on track to open up over three points after a mixed day yesterday. if you want to look what's been happening with the 10-year treasury, the yield right now sitting about where it was yesterday, 2.872% make sure you join us tomorrow "squawk on the street" begins right now. ♪ >> good thursday morning, welcome to "squawk on the street" i'm carl quintanilla with jim cramer and david faber. cigna buying express scripts and we're going to talk to david cordani this hour. waiting to see what if anything the president will sign on tariffs. europe is green, ecb unchanged and 10-year remains locked in the 2.8s and today we may get an announcement on tariffs from the

white house, including some possible new details on exemptions. >> plus, we do have that relarge deal in health care, cigna buying express scripts as consolidation continues. we'll have david cordani this hour. the ceo of exxon talks about the effects of tax reform and tariffs. more from darren woods is coming up we begin with the deal of the morning, cigna agreeing to acquire express scripts, valued at 52 billion plus 15 billion in debt deal recommendation a 31% premium to express scripts closing price on wednesday as david said we'll talk to cordani in a half hour more vertical interest tgratione space. amazing. >> sometimes you get great irony and barclays is out with a piece calling it a hold, saying that one day it could get to $84. why i mention that because express scripts has been down

because of a tift with anthem. >> the deal goes away in 2020. we've known that for some time. >> out and out hatred. >> and cigna and anthem hate each other. >> yes, you get the situation where you suddenly are reminded the companies are worth something. we could just talk about gary cohn and how much that hurts and european retaliation for jack daniels or look at individual companies and say cigna looksa express scripts losing anthem contract and what a great opportunity to buy i think it's very exciting >> everybody has been talking to everybody since anthem's deal to acquire cigna fell apart and aetna's deal to acquire humana fell apart aetna, a huge deal in which cvs buying aetna and then this case.

when it comes to antitrust, the two may be on the same time line, cvv and aetna and cigna and express scripts guys they are talking about it being akreetive, the stock price is getting hit. you can see that down over 6% right now. you do have the falloff from the disappearance of the anthem contract with express scripts beginning sort of working through 2020 when that goes away this deal they expect will close by the end of this year they hope we'll have one year under their belt before that goes away not that express scripts wasn't planning for it already. >> the accretion makes it so there may be a cash and stock discount, when i think about accretion and how cheap cvs was able to raise money. what a great to put companies together and bezos and dimon and buffett, do you want to be up

against that >> they mentioned on the call they've been talking for months and i know that is the case prior to when we first heard about the amazon jp morgan berkshir effort on health care costs. and by the way, some people wondering well, is it possible anthem would be interested here or even walgreen's but my understanding is again, since the hmo deals fell apart everybody has been talking to everybody. at least to some extent. and so you can expect that everybody has had a chance to take a look. it's sort of like a health care tinder, all swiping left and right -- which way is it i don't know eventually these guys swipe right. >> i think it's right. we have no idea. >> not that i know. >> match is at an all time high. their -- i think they are going both ways. >> cordani is like yes -- no. >> people have been writing about a decline in m and a at least monthly spikes that were

lower than we saw the last few years and whether or not that would set the tone for this year and whether this changes that. >> i'm glad you mentioned that one of the great props i've been using is the stock shortage. every time there's a huge chunk of stock that disappears from the market this is healthy for the market a lot of people are concerned since the peak in january there's not been a lot of m and a since the peak and interest rates going to 3 and tariff situation. this is a sign that there is some health in the m and a market it's a big deal. >> yeah, from what i'm hearing out there, spending my day talking to practitioners there' more coming. >> in the healthcare >> in general. >> play it so close to the vest. >> that's the way you have to. >> i guess you have to tune into the show. >> you do. what happens to humana >> the numbers are too low for hue m humana, i think you've got to buy it

>> really. and united health care they haven't been a part of this. >> the other day gave the discount but the cigna tell you that's -- u and h is fantastic some people say i can and can't, to interview the company next week in the coming weeks and what i would say is that they are usually a company that doesn't talk loud. but i think that -- i have said and we're going to be talking about it, remember we have a very big conference coming up, if you gave the health care system to unh, we would be a richer country -- >> booking machine now, jim? >> that was another thing -- >> unh is a giant. >> i learned about your booking perils at 5:30 in the morning. i got it okay -- >> we are working, team faber, out there working. competitive situation. >> trying to head you off at

various passes. >> if this deal done at mad day it would have been "mad money" but it's the 5:50 time slot. >> it works getting things overnight and early morning hours. >> when he's still working out. >> wall street and main street and washington awaiting an announcement from the president on steel and aluminum tariffs. the president tweeted, looking forward to a 3:30 p.m. meeting, we have to show great flexibility and cooperation towards those that are real friends and treat us fairly on both trade and the military. doesn't specifically say he'll sign a pro clamation our friends at nbc today say if a proclamation is signed it will be largely symbolic. we'll see what happens at 3:30. >> symbolic? i couldn't disagree more with that symbolic there's companies that will restart -- we saw that with -- i think new core would take advantage of it, starting putting plants in cities and towns that have been forgotten

and been part of the wave of oepiate, crying for business if that's symbolic, so be it the symbolic is the jack daniels tariff. >> okay, but eventually it's going to be followed by the actual order -- no, we don't know >> do you know >> i don't i guess that's my expectation. >> we know tpp isgetting signe today in santiago. >> with 11 nations instead of 12, i believe. >> if peter navarro is ascendant as we hear, this is the first of many, not the end. >> we'll have to brace ourselves frequently for these eruptions of potential tariffs on various things >> you got it. >> and particularly china and focus one would expect >> this is about china playing tough. i'll give david a thesis so he doesn't want to sit next to me anymore. nobel prize. >> for who the president. >> excuse me

>> that he really wants to make it so they demilitaryize north korea. this has been two different people suggested this to me. >> now, tillerson did say we're a long way from direct talks so are you talking 2018 nobel? >> i think you blew his mind too. >> to be faster to get the nobel than president obama, they are very competitive i i remember the correspondent dinner put down over the president's hair, i think that the president -- two different people have said this is about disarmament, pressuring china. china goes to north korea and bingo. the nukes are gone >> don't you think it's actually about what it appears to be about? >> there are a lot of things are about what they appear to be about in this white house. >> we have the united states trade rep and investigation going on under 301 of our trade

code, related specifically to intellectual property and continued theft by the chinese, that could really be a much more potent weapon and problem. >> we should move on but i will say this, 25% of jack -- goes to europe they had to deal with the russians in 2014 where they found an insect in tennessee honey. they can survive anything but the stock went from 56 to 52 on that and suggestion there was a little bit of downtick in jds. >> speaking of trade, draghi is on the tape after holding rates unchanged after dropping the explicit pledge to increase the size of qe if needed if you put tariffs on allies, who are your enemies steve is covering that for us today. >> draghi doesn't like to talk about foreign issues at all, doesn't like to talk about anything but he seemed to have gone out of his way to say protectionism is a major risk for the european

union. then he had this to say about the current discussion about tariffs in the united states >> these are certain i would say worry or concern about the state of international relations because if you put tariffs to against what are your allies, one wonders who the enemies are. >> kind of really encapsulates the economic thinking on this think, conventional wisdom that there's no two sides to this story. general economists think these tariff barriers are bad for economies around the world just one more note, he did -- ecb did remove the easy bias in its statement and put the euro on a wild ride it weakened and strengthened again. overall the comments an protectionism seeing the most important headlines from the conference so far, carl. >> when the president bashed mexico, you got a dramatic

decline in the peso so made it that it hurt the united states in imports when draghi moves the bias, the euro gets stronger that's going to be worse for europe than a lot of things that a tariff might be. >> steve, thank you for that. >> he can't -- ever since i did that the president might be for the nobel -- >> stop saying that over and over again okay >> it's dynamite >> it's dynamite, mr. jeopardy nobel, dynamite. >> i get it. he's going tofor dynamite. >> yes, yes. energy secretary rick perry making the case for the president's energy policies, we'll talk to them take another look at the pre-market about 24 hours after jim said this market does not want to go down and we did see gains towards the latter half of yesterday's session. more "squawk on the street" continues in a moment. where can investors seek predictable income in an uncertain world? pgim sees alpha in real assets. like agriculture to feed the world. and energy to fuel its growth.

