this company would be better off being a part of a larger platform >> we think we have a large market opportunity 1$155 billion market opportunit. you're seeing evidence of us unlocking growth in that opportunity. we made acquisitions in the past we are acquired black bird technology, a leader in machine learning for product search. you're seeing the benefits of that already and the improvement in our search algorithms we said in q3 we delivered 1$100

million in incremental gms based on improvements in search. that's coming from the integration with blackbird >> etsy jumped into the net neutrality debate recently why? >> we look out for the online version of mainstream, for the independent entrepreneurs selling online we think having net neutrality is critical to have a fair an open internet that gives every person on the internet a fair chance to be heard >> the reason i ask is most of your customers or merchants and sem sellers are not in the broadband business they're not trying to sell video or things like thatpacted by th. >> everyone is open by a free and open internet. the ability for them from their living room to run a global business is important.

the opportunity for them to do that without facing undue tariffs we think is important. we look out for the little guy, they're not always protected we think a free and open internet is important for that >> it's a longer debate, josh. >> i wish it was free. unfortunately it costs more to build out the infrastructure for the internet comcast is not a utility, neither is at&t. if you want the investment you have to let the guys who built it recoup their -- it would be great if it was a nebulous thing that exists. >> everyone pays every month for their access to the internet that should allow them to access the internet as they like. >> we just won't build more. >> josh, thank you for waking up early. >> thank you >> thank you very much coming up, more ceos talk to "squawk box. we'll be joined by mindy grossman, chief executive of weight watchers. hope she doesn't judge me.

sit up straight. then the ceo of secretive startup palantir, remember lord of the rings that little thing, one of them looked at it and saw something. this is a different palantir, but it comes from that his comme the ceo's comments on the corporate mission. and then later, booking holdings ceo, glenn fogel, the old priceline. i guess whenever you say bookings, you will say the old priceline. he'll be here to talk earnings and the new name change. from the market alertse 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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papa john's reporting a bigger than expected drop in same-store sales in the fourth quarter, which is typically the busiest period for the company they also ended their relationship with the nfl.

the new ceo says the company will shift its marketing separate strategy from the league as a whole and focus specifically on teams and players. peyton had a deal with papa john's >> active players, too. when we come back, weight watchers is one of oprah's favorite things. she bought more than 6 million shares back in 2015, boy, has that investment paid off ceo mindy grossman will join us to talk about the company's performance, the earnings reports and big plans for 2018 stay tuned "squawk box" will be right back. when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world.

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♪ ♪ weight watchers reporting fourth quarter estimates being beat on the top and bottom line and ending last year with 23% more subscribers than a year earlier. as a small note, side note,

stock has surged 430% over the past 12 months joining us is weight watchers ceo mindy grossman she's going to tell us a lot of stuff, including a new partnership with a disc jockey, i guess. >> i'm not hip to that. >> do mogul. >> i got it. could be more woke but i'm not -- how was that? that was pretty good i don't even think of you as for profit anymore, here's why millennials in brittain set to become the fattest generation ever you need to help even if you don't make any money there is a societal need for healthier eating 70% of millennials will be obese by the time they hit 30 in the u.k. >> there's a real paradox going on right now because everybody is talking about being healthy, the wellness economy being 3.7 trillion, nobody wanting to use the word diet, but the problem is nobody's getting healthier,

we're getting unhealthier. the numbers are staggering we want to help solve that paradox. i get asked all the time who our competition is the reality is the competition is people trying to get healthy themselves only 5% of people use a commercial weight-loss program i want to focus on the 95% so what we're doing is really trying to educate people, partner with people and inspire people that healthy habits to live a healthier life. what they put in their body, how they move their body and how they think. >> dieting, i'm always hungry and knowing now that somehow it's made it all the way to my wife who told me that carbo loads are zero points, that appeals to me a lot because i could eat too many probably. you say that nobody can eat too many, but just knowing that or chicken breast to know that i could eat enough chicken breast where i don't have that feeling that i -- >> so freestyle. >> that's a great idea what's it called

>> freestyle, which is a new program. it's been the most successful and he haefficacious of any prom that we have what it does, there's tremendous science behind this, there are about 200 foods that have zero points we measure them not just on calories, calories, nutrients, gnat, sugar -- >> sounds like a lot of protein. >> satiety then you get a certain amount of points but it's very easy and it's livable. what i love about our program in general is it fits into your life there's no prescribed foods that you have to eat. you can be with your family. you can go out it just teaches you to make the healthy choices. >> those foods, and knowing that you can -- that's an empowering feeling to know that you're having zero. >> all seafood. >> you saw the studies that came out just about a week and a half ago. people used to think it was calories in, calories out, right? but now it's not calories in and calories out at all? >> it's fascinating.

you can take three 300 calorie plates, one would be 2 weight watchers plates, one is 6, one is 7 it measures it on a much more holistic view on how it's going to process, how it's going to fill you up. >> the peer pressure of all of this in terms of what actually gets people to do it properly. take costco, former twitter coo started a new company which then ended yesterday. exercise thing get people together and he said it wasn't working because we realized that actually people just drop out of these programs four and eight weeks later unless they're doing it in concert together in person, not just online and that they have some goal, like they need to actually either go into a race or that they're trying to diet for a wedding or there's a date. >> what that talks to is the power of community when weight watchers first started in 1963 it started with an incredible food program and

community in the kitchen that has not changed today it's not in the kitchen necessarily, but you look at the power of community every one of our members has the app. >> right. >> it's a mobile first company business it's with you all the time so you're basically have in the app connect, which is our community platform then you also have the physical community of meetings, and in the future there is opportunity for meetings, www cruise you mentioned d.j.khalid and what we're doing and bringing his community together and oprah bringing her community together. it is basically a combination of not just education but inspiration that's really important. >> if we had more time, i want the list because that's empowering. >> i'm sending you the list. when we come back, the wall flower he is a wall flower. home depot co-founder, ken

langone. he's coming over here right after the break. he's not a wall flower are only $4.95... online eqs i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer, ask again at schwab. schwab, a modern approach to wealth management.

from main street to wall street, outspoken home depot founder ken langone is here with ideas for making american business great again we'll talk politics, we'll talk investing and much, much more. new this morning, amazon is calling. retail giant making a billion dollar bet on your doorbell. plus, a cnbc exclusive the ceo of highly secretive pal paleontone is here as the second hour of "squawk box" is here. live from the beating heart of business, new york city this is "squawk box.

welcome back to "squawk box" right here on cnbc ken langone is here, and he's already -- i told you, he was a wall flower, not so much he's already begun the conversation we're going to start the conversation with him in a meaningful way i'm andrew ross sorkin along with becky quick and joe let's also get you through some of the big headlines shares of home improvement retailers lowe's taking a hit this morning how do you feel about that, mr. langone? they reported sales of 74 cents per share estimated 87 cents profit margins fell. the government will issue the second look at gdp in 90 minutes. they think the u.s. economy expanded from 2.5% annual rate during the final three months.

they had estimated it at 6%. we talked about it all morning amazon buying ring valued at more than a billion dollars. it's already compatible with alexa. it's ramping up amazon's move to increase the presence in the home security market also perhaps make it easier for amazon prime members to accept packages on their front door. special guest, you already heard, guest host for the rest of the hour, this morning, two hours, in fact, ken langone. founder dv. >> co-founder. >> i know. co-founder of home depot people are already writing in, ken, that sorkin is here today and that's rare, right remember the last few times you've been in. >> i wish i had a job. he stays home and writes columns, gets paid from them gets paid here. >> you thought when you were here there were times he found a way not to be here. >> he was sharp because he knew. who took him for a shot this

morning. calling me a wall flower what >> that's right. he did that. when you got in here, you know at the beginning of the kentucky derby, the horses, they try to get all 11 of them in. the ones that are in further, you open the gates and he's like -- so what -- but i'm just going to ask you what's on your mind to start what's the most important thing you want to start with today because i think ratings are probably highest at 7:00 people are still home. you want to talk ge now, you want to talk tax cuts? >> i think the tax cuts are going to work fine. >> okay. >> much to the chagrin >> you've got some stuff on ge with this board shuffling that you -- >> yeah. yeah this -- ge, to me, is a colossal failure in governance. colossal. >> board governance? >> board governance, colossal, and i have the documentation >> what do you mean? documentation of what? >> by the way, for those who don't know, you're a former board member.

