♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the frz dnasdaq market site. our guest host for the hour is steve grasso from stuart frankel, also a cnbc market analyst. great to see you >> good to see you guys. >> let's look at the u.s. ekky f equity futures the dow futures are in the green, so is the nasdaq and s&p. the dow industrials are up about 85 points right now, yesterday sol some of the industrials were pulling things down, boeing was one of them. the nasdaq was strong yesterday,

closed up thanks to not only technology stocks doing well, also amazon, starbucks, those stocks helping things out. let's look at what happened overnight in asia. you can see the nikkei was up by 0.6% hang seng was flat shanghai was down. then if you look at what's happening this morning on the continent, in europe, you'll see things are up across the board biggest gainer of the major averages is the cac in france. then you'll see the treasury market we've been watching the yield on the ten-year closely it looks like the ten-year is yielding 2.881%. yields came down yesterday, not only many major stock averages down but yields down at the same time >> we cover the futures, they're important premarket, but whether they indicate what will happen over the rest of the day -- yesterday it was up triple digits early on and slowly

eroded then down 150 on the dow >> did you see things stabilized on this news that larry kudlow could be going to the white house. that's what art cashin was saying >> it was definitively the kudlow bounce yesterday. the market was dropping in a quick fashion. to joe's point, all of a sudden a bad headline, people look at the relationship between the ten-year and the equity market >> you're not allowed to attribute it to certain individuals. when we had gary cohn, you said we couldn't attribute it to going up and down. >> if it went down 600, you would have because the adult in the room was leaving across the board, any cnbc people considered for a job -- >> stable iilizes things. we will get an important read on inflation at 8:30 eastern time this morning, the latest consumer price index

data and voters in pennsylvania's 18th congressional district heading to the polls to vote in a special election the democratic candidate is leading a district that president trump took by a landslide. get ready for more winter weather. more than 1,000 flights up and down the east coast have been canceled as another winter storm is bearing down here it's the third nor'easter to hit the region this month. it's expected to bring coastal flooding, strong winds and snow. call your airlines before you make it out today. china announcing its biggest regulatory overhaul in years it's combining its banking and insurance regulators and giving new powers to policymaking bodies including the central bank china's government has been seeking more authority to crack down on risky lending practices and to reduce high corporate debt levels. to our story of the morning, it's political, it's business. president trump prohibiting broadcom's proposed buyout of

qualcomm on national security grounds. eamon javers >> it's the committee on foreign investment, otherwise known as sifi sifi blocking that deal. broadcom headquartered in singapore said it would move its headquarters to the united states, there is the ceo of broadcom meeting with the president back in november at that time announcing the headquarters move was coming, saying the environment for business in the united states was terrific, thanks to trump's presidency the president signaled that he was in favor of that move. here's what he said at the time. >> we're thrilled to welcome broadcom limited and its ceo to the white house to announce broadcom limited is moving its head quart headquarters from singapore back

to the united states thank you very much. >> there was not enough to get this deal back on track yesterday. sifious taking those steps yesterday to block this deal there's concern in the white house that, you know, qualcomm ip is so sophisticated and so important to u.s. r & d going forward they do not want that ip getting in the hands of foreign controlled entities. there's a pipeline of technology coming out there that the white house is concerned about the president taking bold and dramatic steps here. this was an aggressive move by sifious, a lot of observers were surprised by it. david faber has been covering this, saying this is something we have not seen before from sifious, moving before the deal was signed to take steps to block the deal or to at least review the deal. very aggressive moves from the u.s. government in light of the

globalization picture. i think you can say this is a new position, new posture by the trump administration on what it is going to do on these foreign deals in the united states >> two questions, and i agree with you, completely unprecedented. the first is this, did the president feel played? if you remember how this went down, he shows up at the white house, says i will move back to the u.s. doesn't explain why he wants to move back to the u.s., which was about this deal and others here in the u.s does that a week later after getting this sort of tacid -- i don't know if it's approval but applause for doing what he's doing. then the criticism that came from so many as a result >> i can't tell you what the president feels about this i can tell you there's concern inside the white house that this deal would be bad for the united states both bad for san diego, where qualcomm is headquartered in terms of employees, that's something that the united states and this administration focuses

on and also bad for national security so a lot of levels to this, a lot of layers to this, and ultimately this is about china this is about concern that china has accessed too much technology, has the ability to undercut too many u.s. leading edge players whether or not the president himself felt played, i don't know i think people in the white house today would argue that the president didn't get played here what do you know about larry kudlow on the nec front? >> it's very, very close feels like it could come at any moment larry kudlow is somebody that you guys were just talking about. he's somebody that the president likes because larry has that long career on television, he is able to go out and sell the free market policies of this white house. he's been in disagreement with the president on tariffs, in particular, but unafraid to voice that disagreement. the president seems to think that bringing in that kind of a

voice would be good for the debate inside the white house. the question is whether or not this deal will get done this morning, today, or in coming days, or whether the president is still looking at one or two other candidates before all is said and done here it feels like larry is very much winning this horse race now, but we're not sure whether there's one lap to go, a quarter lap to go or where we are in the race >> eamon javers, good to see you. for more on the president's order to block the broadcom/qualcomm deal, let's bring in ed lee from recode. great to see you so what do you think about this entire situation we kind of were given a lot of hints along the way this was coming, but now that the news is out. >> we talked earlier about the appearance at the white house, was he getting played. there was a deal that was confirmed two weeks after that meeting which was they bought this u.s. company, brocade systems, a much smaller deal, that also has to do with networking equipment

that deal was approved a few weeks after he showed up >> does this change when and if broadcom officially becomes a u.s. company >> by the rules it should. if you're a itself company it shouldn't go over sifious review and the other thing about this is the framework of why this is a national security issue if it buys qualcomm. the reason is not -- singapore is not china to be clear. >> but there's a real concern that if they actually slash the r & d budget, like they've done, we will not be able to keep up with the chinese building up on 5g >> the concern was not so much it's a foreign entity but the way you would run this business is what they don't like. that's unusual i think it opens the door for all kinds of other reviews, which, if you're in business right now, you're like this is so unpredictable, i don't know how to go forward. >> how does sill con vversteil y

go forward from here >> well, he is known as a cost cutter, the ceo of qualcomm, he is known as a cost cutter. he doesn't like much overhead or fat. doesn't mean they don't want to expand the business itself, but for those jobs -- >> why is it about national security why is it not about wireless is there a way for the government to call it security >> they're arguing the future of our national security, 5g is a part of that qualcomm is a huge part of that, if you start cutting budgets in that -- >> is that a legitimate view >> i don't know. i think it's good to be concerned about that i just think the jurisdiction, the way in which they applied this national security review is bizarre. >> every banker i talked to last

night pulled out this one quote from sifious which says in terms of their concern it is a large part broadcom's relationships with third party foreign entities i assume that means china. if broad kam wecom were moving the united states, they would still have these relationships with these mystery countries >> on the face of it, y they have their party relationships, and they sell stuff to chinese hands handsetmakers. yes, there's a relationship. to be clear, the way they evaluate the national security concern is that they pull back off of 5g investment as we've seen, he is known as a

cost cutter. >> he said we will invest 1$1.5 billion in r & d, not enough >> not enough. it's unusual >> we have watched this march towards a trillion dollars in market capitalization. we have some new added heat to this yesterday with apple. >> there's a pullback after earnings, well, they didn't ship as many i phone xs as people thought, that did not deter investors. so they're 80 billion or less from a trillion? that's astounding. we're living in this world where the system under which we're living, amazon is one system apple is another system under which we live. facebook and google are trying to own that third system >> saudi aramco is off until next year? >> decent chance

>> yeah. i think there's -- it's funny. we're talking about how there's a smechcementing of power undere guise of transparency and we want to make sure we're good an open for business in a lot of ways so when you have a free and fair market system, an apple thriving in this thing -- >> is apple lost they came out with the x, the x was disappointing, now they're coming out with a number of different phones are they still on point? are they doing the right thing they're not innovative anymore i'm a shareholder of apple, i'm not saying it can't increase in stock price, but as far as ingenuity and innovation, are they still there >> you're an investor in apple, you see it as a value buy, not a big growth buy >> i am. that's the problem when i look at this, when there's no one left to buy apple, apple buys apple. they have a tremendous buyback

>> that keeps them away from $1 trillion amazon is 773. are you sure apple won't be first? >> apple, come on -- >> apple was stuck at -- >> to bring it back to thi geopolitical issue, are you curious if apple will get in trouble with the u.s. government they just announced plans to move servers into china, after telling the fbi in the united states a year ago -- >> we will invest in the u.s >> no. about we won open phones after tariffs and taxes because we don't want to do this for any government >> they're doing this for their chinese customers, correct. >> and opening up the encryption keys for their customers in china. >> if you have an iphone in china, the government can have the keys to that there's still upside for apple they have such a huge user base and they're experimenting with

things like tv shows they bought a small digital magazine publisher i think they're seeing on the front recurring revenue. media services revenue >> i know you have to go does apple ever buy netflix or is net tlix trflix too big >> netflix is too big. >> 18th district in pennsylvania >> six months. >> it gets split in november to the 14th and the 17th. the 14th heavily republican. >> that's not what matters what matters in thiselection - >> they both will probably be seeded in the next congress. so saccone and lamb -- >> if lamb is successful, it points to something. >> this guy was a horrible candidate, too >> but -- yes, but we had a series of bad candidates the republicans have run >> what you see trump doing now with tariffs, that scared

democrats politically in areas like this, they would never be able to win any ofthese areas again. >> in most of pennsylvania he would be doing well. >> if lamb comes in and do this -- it's not a knock against trump as much as looking at a new playbook for democrats to run in areas >> the hype we're giving it when it's only until november -- >> the democrats themselveses are says if this works, we'll copy what lamb does. lamb is unbelievable candidate >> very unbelievable i don't believe anything he says coming up, mark vitner says his colleagues oppose the president's tariffs. he does not look like a guy who would be -- lease anhe's an adu. the adult in the room don't like the tariffs. >> look at those suspenders.

