it's wednesday, march 14, 2018 it's a day in between my anniversary and my son's birthday weird. "squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. look at the u.s. equity futures. we've been in the green all morning. you're going to get strong results with the dow futures indicated up by 100 points how we go in the morning has not indicated anything by the end of the session. yesterday the dow was down by 170 points the s&p was down by 17 the nasdaq was off by 77 you are still looking at positive month for both the s&p

500 and for the nasdaq, but for the dow in negative territory for the month. we'll see how this goes as we get closer to the opening and then the closing bell. overnight in asia, stocks in japan closed higher. look you'll see the nikkei -- closed lower the nikkei was down 0.9% the hang seng off by a half percent. then in europe, where stocks are already trading at this hour, you'll see there are green arrows across the board. gains of a third of a percentage point for germany and france in london, stocks are up by a quarter percentage point let's check out the treasury markets. the yield on the ten-year at this hour looks like it is 2.8%. couple stories we are watching developing news on toys "r" us sources telling cnbc the iconic u.s. retailer is in the process of drafting a court motion to

liquidate its business liquidation would most likely result in toys "r" us closing all of its 800 united states stores this is not chapter 11 protection, we'll try to make it work again this is potentially the end. >> this is heart wrenching >> it is >> we're not there often, but we take our kids to these stores a couple times a year, like birthday and christmas the idea that you can't go there to get bikes, trampolines. >> have to order them on amazon. >> yep that's what happens. >> right geoffrey, the whole thing. >> there's been a decline. 15 years ago walmart became the largest toy seller in the country, but amazon is the thing they can't hold up against. prudential insurance spinning off its uk and european division from the international business, part of a radical

breakup of the 170-year-old country. also reuters reporting that broadcom officially planning to scrap that bid for qualcomm after president trump blocked the acquisition. qualcomm plans to move on to base itself back here in the united states and it will drop the challenge to qualcomm's board. the announcement could come as soon as this morning as we spoke with david faber yesterday, even once they return here and become a u.s. company, this deal still off the table. the world is mourning the loss of a great mind stephen hawking has passed away. he's best known for his insights on black holes, quantum theory, his best selling book "a brief history of time. a description of him said he

brought theoretical thoughts and ideas to the masses where it could be understood. i tried to read a portion of it, maybe read the first five, ten pages. he was unable to bring it home to me. >> there was another book after that >> when you think that time and space are related, wraparound each other it's not ever understandable >> he was trying to tie up newton's laws with quantum theory and find there was a unifying theory. >> there was this remarkable life for a guy who basically lived in a wheelchair for -- >> diagnosed at age 21 with als. you're not supposed to live another 50 years. >> and live the life he lived. i found him inspiring. >> absolutely. >> in so many ways he lived a full life, remarkably full life especially given the

challenges he faced. >> confined to a wheelchair later. lost his ability to speech but don't continued to be a prominent figure through that famed computer use feature and he died at 76 after being diagnosed at 21 united airlines is under fire once again this morning after a flight attendant forced a passenger to put her dog in the overhead bin that dog died during the flight from houston to new york this was a 10-month-old puppy. i think it was a bulldog french bulldog united is out with a statement saying this was a tragic incident that never should have occurred pets should never be placed in the overhead bin we assume full responsibility for this tragedy and express our deepest condolences to the family and are committed to supporting them. this is less than a year after

dr. david dao was dragged off a united flight. the company said it was going to turn things around this is another black mark in terms of public service disasters. we'll talk to an airline expert at the bottom of the hour and find out why this is united again. united has the worst record for pets dying on airplanes. almost 5% of the pets that travel on united airplanes die >> it's a terrible tragedy i thought to myself do i walk in this morning and pile on united and say another example of -- >> yeah. i'm shocked what are they doing wrong? >> from a corporate level, unlike what happened last year, they immediately took responsibility, there was no wiggle >> they have not corrected anything in terms of the policies they're putting out how this wound up happening, i have no idea >> it's terrible what happened the question is was it a

terrible -- i don't know whether it was a flight aen ttendant wh did not understand the implications of what they're doing. >> every flight attendant is different obviously, but continental as i recall was a friendly great airline they had problems putting together united and continental. less than a month ago i sat here and railed for five minutes about my useless frequent flyer miles on united that are not good anymore because they wait until the last minute. not a single call. no one said, gee -- i knew people at continue intercontinental and united. i railed about that, complete radio silence from the company they don't care. they don't need friends in the media. then something like this happens who do they expect to stand up they got you, who won't say anything you're still working on something. >> i'm shocked that these issues keep happening at united >> 100%.