>> the one thing i will fight to my death, this was not going to be laid on jack welch. before i joined the board jack invited me to join the board i spent a lot of time because he makes the earnings and beats the earnings. >> he had something in the drawer always a couple of pennies to share in the drawer. >> i've got to tell you, if anything, they held him back they were very conservative. when jack turned the company over it had $1 billion in the industrial company in debt it's got $85 billion today in the industrial company all these sales, all these sales of businesses, plastics, these are cash deals, nbc, warner, so you sell -- sold those businesses and you got all that cash, and you're still borrowing $5 billion in '15 and '16 they bought $50 billion of stock back. now the word is they may have to

do an equity raise so you buy it back at 30 -- i'll tell you right now, and i never thought i'd say this here's a case where i think an activist is going to make a huge, huge difference because it's all got to come out. >> what happened you worked on the board when some of this -- you know -- you must know something. >> i don't want to simplify. the selection of jack's successor, do you realize what a frenzy it was. oh, my god, who's going to get it, this one, that one, the other? i think he came in with an aura of coronation. this is a big thing. succeeding jack welch. jack ran the business. jack to me was one of the finest managers i've ever seen. he knew everything about his business when he had nbc and there was a problem with "seinfeld" jack parachutes in and talks to seinfeld every 90 days he'd meet with all

the different 13 business segments and drill down, tell me about your people, tell me about who you're training to be leaders, tell me about your challenges with your customers, tell me about your r&d. >> he used to know the ratings of "squawk box" every day. that was a flea on the tail of -- >> but early on when i had my run in with spitzer, one day a got a memo the whole board got a memo in the memo jeff says he had discussed with me leaving the nbc seat of management, development and compensation committee because of the fact i was involved in a compensation issue, a stock exchange with spitzer. by the way, i'm still alive and walking around where's my buddy eliot spitzer i don't hear much about him anymore. >> right >> but anyway. i called him i said, i don't recall us having that discussion. it's fine with me. fine with me then in that same memo he says he's talked to a few directors

and ralph lawson is going to be our lead director. i said, jack, shouldn't the lead director be elected by the board absent any influence from you? and there was a silence and that was it >> so he picked -- you're saying that he picked the lead director, ralph lawson >> i can tell you this, the first lead director, andy z zigler, we never voted on that there was push back. in the second memo he said i talked to ralph lawson -- >> you're laying fault at the feet of the board? laying fault at the feet of jeff immelt are you laying fault at the board that chose jeff immelt >> i voted for jeff immelt, i'm admitting that on paper he looked fabulous, he really did you can't take that away from him. look at his cv look at the success he had at

ge i know when nyu went out to do a complete overhaul of its radiation, big job, huge job, i disqualified myself because i was on the board of ge and i was chairman of the medical center andy pearson and tom murphy, i said, you guys are fabulous business men, i'm backing away from this. it's all yours just let me know what the decision is and let me know why you made the decision. when i called jeff to tell him why i was doing that, he understood when the results came back his reaction, i'll never forget it, well, any time my competitor wants to lose that kind of money, it's okay with me jack welch would have been -- when jack welch in 1997, when jack welch felt he didn't have enough shelf space for light bulbs at home depot, he was screaming at bernie and me on the golf course one day about what bad guys we were, how wrong this was and how can you do this to ge.

i mean, this guy, every nickel in sales mattered to this guy. he was a manager he spent all of his time with either customers or people in ge that was his life. that is his life to this day. >> the narrative that i see being bandied about now is when immelt came in he didn't address some problems that were with the company as a result of jack's tenure that's what they're -- that's what they're actually talking about now and that he should have done it and didn't right away and then waited on it and never really -- never really had the kitchen sink, but that's just what i'm saying that's what they're saying now. >> that's why i'm saying, i was there. i saw it i heard it i know that when jack and darren met with the rating agencies, they said, we will not allow credits, earnings to become more than 40% of the total company. three -- two or three times from then when immelt took over it went over 55%.

55%! you could argue about making a mistake. we all make mistakes. >> paying too much. >> but wait a minute but then you look at r&d jack never sat -- never sacrificed on r&d. in fact, when jeff -- for seven years it stood the same after jeff took over goodwill. >> you mean at constant levels of r&d >> yeah. yeah but he should have -- the business was growing as i said, the one thing i'm going to do, because i've been there and i think to that extent i'm an authority, only to that extent because i was physically there, jack ran the condition like a stock it was unbelievable how well he ran this company he said -- his logic was he wanted jeff to have the same 20 years he had because he was sure jeff would do things differently and see things differently he said the world changed. he said he has 20 years to do

the changes and he'll have plenty of time, okay, to see the results of that over those 20 years. the thing i really am angry about to say that ge was transformed is to say that the word transformed is a synonym for destruction. look at ge today by the way, i -- >> do you think the bad news is out on ge today? flannery would have a reason to try to get everything out, right? is it onwards and upwards from here >> i can tell you what's good about this, ed garden who's one smart dude, and he's on the board -- >> right. >> -- trust me, he'll press to make sure the world knows what's going on i think there's a good chance that -- >> the activist? >> -- that ge will be busted up. >> right. >> wouldn't that be a tragedy? the number one most valued company in the world in 2000, jack was for ten years running the number one ceo and ceo of

the century. a bench, that's the other thing. the quality of people that have left the company 62 people are now ceos of companies that previously worked for general electric he had a team and system that worked like nothing i've ever saw before give nordelli credit frank light. everybody is saying today, i'll tell you right now, frank blake would have been a logical choice to me if i had known him then like i know him now. look at the job he did at home depot. mcnurney look at boeing, 3m. >> calhoun. >> questionable golfer. >> i can't talk about golf because if i had to make a living playing golf i would die of starvation. >> what should we look for next? you said our breakup what's the best case scenario of how you see things

>> the best case scenario is they have to deal with the challenge, the liquidity need. the biggest thing i see here is there's got to be a horrible morale issue inside the company. when you go to work for a company and you get hired by ge and say, i work for the best all of a sudden you wake up one morning and say, hey, that's the tragedy. think of the people in their mid 40s, been there for 25 years their options, equity is worthless. they've got to have right as to what's going happen to them. am i going to be part of a company or am i going to be spun off. when you work for a business you want your people to know they're coming to work at the greatest place on earth and they're going to be taken care of. >> breaking news on an issue i know you're interested in. dick's sporting goods will stop

selling ar-15s, high capacity magazines. they're saying they will no longer sell these. >> good decision good decision. >> a big move for them walmart had already chosen to do that a couple of years ago at the time they said it was not a political move, it was a business decision. >> dick's sporting goods saying specifically in this case they're coming out because they say they saw what happened in parkland, we were so disturbed and upset. this is an interview i'm seeing coming across "the new york times. we love these kids and their rallying cry enough is enough they got to us we'll step up and tell our view and hopefully bring people along into the conversation. >> good. absolutely look, there's two parts of this problem. the problem with the guns, but the problem is we need to know more about people that have guns, particularly this kid. 39 times the cops are called to his house for doing such horrible things as beating his

mother they get a -- >> you knew plenty about him. >> huh >> they knew everything. they didn't do anything. >> there's people that say, privacy, privacy the hell with privacy. when you have somebody who's capable of this kind of horrendous act. >> he even called cops on himself. >> you know, it's like the argument of income inequality, which i'm passionate about that's only half the argument. the other half is education. you have to get them qualified to be competitive to have a job that pays better these people that push income inequality, in fact, i'm working on it. peter, understand something. i'm not a one trick pony. >> they're no longer going to sell the ar-15 -- >> i don't even know what an ar-15 is. >> high capacity magazines and they're going to raise the age requirement from 21 years old, from age 18, irrespective of the law. what do you make of the fact that companies are now taking

what might be described in some cases critical decisions on issues. >> they're making a decision that the society is good don't try and evaluate whether it's a political decision. it's the right decision. this is where -- >> you know where i stand. >> this is where commies like you polarize. >> i like you. >> this is not a political decision i would suggest this is a human decision. >> i would suggest it's the right decision. >> fair enough. >> okay. that's the point do the right thing. >> but let's just be clear this is going to be politicized. people will say it's a political decision and they are going to get push back from the nra, their 5 million members and potentially others >> look -- >> warren buffet can speak to it more than i can. >> people are going to say that jeff immelt felt i should leave the board of ge, which is why