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. we'll keep talking about nafta. we don't link together the tariffs and the negotiations for nafta. just highlighting that imposition of tariffs on canada would end up hurting the u.s. almost as much as it would hurt canada >> that was canadian prime

minister justin trudeau yesterday speaking to cnbc yesterday. we are joined now by an economist who is diverging a little from many of his colleagues and speaking out in favor to some extent of some of president trump's tariffs. he is mark vitner. in this case, very specifically, do you think it might not be the wrong thing to do in terms of steel and aluminum >> it's like 100% of the time, 100% of the tariffs are wrong. in this particular case, i think there's more at stake. this is about the industries of the future most people don't think about steel as being an industry of the future this is about who will control the industries of the future it makes no sense that china, which makes up 20% of the world's economy, produces 50% of the world's steel and they use

some of the most antiquated technology in the way, yet they are dumping it or undercutting producers in the united states or other places using the most advanced technologies in the world. >> they don't want to keep old technology because they're trying to bring people in off the farms to the industrial side of thing it's a problem we're to have one of our industries put out of business bypriorities is frustrating. you think this is the right way to do it >> tariffs may not be the one and best instrument to do it, but it's getting the ball rolling. china had already embarked on a plan to shut down some of its antiquated mills this may speed that up but adjustments have to take place. don't think tariffs are g

100% of the time >> i can see how in the short-term the tariff could help our industry the question is whether you think by having an open market here that we have actually -- that we have become a role model, a template for everybody else when we want to go into other markets, we won't be stopped not that there's a problem tomorrow but a problem because of this five years from now. >> i do agree that we do not want to get into a trade war i don't think this will result in a trade war >> but i think people have the misimpression of what a trade war is trade war is not a grand war that goes on it's little wars little daily wars. >> it's tit-for-tat. >> but this is already a tat because they're already doing that right now that's the thing it's not like they'll start. we already sort of -- we have this great economy you know, this person does this, this country does this okay they're doing that it is already happening. right? this is the first time we

addressed it they already treat us this way >> we tried this before in some ways we tend to back down i imagine that this is not going to be in place for a very long time >> you're bullish about 2018 this is where it's funny i thought this is where it would go what could go wrong with 2018? trade policy here you are pushing this saying tariffs are okay, but your one risk is trade policy >> one risk is that it could go badly. it is a risky game there's no denying that. my contention is that tariffs are not necessarily wrong 100% of the time. if that's what it takes to get the ball rolling and to get a better deal, when that's what it takes. >> your argument is we need to be protecting the industries of the future, that's the same argument other people have used to say we should not worry about the steel and aluminum industries, we should worry about -- >> we should worry about all of

them, steel is industry of the future you think about steel and older steel mills. my grandfather worked in an old steel mill in pennsylvania the new steel, the new headquarters, headquartered in charlotte. >> the new -- >> he was generally in favor of free trade, but that was prior to the emergence of china. >> it's a problem, but the new steel mills don't employ a lot of people, so we're not necessarily talking about jobs here >> we're not talking about jobs, but the industry of the future, products made. all of the steel derivatives going to be created in the years to come. the industries they're going to supply that's what i really think this whole debate is coming down to is who is going to control the industries of the future >> you also -- one of your other risks is that the economy

overheats because of the stimulus, but then again you saw the participation rate on friday you saw the slack. maybe it doesn't overheat, maybe we bring the nonbaby boomers out of the work force, bring them back >> maybe get some of the millennials off the couch. >> it's not me, andrew we want them on the couch as long as they're watching cnbc, but they're on some stupid podcast, i think is it like -- how is the streaming of a podcast do you know? do you do one? >> i don't have my own i have listened to them occasionally >> you do? >> occasionally. you drive a lot. you should listen to them. >> okay. >> i'll send you my favs my podcast favs, my play list. >> knowing who i am -- >> i'll do the opposite. it will be opposite day. >> daily beast, mother jones, huffington post, don't i get enough of that we're done, mark

thank you. are these guys college or nba guys >> they look like college to me. >> that's why you wore that? frn >> absolutely. for the new boss, was he impressed with that? we have an espn guy here running things and you wore that in smart. i saw quail. you're going to get a pair of those? i told you >> good news for you, joe. >> what? >> breitbart has two podcasts. >> no way. now that i could get -- >> i knew you could get behind that if they move right i'll start listening to breitbart >> mark, thank you when we come back, we'll tell you what's working in the financial sector the trends in the market and in washington that could drive trading of the big bank stocks, that's straight ahead. as we head to a break, look at yesterday's s&p 500's winners and losers

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visit esd.ny.gov. ♪ welcome back, you're watching "squawk box" live from the nasdaq market site in times square ♪ good morning, everybody. welcome back to "squawk box. we've been watching the u.s. equity futures, so far it looks like we're in the green. dow futures indicated up by 92 points s&p up by 7. nasdaq up by 15. this comes after a mixed day for the markets yesterday where the dow and the s&p were lower but the nasdaq was higher. look at shares of ge

jpmorgan cutting its price target on the stock again. this time to $11 a share as you can see, the stock is at 14.85. a decline of 1.6% this morning it's the third time this year the firm has cut that target price, cutting it to $16 in january, then 14 dollars last month. time to find out what's working for investors or maybe not working. our next guest says there are plenty of things working in micro and macro levels joining us now is robert albertson. good morning >> good morning. >> before we get into bank stocks, i want to go straight to something else, given the david salomon news, lloyd blankfein stepping down, what does that mean in your mind? >> i used to work there.

i would tell you that's one of the most embedded cultures that i lived wouldn't cory about e t to me, doesn't strike me sorry to see lloyd go. >> either way on the stock >> no, nothing >> i don't think it matters. i think bigger picture, he had his tenure there i think if you compare it with the other banks that were basically in line, jpmorgan is the elephant in the room depends on what world you're looking through, but if there's goldman, jpmorgan and then the whole banking industry i'll push it back to you is the banking story about rates or deregulation? what is the biggest tailwind >> four things now number one, the economy. we have a durable economy. that's another subject but i'm watching something that's taking two to three times longer to finish than past cycles so i see a long runway for

cyclicals. number two, we have interest rate relief, so it's about rates. rates are driving net interest margins up analysts have underestimated it literally since late 2015 when the fed started raising hikes. there's all kinds of lags. it's a complex calculation margins will continue up number three, we have tax relief which hits the banks directly. that means profitabilities will go up, that means payout also go up so you'll get a kick in dividend yields fourth you have regulatory relief we can argue how much, how much territory they'll get back we have a house and senate that have to mesh on some things. if anything good happens, and i think it will, it will favor the regional community banks more than the large you have four things pushing this group by the way, so far this year the nasdaq bank index is ahead of the s&p.

>> you have some of these midline banks, thinking pnc, trying to get some of that regulatory relief, it may or may not happen what would you do with those stocks >> you have the first three of those four i don't see a whole lot of relief to cifis or near cifis. anything under that, you have political will saying we probably did do that, calm down. if you get that threshold up to 100billion -- >> you think there's a new super regional m&a game. >> there hassen befo been for ag time i'm seeing deal after deal after deal getting 5, 10, 10, 15, now higher they need bigger banks to do the buying >> but the biggest banks are out

of the game. >> totally >> will never be in the game again? >> don't think so. >> could you ever see a super regional becoming as big as one of the bigger banks today? the jpms or the banks of the world? you have pnc, sun trust, i don't know who >> i don't think so. i think you'll see more above 50 and above 100 billion banks, that's where the action is in the stocks, a lot of investors forget about that. we do a lotof ipos they're very favorably received. investors like this. this is where the action is now, at the bottom midlevel what about fintech everybody says fintech, these little fintech companies are supposed to disrupt these big guys >> the problem is, number one, these finteches, not all are particularly great they have not figured out how to raise deposits number two, to your issue on the larger banks, they have been spending eavily.

they are smart fintech will be born more within the industry than the outside. by in large you have the larger institutions with huge budgets, a lot of brains about how to handle technology. >> how about i say one word to you, you tell met reaction bitcoin. >> bitcoin who is doing the most investment around that? >> hopefully nobody. i understand blockchain to some extent it has a ways to go. it will be revolutionary, yes, yes, yes it will be helpful to all. nobody will get an advantage when you look at specific cryptocurrencies, the dangers there -- you have to finally say no, this is not for us don't think so >> okay. great to see you >> great to see you. big day. big, big day made it 20 years i want to wish my wife penelope

a happy 20th wedding anniversary. these songs, we thought long and hard about it. that was the day 20 years ago in hawaii on friday the 13th it was also a full moon and also like some kind of weird partial eclipse. but for me, that was luck. >> that was eeclipse >> that's my favorite wig you wear >> some people say lucky at cards, unlucky in love it's the opposite for me i suck at poker, but lucky in love like both of you that's the most important thing in life to be with someone like that >> i love that picture >> that was in philadelphia. >> are we giving a shout-out to my favorite hotel where you were married? >> we did get married on the 18th tee when you're with someone where no one else -- i like friends, but i don't care about other

friends. i just care about her. >> we know >> there are disagreements politically there's a huge divide i think in the current atmosphere, a lot of couples have disagreements at dinner i don't say anything because she's so far right that i don't even try to say any of my evened balanced opinions around her she's so conservative. this is 20 years i want to hit 50 i have to go 30 more that's the good news bad news, i want to celebrate that here on set with you. 30 years from now. so we're still -- penelope and i will be together we'll be together right here >> becky will be with us, too. >> becky, too. when she hears that we'll be together 30 years from now, she doesn't have the same -- any way. >> just happy ann vers iversaryo and penelope