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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. let's get to the bond pits, we are stuck in the 2.8 range here, rick. >> it is amazing when you pondser all of the thing going on that make economists and analysts and supposedly investors nervous. the transition into the marketplace must be broke. a one week of twos, pretty darn flat one week of tens, this could be the tenth day we settle in the 2.80s and one week of bunds and

grant the march row draghi press conference a little hawkish, horse power at the top of the range but like treasuries this could be the tenth day bunds settle in the 60s. but it means more to the bunds to be in the 60s because of where they are at. the higher you go, of course, the less that means. so they are ten basis points closing yield range may be a little bit more aggressive than ours considering how much smaller 68 basis points is to 288 basis points now, if we look what's going on in foreign exchange, the dollar index hasn't been as compressed as look at the year to date chart but there's no dismissing. for the most part, it's still within shouting distance of 90s and that is significant. if we want to flip this around a bit, let's start out with looking at the two-day of the euro versus the dollar we're getting volatility, that's why i hooked in the extra day there.

we're circumventing 1.24 as mario draghi speaks. that makes sense year to date is that mere upsidedown image and where the dollar index seems to have made an upside move, so has the euro versus dollar downside moves it seems to be moving in slow motion carl, jim, david, back to you. >> okay, rick, thank you rick santelli. another day got to check in on broadcom and qualcomm, the back and forth and the review going on just the extraordinary nature of this entire battle and the file just keeps growing and growing and growing and growing, the notes do. hard to explain how many hours i've spent on the phone at this point with experts in insieve yus, the lawyers who advise companies on these things. broadcom comes out with the following, trying to fight back against this basic idea they would represent a national security risk if they were allowed to take control of

qualcomm because of the growth of 5g and concerns that are clearly evident amongst the various constituents of the ability to dominate 5g into the future time to set the record straight about the business in china -- they go on to say listen, quaulcom has been partnering with chinese companies and promoting advancements in technology in china for years. they go about listing all of the different relationships there saying they have a lot more relationships in china than we do i come back to this and from that incredible letter that we shared with people a couple of days ago from treasury outlining its reasons -- the reasons why might very well have a problem with this. it was this in particular that caught many people's eyes. when they talked about broadcom's relationships with third party foreign entities and the national security effects of broadcom's business intentions with regard to qualcomm, i think

we did have that for people. they said there are some things that are classified and others that we can only tell you about very little unclassified and that was it. broadcom's relationships with third -- thank you, third party to the extent some of the potential national security concerns can be described in an unclassified matters, relates to the risk soeshassociated with fg entities and national security effects of business intentions what do they mean? what do our intelligence services have here they are part of the review. what do they know? >> i have no idea. broadcom doesn't necessarily know all it takes for them to sit down and simply say no mnuchin could say yes and mattis could say it's okay. they sit down and say no, it's done by the way, after speaking to many experts in this area, jim, many come back to what you said day one when i talked here, which is namely it is going to be very difficult for broadcom to prevail here in terms of not getting an order saying you cannot do this

>> do you think, david, there is anything that could be more of a peace, meaning that there's a great wave of protectionism coming from the white house and this is part of that basically shutting down china, even symbolic, because boy, this is a lot of anti-china stuff. >> it is part of an overall policy, certainly a focus and continued increase in focus on national security as it relates to intellectual property as it relates to 5g, absolutely. >> wow. >> don't forget -- >> you know, my understanding is it they got a very tough review on bro okayed but it turned around because the president supported hock tan remember the meeting there >> that was a deal from hock tan to bring the business back. >> and many people believe this is going to get turned around and only one man to do it, your nobel prize candidate you were talking about later.

>> it's been muz sed, i'm not saying it's going to happen. it is too complex to be able to make sense of. >> why can't you just tweet it they added a few words. >> that's true >> president might say that's the way to get that nobel thing going. >> we're going to get cramer's mad dash and count down to the opening bell also ahead our exclusive with david cordani ofn the deal of th day. more "squawk on the street squt in just a min

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. six minutes before trading here on a thursday been an interesting week to say the least. we'll talk to david cordani, today's big deal let's get to a mad dash on costco. >> i'm getting tired of it we had walmart and target people hated. dollar tree, people hated it costco, immediately the stock was down four. had they listened to the conference call you would know the comps are very strong. here's the thing, there are people expected a special dividend from tax reform and expected to know -- certainly accelerated buyback but you know what they've done, plowed the money towards getting better value for consumers and wage increases. who are these people that do the right thing by the store and by the workers when it's about the buyback, david

>> right your point is an interesting one, costco has a history of paying workers far more than competitors. >> benefits are the best in the country. >> somehow they still succeed, isn't it amazing >> because they do offer great value it's fun but i think the stocks could be up at the end of the day because there was nothing wrong with what they did. and i actually like jp morgan's title, another nail in the coffin of the bear case. i think that's right costco is doing just fine, thank you. >> you're welcome. any time. >> great expectations. >> we have an opening bell a few minutes away followed by our exclusive interview with cigna's ceo on his company's deal to buy express scripts for $52 billion in cash and stock. i'm april kennedy and i'm an arborist

with pg&e in the sierras. since the onset of the drought, more than 129 million trees have died in california. pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer

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will sign a trade proclamation, tweeted by a meeting at 3:30, cigna agrees to buy xres script and ecb lefrz rates unchanged and kroger, for instance, in line although gross margins down sequentially. >> people feel like kroger is part of this whole price war that's coming. i actually -- obviously have to go through the quarter the actual lease wasn't that bad but this is an industry where the stock had run to 29. people felt it was overdone and the supermarket business is tough with amazon in it. and i don't know if you've been buy whole foods the prices have come down rather dramatically. >> they just expanded delivery to atlanta and another city i can't recall but that's moving along. >> it's happening right now. happening. we'll get the opening bell here and the s&p at the bottom of the screen at the big board today it is u.n. women for peace

association, celebrating international women's day at the nasdaq parity.org committed to closing the gender gap in companies. mcdonald's turning their logo upside down into a w mattel issuing barbies of famous women like amelia earhart. >> mattel, i saw a price cut in hasbro off the toy fair. i think people are underestimated the power of hasbro and how they are experiential like i have four tonight which is experiential. >> hasbro has been trying to buy all sorts of stuff they tried with mattel, didn't happen they tried with lion's gate i think at some point, at least considered it, lion's gate can be difficult didn't happen. why is this guy so anxious to try to do something? >> he wants to take advantage of the problems at toys "r" us and