i'm saying this. why did i keep that memo >> the memo that said -- >> he talked to a few directors. >> appoint a lead director. >> ralph's going to succeed siegler. all he had to do is call me on the phone, you have a high profile, this is a hot button issue, i think you ought to leave. >> i know we interrupted the conversation, but i just want to ask you one other question, which is becky interviewed warren buffet earlier this week. warren pretty specifically, you can speak to this better tan i can, said, look, i'm not going to impose my own views as a corporation on my employees or the businesses that we do business with. what do you think of that position relative to what dick's is doing today. >> he's saying as a major owner, but he's betting on the board that he elects -- he partially elects being -- doing the right thing. i think the joke of this is isi,

glass lewis, go look at their grades on governance. >> you're on ge. no no no i'm asking a different question. >> i'm sorry i'm sorry. >> i'm asking on the gun issue on the gun issue, you have an issue where warren has come out and said, i'm not imposing my views. >> we had a conversation with him monday. >> somebody was selling guns. >> i don't make the company -- >> i don't consider this a philosophical view i consider this the equivalent of saying a 9-year-old kid can drive a tesla at 120 miles an hour. >> the difference is berkshire hathaway doesn't sell guns or get in the middle. >> no, but they were once a big stockholder of walmart walmart sold guns. >> but walmart back in 2015 decided not to. >> if he had owned walmart at the time they sold guns, who the hell can challenge warren buffet with how fabulous of a job he's done and how he's demonstrated a capacity to separate ownership

from management, nobody's done it better than him you listen to him, this guy makes sense. what he's saying is basic stuff. don't borrow money to buy stocks and you won't ever be in trouble. you can't go broke if you don't owe anybody any money. he's right look, i think this will be to me an interesting discussion but at the end of the day we have got a serious societal problem and we've got to fix it. and the time for political rhetoric or the time for polarization is past us. we cannot allow -- but, again, i say there's two parts to the problem, the weapon itself and the person behind the weapon >> yeah. >> dick's actually sold a gun to cruz. >> they did? >> the company soon discovered it had legally sold a gun to cruz although it was not the gun or the type of gun used in the

school shooting. we know mr. stack. >> goodm man he runs a great business he runs a hell of a business. we're going to continue this conversation with ken and so much more. when we return, inside of one of silicone valley's coans.mpie we'll have a discussion with palantir's ceo on the company's mission. back in a moment obvious. sometimes, they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪

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click, call, or visit an xfinity store today. welcome back to "squawk box," everybody. we've been watching the futures this morning, and after a down day yesterday for markets you do see green arrows we're off our highs for the futures. the dow is up by 45 points s&p futures up by 4, the nasdaq up by 16. palantir is one of the most secretive and highly valued startups in washington josh lipton joins us josh >> reporter: andrew, palantir we know has attracted a lot of attention for the work it has done for the u.s. government including the cia and department of homeland security but the company whose software allows customers to import and analyze massive volumes of data is building up a roster of corporate clients, too,

including airbus, murk, bp we have a previously unreported contract with fiat chrysler and how it helped the company's employees. you. >> preserving jobs because once the 1500 employees are using the software you'd need a ph.d.. you're making them as valuable and it skalgs acrocales across e enterprise. >> palantir once valued at $20 billion has seen the share price marked down but karp told me if and when he took his company public, investors, he said, would be impressed >> i think people will be -- when we do this i think people will be very surprised at what they see, and i think they will be positively surprised because what -- because we've been quote, unquote, secretive,

people always assume we're different than what they expect, maybe sometimes positive, maybe sometimes negative what they will be surprised at is how a creative company can create margins that are much significantly better than what people normally see. >> now palantir whose co-founder is peter tealey is a possible acquisition target with an estimated 3.5 billion in gross bookings we'll have much more from my interview coming up in "squawk alley. becky? >> thank you very much when we come back we have much more from our guest today, ken langone. the futures in positive territory. the dow futures up by 45 points. "squawk box" will be right back. time now for today's aflac trivia question. what does the "buttonwood agreement" refer to? the answer when cnbc's "squawk box" continues and a gentle wave-like motion... liberate your spine... aflac!

and reach, toes blossoming... not that great at yoga ya but when i slipped a disc, he paid my claim in just one day. so he had your back? yup in just one day, we process, approve and pay. one day pay. only from aflac like you do sometimes, grandpa? and puffed... well, when you have copd, it can be hard to breathe. it can be hard to get air out, which can make it hard to get air in. so i talked to my doctor. she said... symbicort could help you breathe better, starting within 5 minutes. symbicort doesn't replace a rescue inhaler for sudden symptoms. symbicort helps provide significant improvement of your lung function. symbicort is for copd, including chronic bronchitis and emphysema. it should not be taken more than twice a day. symbicort contains formoterol. medicines like formoterol increase the risk of death from asthma problems. symbicort may increase your risk of lung infections, osteoporosis, and some eye problems.

you should tell your doctor if you have a heart condition or high blood pressure before taking it. symbicort could mean a day with better breathing. watch out, piggies! get symbicort free for up to one year. visit saveonsymbicort.com today to learn more. if you can't afford your medication, astrazeneca may be able to help.

now the answer to today's aflac trivia question. what does the "buttonwood agreement" refer to? the answer, the "buttonwood agreement" was an agreement between 24 prominent american brokers that marked the beginning of the new york stock exchange it was rumored to start under a

buttonwood tree. good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square among the stories front and center, we'll get a fresh data on the housing market later this morning. the national association of realtors will be out with january pending home sales the measure of home sale contracts signed but not yet closed, that number is expected to be up half a percent which would match the december increase gasoline prices would be headed back towards $3 a share. they say this summer's driving season is likely to be the most expensive in four years. it estimates this summer's average price at $2.79 a gallon, up 11% where it is now that prices in many cities at this point will top $3 which we haven't seen in a while. dick's sporting goods says it will no longer sell assault-style weapons in its stores it will not sell any gun to

anyone under the age of 21 ceo ed stack said the move is in direct response to the school shooting in parkland, florida, earlier this month he spoke on cnbc's "good morning america" earlier this hour >> based on what's been happening, you're looking at those kids and those parents, it moved us all unimaginably. and to think about the loss and the grief that those kids and those parents had, we said we need to do something and we're taking these guns out of all of our stores permanently >> okay. >> i guess one of their -- they did sell a gun. >> yeah. >> in fact, they found out in their records that a gun by nikolas cruz was bought by dick's. >> you read me the riot act when i made the argument that companies needed to step forward and do exactly this. >> no. no no what i said -- i said i think you see that there's a societal change and you want to insert yourself into the discussion for your own edification saying that you're saving children when, in fact, i don't think -- you know,

that's fine. i've seen you do it with ken frazier. you wanted to force ceos to resign from trump's council. you're an advocate and you're comfortable being an advocate for that. >> what i'm saying is there are ceos who are now stepping up on social issues in a way they never have before and given the commentary that they made over the years before about their value and purpose, that there was an opportunity happily, i would argue, over the past few weeks you've seen companies stepping up. >> there's a disagreement about -- we had warren buffet on saying i don't think it's proper for companies. >> i don't know that he was taking sides. >> andrew, my point is, let's say that you're someone on the other side of where you are and to them assault rifles is abortion and you start asking ceos to come and take a stand on that. >> let's understand one thing -- >> right. >> -- a bad person wants to get a gun like this in the future, they'll get one. >> that's what i said. >> whoa.