>> i had some stuff on the card to read. i said that's not me on the air. >> i started tearing up. >> i'm not going to be someone's viral, you know -- >> right >> stop. >> whitney houston keep going. >> this is not a reality show. actually it is >> congratulations >> thank you 20 years >> 20 years to penelope. >> to her. well -- maybe sympathies everything. coming up -- >> happy anniversary to you both >> look at you >> i knew i could get you. a new read on the health of small business in america. we'll get the numbers from the nfib next. and then trendy athletic wear outdoor voices is getting the backing of some funds. and then later, boxed wants to bring bulk shopping to your front door the company has reportedly turned boun multipdown multipleo

offers she was great. what a voice the ceo will join us on set. the ceo will join us on set. how long for you, grasso if you'd have told me three years ago that we'd be downloading in seconds what used to take minutes. that guests would compliment our wifi. that we could video conference and do it like that (snaps). if you'd have told me that i cou? afford a gig-speed. a gig-speed network. it's like 20 times faster than what most people have. i'd of said... i'd of said you're dreaming. dreaming! definitely dreaming. then again, dreaming is how i got this far. now more businesses in more places can afford to dream gig. comcast, building america's largest gig-speed network. can afford to dream gig. 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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kate is here i forgot, this was the tie i was wearing on the golf course when i got married. 20 years ago >> very nice ♪ >> whitney houston all morning >> don't hate it >> you can't hate it >> you can't >> the national federation -- nfib out with the latest optimism report. pretty staggering, isn't it? >> it is it keeps hitting new highs main street optimism hitting the highest level since president trump's election this is the second highest reading ever, 107.6 for

february look at this chart, you can see the numbers have climbed and held well above the historical average of 9 for the conservative lobbying group's monthly read on sentimentment tax reform and overall deregulation driving the gains some positives include 22% of owners planning to raise compensation for workers, in addition owners expecting higher resales increased to one of the best readings since 2007 of note here, reports of few qualified workers, that remains the number one problem for small business that's at the highest level since the year 2000. this is followed by a tie between taxes and government regulations and red tape they were tied taxes got the fewest votes as the number one business problem since 2006 one thing to keep in mind, this was taken before president trump's order on tariffs was signed it will be interesting to see if that has an impact on how small

business owners feel next month. they do a problems and priorities survey, actually trade came in number 75 out of all 75 issues polled i think to the small businesses that are involved in overseas trade it matters for many of them it won't impact the day-to-day >> what does it mean in terms of optimism translating into hiring more people, spending more money to grow? >> we're seeing more business owners willing to invest in people but the skilled labor issue is a big problem, because they can't find the right people for a lot of positions they want to fill, they're raising wages. that being the top problem over taxes and government regulations is staggering. we've seen that month after month now. >> kate, thank you very much >> thank you, guys when we come back, active wear brand outdoor voices is using augmented reality to try to sell clothes. that may sound complicated but some big venture capital firms are on the board the company's ceo will join us next. right now as we head to break a quick check of what's happening in the european

markets, up across the board with the cac in france up by quk "sawbox" will be right back. stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker. that's the power of and. but through goodt times and bad at t. rowe price we've helped our investors stay confident for over 80 years. call us or your advisor. t. rowe price. invest with confidence.

welcome back to "squawk box. we have some video to show you

a flying taxi company backed by larry page unveiling a commercial -- call it a plane service of sorts a an all electric autonomous plane that can take off vertically it lets the plane operate without a runway they're working with the new zealand government to commercialize air taxis. they're not going to be selling these things the plan is like uber. there will be an app there is no pilot. no pilot in that thing you and a passenger will sit there -- >> make that you and a passenger. i'm not getting in that. >> they've been secretly working on that ten years in new zealand. they've been seeing these things in the sky nobody knew what was going on. just today in new zealand they

announced they have a certification process that will allow them hopefully to fly commercially in three years. this is a huge leap forward. >> people have a problem with autonomous drive cars and we're going straight to the air. >> it's easier to create them in the air rather than the road because you don't have all of the things in front of you. >> the guy who says anything can be done is very worried about this i don't want to get more rows. we're jumping -- >> i know. >> -- then you saw elon musk talk about going to mars people who go to mars will in all likelihood die be ready to die if you are going. let's do the autonomous cars, see if that works. but no way you're not getting in an autonomous hovercraft, are you >> i don't know. >> you talk big. >> i don't know.

>> you going to mars too >> no. >> you and matt damon. you're going to be cooking potatoes out of your -- >> they're pushing humanity forward, how about that? >> you won't be there to see it. that's not the kind of progress i'm ready for. never make 50 years. today activewear brand outdoor voices is announcing a new round of funding joining us is tyler haney. she is the founder and ceo of outdoor ventures thank you for being with us. >> thank you for having me. >> those not familiar with outdoor voices, it's hard to think of google ventures getting involved what do you do, why would google ventures be interested >> we're building the number one activewear recreation brand around recreation and focusing

on continuing to invest in our community. inspiring people to be active on a daily basis. we call it doing things. doing things is daily recreation it's all about driving frequency with exercisers, not performance with athletes. >> let's talk about some of those fabrics that you've designed i've just talked to kate rogers. you are very actively involved in finding new fabrics you can bring to athletic wear what are some of those fabrics and what do they do? >> our next recent fabric is pec sweat. it's all about comfort in sweaty movement it's all about comfort and lasts a long time, comfort and durability being key for recreation you should definitely try pec sweat, it just came out. >> sweat doesn't show through this it's a break through for anybody who's ever worn yoga pants and worked out in them.

>> it allows you to be comfortable while sweating in them without feeling self-conscious about sweat showing through. >> i was going to ask you about mickey drexler i'm curious what you've learned from him over the past year or two. >> yeah. mickey has been a joy to work with i'd say his pattern recognition is phenomenal. he's able to at a high level recognize things the other thing is he's been a fabulous mentoring coach for myself in terms of learn how to be an operating leader. >> i want to know what you thought. your company now -- i remember what might be seen as traditional retail companies have now gotten the sort of technology style valuations and obviously technology investors and how you thought about that worby parker was another one

like that. got a technology valuation that might not be a technology company. >> we're driving momentum by amplifying through digital and social that gives us a leg up in terms of retargeting to customers online but really driving kind of this in real life connection around activities like hiking clubs, jogging, dog walking events, et cetera that they can be amplified and kind of leveraged to inspire a much broader community through platforms like instagram. >> do you worry when you're being treated as a technology company, people are going to be expecting very rapid growth. do you think you can deliver on that >> we're focused on both top line and bottom line healthy sustainable growth that allows us to continue doing things, both our customersand our team for the long haul. >> i want to thank you for your time i'm sorry we have to cut it short here we appreciate seeing you and

hopefully you'll see us. >> follow active voices on instagram. >> they're terribly expensive but if you get a chance to google them, check them out. i'm telling you, in the fashion land they're a big deal. >> you got a pair? >> i don't i want a pair. i don't have a pair. i'm going to -- >> saving up >> i need to save up they're like $300 a piece. >> do they make them for men >> they're made for menace well. >> that was a joke >> sarcasm. >> you know what, thank you -- >> over my head. >> supposed to thank you and thank you for that >> you're welcome. >> always a pleasure, guys. >> congratulations, joe. >> thank you >> appreciate it. we have to go. coming up when we come back get your portfolio ready for the trading day. we'll talk stocks and today's inflation data christian is sitting there in our greenroom. take a look at u.s. equity

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deal block president trump blocks broadcom's takeover of qualcomm. the president's reason is straight ahead the case for kudlow. >> competitiveness is key. we are open for business. >> rather ri kudlow emerging as a strong competitor. what he brings to the table. and mother nature is mad

another nor'easter slamming new england. the third one in two weeks what it means for business travelers in new england as the second hour of "squawk box" continues right now. live from the beating heart of business, new york city this is "squawk box. good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin and joe kernen the u.s. equity futures are indicated higher dow futures up by 81 points. s&p futures up by 7 and nasdaq up by 16 after a mixed day yesterday. the white house has blocked broadcom's attempt to buy rifle chip maker qualcomm. president trump is citing national security issues for that decision.

as you can see, broadcom up by $1.66. consumer price index will be out. economists are expecting a rise of 0.2% for the headline number and core inflation number. core inflation excludes food and energy tomorrow morning's release of the producer price inbe decks. >> jpmorgan has come out and cut the price stock for the third time this year, just $11 a share. as you can see, ge trading at $14.80 that's a decline of 2% separately ge says it eliminated bonuses for senior managers for the first time in history saying it is holding leaders accountable for performance. president trump stepping in to block broad com's takeover attempt to qualcomm. eamon javers joins us. this is an unusual move that has been telegraphed

kind of a new direction for cifius. >> this is all about china bottom line. you have to bear in mind the trump administration vote. this is protecting the u.s. industry from the chinese encroachment the u.s. concerned about market share here and concern that broadcom would have too much access to intellectual access here in the u.s. this didn't look like it was heading this way back in september. they said they were going to move the headquarters from singapore to the united states here's what who chock tan said e united states. >> today we are announcing that we are making america home again. >> america is once again the

best place to lead a business with global footprint. thanks to you, mr. president, business conditions have stead little improved. >> a round of applause there some flattery from broadcom to the president of the united states it didn't work out the way broadcom wanted it to work out and the question here, guys, is what does this mean now for these other cifius reviews that's the committee on foreign investment in the united states. they have moved in when there's a national concern about the products being purchased or the access of products being purchased by a foreign investor. there's no recourse for companies that are caught up in the cifius process if they say it's a national security concern, that's it. they can block the deal. that looks like what's going to happen here. how does broadcom get around this they're pretty much out of

options. >> they will become a u.s. company. that's the expectation when that happens, do things change specifically since cifius blocked them, the relationship of the u.s. entities once it becomes a u.s. company they'll have the third party relationships. does that change the game? >> i think that's the key to this i think the united states will look very carefully. who are the players, who has control over it and what chinese influence is on that company the company's headquartered in singapore but the u.s. is very concerned about china being able to buy access, get access to third parties to u.s. technology they're worried about intellectual property and technology that transfer of technology and the u.s. leadership in that space to china is the key concern here. >> do you think this is requesting togoing to apply to other tech companies? steve mnuchin said this was only

about this particular transaction and not supposed to be a broader statement on the world and yet so many of our technology companies, including apple and others, have deep ties to china. >> right remember, these cifius reviews rely on the intelligence reviews and the business department and the treasury departments they have access to this information. they're looking at a whole range of aspects of this particular company. whether that applies to other companies or not i think is going to be on a case-by-case basis. it's going to be about whether the united states is concerned that china is buying access to u.s. intellectual property and transferring to china. the idea here, the fear inside this white house is that china is using its vast financial resources to leap ahead technologically over the united states by buying access and moving that access over to china.

so there's real concern here it's a case-by-case basis and what the financials are. you take that together and you'll see a much more aggressive approach here >> all right, eamon. thank you. you weighed in earlier on larry kudlow we'll talk about it again but we'll say good-bye to you. >> okay. >> i guess it's okay to say conservative commentator i never -- president obama said liberal commentator. conservative commentator and cnbc contributor larry kudlow has a big c here, almost like an a to a lot of people, scarlet letter, has emerged as a strong contender to succeed gary cohn as president trump's -- >> recall joe stiglet called him a liberal commentator. >> you had to go all the way out to stiglets.