pick things off, not unlike what express scripts had with they lost anthem. someone picked them off. >> really quickly, jim, dow is up 85. has the buy the dip narrative survived both cohn and tariffs. >> absolutely. more than ever and when it comes to certain industries, tech is now 26% of the s&p and that is the industry people buy in weakness and it worked spectacularly. >> let's get to our story of the morning. you already kind of referenced it, sitting at the end of the desk here. >> i'm a teaser. >> it's the deal of the morning and perhaps of the week, maybe of the month cigna announcing a deal to acquire the largest farm she benefits manager, you do see the overall value is coming down as cigna stock is declining let's speak with david cordani at post nine, a frequent guest

quarter to quarter very happy to have you on this news making day, david. >> one would expect that since your deal with anthem fell apart sometime back, that so many different people in your broader health care industry have been trying to figure out what to do. that you would have had a lot of different things to think about, whether as a buyer or seller why is this the transaction that is best for your shareholders? >> appreciate the way you framed it the important part, we had a lot of choices, choices are enabled by a couple of things. first, the base core operations of the franchise are working quite well we grew our top line double digit last year and bottom line 25% last year. and we're stepping into 2018 again growing high single digit topline and bottom line eps mid teens. so base strength to for growth platforms gives us strategic optionalty we evaluated the marketplace and we couldn't be more excited about the move we took to further accelerate strategy, improving affordability and personalization for customers and clients and driving more

choice, greater alignment with the health care professionals and more value for everybody we took our time and had choices and we're expected about what we pursued. >> you're talking about expected annual revenue growth between 6 to 8% from '17 until 2021. what gives the confidence you can achieve those pretty significant numbers? >> first, the foundation again, if you look at cigna over the last eight years, we delivered on all revenue growth expectations, high single digit over an elongated period of time driven by stong retention of client and customers and expanding relationships further and then adding new business relationships. express scripts has outstanding client retention results and as we bring the two together, we're going to stand up an additional services vertical built off of both capabilities for employers and health plans and governmental agencies. so strong foundation, proven track record of retention because we deliver and new in

growth chassis. >> i need to know in those discussions did it ever come up, bezos ever come, dimon, ever come up warren buffett, that maybe it's the right time to do something to get together because this could be a threat to your own business >> yeah, we see more as an opportunity. so as the narrative comes out with the filing of the proxy, et cetera, you'll see the conversation started sometime ago, think back in the fourth quarter. our view is that the current marketplace is not sustainable the market demands more affordability and more personalization and more value and whether it's the look of the new jv between the three organizations you identified or clients and customers wanting more value, we will be well positioned to franchise today delivered the best medical cost in the industry in 2017. half of the industry average and express scripts delivered a medical cost for their customers and clients that was industry leading. we see that move with amazon, jp morgan and berkshire as creating

an opportunity to be the service provider of choice for whether it's that joint venture or clients or health plans or governmental agencies going forward. >> but in terms of that jv, i think viewers keep hearing about this sort of nondescript threat that it could bring to the industry but it's ill defined. i wonder if you've defined it, if you know or have an opinion what they are capable of and if deals like this one or an attempt to head that off >> sure, i think we have to wait and see what they are going to stand up we know the organizations as you might expect have had conversations multiple with the leadership of the organizations and teams there. we serve part of those organizations and proudly serve part of those organizations but i think it's symbolic with in that case three respected global leaders saying we could do better we need to do better our employees in society deserves better. this combination accelerates our movement to deliver more value that's the basic thing we want to drive change. we're not trying to protect an insurance franchise. we've been driving service expansion and it's about keeping

people healthy and improving clinical quality forwhen peopl consume care and as a result helping employers have healthy, productive present employees and therefore healthier businesses that's what we do every day. we see that as an opportunity. >> you've been down the consolidation road before. i referenced anthem earlier, that was many years ago, it was a very long review during the period of time you were dealing with that, i would term it there was something of a culture clash. let's at least say you didn't get along particularly well. what gives the confidence that this time it's going to be different with express scripts. >> everybody has opportunity to learn, number one. we talk about as a corporation being a learning organization. every person in the company we learn from yesterday get a little bit better tomorrow personally and professionally. we spend a lot of time making sure the culture is aligned. as we step back and look at the cultures two service based companies and neither company is entrenched in insurance. secondly, very customer focused. they'll talk about patience of

customers and we had nps scores and most people can't do that. we know our nps scores and manage them globally and have for over seven years they understand the customer they understand partner being. they are oriented around transparency and commercially oriented also we're quite community oriented and to reinforce that as part of this announcement, we're putting another $200 million into the foundation for health and social services so we spent time to make sure we understood the cultures. we're going to spend time putting the companies together and build on the strength of both companies we couldn't be more excited about this. >> cvs/aetna may be reviewed in parallel, that happened with anthem and cigna and humana/aetna, both of which turned down. do you have any concerns it wouldn't appear to be a deal that would give antitrust regulators any concern about who knows? >> we understand the importance of that and we look forward to engaging with regulators, state and federal immediately upon

this announcement. >> did you get any feedback -- sometimes people sort of preview something. was there any of that? >> didn't go through a formal preview. this was kept quite quiet. we're highly confident in the review, there's demin mus overlap when you look at traditional services and programs we're xmcommitted to transparen and solutions. we're quite confident we'll get the regulatory approval and seek the close of transaction by the end of 2018. >> the accretion here, it is incredible after the spat that -- more than a spat but litigation with anthem, these guys came with just a massive, massive cost cut program are you just not taking advantage of the fact that they are about to kick in and that the accretion comes because express scripts was just a banshee about cutting costs after the anthem deal? >> let's step back and frame the accretion story. there's a social story and consumer story and employer

story. there's a shareholder story. the shareholder story, year one financially akreetive, double digit, teens accretion in year one. that's even excluding the transitioning client if you add the transitioning client on the books in 2019, there's quan tum accretion secondly it's sustainable and i think third very importantly, we've been very clear. the financial synergies we're counting on from a shareholder standpoint, the medical cost and further pharmacy cost flow to customers largely, we're committed to transparency and improving affordability. it's compelling story because we're creating value for clients and customers will flow step function improve to clients and customers and new clients and customers and have an outstanding return for shareholders lastly, we'll take the company's leverage up to 49% and we will

deleverage back to our strategic range in the 30s in 18 to 24 months all while still leaving capital available for deployment during the 18 to 24 months for further bolt on acquisition to share repurchase. >> does a deal of this size preclude you from other deals of comparable size or partnerships like we've seen in past few months >> i would say deals of comparable size we would not pursue a deal of comparable size we've created capital flexibility for that purpose but we're focused on this. i appreciate the way you asked in terms of partnership. we're a partnership oriented company and joint ventures around the woshrld where we sere customers and clients in china and india and and we have 500 collaborative accountable care relationships in the united states with physician groups and hospitals and some of them approach joint venture configurations and some may lapse into venture configurations, we love to partner and get the best to deliver value for customers and clients and over dependency of this imposed. you should see more

partnerships amass with like minded organizations to create value for customers and clients. >> you're making the case as to why this is a benefit to shareholder as don't seem to be listening this morning is that a concern at all for you at this point, the reaction early on to this deal? >> not focused on today's trading. we think this is a high value accretion for shareholders, two different companies and shareholder profiles there's overlap, expect some relocation of dollars where companies would bought cigna for the value proposition might seek to take money off the table. i would note over the last six to seven years we delivered about 35% tsr kager, not for a year, the last six to seven years, 35% -- >> that's a big number. >> what our shareholders do know, we have a track record of delivering on promises and top line promises and bottom line promises because we have a track record of delivering on our customer and client partner promises. >> when you hear tough talk from