>> i figured the guy -- wasn't he a rail guy? >> oscar munoz >> i think he's used to moving steel, coal, it's already dead they move it from one place to another. people -- that's all i can think. united, a lot of employees were not that nice compared to continental. this is five years ago >> is there something the company is doing wrong are they not paying them enough? not providing enough guidance? i don't know we'll talk to an expert about this >> lebeau knows a lot of people over there >> it's a puppy. >> it's a 10-month-old >> whatever training they have for flight attendants, it makes no sense >> why not put it under the seat >> it was in the tsa approved travel carrier >> we take pongo, we have trooe d three dogs, our little dog comes

with us all the time if they try to put pongo in an overhead bin, there will be blood. there's no way you put a dog in an overhead compartment. >> we have to hear more about it it happened yesterday. >> maybe they didn't think there would be an oxygen problem >> the flight attendant? >> i don't think it's even that. i think these attendants feel they have so much power. >> they do and they do. throw you off the plane. >> they abuse it and -- >> i will also say there's a lot of air rage. there are passengers who are unruly >> you have to empower them to control the situation. >> united has a problem where they have customers who are unhappy and employees who may be unhappy. >> people strip and start playing with themselves in the seat there was a guy last year, a businessman, he got up on top of a table. >> people trying to bring peacocks on a plane. >> in this case, the passenger

said i am not putting the dog up there. >> are you changing now? >> no, i'm saying -- no. what i thought was -- what happened last year was also a tragedy as well. >> with the doctor >> it was also a function and made worse by the way the corporation responded. they didn't defend the customer they defended their own people in this case, they owned it, they said it was their responsibility >> they haven't said what they're doing with the employer. we don't know. they didn't step in the exact same situation >> everybody is at zero from sky west to everybody down united is 2.24 incidents per 10,000 animals the average is 0.79. >> i got numbers a little different than that, but united has the worst -- has the worst record >> this is 2017.

this is the annual report of the incidents. to be fair, delta, american and the biggest ones, they are the last three no one is close to united. >> we'll continue talking about this this morning. we'll have an expert joining us later. we do have breaking news on the pennsylvania special election. eamon javers has more on that story. good morning >> good morning. the vote counting went way late into the night last night, just within the past hour nbc news has declared conor lamb, the democrat, the apparent winner in pennsylvania's 18th congressional district this is the vote count as of 5:19 a.m look at these numbers. so very close between conor lamb, the democrat, and rick saccone, the republican. 113,720 votes for lamb 113,079 votes for saccone. that is a 50/50 split. but nbc news is saying lamb is the apparent winner because the

only outstanding votes are the approximately 200 absentee votes in greene county and provisional ballots in that district will count within the next seven days even with those added, it doesn't appear saccone can catch up it's possible there may be a recount in this district so this battle may not be over for now democrats are calling conor lamb congressman elect president trump campaigned twice in that district for saccone it's a district that the president won by 20 points back in 2016. so it's being watched as a bellwether for just how republicans might do in 2018 in the midterm elections. what happens in these cases, when you have these special elections in the off months, the side that wins always says it is a bellwether, and that indicates we'll trounce the other side in november the side that loses blames the individual candidate and says, you know, this guy was not a good guy this doesn't tell you anything because of the individual characteristics of this

district we can't learn any lessons from this going into november i think there will be a lot of hand wringing in this result stands among republicans going into the fall. they're concerned about keeping the house of representatives that's the political news overnight. in washington we'll be watching for more repercussions from the president's decision to fire his second tasecretary of state, re tillerson. rex tillerson fining out he was fired on twitter yesterday morning. not until noon dereceiveid he r call from president trump. one thing we'll watch out for today is whether the president fires any other members of his cabinet. it's certainly possible that other cabinet members are on the bubble with the president. we'll see if that develops throughout the day today watch for a possible announcement of larry kudlow as national economic council director that seems like a possibility for today.

the president had some kind words to say about larry kudlow yesterday. but it's not a done deal very close, but not a done deal. larry kudlow would replace gary cohn cohn resigning last week over the issue of tariffs and the failure to achieve higher position within the trump administration the president said that larry kudlow has come around on the issue of tariffs on the issue of a negotiating tactic we're getting new reports from reuters yesterday that the white house is considering about $60 billion in new tariffs on china. that would go into place this year i've been talking to sources who say not only is the white house considering tariffs on china but a couple other restrictions as well, including restrictions on investment in the united states by chinese individuals and possible visa restrictions for chinese travelers. all of that aimed at china, aimed at correcting what the

white house sees as a gigantic imbalance in trade between the two countries. the official number is less than 5$500 billion, 347 billion. but that's the number that this white house wants to correct we'll see throughout the day today whether we get an official announcement on those tariffs. >> eamon, we have to go. we have someone to talk to, but tillerson stopped -- maybe he was sick, but i done -- i see other people on twitter saying he knew. the idea that he found out on twitter is that he knew, maybe specifically he didn't know when he didn't work -- he sort of just shut down and stopped doing what he was doing. >> a white house spokesman told me yesterday that tillerson was appropriately notified on friday what does that mean exactly? there was a call from john kelly to rex tillerson

we know that what did he say? did he say you're on thin ice? did he say you're out? did he say something is coming >> did he call trump a moron >> he never denied calling the president a moron. it was reported by nbc >> eat your salad. >> i never denied maybe referring to you like not -- not moron, but terms like that, right? you haven't denied what you say about me, have you doesn't mean you say it. >> i told you to eat your salad. >> i missed that >> get that piece of hair up top. there's one piece. >> yes >> now it's good >> rex, eat your salad it's this thing -- >> i thought it was the worst rex i ever had >> no, they're calling rexit >> did you watch yesterday i was amazed that both sides kind of -- they liked the cia, except the waterboarding they like her because she's a long-term employee there there was some positives from