would you call paul krugman? >> i think you would. >> andrew ross sorkin? >> no, i would not a straight down the middle -- >> i know you would. i know you would. >> kudlow is a long-time friend and informal adviser to trump. chris odell is also under consideration for the job. >> they're saying odell is out who we thought was in, is out. >> by the way, the journal this morning, big picture of larry kudlow so obviously nothing is done until it's done, but larry kudlow is somebody who has worked in previous white houses. worked in the ragan white house. >> he did. >> he knows these issues. >> free markets. best path to prosperity. we're going to hear a lot of that. >> it's funny. some people said larry's chances

were dimmed. he spoke out pretty strongly about it but he's somebody who has no problem saying this is how he thinks about things but being able to support whatever -- >> that's what i ean knowing he was against the tariffs and knowing that he still wants this job was a positive for trump because he wants people with different opinions to kick things around. >> you don't want to be surrounded by yes men. >> someone who takes their ball and goes home and gets mad. >> referring to someone we know? >> no, but you know what, gary did exactly what he wanted to do for a year, i fully understand that it is a -- >> got tax renorm done. >> yeah. would you -- i don't think i could handle in that vortex, could you? it's a meat grinder. >> tough job. >> then you throw social media in and, you know, you get 6,000 tweets and someone writes a story about how the twittersphere. it's horrible. this is the world that you're like welcoming

i don't like it. the stocks, krcesspool. >> that's what elon musk calls it. >> cesspool. u.s. steel is raising its price. the company will benefit from tariffs. the ceo told us that the company would restart a factory in illinois in anticipation of higher demand. credit suisse issued an outperform rating on the shares of a number of companies, including nike, foot locker and ferrari. the analysts slapped an under perform rating on jcpenney and apple hitting a new record close and it is getting nearer and nearer to that trillion dollar market cap. i'm still not ready to count amazon out though. apple has been stalled before along the way. we'll see. maybe it's not stalled

one of those things. more of a value play now amazon is not a value play i don't think. >> gets involved, it's a value play >> yeah, exactly is it still a value play once it's involved? >> i don't know. if he gets involved that's what he sees, not a growth play. the dow closing in on or down rather 157 points amid lingering trade worries. joining us is christnef amani. charles campbell is trading desk specialist i want to know when you get off the set this morning what you're going to do. what's the plan? >> the plan continues -- >> today's plan. >> i think the plan is the same, which is be long equities, be long emerging market equities. we think this will do really well the credit markets are challenged that's the big play. >> you've been talking the emerging markets thing for a very long time.

>> and rightly so. >> why you, but it's a very broad thing to say emerging markets. tell us in a very specific way which markets, which indexes >> emerging markets in our view is really about companies rather than indexes. >> okay. >> primarily because the performance differs very substantially. if you're going to be focusing on emerging markets, look at consumption driven sectors that's what we like in emerging markets. >> fair enough do you buy this? i don't think you buy this. >> it's a consideration. two things that i would say are really going to dominate 2018 are the trade issue and inflation. we have a cpi report this morning. the markets pay attention to it. we have an hourly earnings number for january non-farm numbers treasury backed up considerably.

the path of rate moves in the u.s. treasury market is going to be more important than the absolute level of yields this year. >> we've been talking about broadcom, qualcomm all morning, talking about tariffs the past two weeks. does that matter to you at all by the way, you talk about we haven't set it up. >> so i think tariffs are rmt going to be too much people in the administration don't understand the economic implications it's about politics. when you frame it that way, what that tells you is it's going to be limbed in scope it's not going to be open ended trade war. that's really not good for anyone if you accept that, then i think there will be some posturing on all sides. at the end of the day this is not the first time we have put tariffs on the table the car code as i.b.m. implemented during ragan

administration, the most conservative administration we have had, we lived through that. we'll live through this as well. >> i don't buy into that necessarily. you said you have to buy into it i think that right now it's very possible you could get something for the tariff situation or you could get something on these sort of individual basis but the question to me isn't about what happens today, tomorrow, next year, it's what happens next year. little skirmishes, not some kind of massive war charles sfwh. >> you have to pay attention to t. it's going to be on your radar screen two years ago i said tariff related and trade related issues were the number one and two down side risks i backed it up last year because it was pretty well be45i6d now we hear the administration discuss tariffs and trade. when they take an ideological view, which is jarring the markets, that's alarming so when you have a trade deficit

that's 570 billion, 2/3 of which is with one country, you were thinking of adding tariffs, this is a a little counter intuitive. >> is there any asset class or industry you decide right now you don't want to touch. too high too dangerous right now? >> i think the industry that still remains extraordinarily vulnerable my view in the u.s. is retail. you take tax cuts, for example, retailers who benefit from the tax cut will probably end up spending all the tax cuts in the promotional activities rather than giving it to shareholders that sort of tells you that they have no market control whatsoever and they'll spend whatever money they have to survive and that's a very vulnerable situation >> you have 6.5 billion employees that are tied downstream to aluminum and steel industries if there really is some teeth to the tariff that comes out, that's to be seen, then those industries might be worth

staying away from. then there will be a buying opportunity if they get hammered enough. >> let's leave it there. charles, thank you very much great to see you. coming up,with inventory a such low levels, more homeowners are choosing to renovate rather than move. which projects will give you more bang for your buck? we'll tell you after the break senator mike rounds will talk to us a key moment to rewrite dodd-frank and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.

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now you can get it, too. welcome to the party. pricing and competitive housing market means a lot more people are choosing to stay put and remodel which begs a question, which remodeling projects get you the greatest returns. diana olick joins us from washington with some answers home depot and lowe's are probably happy, diana. bathrooms, no. kitchens, no what is it >> that's what everybody thinks. there's more this is one of the most useful studies we get remodeling magazines cost versus value report if you were to sell your house within one year of the remodel it estimates how much of the renovation cost you would recoup in a higher sale price

the 2018 leader, garage door replacement. maybe you're going high tech, maybe it's security. you will get 98% of your investment back. second on the list is manufactured stone veneer. who knee one you get a 97%. also in the door category, your front door specifically a steel door. security is clearly an increasing priority for homeowners next up though, deck addition. i did this one last summer myself, love it, not a huge expense but an 83% return. and finally a minor, minor kitchen remodel will give you an 81% return on your investment. interesting that the bathroom remodel, joe, like i said, did not make it into the top five. one more thing, doing a remodel will give you a better return than doing an addition surprising because you do get

more space with the addition but the up front cost is higher and the return is lower. and because the home sales have slowed so much and homes have gotten so pricey, the big projects are not paying off as much as the smaller ones. >> diana, i want to make sure i understand this one. you put the new garage system in let's say it costs $10,000 you sell the house for 20,000 more or you get -- >> garage doors are cheap. >> you get 98% of that back in the sale price. >> doubling your money -- >> no, you're not doubling your money. you're getting the highest return on it you're going to get 98% back. >> you put in 10 grand, you sell the house -- >> so nothing makes money. if you're going to move, you - >> there's a value to loving your house, is there not, joe? >> if you know you're going to sell, don't do anything. you don't recoup on any of the projects you actually do if you're going to sell >> yeah, but sometimes you can't even get the buyer in. >> these are actual costs per

thing. it gives you an idea what's going to get you more. obviously if your house is upgraded you're going to get more in general. >> i thought you were getting a 98% return i was going to double everything yeah, that's not -- >> good luck with that. >> you know, diana, i've seen bathrooms that i wouldn't care what the garage was like, if you don't remodel this bathroom, i'm going to go outside to go. sometimes bathrooms really need to be remodeled. >> to your point, there are some people who come in and say, you put in this high end kitchen remodel and bathroom, i don't like what you did. i would rather see the trashed bathroom and remodel it, pay you less myself and i'll do my own thing. >> i'm seeing ads, hopefully it's not cnbc, it's a crappy channel, they pull stick'em and it's horrible. they pull stick 'em off and look at my new bathroom

huh? >> bathroom fitters. >> that would be us. >> great product great product. really can make a difference. >> goo gone, works on everything >> no, but there's no way. it's like the plastic thing they put -- if you step on it -- >> you're going to leave me to clean up this mess >> yes you're up. >> thanks, diana. >> everything is white again there's an up side. >> have you seen it? >> yes, i have. with the risk of rising inflation and higher interest rates, what does it mean for the overall housing market we are joined by mike frattatoni he is the chiefeconomist for the mortgage bankers association. we know interest rates are picking up you are expect 30g year mortgage rates, fixed mortgage rates will go to about 5% for the end of this year. what does that do to the market? >> yeah, well, becky, so far this year we've seen 30 year mortgage rates increase from 4.2 to 4.6 last week for a typical home buyer who has

a 300,000 mortgage, that's another $75 a month. it has an impact we're seeing deceleration for year on year growth. on the other hand, boy, we had a huge job growth in february and unemployment insurance claims down to their lowest in 50 years. we do think that the demand is still going to be strong even with somewhat higher rates. >> there was a headline in the wall street journal last week that said mortgage rates at four-year high threatens to oversell it. >> it's a bit of a headwind. the major constraint is the market supply. the absolute number of units is near an all-time low builders are increasing their pace of construction really not fast enough to meet the demand that's out there. tempering demand a little bit is not going to be a problem. we're still seeing home prices increase at twice the rate of

income growth. what's the most important factor is it the jobs market? is it the interest rates is it the prices that you're seeing for new homes or for rentals? >> yeah, on the positive it's the job market and it's the demographics we still see the peak of the millennial generation four, five years away from what we typically would see as the most active first-time buyer age. there is just going to be this wave of housing demand hitting the economy over the next four or five years. we think that's going to bolster slow, steady growth over that time period. >> millennials coming into the market at a time when interest rates are starting to pick up, it's been a long time since we've seen 5 or 6% on these loan rates for fixed 30 year mortgages. what will that mean for them >> people are going to adjust, they could aim for a slightly smaller home they are seeing the share of adjustable rate mortgages pick up just a bit. you know, it was about 4% a year ago.

we're up to about 7% now just by comparison a decade ago that arm share was 35% this is still a very conservative market both in terms of what borrowers are asking for and what lenders are providing. that might be a slightly way to move to a payment. a 7-1 arm. >> adjustable rate. >> it has the benefits of picking. >> after which point you may move. >> exactly particularly for a first-time buyer. >> mike, thank you for joining us this morning. we appreciate it. >> thank you. coming up, the ceo of ecommerce bulk retailer box. box will join us to talk retail as well as the company's latest round of funding and much more plus, saudi aramco's international listing is said to be looking increasingly atprleti th story and other corporate headlines straight ahead "squawk box" will be right back. but they're not what people really invest in.