but that doesn't mean we should make it easy for them to walk in the store and buy it. >> the other argument, only 2% of these homicides are assault rifles the other 98% are handguns so -- and the virginia tech shooter was a handgun. so this is not going to solve it either my only point to you is there are millions of people, law abiding citizens, that own something that don't do anything with it. this is one person that did do something with it. you are going to take rights that these other people think that they have because of the actions of this one person you're going to take the -- >> we are infringing on their liberties. >> that's fine. >> don't we have restrictions on speeding >> and we have restrictions on hand grenades. >> because it's good for society to have rules. >> probably then outlaw all guns. >> no. no i'm sorry, joe let me say this to you i think the nra has a legitimate right to say -- the framers of the constitution felt the ten

amendments were so special, why didn't they just put them into the constitution themselves. they wanted to red line, bright line, that's why they put those ten amendments apart at the same time that they had the constitution ratified. the ten amendments the reason was they said these are important points i think the right to bear arms, i don't have one, but the right to bear arms is inherent in a free society think of what happened the people that were here, the people that eventually became founders of the country were under a tyrannical rule. they didn't want that ever again. now there's got to be -- we need cars, but do we need them at 120 miles an hour down seventh avenue no, they'll kill somebody. >> i understand that. >> i can't believe i'm arguing the rule. >> assault rifle is something that can be used to kill people. trucks, when you rent -- it's harder, obviously, but they were looking for a bomb in nikolas

cruz's house he can find out on the internet how to make a bomb so all of these things are illegal, but it doesn't mean people aren't going to use them anyway. >> you may be reaching a point of public opinion tipping. i think that's what -- >> there's no doubt, but it doesn't mean that that's going to solve the problem. >> no, it doesn't. >> the point that i have always been making about this, by the way, is congress may or may not do anything, but businesses have an opportunity, one way or the other, to decide i want to be in business with these people and i don't want to be in business with these people. people have constantly talked about reputation, reputational risk and what they want to represent. you can be in business with the gun makers if you like you can sell ar-15s if you like or not these guys are making that decision today. >> you're still putting the argument one step removed from whether you take a collective, make it a collective decision about all the people, all the law-abiding people that don't

use them -- >> i'm making a market-based decision which companies can decide -- given that we have the laws of the land currently, maybe they will change, i don't know, given they are as they are, maybe companies will step up. >> some will and some won't. >> then you'll see those who do get caught in -- >> look, delta -- >> in the position delta has been caught. >> by the way, dick's, i'm sure, will be caught in the fray >> that's fine >> there will be people on both sides. >> look, we've got to figure out a way out to look at an issue on the basis of that issue at the moment one of the things that's going to come out of this, mark my words, the right to lifers saying it's wrong for a 14-year-old to be killed but it's all right for a beeny in a mother's womb that can sustain life -- >> those are separate arguments. all i'm saying, i think, ed stack, god bless him, he did the right thing. >> i wouldn't want the pressure

on -- let's say that there's a religious group that doesn't like lgbt, like a chick-fil-a or something, i wouldn't want those people pressuring people not to make wedding cakes for gay couples. >> the argument i made in the column last week was very specific no, no, there are protected classes of people. gun owners, by the way, and gun retailers are not a protected class. >> but they are -- but these things are legal right now. >> they are legal, but that does not mean that you have to sell them to -- >> i understand that i understand that. i'm saying it's a slippery slope when you're going to do it -- you've got the left and the right. if the left gets everything they want in terms of -- in pressuring -- then the right is going to do it and you're not going to like what the right wants to do, andrew, in a lot different -- >> american express doesn't allow the purchase of online pornography with their cards, period. >> how do you know this? >> do you think that's a problem?

>> i was researching last week >> net neutrality? >> no. i was looking to see that there are certain items that different credit card companies, different banks will not allow the purchase of and that's because they made a choice part of it -- >> whatever you want to do that's not -- doesn't mean anything whatever you want to do. >> the point is -- >> i'm not judging. >> -- whether you like it or not, companies are taking sides. by the way, i think employees and customers actually care about them now taking sides. it will put all sorts of people in a hot mess, i'm not saying it won't, but i think we're at a moment and there is an inflection point. >> we are watching it play out right now. we'll continue to update you with some of these stories when we come back though, we have more of other top stories this morning, including closing the gap. a new cnbc series focuses this morning on the big banks we have an in depth look at pay for men and women in finance. right now though as we head to a break, take a look at the u.s. equity futures. dow futures up by just about 32 off the 100 points or so we had

seen earlier this morning. s&p up close to 3 and nasdaq by 14 "squawk box" will be right back.

welcome back to "squawk box. u.s. banks are under increasing pressure to release information on how they compensate men and

women. meantime, a deadline is approaching for companies with at least 240 u.k.-based employees to publish gender pay gap information. wilfred frost has that story wilfred, bring it to us. >> reporter: hey, joe. so as you said, in the u.k. companies with more than 250 employees must publish their pay data by april the 4th. many u.k. subsidiaries of u.s. banks are included in that list. ahead of this, jpmorgan, citi, bank of america and wells fargo are some companies that have said across their entire firm women are paid on average 99% of their male peers however, the banks made adjustments with factors like job function, tenure, level and geography. in pure dollar terms men are paid above 1% more than women overall. for the pending u.k. disclosures, no such adjustments are allowed. the raw numbers must be reported, for example, barclays reported that women in its

international unit which houses its investment bank were paid 48% less on an hourly basis and 78% lower in terms of bonus pay. the main reason is a higher proportion of men in high earning senior positions at barclays, 44% of total -- of the total 80,000 head count are women but of the 555 senior managers, less than 1/3 are women. ceo jes staley said he's confident men and women are paid equally for doing the same job standard charter showed significant gender inequality as did energy company shell and retailer tesco like barclays u.s. banks also have a skew when it comes to the number of women in executive positions, and with that in mind, when it comes to reporting their raw pay numbers for april 4th, it is likely they will display similar large discrepancies as barclays and many other u.k. companies. that could potentially lead to a lot of negative media and

political attention in the u.k. at least, april 4th the deadline for that andrew >> okay. thank you for that, wilf coming up when we return, shares of booking holdings jumping. you might know it as the old mpy e line coanceo is going to join us next

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back to "squawk box" this morning. booking holdings, formerly price line, company stock rising on that news. up 8%. our own ken langone is our guest host congratulating our next guest glenn close. also on set seema modi good morning >> good morning. >> let's talk about what's going on in the travel business. what does this say -- is this a function of your own operations, dare i say, or do you think there's something going on in the large kber ee cr economy? >> i'd like to say it's us the travel business is going well gdp growing, people want to travel, we have great things to offer, we're doing well. >> in terms of the mix, hotels versus air versus everything

else. >> well, we've -- for many years hotels has been a big part of our business. >> and one of the big questions has been, now getting a little bit off of your earnings, but there's been a lot of talk about airbnb effectively trying to get into your business and getting into the hotel business beyond what you think it used to be what is that going to do >> so i saw that announcement. look, we've had competition a long time. i've been in the company 18 years and there's been a lot of people in our space. we welcome competition any time. we believe that we offer a great product because we're out in that space that they're in we call it the alternative accommodations area. 1.2 million properties out there that you can go that's not a hotel. so we've been there for a long time competing in that space and we're going to come up with some new numbers in the not so distant future to talk about comparisons. they talk about 4.5 million listings we talk about 1.2 million properties sometimes we have a lot of listings in those properties so

we're going to come back to you with some numbers in the future and compare them. >> 1.2 million properties, that still pails in comparison to airbnb's 4 million what do you do to build your inventory and listings to appeal to specifically the millennials that want that non-hotel experience >> that's my point actually. when we say 1.2 million properties, you come out and say, airbnb has so many more, 4.5 million listings, you're comparing apples and oranges that being said we recognize we need to go out and get more properties of that type. we need to come with the more classical home, villa, the thing on the beemp want. that's why we talk in our earnings call we're bringing in more earnings to make sure our customers get what they want. >> we tend to obsess over airbnb but google is quietly amassing more share in the online travel market "the wall street journal" editorial board writing an op ed saying they're effectively

monopolizing it. >> google has been a good partner for us for many, many years. we've been spending a lot of money with them to get customers to come to us. we provide a great service to put people in the beds >> we're working there >> they're competing with it it's in there.

the other guy said i'll give you 220. hey, i'll take the extra 20 bucks. there's got to be pressure here at some point. >> i'll go the other way you tell me what you want to price that property. you own it, it's yours how do you want me to pay you to get something into that bank >> what you're going to get me what am i getting if you get your price it's the reverse of competition. the choice is a, b, c. to me the ultimate answer is who's going to pay me the most. >> i was going to ask you about platforms in terms of advertising which is in terms of your acquisition costs for new customers. what percentage of your business is coming off of google,

somebody is googling for home and this and you have a -- using google q words you have an ad. how much is coming off of facebook are there other platforms? >> so we don't give out an actual number in talking about the direct traffic that comes to us but of course we want that to continue to grow. >> the direct organic traffic? >> absolutely. we talked about that last night. where it has been growing for us >> what percentage of your business is organic? >> well, again, we don't talk the exact number, but it continues to grow. one of the things i've talked about -- >> can you ballpark it >> no. >> 20%, 50%? >> i'm going to say we are pleased it continues to grow one of the things i talked about in our prepared remarks is we're going to spend more money on brand advertising because we want to make sure that long run be we are getting more people coming to us direct and not paying third party places direct to get people to come to our site. >> specifically tv, right? over the traditional advertising. >> maybe we'll spend some more money with you guys and put some ads there. it is one of the ways we are trying to bring people to come

to us direct and not go through the third party places. >> thank you appreciate it. >> you're welcome. >> thank you when we come back, we have this morning's biggest stock movers also, we've been watching the futures and so far it looks like things have been in the green. dow up by 42 points. this comes a day after the dow lost 300 points. s&p futures just over 4. the nasdaq up by 21. stay tuned, you are watching "squawk box" right here on cnbc. is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.