both sides of the aisle, positive stuff about pompeo. >> the thing he has that rex tillerson didn't have is a relationship with the president. i see mike pompeo in the west wing all the time. he comes in to brief the president, give him the presidential daily brief, the intelligence secrets of the nation he does that face-to-face. a lot of other presidents and cia directors have not done it face-to-face they have a lower brief handle it in this case the president wants to hear from the director himself and the director took advantage of that opportunity to build that rapport with the president. that seems to be what the president was saying also he had some fundamental disagreeme disagreements on policy with rex tillerson, including iran. so this was a fundamental policy and personality split between these two men. >> thanks, eamon >> you bet >> for more on the shakeup at the state department, let's bring in john negroponte, he served as u.s. ambassador to

mexico, to the u.n., and as former director of national intelligence now vice chairman of mccardy and associates you point out from off the bat that it's an important cabinet position for the president to be in sync with out of all of them, it just seems like one where you want to be slike that and for that reaso it's a positive move >> i think that's right. the president has to be comfortable with his national security team, especially his secretary of state so this may just not have been a very good fit. if that was going to continue to be the case, perhaps it was well that mr. tillerson depart sooner than later he's picked somebody in whom he has a lot of confidence, who i think has a lot of qualifications for his job

he's been in the government throughout much of -- if not all, much of his adult life. he was in the military he was in congress now head of cia, and soon if confirmed to be secretary of state. you mentioned it, the baildaily brief. i used to brief the president, that access to the president on a regular five, six-day a week basis is an important thing. >> when you use the word blunt and diplomacy in the same sentence, it sounds like an oxymoron he's very blunt. is that what you want in a diplomat depends on the situation in these times that we're living now, blunt may be better, i guess. >> i'm sure he's capable of being diplomatic if he wants to be or has to be. he's certainly got a tre mrend douse educationtremendous perso.

you can't be editor of the harvard law review without having the brains to go along with that. >> what does it mean for russia and china? he's hawkish on both, no >> i think we'll have to see the agenda is a busy time. it's always a busy time in foreign policy you have the north korea possibility of north korea talks coming up. you have these economic issues that you were referring to with respect to tariffs on chinese goods. the plate is really full >> ambassador, two questions one on the policy front. from some of those looking at the outside, they look at tillerson and say here was a guy who said we should be negotiating with the north koreans. and pompeo on the other side, now the roles reversed do you see a switch in terms of

the way he will approach it in this seat, meaning by being in the seat does he have to -- does he have to think about the world differently? >> well, i mean, there's a certain amount of that you stand where you sit, so to speak. the real point of what happened eventually is it's the president who decides these things he's the commander in chief. he's the steward of our diplomacy. the secretary of state has -- while he's obviously somebody who has to think independently, ultimately he's got to get in line with the president's thinking and reflect it to the best of his ability. you could make the case that mr. pompeo is possibly going to be able to do that better what do you make of the critique that given the way tillerson was fired and the way some of these things have been handled and just the struggle that has gone on inside of the state department already in terms of filling or not filling rolls,

that it's going to get harder, not easier how do you feel about that >> i see -- i see it perhaps going in a somewhat better way a lot of people fault mr. tillerson for not fighting enough for his own department. he didn't fight the budget >> he tried to hire people that were totally at odds with a lot of the stuff that maybe was coming from -- coming down from the white house. he was a ceo a lot of times you think these guys are operators, managers, they know what they're doing they get in there, someone is telling them what to do, they haven't been told what to do in 40 years >> yeah. >> then they disagree with them, and they sort of work around it, try to do it any way i'm not sure that's -- when you're working for someone, it's hard to be a ceo because you have not worked for someone for so long. >> this depends from case to

case i've known a lot of businessmen who came into government we are had a lot of political appointees in the state department some get it. some don't it's a matter of each individual case i just don't think he ended up -- he wasn't comfortable with his governmental kind of approach to things the inner agency process and particularly what it is to recognize that the president is the ceo. not himself. >> the people that don't like this administration talk about, well, the state department, all the employees hate tillerson this guy is awful. now you get somebody this there that they supposedly all like, they go what happened to rex it's tough to win. you would think they would be happy. >> i don't think they hate him i think they want to make a contribution they've just -- it's a dedicated service. they work in very difficult

places, iraq, afghanistan, africa, all sorts of hardship posts. they want a leader somebody who recognizes the sacrifices they have made. perhaps somebody who has been running the cia for the last couple of years who i hahave similar types of careers, hopefully he'll be more sensitive to that and treat the foreign service the way a lot of us foreign service officers would like him to see. >> a woman at the cia. >> she's a career person i think that's good news >> right all right. when we return, futures indicating a higher open after yesterday's 170 point seofllf in the dow. well talk portfolio strategy ahead of today's economic data

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let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. welcome back to "squawk box. joining us to trualk about the markets is mark tyler and phil orlando. good morning to you. >> good morning. >> just help us try to understand the market. market looks like it will go up today. that's not an indicator of anything given where we are on tariffs,

given where we are in pennsylvania and on tillerson or pompeo, is there a gamble or a bet -- i shouldn't say gamble but has anything changed in terms of your thinking >> that's the problem. you have the narrative, the noise, the nonsense, stupidity on one side. we say let's forget about that and focus on the numbers we have a terrific jobs report on friday. the business optimism index hit a new cycle high yesterday the inflation data has been running nice and benign. when you focus on the stuff that moves stocks, corporate earnings last year was the best we've seen in six years. the stuff that matters is doing fine if we can just screen out the nonsense >> so you screen out the nonsense and do what >> we have a % 7% equity overweight, we continue to like the sectors that are economically sensitive and we're continuing to focus on large cap

value, small caps, and international developed as areas that offer good value. >> is all of this news in your mind all of these headlines, are tariffs noise? >> tariffs are not noise certainly the replacement of pompeo for tillerson injects a bit of uncertainty into foreign policy issues. i think markets do tend to look past that. what we are going to pay attention to are inflation numbers and earnings numbers, and so far those seem to be coming in well we'll see for sure when -- first when we see the fed meeting next week what mr. powell wants to do and how he says it secondly first quarter earnings coming through in april will give us our first sense of how much of the earnings growth this year is from tax cuts and how much is from actual demand growth that will dictate the direction of the market for the rest of the year until then we're treading water.