scott gottlieb or out of hhs among the industry, what do you think they have in mind? >> we look forward to engaging directly in those conversations. i don't want to interject indirect indirectly if i step back, whether it's federal regulators or state regulators or employers or new joint ventures and amazon, everybody is looking for more value. everybody is looking for more value, more personalization, what works for an individual and more transparency. that's what we want as well. so you'll see continued drive and we do so in partnership with our health care professional partner, we're open architected and don't sell proprietary technology and not an ownership based model. we embrace digital capabilities, 85% of the cigna's business to date in the commercial pace is aso or self-funded it's built on transparency it's built on alignment. i think it's reinforcing that everybody recognizes we're not sustainable today as a society we need to improve health and

improve affordability and drive it rapidly. >> as far as you know, have you or other leaders of health care companies had an extended conversation with buffett or bezos or dimon >> i can speak to me personally. i spoke to at least two of those three individuals over the recent past live >> about >> their aspirations and ours. >> you think you do understand it maybe >> we're a learning organization we're a very customer and commercially oriented organization and we want to drive change for the betterment of customers and clients with our health care partners and ultimately for the benefit of our employer clients and we view that our job is to make sure our employer clients businesses better you do it by having healthy, productive, present employees in an affordable predictable way. you've got to engage with them and the best way you do it aalign with the employer, we have ongoing conversations. >> but are you a community organization when cigna left philadelphia, you decimated philadelphia

it was one of the biggest employers, lots of people worked for cigna. express scripts is st. louis, another town hurting for really hurting for big companies. is that it for st. louis is that what you're going to do? is that company moving to connecticut? >> first, thanks for addressing that topic we have over 1,000 co-workers in philadelphia proper today. we have about 6,000 colleagues that work in pennsylvania proper today. if you look at our recent track record, let's talk about the past in the last decade, two large acquisitions in the united states, not of this scale, one denver based and one nashville based. today the employee population in denver is greater than the date of the acquisition today the employee population in nashville is greater than the population when we started we have a track record of securing growth platforms and building on those. this service based business will be driven out of st. louis i will personally be in st. louis tonight. i will not let the first day eclipse without spending time with the leadership in st. louis face to face and we will make a significant

commitment to that community and the other communities that legacy express script serves in, including our employment commitment we want to grow the business growth creates more opportunity. we understand that community responsibility and lastly as i referenced before, both symbolic and substantive. $200 million commitment to a foundation, that goes to community health and community social programs and will be directed as always has to communities we're deepest in and we understand the communities that legacy express scripts is deepest in starting with st. louis. >> finally, given the stock price moved down, there are people who say the value of the retained synergies here is noticeably below the premium you're paying. and that there's an out sized reliance on unquantified platform synergies how would you respond to those >> really important point. let's break it down very simply. the accretion numbers we talked about are based upon see, feel,

touch, know the synergies with diligence. all of the medical cost synergies flow to employers and clients. people don't make position statements like that we do. >> growth synergies are not in the numbers. let's be really clear. the growth synergies that are potential for this business rl not in the accretion numbers we've talked about what we promised our shareholders are based upon the baseline operations of the companies and the expense incertificate i insufficienti synergies and generate accretion. second the rapid deleveraging, massively reducing debt service cost over 18 to 24-month period of time. all of the medical and pharmacy synergies go to clients and customers and growth synergies are not in the projected numbers we indicated when we put it all together, we increased the outlook for 2021 to $18 per share from $16 a share. we just took it up again to 20 to $21 that doesn't depend upon

additional new business model growth synergies, that's all to come we like to overdeliver relative to promises. >> we appreciate you being with us today. >> thanks for the time. >> ceo much cigna. you'll see him again on march 28th, cnbc will host our first ever health care conference, healthy returns and we'll feature ceoz and investors including mr. cordani, check it out for tickets and information. reflections on that, jim >> look, i think this is -- these companies have to combine. they have to combine they are so competitive. it's one after another after another. and i think the fact that it's akreetive and the stock is down, i think it's a buy it's too accretive -- >> over the last serve years >> long period of time. >> their costs, mlr so to speak

has been vastly superior i would buy cigna right here it seems that this is the discount that you want to just come into. >> i got you down for 17 176. >> put me down. >> take the top off. >> i think cigna is a buy right here there we go. i'm saying it. >> that was good, good time with him. when we come back, the president's game plan for energy independence, we're going to talk to energy secretary rick perry. as you see some gains here at the open dow is up 100. we're back in a minute whoooo. when it comes to travel, i sweat the details. late checkout...

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let's get to jim and stop trading. >> earlier, i said there were some people close to the white house saying the president wanted the nobel for disarming north korea. >> when that happens >> i'm going three for three

in "vanity fair" will apple buy snap tim cook, they're like minded. augmented reality. i think that's not going to happen, along with the nobel and amazon to buy wayfair, speculated by luke capital i'm going three for three. >> three for three with things that aren't going to happen. i want to make sure i understood >> things that are not going to happen >> that's a good list. i like that. >> that's stop trading all right. what's on "mad" tonight? >> sometimes stone matters, okay martin mar martin marietta. i like that company. then thor. stock was up big seems to be wavering we're going to ask about millennials. they love -- they love their trailers >> they do >> they love them. and don't forget the airstream tree house hotel the next is an airstream hotel

aluminum assembly, everything. this story has everything. you might even want to tune in for the first time ever. >> that's not true i watch. >> i know they source domestically >> yes, but it's assembly. there's so much to talk about. i can't wait for the show. i can't wait for the show. >> the show at 6:00. >> mr. nobel first time it's been mentioned on air >> first time. >> according to twitter, it's a fresh point of view. >> nobody's ever said that before >> i would say it's an original but a sourced -- >> plowing new ground. >> it's also about pressuring china into disarming north korea. then the nobel faster than president obama got one. there you go >> i don't know who you're talking to, but they must be very interesting people. >> we'll see what happens this afternoon. tonight "mad money" 6:00 p.m. eastern. we're going to talk tariffs and the weather with the former ceo of continental and american airlines meanwhile, dow is up 1 ba ia nu13

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good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla with melissa lee and david faber. bit of a mixed market today. dow is hanging on to an 80-point gain a lot of news. waiting to see if the president will sign a trade proclamation this afternoon some m&a and health care road map begins with the markets moving higher amid hopes the u.s. will exempt canada and mexico from proposed tariffs we'll bring you up to speed on the latest >> and we have a big deal. health insurer cigna is buying express scripts in a cash and stock deal valued at $52 billion. what cigna's ceo told us about the deal and a lot more. >> and it's international women's day. we will speak with the ceo of williams sonoma about her experience as a female ceo, her initiatives on gender equality, and much more. first, we start with the markets. stocks are up as investors await an announcement from president trump involving steel and

aluminum tariffs >> after the tax reform came out, we talked about $50 billion in investment here in the u.s. all those investments were facilitated or enhanced by the deregulation and lowering of the tax rate i think some very positive steps by the administration to make our businesses more competitive. i think the talk of the tariff was -- it's still yet to be defined, actually takes us back the opposite direction and makes investments less competitive >> for more on the tariffs and their impacts on the markets, let's bring in erin gibbs, portfolio manager, and gina sanchez, ceo ladies, good to see you. gina, i'll start it off with you. sounds like -- seems like there are a lot of inflationary pressures stacking up for this economy. potentially three to four rate hikes to come.