let's take a look at some stocks to watch this morning general motors shares are lower. uaw's retiring medical benefits trust is selling 40 million shares of the automaker in the secondary offering elsewhere, express scripts reported quarterly earnings of 2016 a share beating estimates by 7 cents the pharmacy benefit manager profits were up 62% from a year earlier and announced employee bonuses in the wake of the new tax law. and celgene is lower this morning after an application for a new multiple sclerosis drug was rejected by the fda. they had expected approval by the end of this year the company is now seeking guidance from the fda on what additional information is needed hertz global expects losses

when we come back, media watcher jim stewart on industry reaction to comcast's $31 billion bid for sky. we are 30 minutes away from potentially market moving data the first revision from fourth quarter gdp. you are watching "squawk box" right here on cnbc i have access to the oil markets and gold markets. okay. i'm plugged into equities - trade confirmed - and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you. gglobal bonds, and high-dividend strategies. sure, these are investments. but they're not what people really invest in. what people really invest in, is what they hope to get out of life.

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breaking economic news a read on the trump economy. we're minutes away from the second look at fourth quarter gdp. the number and the market reaction coming up. new this morning, dick's sporting goods announces that it will stop selling assault rifles we will hear from ceo straight ahead. plus our guest host today is a man who never holds back >> you watch your people when you are running a business you want your people knowing they're coming to work every day to the greatest place on earth and they're going to be taken care of. >> the billionaire co-founder speaks out on the markets, president trump and has the final hour of "squawk box. it begins right now. ♪ ♪ live from the most power full city in the world, new york this is "squawk box.

good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross sorkin our guest this morning is ken langone. let's get a check on the markets right now. the dow is up somewhere around 50 that might have not been -- yeah, there it is. up 52 right now. the s&p up 5 the nasdaq up 23 we had a rally kind of thwarted yesterday by the jay powell testimony which was one of those strange good news/bad news scenarios where he indicated he thought the economy was growing faster than he thought, think that's good, but that could mean a more rapid pace of rate increases. 300 points isn't what it used to be it was up about 750 on friday and monday combined. treasury yields did rise

they have been back down to 2.85 actually, they were 2.90 earlier today. 2.88 again on the ten-year which has actually -- as greenspan said, that's the one thing you should have a bug for. >> that changed for a while, but lately that's exactly the most important thing that dictates where equity markets are. >> fed funds >> yeah. on a tick by tick basis. shares of lowe's under pressure the company reported quarterly profit of 74 cents a share that was below what the street was expecting. revenue and comp store sales beating investments. profit margins fell and they talked about some of the things that they're going to be tackling in 2018 you can see that stock is back down by over 7%. decline of almost $7 to $88.85 also, pizza hut has signed an official deal to become the official sponsor of the nfl. that relationship became strained when papa john's

founder blamed slowing sales on the national anthem protest by nfl players. new this morning, dick's sporting goods saying it will no longer sell assault rifles it will remove them from its 35 field and stream stores as well. the retailer also said it will not sell any gun to anyone under the age of 21 and it will not sell high capacity magazines either ceo edward stack said it is in direct response to the shooting in parkland florida earlier this month. >> based on what's happened and looking at those kids and those parents, it moved us all unimaginably and to think about the loss and the grief that those kids and those parents had, we said we need to do something and we're taking these guns out of all of our stores permanently. >> he also specifically addressed the potential backlash that the company could receive from those on the other side of this issue >> we know that this isn't going to -- this isn't going to make everyone happy, but when we take a look at what those kids and

the parents and the heroes in the school, what they did and our view was if the kids can be brave enough to organize like this, we can be brave enough to take these out of here. >> you're also, i should say -- let's show you the stock real quick. stock, by the way, slightly up over 1%. people on twitter on both sides of the issue are ready they're saying they went on to dick's right now to buy a pair of sneakers to support what dick's is doing. then there are others saying boycott dick's >> the other background is that after sandy hook with great fanfare dick's stopped selling assault rifles then to compete with cabela's, they started field and stream stores in 2013 and then a month after starting it they opened two or something, they -- they went around their ban at dick's for the ar-15s and started selling the ar-15s, got rid of the moratorium they had and started selling them at the field and stream stores.

they have 35 field and stream stores that sell ar-15s. the 610 dick's stores haven't been selling them since 2012 >> you know, with great fanfare now announcing that the 35 field and stream stores won't sell either >> he also said it would be permanent. >> permanent and 21. >> 21. >> and high magazines. >> the article yesterday was an article in the paper about the fact that the nra is perceived to be money but the political side, the actual number of people is very meaningful. so that's the political side of it. >> right that's actually probably more important. >> absolutely. they say they get notoriety because of the money but it's not so much the money as it is the fervor, very powerful base there. >> the question is to this point this has always been the nra numbers that are the most fervent. the question is, is that shifting i don't know. >> i know one thing, i'm sure happy home depot doesn't sell guns. let's get back to the broader markets. it's the final trading day of

the month. mike santelli joins us now with february's market report card so far. friday and monday, a lot worse friday and monday. then we gave back some of that yesterday. >> yesterday if you look at the s&p it almost literally just gave back monday's gain. things got interesting in february generally you had 1% daily moves in the first 27 days of february than you had in all of 2017 one of the consensus ideas coming into the year, the market would have positive, maybe not great returns. more volatility. so far that's correct. there's a lot of ways the consensus has been run on the year-to-date basis the s&p 500 is up 2.6% in february it's down 2.8% so far. where the strength has been i think has also been noteworthy it's been a somewhat narrower market nobody talks about bfaang. that's banks plus faang. that's what's been leading the market the market is recovering and skittish the patient's out of critical care unit but it's day to day. and i think that's exactly where

we are it's still a recovery but it's still a little bit on edge you definitely have a narrower tape the average stock if you look at the equal weighted s&p is up only less than 1% year to date versus the over all index 2.8. if in fact that's what we're seeing the stock bond valuation question remains i think right out front. yesterday the market closed on its lows but the ten-year yields did not close on the highs it's not the direct one for one magical number it's the general sense of what do we pay for good good earnings in the environment where we're not sure what the path of interest rates are. >> it may not be a tick for tick but like i said before, every time the yields go up -- >> the two year. >> the short end is telling you what the fed is expected to do >> you know how much rates are going snup. >> i'm sure they're going up, i'm not sure that's the direct daily factor that matters more than anything else. >> that's to me, frankly, we disagree i think where interest rates are going is going to have a strong

and powerful interest in equities. >> where does your money make the most sense >> yeah. where do you get the return on the money? the ultimate reason you buy a stock is to get a dividend you get income on your money >> yeah, but if -- >> i know warren buffet doesn't do that. >> but if the economy -- >> he made the same argument you're making now the other day. >> if i can only know one thing, tell me where interest rates are going -- >> but there's two things that go into a stock price, earnings is one and the multiple is the other. so interest rates go up if it means the economy is really cranking and company's earnings are going up, then that can offset some of the interest rate increases. you don't want rates to stay zero forever, do you no hold it. the worst thing in the world for us is the fact that rates have been kept down too long. >> make up your mind then. >> huh >> if the economy starts going and rates go up for good reason, doesn't necessarily mean stocks go down. >> no. they won't one way or the other they'll

either go down or they won't go up as much >> if earnings go up -- >> it's the age old argument people invest to get a return. >> the tipping point, is it 4% for long rate. is it 5%, 6% there's a lot of stocks that don't pay. you're buying them for future growth. >> you can't just use the dividend. >> you're hinting around -- >> interest rates go up 200 basis points you're having $200 billion a year that's the thing we have to start focusing on. there's a ticking time bomb here this is what stanley drucker said, he's saying, wait a minute, at some point we have to pay the price for this joy we've had. >> let me ask you a question about that by the way, mike santoli, thank you for that here's a guy you called me a commi before i think you think this guy is a