one question on the tariffs issue. there is a real implication for that are there stocks you want to be in or not to be in during this period where this gets settled out? >> the short answer is we don't know it's been our view that the whole tariff issue was a negotiating club, if you will, to try to extract better terms nafta, china so we don't know what the final thing is going to look like. it was our view that all of this was meant to try to get some sort of an advantage in negotiations >> you know, one thing that is true is that as the dollar has weakened, it has made u.s. exports more competitive so u.s. companies are doing better, especially exporters so a focus on industrials, on some other companies, on technology that does a lot of export business, with or without tariffs is a reasonably good place to be. >> we'll leave the conversation there. sorry to keep it short appreciate your time >> thank you

when we come back, the squawk planner we'll get you ready for a busy day and data on wall street. and adidas is out with earnings the ceo, kasper rorsted will join us live after the break right now as we head to break, let's look at the s&p 500 winners and losers whoooo.

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welcome back you're watching "squawk box" live from the nasdaq market site in times square. welcome back it's time for the squawk planner there's a trio of economic reports on the wall street agenda february retail sales out at 8:30 a.m. eastern. the headline number expected to rebound after a decline in january. we'll get the producer price index for february at 8:30, followed by january business inventories. that's at 10:00 a.m. u.s. equity futures, we're in the green. we we we are up about 100 points on the dow. we'll correct this i've been going back and forth on twitter for somebody. it was not 5% of all animals on united that are killed here are the correct number. united was responsible for 18 pets that were lost, injured or

killed 24 pets were either lost, injured or killed in the entire industry two of the other airlines had two. united had 18 of them. >> it was like including insects, roaches >> it's a serious story. >> it is 5%, it's like -- that's why i was so stunned when they told us that i said i would never take a pet on any flight. >> that's like a crap shoot. >> 5% of anything -- >> that's like letting them cross the west side highway. >> repeatedly. >> we'll talk more about this story in a bit serious story overnight where a dog that was being transported on united was told by a flight attendant -- the passenger was told to put the pet in the overhead bin the pet was dead when they arrived. best buy set up a hotline to

field complaints from customers who believe they have been unfairly banned from making returns. the company took action after the "wall street journal" reported that best buy and other chains pay to track customers shopping behavior and then limit the items they can bring back based on that behavior using data provided by retail equation, retailers have the power to override its own return policy and then refuse to refund the customer's money best buy said it prevents returns in less than one-tenth of 1% of cases because of suspected fraud. customers complained they were not able to clear their names. the company apologized to everyone affected. >> i'm turning into an anti-corporate activist hearing all these stories. >> are you a major return guy? >> no. but i had an issue a couple years ago. it was ridiculous. >> there is a lot of return

abuse. >> that's why l.l. bean got rid of its return policy for the life of the item >> people would show up with boots from l.l. bean from 15 years earlier, say they're broken and they would replace them >> i bought a big tv set, and two days later was $500 less i said take it off they said, no we can't do that i said i can buy it amazon today. they said that's tough i said okay, but i can return it yeah, you can return it. well why -- it made no sense made no sense. i sometimes wonder who is in those places are they middle management types? >> that make the decisions that make a decision that's so patently stupid. >> they make these relatively rigid rules because they are worried that people will go outside of them, then nobody feels empowered to do the right thing in the moment. >> make a logical -- >> right

>> wait until you -- >> that was not the case with united >> wait until you try to get a driver's license >> he has a driver's license >> you have been to the dmv? >> can i tell you something about the dmv? i was just there this week >> you have a good one >> they did a spectacular job. >> amazing >> i want to thank the people of new york city, 30th street >> wow >> for all of the commentary that people say did the dmv -- >> because no one drives they're like this in new york. >> it was efficient, they were nice they were smart. they were helpful. >> excellent >> they deserve a lot of credit. they get too much push back. >> coming up -- i don't understand that. >> not in jersey >> night and ay. >> another reason to live in the city >> they start discussing lunch plans at 9:30. they are not even -- you know -- >> so do we. >> that's right. >> coming up, what united

airlines is saying about the family whose dog died if an overhead bin on monday they said they're taking full responsibility what does that mean? >> i don't know. >> the dog is dead later we'll talk -- buy you a new one? clone it the shakeup at the state department thomas friedman will join us at 7:30 and then bob corker will join us at 8:40. stay tuned you're watching "squawk box" on cnbc tomorrow, it's a day filled with promise and new beginnings, challenges and opportunities. at ameriprise financial, we can't predict what tomorrow will bring. but our comprehensive approach to financial planning can help make sure you're prepared for what's expected and even what's not. and that kind of financial confidence