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good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. among the stories front and center this morning, small business optimism rose in february according to the latest measure from the national

federation of independent business the small business optimism rose to 107.76. that was up from 106.9 it's the second highest level ever. apple music now has 38 million paid subscribers up from 36 million a month ago apple's number is still well short of the 71 million for the industry leader spotify. berkshire hathaway's geico changes its policy geico will no longer use a customer's he heducation and occupation in determining the rates. the widely anticipated ipo of saudi aramco may not make it to international exchanges it's highly possible that saudi aramco will only be listed in saudi arabia at first.

they're planning to list the oil producer in an ipo that could be worth up to $2 trillion. they said there are risks from possible listing in the u. sms. >> the problem is if it's just listed in saudi arabia as a $2 trillion valuation, the rest of the world won't believe it. >> how much are they actually selling? >> they're going to sell 5% of the company. but they need that money because they have agreed to fund the softbanc vision fund they are putting money into blackstone's private infrastructure >> what happens if this rolls out on the saudi exchange? do people buy it >> i think it's going to be hard maybe they don't get 5%, maybe they get 3%. >> valuation. >> there's the legal issues in the u.s. which by the way were all around 9/11 if you really remember what this is all about.

there's the questions about transparency, what you do in london there's all sorts of questions also about how much they are going to tell us about what's going on inside the company. that's part of it. >> you have to question the reser of tr reserv reserves. >> separately, canadian prime minister telling the president the tariffs have nothing to do with ongoing talks on nafta. >> we're going to keep talking about nafta. we don't link together the tariffs and the negotiations with nafta we're happy to continue to move forward. really just highlighting imposition of tariffs on canada would end up hurting the u.s. almost as much as it would hurt canada. >> he said the exemptions were not, quote, a magical favor being done the impositions would hurt the u.s. almost as much as canada. >> i'm going to stand up for

canadian interests right now we can move forward. we have the president saying he's not moving forward with tariffs. it would hurt canada and the united states as well. we're going to stay at the negotiating table as we have been on nafta and we will move forward in a way that benefits us all. >> trump exempted canada and mexico from the tariffs he signed last week however, the exemption is not, quote, open ended and will depend on changes that are made to nafta that satisfy the trump administration deidre bosa doing a great job. if you are traveling for business on the east coast, look out. more than 1,000 flights have been canceled as yet another winter storm bears down. this is the third nor'easter to hit the region this month. it's expected to bring coastal flooding and strong wind the third in the last two weeks. nearly 44 million people are under winter weather advisory in long island, connecticut, massachusetts, vermont, new hampshire and maine with boston expected to bear the brunt of this storm

flight aware reports that nearly 1600 flights have already been canceled today with more than 1800 delays. almost all flights in and out of boston canceled. american airlines are scrapping all of their flights airlines including american, delta, southwest and jetblue are waiving ticket change fees for travelers affected by this storm. if you are traveling by train and think you are going to escape it, maybe not amtrak temporarily suspending its service until at least 11:00 a.m. today. >> did you lose power? >> never did. >> howmany inches did you get -- >> a lot more than six. maybe eight. >> big double digit. power out. >> power back on >> it is now as of yesterday. it was out since thursday, mid wednesday. >> a lot of trees down. >> the benefits of underground wires. that would be one of the great infrastructure projects.

>> you were in here. with your chinese food delivery. you disrupted for like 20 minutes. did anything happen in here for you? >> no. >> nothing >> my plane landed. >> then you twoewent to a museu >> coming up when we return, a number of big retailers, boxed ceo going to join us to discuss whether or not the company is for sale "squawk box" continues alerts -- wouldn't you like one from the market

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i failed to mention my power was out but i have a generac generator where the natural gas comes in it immediately goes on and stays on it stayed on the entire time >> ron baron. >> ron baron has some of that stock. there's no lights anywhere in the neighborhood so i would not allow any lights in the front of the house.

i don't want zombies walking towards me. >> so you've been very neighborly. >> no. no just a small little light in the back if anyone comes we don't answer the door go away! >> can i get you a tesla power for your home now. >> solar panels. >> they have them. >> will that work to run my power through the generator? >> i think so. it will run through the whole house. >> what is it? >> tesla now through the old solar city now sells a battery pack for your home >> i don't think it will run your whole house. >> i have a generac. i'm pretty loyal anyway, the senate rewriting financial regulations known as dodd-frank i can't believe that it's going to vote and it's going to pass so easily. it almost sounds bipartisan. it's expected on thursday, the vote, to roll back some of the post crisis banking rules. joining us senator mike rounds,

a member of the banking committee. senator, good to see you you're going to get democratic votes on this. it's enough -- you think you have enough support on both sides to pass this thing >> 66 members in favor moving forward and that's the one that says let's get this thing rolling, let's start debating it and let's get closer to the final vote yeah, so far we're hanging together as a team we've got republicans and democrats realizing that dodd-frank maybe went too far. we've had a chance to review what's happened because of it. now it's time to take a serious look about what modifications need to be made in this huge bill. >> is it the perception that on big banks it was about right but on small banks it definitely

went too far and has hurt consumers and hurt the ability for loans with that sector of the marketplace but you don't necessarily want to roll back anything on the big nasty too big to fail banks, do you? >> yeah. i think there's still a discussion and an analysis that says the damage that was done in the last recession was caused by larger banks who were finding themselves in investments that sometimes were more risky than what the american public realized i think both republicans and democrats are supporting changes for community banks. that's where the emphasis in some, not all. there are some proposed changes that would help consumers dealing with all different sizes of banks as well. >> i mean, how far along did all the rules being written get,

sorkin >> no. >> a good example is the vulca rule it was designed to talk about the differences between a bank using its own money in trading versus co-mingling and using money that's been deposited with them we actually make a minor modification in that in that we exempt banks with less than $10 billion in assets with the vulca rule which is onerous and time consuming piece of law or rule making that all of the banks have to comply with right now. this he have to go through all of the paperwork republicans and democrats alike have agreed there are some things that simply weren't needed to be included in the original bill. now that we've seen the agreement, we can relax some of those regulatory challenges that are put in front of the smaller banks. that cost gets passed on then to

the consumers. >> senator rounds, the wall street journal points out today they have concerns about leverage loans that's a new, unique situation where banks can really offer leverage, they're not getting some of the traditional stops, backstops that you would have in those positions and while those really help things when times are good, when times are bad those are the first things to really sour. are you worried at all about leverage loans that the banks might be able to extend? >> i think we're getting into the weeds. let me share with you. there's a question of how much capital or their own money that they should have in place if they are using other people's money as well when you talk about any type of loans. and the debate is is how much should the asset that actually belongs to the bank itself be there. if you've got a 5% capital, you have 5% of what you're actually bringing in as deposits that can

be loaned out. any time we talk about those numbers, those have been enhanced over the years. the real question is what's the right number it's a healthy debate to have. we think we might have gone too far in certain areas i think "the wall street journal" has indicated that. there are other speakers who have suggested they disagree with some of the modifications we've made we think we're in pretty good shape with the bill but nonetheless all of it is better than what we have. we've broken through no changes in dodd frank. over the next couple of years we'll be able to on a simpler and easier basic make modifications to the base bill itself and allow the regulators more flexibility based on what they're seeing in the marketplace as well. it's a healthy discussion to have but i'm not sure that i necessarily agree that we've gone too far at this point. >> i want to combine your role on the banking committee with being chairman of the senate armed services cyber security subcommittee which is this

when you talk to bankers today, the biggest res being they talk about is cyber security to the banks. so my question to you is do you think they're spending enough money on cyber security and do you think that should be regulated in dodd-frank in a meaningful way >> i think they have to ask the appropriate questions about what is being done on a bank-by-bank basis with regard to cyber security and the entire system themselves the communication between the banks themselves what are the fire walls put in place because right now the department of defense put out a report that basically for all of our infrastructure in the united states, whether we're talking financial services industry, we're talking the power industry, we're talking the utilities themselves, in all cases our defensive capabilities will not meet the challenges, offensive capabilities of our

peer competitors when it comes to them trying to do damage to those different systems. so in the meantime what we've talked about and what the department of defense science board recommended was that we have to have a deterrent in place. that deterrent is not that strong today and over the next ten years we have to improve it. in the meantime we have to make it more competitive for them to get in and do damage we have to build those defenses and that means we have to share with the institutions, the financial institutions, the power companies and so forth what those lines of defense are. that's what we're continuing to work on. it's a never ending challenge out there. every time you make a defensive move in cyber space, then the bad guys have the opportunity to come back in and create a new tool that's what's going on right now. it's moving at a rapid pace. until we have developed at the offensive capabilities and our

policies allow us in certain cases to do it, we're not going to get ahead of the bad guys they will be in and knocking at our door the regulators most certainly have every reason to continue to push the financial institutions to do everything they can to protect those assets. >> senator, where are you from >> south dakota. >> are you from south dakota >> absolutely. >> you don't have that fargo, i mean, heitkamp comes on here i can't understand -- >> if you want me to take about potatoes i can talk about potatoes too. >> all righty. thank you, senator we'll see you. coming up when we return, president trump's stepping in andblocking the proposed $117 billion deal between broadcom and qualcomm citing national security concerns. is there more behind the move for the trump administration we will discuss that in just a bit. "squawk box" right after a quick break. back in two. 6. still to come, the ceo of

online warehouse club boxed joins us to talk about retail, the amazon effect and why the company said no thanks to kroger's $400 million offer. that ierew intvis straight ahead right here on "squawk box. at crowne plaza, we know business travel isn't just business. there's this. a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly.

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♪ welcome back to "squawk box. an e-commerce startup looking to go head to head with amazon now reportedly the target of other retail giants. joining us is chieh huang, cofounder and ceo of boxed how many calls are you getting >> it's like business as usual for us, since we first started since we were first on the show, we are numerous conversations with just about the entire retail sector. not many people out there sell oreo cookies and welch's fruit snacks that we have not talked to eight weeks after we launched it was acquisition inbound. >> for those who don't know, it's called boxed because you have to buy stuff in bulk.