potentially tariffs. how do you see the risk to the market >> the element of tariffs could create inflation and the kind of inflation that isn't actually that great if you look at wages and wage growth, in 2008 when we started into the meltdown, wage growth was at about 3.5%. it went all the way down, and now it has come back up from 1.5% to only 2.5%. we're still very low in terms of wage growth. however, if we see tariffs, we could see a lot of inflation that would force the fed to hike, but into an environment that isn't that stable it could be very destabilizing >> tomorrow is going to be key then in terms of the jobs report and whether or not we get any further inklings of wage growth. the economists out there come out and they're very worried about the impact of tariffs.

stock pickers say, eh, not so much of a big impact, let's keep buying >> i would disagree with the stock pickers. i'm definitely concerned the fact that we're trying to protect an industry that is less than one-third of 1% of the s&p 500 and potentially harming up to one-third of different industries with higher exports as well as those industries that rely on aluminum and steel imports. the auto industry is twice as big as the steel industry, just to give an example in the market so i think those impacts could be much greater, and i wouldn't poo-poo the tariffs just yet certainly with wage growth, absolutely we're always looking at how hawkish the fed is going to look, and that's important on interest rates, more sort of adding short-term volatility, not so much long-term. we still have an idea in the general trend of where things are going. >> gina, kkr has a piece out today where they say they're getting more constructive on

europe and asia relative to the u.s. maybe because of inflation on tariffs, but more pointedly, fiscal policies, regulatory policies that will lead the fed eventually to be more aggressive than they even would like to be. you go along with that >> well, the fed is certainly ahead of the cycle for both the ecb and asia no question. but interestingly, the fascinating point of that is that european growth, economic growth, has probably peaked. we'll look back and say 2017 was probably the peak of economic growth, and we're starting into sort of a slowing cycle. asia has been slowing for some time i find it fascinating that kkr is focused over there. the u.s. will probably extend because of tax incentives, extend our economic peak into 2018 and possibly the beginning of 2019.

so we actually are going to have slightly better growth in the u.s., although i think this tariff and protectionism element will make the rest of the world more attractive. >> so erin, how do you layer in the impact of tariffs around the world with where you're looking to invest? >> so one thing is that the small caps are a little more insulated from this. this is really more of a large cap global company impact. small caps have been trailing large caps for most of the year. so this is actually something we could actually see more potential positive numbers and a shift towards there. another, we like europe, just more because of a valuation perspective. though, the growth isn't quite as impressive as the u.s they're not trading at such high premiums this is another reason why we also like developed international markets over the u.s. so we think there's sort of two prongs of how to trade this. >> all right we're going to leave it there.

erin and gina, great to see you. thank you. all right. a large and important deal to tell you about this morning. cigna announces a deal to acquire the nation's largest pharmacy benefits manager, express scripts. the deal price was $52 billion in cash and stock, at least before cigna stock opened this morning. it was a 31% premium to yesterday's close on express scripts. and the two companies, of course, talking about accretion right away cigna had been focused on an $18 a share 2021 earnings number and now says it will add between $2 to $3 a share additionally as a result of the express scripts deal of course, this deal, in addition to aetna's pending purchase of cvs, are two of the latest moves in the broader health care arena. as people may remember, aetna itself was once an acquirer of

cigna. those horizontal deals got turned down by the department of justice. we did speak with cigna ceo david cordani earlier on the show he went into some specifics about the expected synergies, particularly in light of the fact that right now at least they don't seem to be getting much credit from the stock market >> acessicretion numbers we tal about are based upon see, feel, touch, know, expense and administrative synergies all the medical cost and pharmacy synergies flow to employers and clients. people don't make position statements like that, we do. growth synergies are not in our numbers. let's be really clear. the growth synergies that are potential for this business are not in the accretion numbers we've talked about what we promised to our shareholders are based upon the baseline operations of the companies, the expense synergies we know we'll secure responsibly over a four-year period of time

and generate the accretion secondly, the rapid deleveraging massively reduces debt service costs over an 18 to 24-month period of time all the medical and pharmacy synergies go to customers. >> as i mentioned earlier, of course, mr. cordani not a stranger of consolidation. i did ask him why and whether he's confident this deal will receive anti-trust approval. >> we look forward to engaging with regulators, state and federal, immediately upon this announcement >> did you get any feedback? sometimes people sort of preview something. was there any of that? >> we didn't go through a formal preview. this has been kept quiet we're highly confident this gets regulatory approval. there's minimus overlap when you look at the franchises based on traditional services and programs we're committed to transparency and open architected solutions

so we're quite confident we'll get the regulatory approval and seek to close the transaction by the end of 2018. >> of course, you guys may remember anthem and cigna kind of broke out into open warfare between the once merger partners i think they're still involved in litigation about the breakup fee. melissa, he did sort of assure people that they learned the lesson there and feel the cultural fit between these two companies is much more appropriate. >> it was long view cigna had to do something after the anthem deal fell through. just a month ago we were talking to david shortly after the berkshire hathaway, amazon deal. that's why cigna had traded down so sharply you have to wonder with the growth synergies how much of a push/pull this will be, how much they'll be able to boost thei n margins. on the other hand, have the margins pressured by potential venture where people have blue

sky expectations >> you asked him about it a number of times, carl. he indicated there had been conversations between cigna and at least two -- >> at least two of the three in the recent past, he said and we also asked him about scott gottlieb and the regulatory pressure that has them in this vice from the government and would-be competitors. pretty fascinating >> express scripts itself also facing what we all know is coming, which is in 2020 the end of its relationship with anthem which to your point would conceivably pressure margins over time. one reason why they may want to do this deal now. >> cigna shares down by 9% when we come back, it is international women's day. the ceo of williams-sonoma is with us. what she has to say about her experience as a female ceo and later, two airline industry heavy hitters will join us their takes on tariffs, steel, the impact of storms on the industry and more.

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joining us exclusively is williams-sonoma ceo. it's great to have you back on the program. good morning to you. >> good morning to you >> we said less than 10% -- actually, the number is 6.4, which is -- it's kind of stunning i wonder whether you think whether it's a day like today, what is going to get that number higher over time >> companies need to hire more women, and they need to make that commitment today. we're so lucky at william williams-sonoma. we're 50% on our board women >> does it feel to you like your experience is solitary somehow, isolated, relative to other ceo jobs does this have an effect in the way the culture or policy is implemented in the company >> yeah, i mean, we are so focused on our culture and our values we have worked very hard to build an environment where people are judged by their performance, not by their gender, not by their skin color,

not by their sexual orientation. it allows people to be their best self at work and to achieve great heights without having to deal with bias every day >> half of the board is women, right? that's double the national average. so -- but if your screen is essentially a meritocracy, as you say, i assume your sample of potential directors is just wider than other companies >> we've been so fortunate to find great people to be part of our company, both on our board and working for us in our stores and around the globe in manufacturing. you know, it's funny, you only know what you know, but we see that people are able to really excel because of the environment that allows them to be innovative and to speak up