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welcome back united airlines passenger suffered the death of her dog on board a flight from houston to new york on monday night other passengers reported that the flight attendant told the owner to put the dog in the overhead storage compartment joining us now to talk more about this is bris brian kellere points guy this story has gone viral because it was a 10-month-old

puppy and there were pictures, and it caught peoples attention. this brings an issue to the idea that this is united again. it's been less than a year since they dragged that passenger, doctdr dave dao off a flight. is this a series of bad events >> this is a huge problem for united i think it really -- the nerves have not quite settled over from last year's incident this story is just outrageous. the fact that a flight attendant demanded that a puppy that had been paid for and was in an approved container be put into the overhead bin, which we know things shift during and after takeoff, flight attendants tell us that all the time it's a sad and outrageous story. even though united accepted responsibility, what does that mean

are they denoting to the aspca, doing training to make sure this never happened it's a sick story. >> what we're trying to figure out is if there are policies in place or policies not in place at united that would cause this to happen. what do you think? >> it's very similar to last year's event i think there's a culture of rogueness. united merged with continental airlines years ago yet the flight attendants are still separate there's an us versus them culture -- continental versus united employees, and us versus them versus customers. this reignited that age-old debate of flight attendants on board thinking they run the show, can make their own rules and unfortunately a small dog -- i have a french bulldog that i traveled with many times over, and everyone knows that they have breathing problems. so everything -- it just makes no sense we talked to witnesses that were

on that plane. that flight attendant knew there was a dog and consistently kept saying put it in the overhead bin. i know a lot of people are blaming the dog owner, which i get. i would never do that, but when you're on a plane, we've been conditioned to be lemmings in that, the flight attendants are thoer teari authoritarians -- >> to me, there's two issues what do we know about the flight attendant and then the training of the flight attendant, the culture of what's been done, the support these ae tend dattendano don't have >> i know a lot of flight attendants we've never heard of something like this. i think the flight attendant is claiming they didn't know there was a dog in the dog carrier, which makes no sense to me all of oureyewitnesss say that the owner strongly pushed back

and said that, no, there's a dog in there the flight attendant said it will fit in the overhead, it's fine you must do it you must comply. with dr. dao, similar situation, he didn't comply, and he got beat up. united has a situation of their front line employees are terrible -- not all of them. >> i have been on planes where passengers have been unruly and out of line, and where the flight attendants had to step in i think what you touched on is this idea of a separation of the flight attendants between united and continental. that baffles me. why is that still the situation? it's been years and years since that merger went through. >> it's crazy. >> why does that still exist >> united management oscar munoz was brought in to take care of these crazy issues that had not been solved it's a management issue. flight attendants and employees

will say they're underpaid, not respected. and i think, you know, this is a flight attendant -- no flight attendant is trained to do this. this is the first time we're hearing of it. i don't know what their excuse is going to be there's none valid in my opinion. i think it's -- going rogue of a flight attendant taken to the extreme. >> thank you for your time today. >> thanks for having me. when we come back, did you pick radford and st. bonaventure in last night's ncaa play-in games? don't worry, you can still pick a perfect bracket. march madness after the break. first here's what's happening in the european markets green arrows across the board.

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♪ ♪ tickets to the big dance have been punched. cinderellas everywhere polishing their slippers set to tip off in a little over 24 hours the odds of a perfect bracket

being picked, you know how buffet like says i'm going to give people if they pick the perfect bracket, one in 9 quinn till on. >> the sweet 16. >> you had to get a perfect ticket that's the way he writes insurance. oh, gee. things that never happens, he takes all the money in he's counting it that's why he's a rich -- anyway joining us is vin parise, college basketball analyst for sportsnet new york andrew is going to w5ant to tal to you about pro ducttivity loss, gambling i want to talk about how tough it's been this year to find the team to pick for --i have no idea >> i'll tell you this is not good gambling money this year. you know, when people fill out their brackets or who have filled out their brackets, seating means nothing this year. there is not a big -- especially at the top don't get caught up into the numbers. >> then why pick that -- >> i don't believe that.

you like -- it starts at 64, not 68 but there's not a big difference between the one, two, three -- >> we've seen it all season long we've seen teams, we've seen who villanova's lost to. north carolina beats duke, duke beats north carolina everybody has lost to an average team and everybody has, you know, done well and won those -- you know, the big games that get them into tournaments. even when they've failed me in the past. >> don't get -- that's one -- >> why so doing it logically? >> well, this team has not had a lot of success in march madness. you're basing it on guys that are 30 something years old who cares, nine years ago. new coach, new kids. >> logic alone can get you through this. >> people won millionsby picking mascots. what do we know by breaking this down for a living. >> okay. so i've heard that like as far

as the best nine players, michigan state and xavier have the deepest bench. >> i love michigan state i'm a big east guy virginia dominated. >> i've heard virginia -- >> they had a huge injury. i scratched them yesterday they just got announced yesterday. their sixth man of the year in the league. >> defensive guy >> defensive guy that had a lot of people scrambling yesterday i'll tell you why i like michigan state, at the start of the year, first two months of the season, one of the top five teams in the nation. their seating was low because the big ten wasn't that big. you can't get caught up into that you want to win your office pool, you have to pick one of those 5, 12 match-ups in the first round. pick a team that no one's ready for. >> someone wants me to pick penn over kansas. >> no, take new mexico state. >> why >> because -- i'll tell you why.