>> that's right. you know, it's basically we ship the warehouse club directly to your doorstep anywhere in the lower 48 states. >> the long-term question we asked of you is why do you -- is this a company that stays independent forever or is this a company that ultimately needs to be on a bigger platform? >> it's so interesting you have asked me every time i'm on from the days when we were right out of the garage i remember was the piste tifirst time i was onw until now and we bucked that trend to stay independent. when you look at the folks who sell oreos and welch's fruit snacks, who are independent, there's not many left. >> jet.com was shooting for a different target demographic younger, more urban. now walmart.com is focusing on going back after its core customer >> what's super interesting is you would think we're 99% urban. but the reality is we spread

throughout the u.s., all over the country. so even when you look at new york city, for example, it accounts for single digit percentage growth. >> i would assume it's tough for us with little apartments, right? >> that's right. >> what about social buying? we were talking during the break, the last time you were here, we were talking about this idea, if i wanted to buy a toothbrush -- >> you think about getting one >> do you think i should need one? >> is this your first? >> no. is that the future do you think there's going to be a social buying idea >> there's potential we just launched a group buying feature, let's say all the anchors of "squawk box" can come n add to cart, one person owns the cart and they lock in. >> it all has to be shipped to one place. >> that's right. >> why isn't it a teeth brush? >> i don't know. do you know about that

>> you brush one at a time >> i'm a thinker you didn't think about that, did you? >> no. final question for you, between amazon and walmart right now, if you had to invest in one or the other, i'm curious where would go >> just on the retail business, i would say -- gosh, it's 50/50. it really is >> no politics thanks for coming in >> thanks. when we come back, the ceo of one of the nation's leading companies will join us at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital.

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coming up, the ceo of ae com will join us after this break. and the chance to get the big dance. it kicks off today for four ncaa teams, radford, liu, brooklyn, ucla and st. bonaventure i veigio look at the ncaa, the fbinstatn and how the league can clean up its image. "squawk box" will be right back. ? because i'm retired now. so? we're voya. we stay with you to and through retirement... with solutions to help provide income throughout. so you'll still be here to help me make smart choices? well, with your finances that is. we had nothing to do with that, uh, tie. or the suit. or the shirt. voya. helping you to and through retirement.

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no deal, president trump blocks the broadcom qualcomm takeover. and a global economic organization is calling on the u.s. and others to avoid a trade war. the warning coming up. plus check it out. google co-founder larry page unveiling a pilotless flying car. the pictures you have to see to believe as the final hour of "squawk box" begins right now. ♪ live from the most powerful

city in the world, new york. this is "squawk box. good morning welcome back to "squawk box" on cnbc live from the nasdaq market site it is raining or snowing turned into rain i'm joe kernen along with becky quick and andrew ross sorkin the futures for most of the session have been up about 80 points, just under that on the dow now. the s&p indicated up 6.75. the nasdaq which was strong relative to the other indexes yesterday, nasdaq indicated up 15 and change. two-year -- ten-year yield has moderated, below 2.90. among the top stories, a key reading on inflation february cpi is due out in about 30 minutes time. that headline number is expected to rise by 0.2%. we'll watch that closely the market has been keying off inflation data cvs and aetna shareholders will vote today to combine the two

companies. the drugstore change proposed an acquisition back in december and president trump blocked broadcom's attempt to buy rival chipmaker qualcomm citing national security concerns david faber joins us now from the new york stock exchange. david, you telegraphed all of this yesterday when you got a look at the treasury department's letter on this. >> that's right. could have potentially known we've been following this atypical takeover battle for months, then we had the introduction of a national security concern and the cfius investigation. we got an extraordinary letter in which treasury laid out in a not typical fashion all of its potential concerns with this deal followed by yet another letter yesterday in which they said to

broadcom you're in violation of the order, the interim order we issued just a week ago cfius stepped in before qualcomm kuz suppo was supposed to have an annual meeting where broadcom felt they were in position to win the majority of electors up for election on the board and enter into a negotiation that would be favorable for it this was pretty stunning regardless and unexpected to a certain extent, for many of us a couple weeks ago it had always been a question, it was one that qualcomm wanted to explore which is why they say they reached out to cfius for potentially a filing to have them take a look back on the 29th of january. broadcom will say they disenfranchised their own shareholders by doing something atypical companies don't usually reach out to cfius

give wlan we hean what we heards and the president, there's no doubt this deal would have been blockedone way or the other, whether it was prior to the vote, prior to broadcom taking control or after they had negotiated a transaction so you could argue that qualcomm's board did the right thing by getting out of this impressive order we've only seen this five times where a company actually doesn't just say, okay, cfius, we'll stand down, but takes it to the president. normally when these deals don't happen it's because the committee for foreign investment in the u.s. says we don't want you to do this the companies say okay it's only the fifth time that it's gone to the president and you get the decree itself which he basically just signed off on from cfius saying you can't do this you can even do this if you were to indirectly merge with another company and wanted to buy qualcomm it's over for this company >> broadcom ultimately domiciles here which is the plan, how does

that change the dynamic? >> it doesn't at all this is permanent. we've been telling people this for a while now. this is one key area of debate does it only apply given cfius's jurisdiction is only for foreign companies once broad kbecame a u.s. company, wouldn't it go away the answer is no it will have perpetual effect. they will never be able to buy qualcomm period. >> how does this then change the m&a game at large? are we going to now -- i know mnuchin went out of his way to sigh this was solo, just about broadcom do you think they'll jump into more transactions? could they jump into a u.s. deal based on this idea of this sort of third party connection that they talked about in this particular transaction >> not as cfius is currently written. there is an effort undertaken on the hill, john cornyn, the senator, is behind it.

they'll have hearings on it in terms of making cfius more restrictive in some ways you might see something like that my understanding is no i've only spent the last couple of weeks trying to study this stuff. my understanding is it only applies to a foreign company at this point, though your point is an interesting one that was one of the keys in that initial letter we got from treasury where they pointed to third party foreign entities and they didn't go into it because they said it was classified relationships they said concerned them about broadcom. we'll never necessarily know what it was. the intelligence agencies are part of the cfius review it's a lot of different agencies from across the government, and it does include intelligence they don't have to tell you what they got or why they feel what they feel, they just have to say we're against it and that's the case. broadcom will want to know what it may be up against should it try to do something again even as a u.s. company, just because

it can be difficult when you get a presidential decree saying you're a national security risk. >> faber, how long have you been married? >> that's a really interesting question to ask in the middle of this >> you can answer anything on broadcom >> 18 years. >> 20 years today. that's why ibring it up. ♪ >> you're 20 years today >> 20 years today. i'm wearing the same tie wearing the same tie and we've got some pictures of when she was still your boss, producing your rear end, remember you know what else larry kudlow, a lot of stuff going on >> a lot of stuff going on >> at my wedding, joe, you and penelope were in the aisle, when walking up and down the aisle, you're in every darn picture every one. from jenny walking down, me. >> looking for some without him? >> you don't want a good looking

contingent you know what else happened, how i will bring this back home, penelope called kudlow when he was sort of on the outs and brought him back to be a guest he'll tell you that, too we want him to go there, don't we >> i can't wait do interviews around the employment number that will be -- that will be interesting. >> is that sarcasm >> i'm not sure. >> i think it will be, to have larry do an interview with us. we'll probably get a lot be better than the other people we've had on through the years >> you know where that one shot was? philly, remember, when we went on the "squawk" road trip with hanes on the bus, he took one leg on the bus and that was it he flew. >> it was me and joe the rest of the way. >> me and faber in the back of the bus. >> yeah. i remember that. >> we've been through a lot. only penelope is longer than me and you, faber

we've been through a lot together i was getting teary earlier. it's happening again >> look at this. wo knew w who knew who was in there. >> both of us were doing different things >> life moves on, i noticed that >> david, thank you for joining us >> thank you for saving me thank you. >> very popular. >> we'll cover this later on on "squawk on the street. >> the east coast bracing for another major winter storm more than 1,000 flights have been already canceled. this is the third nor'easter to hit the region this month. it's expected to bring coastal flooding, strong winds and snow. speaking of trouble with planes, trains, automobiles, five cabinet members will appear before a senate committee tomorrow to talk infrastructure. this is part of the administration's push to move its plan along in congress

joining us is michael burke, ae com chairman and ceo. this is something we thought would be easy lifting. usually you say infrastructure and you can get people on both sides of the aisle lined up. this is much more complicated. what happened? >> thank you for having me yes, it has become more complicated. if you asked anyone a year ago we would have thought there was broad bipartisan support for infrastructure, it would have been first on the agenda we're hearing from taxpayers across the country we saw the harvard harris report where 80% of americans are saying they want increased investment in infrastructure so there's clearly a demand among taxpayers. we hear a lot of talk on both sides of the aisle about infrastructure and i think it's time now that congress moves forward we cannot have a policy of america first if our infrastructure is last i think our congressmen are

focused on it. the importance is reflected in tomorrow's testimony by the cabinet members that now is the time for action on this point. >> however paul ryan in the house has said a gas tax at this point is off the table that's how people thought thisfd what does this mean if we see any action taking place. >> i think we'll see action. whether we see a broad comprehensive bill has yet to b seen we firmly believe a fundamental important pillar in this platform is to take care of the highway trust fund we have a highway trust fund that is set to go bankrupt in two years time and that is entirely funded by a gas tax today. we need a long-term, sustainable solution for that highway trust fund, whether it's gas tax or some other type of user fee we have to fix that, otherwise

we're going to see a continued disrepair of the highway and road system of the united states >> if gas tax is off the table, what would be separate user fee? something else >> there are a few other suggestions. one is a transportation tax on transportation services that many people have talked about. that cuts across all types of transportation to fund the improvement of the infrastructure another one is we're seeing an increased use of electric cars that are not paying a gas tax. so a tax on batteries for electric cars to help fund their portion of the highway transportation system. so there's a number of opportunities. another one would be simply from the general funds. that is more remote. >> one philosophical question. when people talk about public/private partnership, part of that involves auctioning off public assets to private owners.

are there certain pieces of the public pie that should be sold off and certain pieces that should never ebe sold off? >> unless it's a matter of strategic importance to the country, which is a small portion of the assets, there is a wide, wide variety of assets that can -- >> what wouldn't you sell? >> i wouldn't sell anything to do with our military operations. beyond that transportation assets, ports, roads, airports, the wide, wide variety of assets we've seen it work in many other countries. the asset recycling program in australia has been widely successful to sell existing assets underutilized to the private sector that can improve the efficiency of those assets it's worked in many countries around the world we've seen it work in canada

there are broad pools of private capital that are looking for investment in long structure assets we have the private capital. we have a need for public infrastructure we need a federal public policy to put these two together. >> thank you for your time today. >> thank you coming up, breaking economic news, an instant market analysis, key inflation data due at 8:30 eastern time plus rob portman on taxes, trade and jim cramer will join us. live pictures from the white house where questions are swirling about who will become president trump's top economic adviser. we will focus on that right after the break.