and you know, we've just really enjoyed a wonderful experience at williams-sonoma >> what sort of pipeline, laura? you mentioned the representation of women in the ranks. is there a pipeline to make sure -- it seems like there's a disconnect often between the women in the ranks and the pipeline to the ceo job, to the suite. how do you make sure there is a pipeline, a path from there to the suite? >> you know, it starts with all the people that we attract, both from our internship programs and throughout the company and our stores most retailers have a lot of gender parody in the ranks, but it's really hard to breakthrough that vp level. so the most important thing i think is that people can see role models in those big jobs. they see all types of different types of women who have been successful, women who have families, women who don't, women who are straight, women who are not straight, and the reality is that if you can see yourself in

the leaders, it helps you strive for more, it helps you be bold and brave about seeking that next job title and going for that performance that will get you that job title >> williams-sonoma has brands that i'm guessing have a high percentage of female consumers, right? williams-sonoma, pottery barn, west elm i wonder you think the female leadership, the component we're talking about, has an impact on consumer demand for the brand's products and if it does how you manage to transfer that to companies that are in the steel business and other industries that may not be as -- not have such a high cob s -- concentration of female consumers? >> yeah, let's remember that customers are diverse. management needs to represent the customer base. those diverse perspectives that we have in our company allow us to see opportunities that other

companies might not see. we're very comfortable talking about a wide range of subjects and looking at the nuance of what makes a person buy based on our own experiences. >> what's a good example of that is there an sku you think has been -- >> yeah, i think a good example is, you know, our very large home furnishings business for children we were the first that brought, you know, kids home furnishings in a tasteful way, in a quality way into the home. that was because many of us were pregnant at the time it was real for us we understood that nuance and built that business over time, bringing in pottery barn teen and working on, you know, different brand extensions, baby gear, and that's one where, you know, it's just so obvious when you're in that group it's just one example. >> finally, i know you're in a quiet period, and you can't discuss company specific financials is there anything you can give us in terms of color on the consumer we're coming off pretty good holiday season, retailers have had a good few months at least

from our perspective, talking stocks on this network anything on that >> you know, we're going to talk about that a lot next wednesday. i'd love to talk about that, so stay tuned but today i'm just so honored to talk about international women's day. we don't get much of a chance to talk about this very important subject, and i really believe it's one of the greatest injustices of our time that we don't have gender parity that what i'd prefer to talk about today. >> well, it's a good time to be around in business to see this change happen. the point is to make sure it doesn't happen just on one holiday, once a year, then we forget about it. let's try to keep that conversation going we hope you'll come back >> appreciate it >> ceo of williams-sonoma. thank you. >> thank you speaking of women in the workplace, a new study is out looking at possible gender biases held by activist investors. leslie picker joins us with the findings they're kind of shocking >> they are shocking indeed, melissa.

women are, of course, making strides in corporate america but still represent a paltry proportion of the suite. 5.2% of s&p ceos are women they make up almost 45% of total employees. while the proportion of ceos has doubled over the last decade or so, turnover is high on average, women spend a little more than four years as ceo in 2017 that compares with .4 years fo men, almost double the ten year. and a key hurdle for women appears to be activist investors. these are hedge funds that take stakes in companies and agitate for change that new study you referenced found out that women ceos were about 50% more likely to be targeted by activists. the researchers controlled for variables like size, profitability, leverage, and competition. so activists tend to single out women-led companies, even if they're performing just as well as those run by men.

this adds to previous research which finds that women tend to take on ceo roles during periods of crisis when the chance of failure is highest this is known as the glass cliff. that attracts activist investors who tend to target companies they believe are undervalued and underperforming. and analysis by cnbc found almost a quarter of women who ascended to the ceo role at a fortune 500 company over the last five years has been publicly started by an activist. think of names like marissa mayer at yahoo!. of course, the more public the criticism is against women ceos, the worst it bodes for the rest of their female peers as well as the pipeline, guys >> leslie, what i think we need is a very strong activist firm run by women, right? >> well, that's exactly -- >> we don't have any of thos either, do we? >> there's one one activist firm run by a

woman, out of you know, an industry that has hundreds of activist firms out there i think that's something she's keenly focused on. but to your point, it's something where i don't think these are overt biases i don't think activists are sitting in a room saying which woman ceo can we get off the suite at this point in time. it's something that they're not, you know, these ceos may not look like them, may not act like them so it presents more of an opportunity to target them in that way >> you're right. i've never heard -- dealing with activism for a long time never heard anyone say, we're just targeting women at the same time, it has been an issue. it's interesting to hear you point it out those numbers are actually kind of astounding. >> i agree thank you. >> good angle. thank you, leslie. when we come back this morning, a busy day at the white house. the president may or may not sign a formal order on tariffs a big meeting coming up with video game executives on

violence and a cabinet meeting in just about an hour for that we'll take you there live for the latest a look at stocks this hour a little bit of a chop but d ldg tan 80-point gain we'll be back after a short break. that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow. a few years ago, me and my wife was actually saving for a house. but one day we're sitting there and we decided that, something needed to be done about what was going on in our inner-city. instead of buying a house, we decided to form this youth league. these kids mean everything to me and i just want to make sure i give something positive to do. ♪ ♪ wow, that's amazing. that's a blessing right there.

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president trump set for a meeting about steel and aluminum tariffs. it's unclear exactly what will come of that meeting kayla has had some good color on this from the get go and joins us today from the white house. morning, kayla >> reporter: morning, carl white house officials are hoping they'll have more details in the next couple hours on exactly what will take place at the white house this afternoon when the president convenes with rank and file workers from steel and aluminum companies staff on capitol hill who had been briefed by the white house were told yesterday to expect between 3:00 and 4:00 p.m. today a formal signsing of the tariffs that the president announced last week. then as of this morning, they were told that would be moved to friday as some paperwork got finished that was before the president tweeted publicly acknowledging the meeting and saying that he was looking forward to it and saying we have to protect and build our steel and aluminum industries while showing great

flexibility and cooperation toward our real friends. i'm told one of the hang-ups here is the possible consideration of a 30-day exemption for canada and mexico. that may seem like an olive branch it's an extremely short period of time, and the expiration of that would come right around the time that washington is set to host the next round of nafta talks, which of course the president has sought to illicit some concessions from canada and mexico in order to exempt them from this. certainly at the cabinet meeting here at the white house that's happening later this afternoon, these tariffs are bound to come up the secretary of defense, james mattis, and his secretary of state, rex tillerson, have both been asking the president to put exemptions in place for certain alli allies like canada, like mexico, and like our allies in europe so we can continue to count on them and not disrupt any supply chains

certainly we will see what happens after that meeting, whether the president decides to announce those tariffs or reference them at that cabinet meeting or at the meeting this afternoon at the white house in the meantime, there has since been a letter from capitol hill from 107 house republicans to the white house where they don't mention country exemptions, but they lay out a list of recommendations that they have for these tariffs. among them, they want a robust exclusion process for companies that do business and that get specialized steel that they can't get from the united states' producers. they also want contracts that already exist to be grandfathered in while they lay out these recommendations, they say ultimately they don't support the tariffs. they think they would undermine the progress of tax cuts, but at this point, i think the assumption from republicans is that the president has made up their mind and the best they can do at this point is try to influence the fine print and we'll see where that shakes out later today, guys. >> all right kayla, thanks for the rundown of this developing story here out