commi, too. >> i'm only kidding. >> these liberals. >> more socialism, not commun m communism. >> i want to ask you today there is a column i imagine you'll disagree with -- >> walt krugman. >> he's never been right for god's sakes. >> hold on he makes an argument today about the tax cuts and how $6 billion of the tax cuts happily has gone into the pockets of employees in the form of bonuses and higher wages but he makes the point that $170 billion is going into buy backs as opposed to investments in capital spending and other things what do you make of that and what should we do about it >> all right headline home depot is buying $4 billion worth of stock back. guess what for the last ten years we've been buying back $4 billion worth of stock it's -- when you see it as an

incident, isolated, that that's the correlation. look, if paul krugman didn't have the times, nobody would give a hoot about what he says he's been wrong. he's been wrong. >> right how about the internet >> how about that? >> come on he's angry >> look -- look, let's not make this personal. >> you brought him up, i didn't. >> no, but it was an interesting piece today. the reason i wanted to bring it up is there was a question about how the tax cut is going to eventually trickle its way into the economy and what it's going to ultimately do to growth or not in this economy. >> it's going to help growth like it or not, it's going to help growth. >> i like it i hope -- >> home depot just -- lowe's, too, and a lot of people, they were sharing the goodies we're sharing. and we did it quick. this is important because, guess what, people don't get it. i am as successful as i am for one reason and one reason only, those 400 -- no. those 400,000 kids that put an

apron on every single day. the difference in us and lowe's, these are people these wonderful kids that work crazy hours and put up with all kinds of grief, if you don't take care of your people -- this is -- i'm going back to jack welch. jack was mania cal about his people, taking care of them, paying them, respecting them, rewarding them, telling them what a good job they do. i hope all 400,000 of those kids are listening to the show so they can know the gratitude of what they do for the company they're it a smart businessman, an enlightened businessman takes care of his people, and we will. we've never paid anybody minimum wage in our entire history never once it's no -- it's no -- it's not a disconnect we are ak successful as we are largely because of those kids. i call them kids because if they're under 82 they're a kid. >> what do you think is going to happen to wage growth in this

country? if you came back here and we're sitting here together in a year, what's going to light up >> there's 80,000 jobs in this city right now crying for somebody to come forward at about $70,000 a year of income we've got to -- you want the dark secret? what are we going to do about educating these kids in public schools to make them -- put them in a position where they can read and they can count and they can write? we've got a serious social issue here, but guess what the other side of their argument about guns, the school teachers. let's call it for what it is quality of instruction has gone down in the eight years obama was president he wanted -- to me if he wanted to be the president, he would have said if i wanted to make a difference, i would make education my number one issue. what's happened? the quality of education has eroded more in the eight years of education. >> you've been a supporter of president trump. have you seen anything on the education side yet >> no, but i'm optimistic that betsy devos is going to do things i was optimistic about dunkin',

too. he was a good man. look, we have a real issue in america. we've got to help these kids get qualified to take advantage of the opportunities because as i think -- >> i'm not disagreeing with you. i'm curious if you've seen anything that betsy devos or anyone else in the administration has done anything that charter schools that you've supported and other efforts are going to be materially improved in any meaningful way. it's that conversation, frankly, oddly enough, we have not had over the past 12 months. >> well, let me say this to you. i wish there was more of a focus on education by the president and by his administration. i wish that, okay? why? i know the importance of my public school education in my later life i'm only here today because i had a wonderful -- i came from a wonderful school district in long island. the parents were involved. the parents demanded results from the kids, from the teachers and the kids

we have -- joe, this is the other side government in my opinion there are social issues that are going to be impactful going down the road for a long time when a kid gets a high school diploma and is performing at the fourth grade level, fifth grade level, something's wrong >> right in davos when i talked to trump i said let's say that you're effective in getting faster growth which gives the federal governmentmore revenues, how d you address income inequality in terms of education how do you start to try to narrow that gap? he didn't have a long detailed answer, but it had to do with matching the skills gap in vocational schools and preparing kids that may not -- you know, french renaissance poetry in a college setting may not be what we need anymore, it might be coding, it might be technology, it might be things that can match what is going on with the jobs that are going to be around, the high-paying jobs >> that's the other thing, college is not for everybody, and i think we're putting kids in a position, you do this, you

go to college, the world is yours. it doesn't work that way >> right. >> i think trade schools -- >> that's right. >> we have a crying need. >> let me ask you, by the way, about that another issue came up in davos the idea of reskilg -- reskilling workers and giving the tax cuts and the amount of money workers have are going to use some of that money to invest in reskilling. if we're being honest, the numbers are de minimis on the reskilling piece. >> you know what, we can't make people be what they don't want to be or aren't interested in being. if a kid came to me, i've said to all of them, they said to me about wall street. i said, the wall street is over for all intents and purposes go out and go to work for a company, learn the business. learn what drives a customer learn about margins. learn about inventory. learn the basics of the business then you've got something to sell but i think right now we've got

to change the focus in america on education and secondarily on saying to a kid, it isn't such a bad thing to be a plumber. or an electrician. an apprentice who goes into the union today, $44 an hour starting pay, okay so he works seven hours, let's say he works eight months a year, making over 40 grand a year that's a good start, and that's just an apprentice ken is our guest host this morning. we're going to have more with him throughout the show. up next though, the next move on the media merger chess board we will lk ttao "new york times" columnist jim stewart about comcast, fox, and their bids for sky. that's right after this break. l. fidelity, where smarter investors will always be.

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you know what's not awesome? when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. . welcome back, everybody. the media merger chess board growing more complicated by the day with comcast making that $31 billion offer for u.k. broadcasting group sky joining us right now is "new york times" columnist and cnbc contributor jim stewart. jim, thanks for being here today. >> sure. pleasure. >> so you saw the news yesterday. caught everybody by surprise, and you thought what >> i thought, this is a great move by comcast. it's bold. it's aggressive.

and they're going after a very valuable asset that puts them as a big player in the international playing field, and i think one thing that's become perfectly clear to me, if not everybody else, the media landscape that was always very u.s. and hollywood centric, it's a global business. you have netflix global, amazon with huge global visions and it's not enough to have market share. >> the u.s. regulators aren't going to let you get much bigger. >> that's one of the biggest things about the move. that was mourdock's excuse for not selling the whole package. this is off the table. >> let me ask you a question the stock of comcast is down it would invariably be down. they have anxiety about this transaction. craig moffett was on our show yesterday, and he made the point that the satellite business in

his mind long term is a lousy business because as we've seen over the years now including with at&t is now done with directv, ultimately you need cables or you need to go through traditional wireless but that satellites may not go. what do you think of that? >> i think that's looking at it too narrowly i mean, sky is a brand and it's a great big distribution platform the fact that it is currently satellite focused doesn't mean it has to stay that way the entire time. cable does not seem the future to me. it's over the top. it's, you know -- >> i would make the argument to you. >> it's the internet. >> i would make the argument the real transaction is to take all of the content and you're starting to see sky use that otc service all over europe and the rest of the world. >> absolutely. >> the question is are you paying a little extra for a business that you may not want >> well, look, i'd have to look at the cash flow analysis on that >> could you create the otc

without owning their business? >> i think you get a huge advantage when you've got that presence already, the brand name, you've already got it. look, satellite is not going to go away overnight just like, you know, the same thing cable doesn't go away overnight. you have a long transition period where they can build ott. they get content with sky, too they get the great sports rights, soccer, football in europe >> moffett, the reason comcast shares had not rebounded with the overall market from the recent selloff was because of the worry that they were still interested -- the companies were still interested in all the assets at 21st century fox and that their original bid had been 15% higher -- >> right. >> -- to start with and fox hadn't accepted that now that makes him think that it would be a bad thing for comcast to get -- i guess because you'd have to borrow money, comcast would have to borrow money to buy all of 21st century fox. is that still part of -- is that still part of it

could they do it or would have at&t to get the clearance? >> i think at&t has to get the clearance. >> before comcast could buy -- >> absolutely. >> do they want it all just to stick it to disney >> they're already sticking it to disney. another fascinating thing here, the gloves are off here. >> on both sides. >> wherever they're on. >> could you imagine a scenario where they own 50% of the business, disney owns 50% of the business that at least leaves comcast with a piece of this they have hulu >> why would comcast want 50% if you could be a majority owner, forget it, minority owner gets nothing. >> 60% but then you have these other guys be your partner. >> do you mean of sky or all the assets >> of sky. >> well, comcast is going to want it all. why wouldn't they? they could live with it. no, you don't want a 40% interest this has been mourdock's achilles heel. he can't get the 60% he's not going to get it the british don't want him to have it. i don't know, they're not going to welcome comcast with open

arms, but compared to mourdock, he's a very benign owner of these assets comcast is not a dominant player in the u.k. and european news. i think of course comcast could get the whole thing and would want the whole thing. >> how about giving credit to brian for what he's done with nbc. done a hell of a job these guys are good. he has a great team. >> brian and steve. >> he's built a fabulous team, and i think you've got to give him some credit for taking this move. >> you've been talking about meimlt you have to give immelt credit for selling it for half of what it's worth >> don't start me there. but right now, our bond is fraying. how do we get back to "us"? the y fills the gaps. and bridges our divides. donate to your local y today. because where there's a y,