clemson, the game's in san diego. new mexico state as a 12 seed is going to have twice as many fans as clemson they're 28-5 they've beaten miami this year they've played the big boys. they've beaten illinois. >> first round game -- >> here's the money question. >> should you play in cash in an envelope. >> yes. >> or venmo? now this is how this is all going down do you know about this a lot of these pools are going to get settled electronically. good idea, bad idea for tax purposes. >> it gets me nervous. >> i can't believe you're asking him -- >> bitcoin what do you think of bitcoin >> this is the new thing people want to settle these things -- >> bitcoin's a power forward from -- >> i don't know. we had brian kelly on talking about a dead dog coming up when we return -- . thank you >> -- pulitzer prize winning

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the potential for a trade war. considering a new round of tariffs on china in this hour pulitzer prize winning columnist tom friedman bank regulation front and center why house banking chair jeff hensarling says it falls short. it'sthe end of an era. ♪ i don't want to grow up, i'm toys "r" us kid ♪ >> the iconic toy store closing its doors for good 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 joe kernen and andrew ross sorkin. the u.s. equities this morning have been sharply higher dow futures are up they were up triple digits before the nasdaq up by 38, s&p up by 9 points this comes after a down day. we are just about 90 minutes away from two economic reports producer prices and retail sales out at 8:30 eastern time producer prices are important because we'll be getting a little bit of a look at inflation. economists looking for a 0.1 increase for ppi and 0.3 in last month's retail sales alphabet, google's unit, plans to banned all cryptocurrency

they are approaching cryptocurrency with the potential for consumer harm. >> this is fascinating this is another product that some of the platforms are going to decide not to sell or to advertise. by the way, this is interesting because there's a gun debate about what kind of content these guys are going to be able to put up or not. there's a freedom of speech debate for some reason on cryptocurrency you haven't had the outcry on some of these issues >> what people can do, what they can talk about. >> this is similar it's similar in that a number of these platforms have said we won't take advertising or guns or other firearms. they've said they -- there's now a list they won't take advertising for. >> not a freedom of speech issue. if we choose not to take your ad. >> this goes back to the whole idea of offering discounts for your products. what companies are associated

with other companies. >> we had a headline dick's was seeing increased traffic because of their decision. >> now they're saying the opposite. >> i heard that. >> i was surprised a week ago. now i'm not surprised. >> no, but i'm just -- >> hurts store traffic and retail the way they did it -- >> i'm saying all of these platforms -- >> they had already stopped selling them they tried to get the bang for the buck twice they did it at dick's and the guy went on, went all over the place, virtue signaled all over the place. they tried to look like it twice. >> you're saying he did the wrong thing? >> i'm not talking about guns at all, i'm talking about trying to get the publicity twice for doing the same thing was lame and he ended up -- dick's is -- >> i don't think it has anything to do with doing it twice. >> i'm not saying it was. >> that was transparent to me that they had already stopped selling at dick's. >> right they sell them at field and stream. >> which they started after they had already ban and there were only a couple of stores that did

it he went on -- he was out on all the morning -- how did that -- all of a sudden he's booked on all of the morning shows to say that when they already stopped it it's like he's trying to get more store traffic to come in. instead -- >> you're saying a pr blunder? >> not a pr blunder. it was transparent. >> the only point i was making was given that google and others are saying they don't want to advertise cryptocurrencies and they're not going to allow it on their platform, it's interesting when there is a larger debate when it comes to guns. >> it's interesting because down in georgia you saw the flip side of things, too there's going to be both sides. >> that's capitalism at its worst. you should be against that at its worst. >> i'm not talking about that. the nra, i know how one side feels about them but there are people that are around the country that don't view the nra in a negative light. they actually are members. there's just two sides of this

whole debate that living here you have no idea. >> no, no, but what i'm saying is certain companies are taking certain positions on other issues, not necessarily guns, but guns are one of these politically charged topics. broadcom has scrapped the bid for qualcomm after president trump blocked it on national security grounds broadcom will press on to move its bid for the united states and will drop its challenge to qualcomm's board that announcement coming moments ago. broadcom saying it is disappointed but it will comply with the president's order broadcom off by 24 cents. united airlines under fire this morning we talked about it after a flight attendant forced her to put her dog in the overhead bin this was a tragic incident that never should have occurred as pets should never be placed in

the overhead bin we assume full responsibility for this tragedy and express our deepest con dole lenses to the family and are committed to supporting them. having said that, there is no -- we don't know what it means to be taking responsibility just yet. it's another black mark we should mention on united's record of public service customer disasters we will talk with an airline expert at the bomb tomorrow of the hour. it's the end of an era toys "r" us is in the process of drafting a court motion to liquidate its business could happen as early as today a liquidation would likely result in toys "r" us closing all of its 800 stores permanently. the once iconic toy seller has gone through a few rounds of bankruptcy and come back this would be a permanent closing and would leave a lot of big warehouse type retail operations ready for probably not a sears or a k-mart. i don't know who moves in. some of them are still -- i look

around some of the sears and k-mart are still going. really amazing i guess their real estate is still worth something. >> in some cases. >> too much brick and mortar retail spaces around. >> we've over stored ourselves and americans have changed their shopping habits. >> maybe roller rinks coming back. >> gyms. some malls are opening gyms. >> i went to a roller rink that was right out of a movie in the 1950s. >> do you do in line >> i did the regular roller skates. >> yeah. cool all right. walmart is planning to expand its grocery delivery service business to 800 stores by the end of the year. this will be in 100 metropolitan areas reaching more than 40% of american households. it will offer shoppers same-day delivery of fresh produce, meat, seafood. politics and the special election in pennsylvania nbc news naming democrat connor lamb as the winner over rick