of washington. now for our etf spotlight, where mike santoli is taking a look at etfs highlighting underlying strength in the market >> this is some segments of the market that usually correlate with more risk taking or acceptance of risks by investors. the overall market as we know has been kind of caught in the neutral zone roughly in the middle of this range we've been in for five or six weeks. the s&p 500 came in with nearly 5% below those highs of january. but here are some segments of the market prok sxied by these etfs, including the small caps we've been pointing that out in recent days. from this whole period, the iwm, the russell 200 0 etf is down coming into today about 2.5% off its highs. slightly weaker today. in general, it is held up better, come back better object -- on the up days we've had microcaps, there's an etf that tracks even smaller stocks iwc is the symbol there. it's only about 1.5% off its

highs. you can go through this list of other kind of parts of the market like the high beta stocks these are stocks that tend to move more than the overall index. also correlates with essentially risk appetites and banks as well all these things really not saying, hey, we're out of the woods, it's off to the races, but that there's not so much a real safety instinct going on here and the market is kind of gathering up a little bit of strength it may be ultimately it resolves higher >> what's your take on russell and microcaps? seems like they're benefitting greatly from this notion of a trade war. >> yes, they are there's no doubt about it. there's been this rotation into domestic stuff i have to say, there's been a lot of head fakes in that area the last couple years, the very simple logic said, oh, tax cut beneficiaries. yet, amazon goes up every day. >> and a new high today. >> exactly i don't necessarily think this is the leadership that is going to lead you out, but what it is telling you is that the money is not moving to safety in a big

wholesale way. so maybe that means a net positive, even if we are stuck in this area for a while and do have to check out if those lows are still good >> mike, thank you mike santoli with the etf spotlight. now over to scott wapner with the cnbc news update at this hour >> here's your cnbc news update this hour. the northeast digging out from its second nor'easter in less than a week. some areas in new jersey, connecticut, and massachusetts receiving more than two feet of snow hundreds of thousands are without power, including thousands who are still without power from the first storm secretary of state rex tillerson holding a news conference in ethiopia, expressing support for the african union's efforts towards economic integration >> i'm really pleased to be here in the continent, and i express to the chairperson and his colleagues that it was appropriate that i begin my visit to africa here with the african union leaders as well to further our partnership with the

african union. today is international women's day. businesses are celebrating the mcdonald's arches were turned upside down at a franchise in lynnwood, california the logo will be changed on all of the company's social media channels, commemorating the day with its call for gender parity. that is our cnbc news update this hour. guys, back to you. >> okay. thank you, scott scott wapner when we come back, a massive winter storm that you just heard scott talking about is hammering the east coast, or did tens of thousands of flights were canceled. two former airline executives are going to join us to talk about the impact of the storm on the industry and trade and a lot more tetht"s ck the stree iba afr is

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moderate gains dow is up 41 s&p up about 3 as we continue to watch a number of stories involving trade. m&a and the health care space, even central banks as the ecb leaves rates unchanged today airlines are cancelling over 2700 nigflights yesterday due to the inclement weather and storm conditions for more on the impact, let's bring in two of our favorite former our line chiefs gordon bethune joins us from houston. bob crandall joins us on the phone. i don't know if we've ever had you two on the show at the same time welcome, guys. >> thank you much, david >> hi, bob nice to hear from you. >> hello, gordon >> bob, i want to start with you. in terms of white house policy, you've been critical on some areas, supportive on others, like privatization what do you think about this trade issue, and is there a chance it could bleed into aviation >> oh, absolutely. it certainly could bleed into

it, and i think there's no doubt at all that free trade -- and i would emphasize fair trade -- benefits everybody in aviation over the years, we've had a gradual evolution to the point where most of the world's aviation is now essentially regulation free under open skies agreements. it's very interesting what's going on right now between the uk and the eu. unless they cut a new deal, everything flying between the uk and the eu won't be able to fly next march, at which time the brexit effective break will occur, and there won't be an aviation agreement between the eu and uk. that could be very serious it needs to get fixed. so this whole notion of looking at trade as a bad thing rather than a good thing is a major

mistake. >> so gordon, can you walk us through how you see the impacts, specifically to the airlines i mean, for instance, in recent days, boeing has been -- has shown some weakness in the markets on this notion that, you know, it could have to pay more, et cetera, for their input costs. that could certainly impact the airlines then there's this notion that if trade is more curtailed, there could be less demand for flights. how do you sort of break the impact down? >> i think, melissa, those are all good facts the extent of what that occurs just depends on how acrimonious things become. i suspect boeing will continue its dominance in the field, but the eu and airbus itself are already undergoing some change so it's hard to tell you how many ways this is going to manifest itself. you pointed out two good areas as bob say, it could cut across a wider swath. >> hey, bob. our friend jim cramer has said boeing is a stock to watch in terms of this whole issue

because we know how much they have to offer to china we know how much china wants the planes we know how tight delivery schedules are. in jim's words, they're not going to cut off their nose to spite their face if they give up a place in line for some of these deliveries, plenty of other buyers are going to be happy to step right in and take that order. is that true you go along with that >> generally true. at the moment what's going on in the world, generally speaking, most of the world's economies are working well generally speaking, we're seeing growth there has been consistent growth in aviation. over time, as people get richer, the one thing they want more of once they've got food and shelter and automobiles, they want to travel and the consequences, people have been traveling, therefore there's been big demand for boeing's airplanes if somebody sticks a spanner in the wheel, whether it's us or whether it's others, if somebody

makes a mistake and decides we're going to slow down the world's economies by inhibiting trade, and i'm afraid that's what these early moves in that directi direction, then that demand for travel will dry up if the world's population gets poorer once again, more trade drives more wealth, drives more travel, sells more airplanes on the whole, i think we'd be way better off to try and correct individual discrepancies in our trade agreements rather than taking the attitude that trade is bad >> gordon f you're in the suite right now, would a fear of yours be perhaps that retaliation could also encompass limitations to access to various routes or routes being taken away? >> well, things are changing, melissa. quite frankly, this convenience of ireland using the eu to

access markets is an exception to an agreement, atruce. so it could go into open warfare. i just hate to see an erosion of the kind of stability that's been built up here in the last few years in the united states with companies not going bankrupt and getting people laid off in a normal life i kind of fear for that because it is at risk. >> certainly we'll see if it gets more serious for the industry as we know, times have been better than a lot of critics ever thought it could be bob and gordon, thanks, guys talk to you soon. >> thank you thanks, david. >> all right let's get to bob on the floor. we're pretty much at session lows interesting action because we have yields under pressure today. we also have stocks under pressure as well, at least right now. >> that's right. the yields are affecting the

banks. look at the s&p. we're higher than we were yesterday and still moving on tariffs. we're 15 points high, even flat, from where we were yesterday we heard about the possibility of exemptions in the tariffs here we've kind of flipped around we were positive on the cyclicals early on industries were strong in tech we flipped around a little bit consumer staples, for example, started moving up. we got a little more defensive if you look at the market. banks, ten-year yield has moved essentially straight down since the open that's affecting banks you see the decline there, about 1.4% in the bank sectors here. traders still very focused on this whole tariff issue and how a trade war might hurt growth. there was a lot of analyst commentary floating around here. before that, i want to note the techs are at new highs, a whole bunch of them. back to this growth story and the tariff issue, a lot of analyst commentary in the last 24 hours goldman sachs is one of them they had a report out, a 10%

increase in the average tariff across the board, you have an 0.6% drop in gdp these are the kind of comments floating around as people try to figure out what would happen if we had a trade war earnings are going to be lowered, and the rally will stall. that's the problem if you look at peak earnings, there are people arguing this kind of thing will affect this the reason the markets held up is this is the kind of earnings growth we're looking at for this year these are phenomenal numbers, huge and that's why the market keeps staying up if you start lowering them because we're going to have trade wars, that's going to be a problem for the market that's why it keeps fluttering around these trade war issues. so there's three issues right now very much on traders' minds. growth, wage inflation, and the federal reserve. they want to know are tariffs going to hurt growth in any significant way? number two, this wage inflation. remember, we had january wage growth, 2.9% that was the highest since 2009. we're going to get february tomorrow they're expecting 2.8. anything below that will help. finally, march 21st, the fed,

three or four rate hikes a lot on the plate right now we are up one point in the s&p guys, back to you. >> bob, thank you. when we come back, two of the highest paid athletes in the world, the williams sisters, sitting down with cnbc we'll get their advice for leveling the playing field for female athletes and a lot more you heard bob bring you up to speed on the markets as we have dipped shortly into the red. dow up 20. back in a minute 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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so-called safe sectors are acting anything but. so where should investors hide in a volatile market find out on tradingnation.cnbc.com more "squawk on the street" coming up.