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welcome back to "squawk box. we have some big breaking news momentarily. our second look at fourth quarter gdp. expecting 2.5 it is. 2.5 it is right on the nose. that is one-tenth less than our last look. of course, we have one month basically as we wrap this month up of the first quarter. let's look at some of the internals, shall we? consumption. consumption 3.8. same as our last look but many expected it to cool off a bit, it did not the price index, 2.3 that's one-tenth cooler than both expectations and our last look and finally personal consumption expenditure quarter over quarter up 1.9 and 1.9 it

is that's our last look and that's where it remains arguably, not much difference here many would have liked to have seen a little higher revision on that quarter but then again, the back-to-back three handles prior, is there a slowing down, it's hard to tell. you know, our new fed chairman yesterday jay powell said he thought the economy strength je enned a bit. yields still under 2.90. chicago pmi and penny home sales yet to come. joe, back to you >> liesman, that's what his work was showing him, rick. 2.5. exactly 2.5. all right. i'm done with the 2.5. liesman, what's the first quarter? >> you know, you've talked yourself into a corner because you're so hung up on this 3 number. >> no, what about the first quarter? >> first quarter is also running 2.6. running 2.6. >> we know the first quarter is off a little bit >> possibility. >> what's the year going to be, not 3? >> look, joe, i -- i'm in the

2.5 camp and i think that's a huge victory remember, underlining growth, if you get 2.6, which is counted for me, 0.8, nearly a full percentage point on an $18 trillion economy, go home and count it as a victory. you've made 3 into this political thing. that's crazy. >> no. i want it to be because of productivity gains that err would' not factoring in. >> we had negative productivity in december. the whole thing is they lead to capital investment, lead to productivity lead to wages. >> which it is. >> it can't be, ken. >> the number of companies i know going forward with big numbers in spending because they can write it off. >> no, they're going forward but at this time it can't be >> no. >> when you bring new technology into a company, doesn't productivity fishily fall? >> sure, because you have to train the people >> my point is, it's a ways until you get this productivity boost from the capital spending.

i will say i saw morgan stanley report this morning that sees a very positive and strong outlook for cap ex by companies which is what ken is saying. >> absolutely. look at companies like park -- look at caterpillar. go to caterpillar and see the pieces of equipment they've got now, it's -- it runs by itself. >> it has to be something that makes you say this old one i've got -- >> i've got to get rid of it and i'm getting my money back. >> i bought a new car for my kids because of the safety stuff in it. i thought it was better than a three--year-old car. let's pivot and talk about the fed probabilities. how high can the fed go. some guys are pricing in an extra quarter point each year. i did a little really simple mathematical model let's look at the probabilities. what's new here is september is now in play. so the majority or the 50% plays now is there would be three

successive rate hikes, 97% chance of rate hike one, 75% chance of rate hike in june and this is now after yesterday, a 50% chance now of that third rate hike which had been priced in in december now coming back what you see now is the fourth rate hike is somewhere between december and january the fourth rate hike is just 25%. 53%. now what i did, i did a quick modeling here. take a look at the current scenario for the federal reserve. what you see is 1.4 now. 2.1, 2.6 that's the current immediate outlook of fed members so i did what -- i guess it was ian shepardson said, we think it's 100 this year and 100 next year i said what happens to the ten year which is 150 basis points above the fed funds rate there are some serious numbers when it gets to the ten year so what i'm talking about here, folks, is tail risk. i don't think this is the most likely probability, but i think this is on the minds of markets when they think about greater

and more fed rate hikes. what you see here is this, all right? i know it's a lot of numbers on the screen, but what i did is i added a quarter point to each year for the fed and i added 150 basis points on top of that. people start to write in, if the fed starts to go up that much the yield curve is going to start to flatten. >> this is just a simple -- >> what you see is if you remain at that 150 over you get to a 4.5 ten year when i start to think of why does the market get so upset about an extra quarter point this year? it's because it's not an extra quarter point this year, it's an extra quarter point next year. you start to think about what is the overall outlook. i think it's a terrible risk right now. i think powell yesterday was simply honest. >> huh. >> i think that maybe -- i'm not sure how much he considered -- >> we're not used to that from fed? >> it could have been a rookie mistake. what happens since december, tax cuts, major stimulus, better growth better foreign growth. scenario has probably changed but he didn't want to pre-judge.

it will take four members of the fmoc to raise their forecast by a quarter point in order to get that extra quarter point priced into the medians i don't think it's a big deal for this year. i don't think it is a big deal for next year but over time depending on how the ten year and five year and interest rates react for private companies, that's going to be something the market has. >> let me be honest with you isn't such a bad thing. >> no, it's not, but if you say that it means everything -- >> everything else is -- you look good today. >> thank you >> but let me be honest with you -- if you paraphrase when you're finally going to be honest, everything you say prior to that -- >> joe, i have to think about this he's a new chairman. i have watched new chair men for many, many years now they always make a mistake at the beginning. >> of telling the truth? >> sometimes or sometimes they don't think about it did he mean to make the market think of a more hawkish fed? was that his intention

>> i'm sure it was not. >> you think it was a mistake? >> i don't think it was a mistake. i think he was answering honestly. >> then it's a mistake then it's a mistake. >> a weaker dollar is not necessarily all bad. >> because the way this art works is you are always honest but every word you say you have to think about the implications of it. i think it's actually okay i think that the market had been thinking about 4 and now it's a little bit possibly more likely. >> if all you get is 300 points down the day after you were up 400 points, eh. >> who's going to remember what he said? >> right. >> i think you're slicing this thing too thin i'm impressed -- >> which is what traders do right now. >> that's fine let them be traders. >> i agree with you except for it was the inaugural testimony, right? what we're trying to do is automatically do as much as we can. >> first impressions are lasting impressions. >> that's what i'm saying. >> i, frankly, was impressed with the guy more importantly, people who are

much smarter than me that know this -- what he's talking about better than me were pleasantly surprised by what he did. >> right if you're looking at the new form of communication, i'd prefer it be kind of an open and honest and tell me what you're really thinking thinking man he has already mastered the art of saying nothing impression. >> i think he had a major accomplishment yesterday he's giving people a lot of confidence that he knows what he's talking about and he's going to do the right thing. whether he does or not, the future will tell >> lindsay was watching. joining us now, chief economist for stiefel. you heard steve's report should all of our numbers be ratcheted up a little bit? if they are, do we need to remember it's not a quarter point more this year but also a quarter point for every year in the future was it more hawkish yesterday? >> you know, i was actually surprised to see the market's take on the chairman's comments

sugges suggestsi in suggestsing that it did have a hawk i shall lean. he also reiterated the general party line of continued gradual increases in interest rates. he also said that the fed will remain data dependent. so really continuing the same type of policy, the same type of policy tools that we've seen in the previous fed regime. and so i was a little surprised, a little taken back to see such a hawkish retooks his comments now i think at the same time while he was talking about a stronger, more firm u.s. economy, we do have to take a look at the underlying data which has come in to the weaker side more recently trade disappointing. durables disappointing new home sales disappointing retail sales disappointing even this morning's q4 gdp report, yes, 2.5%, that is a

sizeable step in the wrong direction from over 3% april to september. so as we look out to 2018, yes, we did see a lot of fiscal stimulus, but government spending alone is not going to be the catalyst to outside growth we need to see that translate into growth in the business sector and consumer sector as steve pointed out, even if we see further growth that will retard growth. >> if we had the opposite of stagflation, we discover a new internet, another one. we even have holding prices down for some other reason and if there was no inflation in a world where we have still this inflation, does just more growth by and of itself mean higher interest rates or that they need to be more hawkish or can we just welcome higher -- better growth if there's no inflation