succone. he has not conceded and his campaign is in touch with lawyers. the white house considering a new round of tariffs on china. eamon javers is in d.c. with the latest. >> reporter: reuters is reporting that $60 billion worth of goods that the trump administration would put a tariff on coming in from china there was a report that the president was offered a package of $30 billion of tariffs. no, i don't like that, i want a bigger number. reuters reported later in the afternoon that the number would be $60 billion of goods coming in that would be hit with this new tariff i'm also talking to sources who tell me there are other things under consideration inside the white house beyond just these tariffs. take a look at a quick cheat sheet here it's tariffs being considered. investment restrictions on money coming in from china into the united states. possible visa restrictions on chinese travelers coming to the

united states. all of this designed, i am told, to chip away at this number. this is the deficit. trade deficit between the united states and china, 347 billion. the president often refers to it as $500 billion. he'd like to chip that number down to something a lot more manageable there have been diplomatic overtures asking them for their ideas on how to lower the trade deficit. we'll see if they bear any fruit here that is the state of play right now. this administration on trade very focused on protectionism and very much focused on china meanwhile, in terms of the international picture, rex tillerson fired by the president of the united states as secretary of state over twitter yesterday mike pom pay owe, the director of cia will be moving over to that position if he's confirmed. mike pompeo is someone with a better relationship with donald trump than tillerson ever had.

pomp we'll see whether we get anymore announcements on the cabinet there are a couple of other people who might be on the bubble in terms of firing by president trump. we'll watch for that we'll watch for an announcement possibly of larry kudlow to be national economic council director replacing gary cohn who resigned last week that feels like an a nonsment that we could have today i'm told it's not final yet. no final decision from the president of the u.s.a. eamon, thank you very much when we come back, the senate is preparing to vote tomorrow on their banking deregulation bill. we'll speak to house banking chairen hensarling we'll find out what he has to say right after this "squawk box" will be right back. still to come, pulitzer prize winning columnist thomas

friedman tillerson out as secretary of state. kudlow's chance of replacing cohn and inflation jitters in the economy. we'll cover all the stories making headlines and moving markets this morning at 7:30 a.m. eastern time, "squawk box" will be right back

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welcome back to "squawk box. take a look at the futures here's what's going on dow up in the triple digits. 111 higher nasdaq up 43 points. the s&p 500 looking to open about 11 points up joe? >> the senate preparing to vote tomorrow on their banking to regulation bill. house financial services committee chairen hensarling said it doesn't go far enough. chairman hensarling joins us this morning it's interesting because we had someone on yesterday and i couldn't believe it. it looked like there were going to be votes for this from both sides of the aisle enough for it to work. what about republicans that say it doesn't go far enough and democrats who say it goes too

far. i was eluding to you yesterday i was channelling you. >> here i am >> are you -- this expression gets more and more apt are you an enemy of the good for the perfect here i mean, isn't something better than nothing in terms -- >> no. i think that's an improper characterization what i'm here to do is represent the house. number one, i give chairman crepo, my senate counterpart, great credit for taking this bill this far. we don't know exactly what it looks like until it comes off of the senate floor they've put together a number of bipartisan provisions in the senate and rolled it into one bill well, guess what, in the house we have a number of bipartisan bills. in fact, we have 30 bipartisan votes. some have passed on voice vote we can't pass a mother's day resolution on voice vote

something like a bill from steve shabbot of ohio that would help angel investors help in demo days that passed 344-79 we have a bill from ann wagner that would help our startup nrsros, security ratings organizations. that passed the house i believe it was like 388-32 what i'm trying to do, my job is to represent the house so we want to make sure we go to conference i'm a little surprised that anybody would have thought anything else but that the house goes to conference with the senate there are two bodies find it in the constitution and i would just leave this thought. there's not a dodd act and there's not a frank act. there's a dodd-frank act because the house went to conference with the senate. that's what we expect here >> let me ask you about the news from pennsylvania last night i can't believe how many

different facets there are for this really the seat is up again in november, right? it's going to be split into two districts. >> you say the see the may be up the district may not even exist in november. >> that's what i mean. 14 -- i don't know i saw how they're doing that then i've seen crazy stuff i've seen from the left this is going to be a wave, no doubt about it republicans are quaking. you're going to lose so many seats in november that trump's going to be impeached. that's what i'm seeing from the left from a lot of people that are counting on that from the right i've even seen it's the guy's moustache that did it did you see that >> no. >> it was a porn moustache and it was so bad that he lost all of the -- he did not get elected because -- >> bad fund-raiser. >> maybe there's a reason that so few members have moustaches here we have the political realization. >> but the 33-year-old guy was an attractive candidate, you know, he had been in the military and he was running

almost like a -- you know, like a centrist almost. >> which i told you. >> apparently they've been saying that. will other democrats now be harder on just doing the anti-trump stuff or will they be anti-pelosi from here on out >> well, that's a great question one, i'm not paying quite as close attention to these races as i once did since i myself am not running for re-election. >> you're a big help. >> what i do know is this. no, it's not good news for republicans, although as i understand it there may be a recount. you know, we're still five for six. i would have preferred to have been 6 for 6 if they're going to bring in democrats to embrace the president's trade agenda, embrace the second amendment, publicly say they will vote against nancy pelosi, i'm not sure the democrat candidate in some respects didn't outtrump the republican candidate he's an atypical candidate