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. let's get to the cme group in chicago, check in with rick and get the santelli exchange. morning, rick. >> good morning, carl. thank you. i'd like to welcome my against andy brenner thanks for joining us this ecb morning. >> rirnck, always a pleasure to see you.

>> without a doubt, if i had to pick the area of mario draghi communications that is most interesting to many on this trading floor, it's dropping the line that they'll promise increased bond buying if needed in the future. your thoughts on that and the entire ecb meeting and press conference this morning. >> rick, the first headlines that came out looked like they might be removing some of their easing bias, but draghi certainly put that aside in his q&a. looks like they're going to be there. they're concerned about the basket case election they had in italy and what's going to happen with italy over the next year and whether italy tries to exit the euro or minimize the euro somehow. they're also concerned about, you know, merkle only won barely, and really it doesn't have a strong coalition. so yeah, they might actually continue to keep more of an easing bias, but i got to tell you, rick, we can see the light at the end of the tunnel the light at the end of the tunnel is the european economy

is fine and they're going to start backing away i would look for higher rates and higher spreads but not today. >> you know, i find it interesting that having listened to you and watched the marketplace, we still couldn't get above 70 basis points in bunds. we couldn't get under minus 50, meaning sold off to the point. minus 51 was the high yield today. i find it fascinating the ranges are so tight, and all things being equal, the bund to ten-year spread is roughly 20 basis points wider than it was at the end of last year. do you see that growing even more, or do you think we're going to be linked at the hip and narrow some of those spread relationships? >> rick, i think it's going to increase dramatically. you have a huge amount of supply coming you know, i mean, you have increase in treasuries, increase in deficits. you've got a fed on the warpath on higher rates. you have less buying from central banks, certainly our central bank you've got a big uptick in

corporate spreads -- excuse me, in corporate issuance. i think that's going to continue all year so i don't see any of those things coming out of europe. i think those spreads are going to go wider. one of the fears that draghi is looking at is no one really understands what the effect of tariffs are going to be on equities, on trade, and hence on interest rates both in europe and in the u.s. so you're probably going to tread slowly and carefully until you get a better idea of whether this is just a head fake by the president as a negotiating style or whether it really is the start of something big and a retaliatory response >> well, i'll tell you, we may know more today. i agree with you markets have taken it remarkably well andy brenner, thank you for your comments this morning. david faber, back to you >> okay. thank you, rick santelli let's send it over now to john fort with a look at what's coming up. >> we have energy secretary rick

perry coming up in houston, texas. a lot toalabt th tk ouwi him that's coming up in "squawk alley. two,that was awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum -- just to help you improve your skills. boom! that's lesson one. education to take your trading to the next level. only with td ameritrade.

it is international women's day. contessa brewer spoke with two women among the top earning

athletes in the world. serena and venus williams. >> i sat down with the top women of tennis for a rare joint interview. the sisters were playing in a new tennis competition at madison square garden called tiebreak tens. it's a sudden death knockout style tournament featuring eight of the world's top women and while venus is fifth among highest paid women athletes and serena takes the top spot, according to forbes, serena ranks 51 among all athletes behind five male tennis players. >> there is a tremendous amount of fighting left there's so much -- so much difference between a woman's pay and a men's pay. and tennis we're lucky that most tournaments, not all, are equal pay. but then there is off the court things from endorsement deals to other stuff. and that's just to be more equal. and so there's a long way to go. but i just feel like we're

getting there. and, you know, like venus said, we need other females supporting it and men advocating for it as well >> when you're talking about going in and knowing your value, do you do your own negotiations ever >> no. we have people that do that for us but thankfully we also have people who know our value and that's important too so you don't have someone working for who you knows your values as a woman and then they can undersell you. >> and what's your advice to women who might not be in a position to hire an agent or hire a representative, hire a lawyer to do the negotiating how do you know what to ask for when you go into a business situation? >> i think it's important, first of all, to have confidence when you go in that room. it can be intimidating when you're doing things for yourself and second of all, you have to fight very hard for what you want you may not get. that but we're fighting for the bigger picture we may not get it today. we want the future to be better

for maybe my daughter or her daughter and so that's what we really are fighting for >> serena had a baby in september. she says having her daughter has given her new insight into the juggle of working moms and the importance of parental leave there was no way she was ready to go back to work after four weeks. she goes back to work tonight. she'll be at indian wells playing in the tournament there. that is one of my favorite tournaments. >> really insightful conversation with them we know the story how the career was launched by the work of a very devoted father who worked hard to make sure they were going to succeed and be seen as contenders on an even playing field. >> they were pushing for equal pay from the tournaments themselves long before they reached this point but it still really notable that venus who is the number five top earning female athlete doesn't make the top 100 earning

athletes on forbes list. and serena who is the top female athlete in the world in terms of pay comes in number 51 it's telling >> contessa, great stuff what what a great day to play it contessa brewer at hq. meantime, we continue to see conflicting reports about whether or not the president signs a trade proclamation at 3:30 p.m. this afternoon he said there would be a meeting. nothing specifically bl about wt they would sign. what he would sign might be a symbolic gesture markets will keep things close to the flat line in the meantime >> the question how it impacts economic growth, take a look at the moves in wti yesterday was down 2%. down by more than 1% right now we're seeing some pressure on yields here. so there could be perhaps some questions about how this will impact the overall economy >> all right we'll remain in suspense when we come back, busy day in washington a cabinet meeting is about to get underway

at 2:00, a video game meeting with executives from that industry gathering at the white house. we have an all time high on activision and we'll talk to rick perry when "squawk alley" starts in a couple of minutes. no matter how the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence. you or joints. something for your heart... but do you take something for your brain. with an ingredient originally found in jellyfish, prevagen is the number one selling brain-health supplement in drug stores nationwide. prevagen. the name to remember.

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good morning it's 8:00 a.m. at amazon headquarters in california and it's 11:00 a.m. on wall street "squawk alley" is live ♪ let's go, girls ♪ come on ♪ i'm goin' out tonight i'm feeling all right ♪ ♪ i'm goin' to let it all hang out ♪ ♪ wanna make some noise need to raise my voice ♪ ♪ yeah i want to scream and shout ♪ happy international women's day. welcome to "squawk alley." i'm carl quintanilla with jon fortt and morgan brennan president trump expected to make announcement on imported aluminum and steel this afternoon. but there are a lot of moving parts. reports say aides frnt