president trump looking for new director of the national economic council joining us now is greg ipp from the "wall street journal." we're all trying to handicap who will get the job and why we keep talking about our own friend larry kid ludlow.

do you think he'll get this gig? >> that's what everybody is reporting. let's talk about the job this is a tough job, it involves bringing forgot a group of advisers to the president, getting the president to focus on the best outcome to a problem and always sort of dealing with the possibility that the president could change his mind at the last minute >> one thing that's been a big sort of question mark over larry kudlow, he's come on our air and gone elsewhere and said look, i don't buy into the tariffs i don't like this. this is not my way >> even more stronger than that. >> one argument says maybe the president likes disagreement, wants people to push back. another group of people says he likes people who say yes >> part of the question is what do you want your national economic director to do. the job of this person was not to advocate for a particular position but canvas the positions in the administration and reach a consensus to bring something to the president

if you're going to be a nec director for donald trump, you need to put your views to the side and help the president get what he wants. if the president says i want tariffs, even if you don't like tariffs, your job is to help the president do that. >> is larry kudlow that person >> that's up to larry. he has to decide the extent to which he can set aside his own personal preferences to bring the group around there's another question here as well this is a key issue. it wasn't so much gary cohn did not want to do the tariffs, it's that the process didn't work wilbur ross and peter navarro went around him and brought the idea to the president and the president was good with that if you're creating a process where the people are supposed to go through the nec director and that's not working, that will wear you down. >> what is your take on the editorial that the "journal" did

today on lidell? >> the complaint against lidell was a person not strong enough on free trade views. but the question is what do you want this person to do if donald trump is a president, he's a nationalist, a protectionist, those are the policies he will pursue. one thing that gary cohn did a year ago, which was very important, when the president wanted to basically initiate the withdrawal from nafta, one of cohn's jobs was to bring to bear on the white house and on the president outside voices, especially from the business community saying don't rush into this that's the role that somebody like larry kudlow could bring to the table saying, mr. president, we know this is the direction you want to go hear out these people before you do that. i hate to keep saying this, but the process is important making sure the president doesn't rush into something before he hears what other people have to say >> greg ip, have to leave it there. thank you. >> thank you. coming up, we will talk

march madness. eric is here stopping by the set. >> today the first games of the ncaa tournament. we'll talk about everything involved there are billions of dollars at stake. "squawk box" coming back

. today marks the beginning of the ncaa tournament with the first four games today and tomorrow featuring rat ford

versus liu, brooklyn and ucla versus st. bonaventure the selection committee conveniently -- had a high rpi for usc. >> the highest rpi of a power five conference team to not make the tournament >> not fair. louisville, have you heard anything about louisville courting chris mack from xavier? >> that's your account anything cincinnati based i defer to you >> oklahoma state, bubble teams implemented in this fbi investigation, is it enough to drive reform can i ask you for some help here >> of course i figured we would get into gee's joe's bracket. >> michigan/north carolina >> what's your focus >> i had north carolina last year all the way to the end. michigan is peaking now.

>> what you find -- in basketball, it's the preseason estimates. the preseason rankings are more predictive than the end of the season rankings. because it's how you were on paper. all the volatility of the last three month dshs -- >> michigan state or duke? michigan state has nine guys that are good. >> you can only put five on the court at the same time what about pressing the button, the automatic. i'm trying to look for an active manager who will pick it for me. >> there's no fun in that. >> do you want to earn a fee or pay a fee? >> i feel bad enough picking all the hot -- i don't want to miss -- previous years i tried to pick upsets >> if you pick the wrong upsets, then you're doubly in trouble, you missed the favorites, then you didn't get the upsets. sometimes it's better to pick all favorites with a couple of upsets

>> will we ever have a number one seed lose the first game >> eventually we will. >> you want to talk business >> we don't have to. >> can you talk about the legality of using money in all of this? >> the american gaming association yesterday estimated $10 billion will be gambled on this tournament. 97% of that would be illegal because all this stuff is technically illegal. it's not enforced. it goes to the point that if the supreme court legalizes sports betting, next year who knows what the brackets look like. maybe you don't bother because you will say i will bet on individual games one by one. it's like fantasy sports was there as a substitute for gambling if you can gamble on games directly you might not do fantasy sports >> does it really shut all of it down >> it doesn't shut it down, but some hard core guys may say forget the bracket, i'm just calling my bookie for xavier the entire time. >> i'm glad you mentioned xavier there's going to be some

serious -- i'm looking any of these teams can beat any of these other teams this year in particular is tricky >> it has been is virginia really -- is this the year -- >> too big on defense. i find defense -- frnts how about kansas will they -- >> the music is coming we didn't get to anything. what is the lost productivity on the games? >> it's a lot. >> you mean like rite now? >> there's also a loss >> great to see you. at crowne plaza, we know business travel isn't just business. there's this. a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly.

crowne plaza. i we worked with pg&eof to save energy because wenie. wanted to help the school. they would put these signs on the door to let the teacher know you didn't cut off the light. the teachers, they would call us the energy patrol. so they would be like, here they come, turn off your lights! those three young ladies were teaching the whole school

about energy efficiency. we actually saved $50,000. and that's just one school, two semesters, three girls. together, we're building a better california. welcome back to "squawk box. february read on cpi, consumer price index on the month over month we are up 0.2% following unrevised up 0.5 food and energy also up 0.2. year over year up 1.8. year over year headline up 2.2 maybe that's what we'll talk about. 2.2, you have to go back to march of last year to find a higher read. we had several 2.2s. march of '17 was 2.4 february of '17 was 2.7.

even though this is loftier, though matching expectations, it's one tenth hotter than the last look, the numbers are about right. the intervening move in the marketplace is not much. trading at 2.87, 2.86 before the number, and this could be the 13th trading day in a row where the ten-year note yield closes in the 2.80s back to you. >> thank you for that. we'll get to steve in a bit. first president trump just tweeting the economy is raging, he says, at an all-time high and set to get better. jobs and wages up. vote for rick saccone and keep it going let's go back now to the professor. you seem excited about all these numbers. >> i don't like that word raging that's one that central bankers would be concerned about i would use -- don't use the word raging. it is doing well without a lot of -- this is a

curious report you disagree, joe? raging is okay in. >> i'm okay with it. >> a lot of negatives in this number here. a lot of negatives in the list new vehicle down, gasoline down. prescription drugs down 0.4% education down but there's a bunch of one-item big ones housing and utilities up apparel up 1.5% after being up 1.7% that's the iconic cheap good in today's globalized world for some reason that's up 1.5% airline fares reversing last month. a very, very mixed push me pull you going on in the inflation report i don't think it's anything again that changes the fed's calculus you have this one thing going on, next month, the big drop in telecom drops out. that might bring up the core from 1.8 just remember, using the cpi number here, the fed focuses on the pce number, which is anywhere from 0.3 to 0.5 lower

because of how it's calculatecad don't use the 1.8 close to 2.0, what is it >> before we do this, we have to see the market reaction to it. dow up almost 150. >> it's pretty fascinating we did see a pop in yields everything from 2s out to 30s. the longer end holding some of those gains. the pre-opening equity futures really also made a big move. we jumped right over into triple digit territory in the dow futures. we were up less than 4 points in the s&p, they're up 14.5 therein lies important information. the treasury looked at it and said as expected really not super hot and the equities looked at it like wow, yeah, we have a little inflation, but it's not super hot either they really like that. i think that's something to point out early in the session >> now let's bring in another voice to the conversation.

the chief international economist for deutsche bank joins us you are okay with raging >> raging doesn't sound like -- the number here was basically boring wages on friday did not show much signs of overheating or raging we do think the labor market is tight. inflation is eventually coming and when we get to next month the reversal of wireless phone businesses and a jump of 0.3 automatically in the year over year number smells more like raging the difficulty is a lot of indicators are suggesting the economy is overheating but we're not seeing that in the numbers today or in wage numbers last friday it's not quite raging and overheating yet, but we think we will get there eventually. >> you messaged me and said you had not copped to it on air. are you at 3% for the year now >> for -- the thing i messaged you about is the fourth quarter which was a big miss which so

upset you and you were depressed about that, you couldn't get your 3 for the fourth quarter, it's been inching up we're at 2.8 not quite there yet. >> where are you for the year? >> it's like 2.6 >> no, you >> me? >> yeah. >> you're talking about 2018 i think we can do 3 this year. i think we can do 3 this year. >> wow wow. >> i was at common fund yesterday. nancy lazar was on is she ever bullish. she thinks the whole thing -- i call it -- it's the trump proposition, yesterday i called it the lazar proposition, she says tax cuts, capital spending, productivity growth, wage growth she sees that whole thing happening. she was -- i tested her on it. she was like rock solid on this. are you there? >> we are. >> tax cuts, capital spending, wage growth, job growth. >> it should move us up to three, but what's critical for the market is to think about

when is peak fiscal boost what quarter do we get maximum out of this fiscal stimulus is that in the middle of this then the second derivative of the gdp number will slowly start to come down the question becomes when will you get the highest growth rate in earnings. >> let's play with that word raging again so the proposition i laid out earlier is one that is not inflationary a certain guy, larry kudlow, argued this for a long time. i learned something, growth is not necessarily inflationary even though the market takes it as inflationary. if you're building new plants, if you're hiring new workers, bringing them off the koufrps in couches into the work force, that's not inflationary. innatiflation is when you have o much money chasing too little resources, or they shrink your&

there. do you see the growth outlook here, that series of events does that cause the fed to do more? >> the day you have no more people sitting on the couches, that's when people go up people say i have some bargaining pressure here in that sense the day you run out of slack, the day you no longer have excess capacity in the labor market, then you will eventually see wages up. we still are waiting for that day to come. >> i think there are bad market estimates of what is inflationary, what are inflationary wage gains. right now they're running 2.5. people freaked out when they were 3 that's wrong wage growth that's equal to inflation and productivity is not inflationary what does that mean? yellen has said this 4% wage growth is not inflationary but the market freaks outs at 3. i think there's a dissidence

between what the economists think and what market thinks i don't know if that's a big deal but i think the market should chill out on wage growth which is not always wage inflation >> at least the fed is telling us they want to hike rates three times this year an ned next yea. that leads you to think they believe they are getting close to the inflection point. we do expect inflation to go up on the other side of 2%. >> move out your fiscal peak, we have tax cut part two coming now. >> been reading about that who knows, right >> it's a huge experiment we're running. we've been waiting for ten years to show signs of overheating it has not happened. >> we have a pool of 25-year-olds to 54-year-olds ready, willing and able. >> there was 3$300 billions in the room yesterday, joe. you know what the number one concern is >> a humble brag, by the way