is it an inflation fear that causes consternation is that it >> well, it's the concern that the economy is going to overheat you're right, if we saw consistent 3% gdp with sub 2% inflation, i think the fed would be very comfortable with sitting at these accommodative levels of interest rates so, no, there isn't a necessarily correlation between higher interest rates and higher growth >> it's also a price of money, right? let's say everybody -- the hot dog stand across the street was giving away free hot dogs, everybody would get in line. if growth is 5%, then your investment in the economy has a potential better return so the cost of money should go up in that context. >> it's not just inflation >> it's not just inflation there's also a cost of money issue. lindsay, i think where the rubber meets the road where you forecast the fed, what do you think is going to happen what about this scenario what happens to the ten year yield and what happens to people in

the economy here >> if we look near term it does appear as if a march rate increase is a sure bet at this point certainly the market is pricing that in with 100% certainty i think the chairman is continuing to support a near-term rate increase following forward with really the expectations that janet yellen said. not wanting to cause any undue volatility in market expectations moving forward, however, if we don't see that, quote, move up in inflation this year, it's going to be very difficult for the fed to justify additional rate increases so i would say that we're on the more pessimistic side in terms of expectation for rate move, meaning that we could just be around one or two rate increases this year. the risk is not to the up side that we see four or five. >> it depends where you put the tail risk. is it more rate hikes or as with lindsay it is fewer rate hikes that's a pretty important determinative factor you could be presently surprised under lindsay's scenario.

>> thanks. when we return, we're going to get to the big news of the morning. ckpoing goods announcing it's going to stop selling assault style rifles look at the retailer's history with those weapons we'll talk about it next real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies to pursue consistent returns over time from over one hundred fifty billion dollars in real assets. partner with pgim. the global investment management businesses of prudential.

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innovation with jobs now why should we care well, because if you don't have jobs you're not going to have democracy and i think -- you know, i mean, obviously we were born in the silicon valley and we're of the silicon valley in some ways, but this movement towards innovation with no jobs is really hurting our society. >> that was ceo alex karp speaking to cnbc guess what, ken langone is an investor in the company. >> yes, i am. >> is the company ever going to go public? >> i don't know. frankly, if i had my druthers, i would wish they wouldn't. >> because >> because >> because i think what they do, the way they do it, the mind set on the future, i don't know if the public could accommodate that. >> have you gotten any dividends out of this company yet? >> no, not at all. >> as an investor -- this company has now been private for quite some time -- >> i think i -- my first investment was maybe five or six years ago. >> do you think of this company -- this company there's a halo effect of this being a silicon valley company but

others are saying ultimately it's really a consulting company. what is it >> it's a people company he has first class people doing this thing and he's created an environment where creative people want to come there. you know, strange hours and dress and bicycles next to their desk these people are brilliant and creative at the same time, and i think -- i think alex has created a culture there that the best and the brightest, now i'm partial because my god daughter works there. >> the reason i ask the question though is if it's a software business, software is traditionally very scaleable if it's a human business, a consulting business, it's harder to scale >> no, i beg your pardon. >> okay. >> the more creative people you have, the more brilliance you have, it's exponential you can get geometric growth, okay and i think what they've done is to position themselves where

they're going to get enormous leverage out of who they bring in maybe the first year they needed 100. the 15th year they might need ten. >> fair enough we will talk more about this also the other way about this going public is what they'd have to disclose about this to the public and so many -- >> i don't think that would be a problem. >> okay. don't miss the full interview. you can see it with the ceo at 11:00 a.m. in the meantime, we want to get to the story of the morning. dick's sporting goods inc. will no longer sell assault-style rifles brian sullivan has been following this story for us for now for so very long brian, what do you make of this? >> reporter: well, i would say it's the first really big move by a major retailer, andrew. walmart stopped selling this stuff years ago but that was not in response to anything. we were saying this was an emotional decision they had seen and heard these kids from parkland, they had

seen and heard the cry and they are making a business decision based on that emotional reaction, but here's the thing they're not stopping selling guns they're still going to sell most type of guns, although you've got to be 21 years old to buy them they're going to stop selling the modern sporting rifle and the attachments. the ar-15 style guns we'll see how the market reacts. the nra has about five million members, maybe 4.5 in the united states there's 180 million teenage and adult consumers in the united states when you just simply look at the numbers and if people choose a side, maybe they're just going with the side of the numbers as well. >> brian, dick's wasn't selling them anyway, right >> the field and stream division of dick's was. >> was >> they suspended after sandy hook, brought them back. >> no, dick's -- the way i saw it was dick's stopped selling them in 2012 before they even started a field and stream they started field and stream in

2013 and then started selling ar-15s in their field and stream stores, of which there are now 35, but they never resumed selling any assault rifles in the 610 dick's stores that they have so this is the same page as where dick's has been since sandy hook. >> true but they spended it after andy hook, joe he's said he's adamant this is a permanent decision and not going to go back and resume selling them at any of our chains. >> field & stream. dick's wasn't selling -- never resumed since 2012. >> not that i'm aware of, yeah now bass pro shops and cabela's. i have a call and e-mail into them they have not responded to me as of yet. >> they'll stop it, too. >> that's the question what other companies could you see deciding the follow suit and how would you differentiate this decision with the one that walmart made for many years they denied that

the reason that they stopped selling the ar-15s was a function of this emotional response they said it was a business decision. >> yeah. that's what they said, i guess you have the take them at face value. they're running out of major retailers that are we have dick's saying no field & stream, no bass pro shops, there's gander mountain and a few others out there and the majority of guns sold at gun shows and mom and pop retailers. kate rogers, has been to the shops. the number of national chains is actually not that great. i mean, mr. langone would know if you were owning a major retailer that had sold guns. >> i was an investor but i think the decision is a business decision that walmart made because if it offends enough of your customers by selling it - >> let me ask one other question real quick >> it's a business decision.

>> larry fink says he wants to use his influence as a large investor - >> for social issues for important social issues he thinks long-term influence the business. >> absolutely. >> so the question is, he's going to go to companies like american outdoor and others. >> right. >> i imagine and say, look, we think for the long-term health of your company, what's going to happen, we think you need to start pursuing the manufacturer of smart guns or screening for the sales of certain types of your guns. >> right. >> is that the right decision from a company like that from a company like blackstone, blackrock to use that influence? >> i can't prove what influences management decisions i know this. what dick's did today was right for two reasons. it was the right thing but i can't not believe that this is going to be good overall for people feeling good about dick's or wanting to go into the stores you have to understand the importance of people feeling

good about where they spend money. or feel like they're doing the right thing. >> thank you very much brian, thank you when we come back, jim cramer. make something for dinner. but some of us make something much more. mom would be proud. with blue apron, any night is a chance to see what cooking can do.

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jim, i have to ask you about lowe's, what you thought about the numbers today. >> geez, i have to tell you i was quite surprised because i believe that people may extrapolate and say weakness in home depot it feels like a horse race and lowe's lost it a lot of categories i think they're slipping in. i do notice, also, by the way, the sherwin williams deal and i think when people look at it they say, you know what? this category is not as strong i think that's the wrong takeaway lowe's is not strong home depot spent a fortune on technology they're doing a good job. >> i wish we had more time to talk with you today. thank you. >> thank you. >> see you in a couple of minutes. on "mad money" tonight, don't miss the chief executives of under armour and sales force we haven't heard from viken plank in quite sometime. right here on cnbc 6:00 p.m. eastern time

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visit sleepnumber.com for a store near you. well, it'sonce again.eason >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. big thinking in the finger lakes is pushing the new new york forward. we're the number one dairy and apple producers in the eastern united states supported by innovative packaging that extends the shelf life of foods and infrastructure upgrades that help us share our produce with the world. 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

thank you! to our guest host ken langone. >> thank you for having me always enjoyable being with you. >> thank you from langone medal center two ads in the super bowl, didn't you >> i don't know. at least one i saw one. regional not national. >> wasn't national >> it was here and in florida where we have a facility

but you want a thought don't give up on america we're still a greatest country on earth and we always will be. >> all right. >> take it to the bank. >> preaching to the choir. at least for some of us. make sure you oin us tomorrow. "squawk on the street" is coming up next. ♪ good wednesday morning welcome to "squawk on the street." at the new york stock exchange final day of february. and markets look to get back some of yesterday's loss the dow and the s&p set to break a ten-month win streak, the longest since 1959 europe just shy of flat and the 10-year near 2.89. we begin with the last trading day of the month and only sector in the green, all the major averages are down. we h