>> i know. >> i'm not being humble. there was a lot of money in the room >> none of it was yours. >> none of it was mine no no i'm not being humble >> osmosis fifrnlgts w >> if i was being humble, you would know it. >> and >> the number one concern, trade and tariffs. >> that's number 75 out of 75 issues for small business owners >> was your name in the has the for goldman sachs ceo? you saw those guys, right? >> no. but if you're saying i should be considered because i'm bald, joe, that's another anti-bald type thing you have brought up >> do you think that they all wore too many hats do you only wear hats once you go bald? do you know? i think you can -- if you wear a hat too often, that can be part of the -- >> when a bald man wears a has the, he covers up the sexiest part >> when i was pregnant, steve

touched by belly, pregnant women's bellies and bald heads are public property. >> wow >> thank you >> too much. >> yeah. senator rob portman will join us. he's from the rust belt state of ohio the topic of steel and aluminum tar wriffs are hitting close to home his take after this. what is th? it's life insurance and retirement solutions to help you reach your goals. it's having the confidence to create the future that's most meaningful to you. it's protection for generations of families, and 150 years of strength and stability. and when you're able to harness all of that, that's the power of pacific. ask a financial advisor about pacific life.

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welcome back to "squawk box. breaking news. the "washington post" reporting that secretary of state rex tillerson officially out of his job. he will be replaced by cia director mike pompeo this comes after president trump decided to pursue negotiations with north korea without consulting tillerson, which might have been a sign tillerson was just on 60 minutes talking about his role and his relationship with the president. we'll continue to monitor this we should say unconfirmed by cnbc and nbc at this moment. when we get more we'll bring it to you >> adding context to this, as far back as november politico was reporting that officials at the state department said that they would take pompeo over tillerson. they were frustrated by how there were severe cuts at the department, and how someone with close ties to the president

would bolster the position there. this is certainly somethings that been circulating for months potentially. >> well, this will be interesting because joining us now, former u.s. trade representative, ohio senator rob portman. can you add anything to this, senator? is this the first you're hearing of this? >> it's the first i'm hearing of it, but i agree this has been sf speculated about pompeo is a good man he'll be well regarded at state. i saw him on the sunday shows talking about foreign policy he's a good pick tillerson did a good job in terms of changing some of our relationships around the world with our allies. he's someone i have gotten to know because i'm on the foreign relatio relations committee. we'll see what happens >> would you have preferred he stayed >> i don't prefer one or the

other. he has to make a decision himself. he talked about leaving some time ago it doesn't surprise me >> while we have you here, we have your comments before, and i remember you said carve outs, specifics, now we know about the tariffs. is this more in line with what you're comfortable with, the way that the steel and aluminum tariffs have been rolled out and initially -- you needed more information. you are happy now? >> yeah. it's still unclear exactly how it will work out it's good to exclude canada and mexico we're in the middle of negotiations with them on the north american free trade agreement, nafta, it might help to get to us a decision point on nafta. some other allies, us a traaustn uk come to mind, the top ten steel exporters to us. strong allies and military al allies in some important conflicts. one thing i said last time there's certain products of

steel that are particularly problematic because they're coming in at high levels electrical steel i talked about, which is threatening our ability to have an electrical steel production in the united states, which is necessary for the grid. the other is oil country products, the pipes and tubes that have been coming in electrical 100%, pipes and tube about 90% increase in the last year alone targeting the products is also important. >> that news that was just coming from the "washington post" before is now being confirmed by the president he just tweeted out mike mom pay pompeo director of the cia will be new secretary of state. he will do a fantastic job thanks to rex tillerson for his service. gina haspel will become the new director of the cia and the first woman so chosen. congratulations to all >> how much of a factor do you think tillerson is in may

maybe pompeo is closer to how the president thinks >> i think is he closer to the president, that's why some folks at the state department might be happy, they believe their budget has been cut too far and they have not had the support they're looking for. we'll see what happens i think pompeo has the respect at the state department, will you also on the hill so he's a house -- former house member he has a lot of relationships on capitol hill i don't see a big shift. maybe a deepening of ties. in my view, tillerson has done a good job he comes to the foreign relations committee and talks to us regularly i wish him well. >> senator, what should we try to get out of north korea, both before the meeting and during the meeting do you think i heard there's no more conditions necessarily coming. you know there's going to be a lot of monday morn quarterbaing

quarterbacking i would approach this with some consternation given the history of negotiating with north korea, given their history. the president is probably not going in with rose-colored glasses, but you can't be too skeptical. how would approach it? what would ask for >> i would be very skeptical they used negotiating consist t consistently over time it's sort of a roller coaster. they violate international rules, and then they finally agree to have a meeting and in exchange for not doing something. cessation on testing of weapons, and then after the meeting they go back to their old behavior after they get additional concessions, usually economic concessions, countries including the united states agree to provide more aid you have to be skeptical on the other hand, i have called for some time for direct negotiations and talks with them as you know, i went through this process with at otto warmbier.

i did talk directly to the north korean officials, understanding that say the department was not officially doing that. they allowed me to do that that was one reason we were able to finally figure out what his condition was. you have to have a negotiation, a line of communication with them, a dialogue with them i'd be very skeptical. >> back to the question of tariffs and protectionism and national champions, one big news item of the morning also has been this broadcom and qualcomm deal with cfius jumping in the middle and the administration blocking that. broadly what do you think of that and does that have implications for more transactions, not just those related to china, but even beyond that. >> well, i wasn't surprised from what i knew about it i am not privy to all of the classified information on broadcom but i do think that given the chinese influence at least and ownership to a certain extent of broadcom and their interest in

getting this 5g technology, it is a national security issue it's appropriate for cfius to have looked at it we'll get further briefings on it. i was not surprised. i do think that we are in sort of a competition with other couh now. the most important national security issue is technology this is an example of that i think it is appropriate to look at it and i think we got to wake up and realize that china and russia and other competitors are out there trying to get technology and in the case of china, of course, we'll see soon the announcement of a case with regards to them section 301 under the trade act. i think there is appropriate review senator, while i got you here, you saw the house panel yesterday ending the collusion investigation immediately met

with adam schiff and his criticism calling it the house cover up do you know where the senate stands do you have any clear notion about whether the senate continues or whether they are closer to find anything? did you agree of what the house concluded yesterday? >> i think a bipartisan review of this is very important and so far so good. mark warner and richard burr who's the ranking democrat and working together they told me something is coming out real soon and it will be two or three stages as i understand of their report. the first report will focus on what actually happens during the election and what the russian meddling was and how to avoid it going into the primaries general elections this year. it is important to get to the bottom of this issue the american people want to know i think the collusion issue is one where i don't see any proof of it out there.

i see a lot of proof and evidence of the russians meddling in our elections using this information against this country and we have not talked about that the notion that we as republicans are not going to get into that issue because it may affect the presidential campaign inquery is crazy it would be in the interest of everyone to dig into this and understand what happens and provide the american people with a bipartisan or anon-partison. >> this is going to take all your skills. >> you got to pick >> xavier is my cinderella team. i have them playing each other in my bracket. >> who's going to be moving on

after? >> awesome i can say xavier in the final. >> you did give an answer. you could lose a few votes on that, that's taken a stance. >> that's good >> thank you, guys >> rex tillerson out as secretary of state and mike pompeo will now head to the state department let's get to ylan mui. >> that's right. trump confirmed it to twitter, congregations to all replaces mike pompeo as cia director. trump nominated the department director of the cia. the post reporting that the president trump asked tillerson to step down on friday while he was on a trip to africa. rex tillerson had cut that trip short saying he had some illnesses and wanted to be back in washington by today perhaps, we now know the real reason behind that

secretary of state had frequently seen out of the loop on some key issues he said north korea has not directly confirm the meeting that president trump said he would take with kim jong-un. rex tillerson is now out at the state department, mike pompeo at the cia replacing him and the department director of the cia is looking to fill pompeo's shoes. another day of musical chairs at the white house. >> this one has been talked about for a long time, ylan, something we have been waiting and watching >> rex tillerson's status in the white house has been in question for a while but he seems to hung on longer, gary cohn's name has been in and out, he submitted his resignation but hung on. now tillerson coming out during a critical moment and diplomacy for the white house. you know we'll see how the white

house is able to carry forward and what comes out of these north korea meetings >> ylan, thank you very much we have much more on this breaking story president trump announcing that tillerson is out the secretary of state. stay ted, unyou are watching "squawk box" on cnbc, futures are down by 106 points ♪ i'll stand by you. fvo: he's encouraged other people to look around and notice one another and take the time for each other. that's his gift. ♪ i'll stand by 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?

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today's breaking news, tillerson is out and replaced by mike pompeo. our own andrew has a calendar. did they both make it a year >> my cynical take that cohn and tillerson did make it for a year if you are there for twelve months, your capital gains, you move into treasuries go away it allows you to diversify if all of your stocks are in exxonmobil or goldman, you are in a different place i know that sounds so cynical. they did get through a year. >> did you think the whole government waits for someone's holding period >> no, i think that's a thought in the back of some people's

mind minds. >> i saw you jump into action to protect the sorkin's assets. >> you go 366 days >> you're forced to sell your shares when you go in. >> if the stock goes up -- >> you are not paying capital gains but you are forced to sell your shares. for goldman sachs is a different story. >> that's a bit of a different story. and even with the capital gains, his basis is so low, you are talking about gary cohn because of the stocks he's got >> this is fascinating news though >> big deal. >> what did you say of all of the businessmen who no longer are around the table a lot of business people have

sort of left >> right, we did not get to go to cramer because he has sources and i am wondering if he knows of the timing for larry kudlow >> you can find out in about ten seconds. >> is he still on the west coast? >> okay. >> we'll send you over to him right now. happy anniversary to joe and penelope, "squawk on the street" begins right now >> good tuesday morning. i am carl quintanilla and david faber. >> rex tillerson is out as secretary of state to be replaced by cia director pompeo. the president heads to california today futures held in there this morning. europe is pretty flat. bond yields did drop slightly on the tillerson's news and the cpi this morning as been in