they recruited him for this particular district which may not even exist in months what i believe, again, is a rising tide not only lifts all economic boats, it's going to lift all political boats as well as this economy continues to gather momentum, we're averaging 3% economic growth as you well know unemployment at a 17-year low. wages finally increasinincreasig paychecks increasing 90% of americans getting tax relieve from holding i think things are going to look good in november myself. >> you do? >> i do. >> you would think if bill clinton was right, it's the economy, stupid, then he's right. there's a lot of other stuff swirling around in the voter's minds. usually the party with -- >> i'm not oblivious to history. yes, the republican party is fighting history here, but,

again, the tax cut and jobs act, everywhere i go i'm hearing from my districts somebody wrote me my husband just announced everybody is getting a 5% pay increase. i had a doctor call in and say, you know what, with the tax cut i'm able to go out and buy a new sonogram machine, i'm hiring a technician good things are happening. it's going to take a few months for all things to percolate politically through the system so i think we're on the right track frankly, as long as, and i've heard the report earlier, as long as any tariffs are highly targeted and imited i am concerned that the president who's done so many great things for the economy, i don't want to be taking steps back after we've taken steps forward. >> mr. chairman, did you do a bracket? i don't have any texas team going that far houston -- >> well, aggies. they're in there. >> i don't have them going that far either let me -- i think you -- you're

better at football down there i think. >> we're a little better at football. >> i have providence beating a&m. >> people like becky that hit the button. >> i didn't do that this year. >> i don't want just a -- anyway, all right. so the aggies. houston's pretty good although cincinnati -- chairman, thank you. why are you leaving? that doesn't help. you're not helping the cause do you want to make some money or something what's your problem? >> well, my wife thinks that's a very good idea. >> all right thank you, jim. >> thank you. >>en thanks >> old joke. old joke obama called him that. >> adidas out with earnings. the ceokasper rorsted will join us "squawk box" will be right back. time now for today's aflac trivia question. which state was the first to

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joining us is the adidas ceo obviously the street likes what it sees on this. >> hi, becky. >> strong ales better margins than had been anticipated. last i saw the stock was up by 9% congratulations. >> thank you very much it was a great year for us >> go ahead. finish your thought. >> it was a great year for us. revenue up 16% bottom line up 32%

u.s. adidas up 35% a year we were really happy with. >> one of the things that the analysts on the street have been talking about is that adidas has really improved margins across the board. they point to the idea this could be room for improvement against nike what are your plans to try to boost profitability for next year >> last year we came out at 7.7. this year 9.8. 2020 we're looking for 11.5. continuous improvement coming through three major drivers. one is our efforts in north america. grew 35% growth in china where we're growing 30%. online business which we're growing 57%. all of these will make a bigger company and more profitable company. we have to have the right products i believe we have the right

products. >> you said adidas i've been saying adidas. >> so you're going with adidas because in north america that's how we say it? >> that is correct i'm speaking to north americans so i thought i would say it in the appropriate way. >> in north america you've been stealing market share. who have you been stealing market share from? >> pretty much across the board. it didn't grow too much last year across the board we are in catch up mode. we need to get to 15% market share in the u.s. which we have in pretty much every market. we need to catch up. we have a target to do 5 billion so approximately $6 billion. so the growth we're seeing has accelerated in 2017 is necessary also for us to hit our targets

we feel comfortable. >> kasper, do you consider the company's success a function of being a performance footwear sporting company or a fashion company? and i ask because of the collaborations with kanye west, the collaborations with pharrell, the collaborations with the stan smith line and so much more. >> clearly the core of who we are is sport we want to be the best sports company in the world the products that we see and our fashion-related business is all sports products that we have revived whether we're doing that with pharrell, stan smith or kanye west we're looking at the trend setters. there's no doubt that kanye west or pharrell williams has helped us when kanye does something in l.a. it transmits to all parts of the world

we're using key designers to help bring fashion into our sport. >> we've been talking about tariffs. i wonder if that raises concerns with you is it an issue that you're following? how do you think this will play out and affect your company? >> we are following the tariff situation. it's not something that i think has dramatically increased for us we are seeing as we're seeing an increasing level of taxes across the world and all large companies are seeing that. as we become more digital we become more exposed to cyber tax. >> kasper, i wanted to weigh in on this controversy with the pharrell line that you guys are involved in. there is some debate about the name of the line, whether there's a cultural appropriation going on related to india and a number of people there who feel

that it's inappropriate and that there's -- the way both the naming and the approach is offensive to some people there. >> of course as a global company we friday not to offend anybody. >> looks like we lost our feed >> we're sorry about that. >> thank him for his time. >> we do want to thank him when we come back we'll talk with tom friedman. he's going to talk to us about the big stories of the morning from washington to wall street also saudi arabia as we head to a break, take a look at u.s. equity futures let's stop talking about diversity, and actually be more diverse. as investment management professionals, let's measure up.

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broad com dropping its bid to buy qualcomm they say it's disappointed with the outcome but will comply with the president's order. you're looking at qualcomm stock. actually up marginally but come down big time after that blockage just 24, 48 hours ago mortgage applications rising .9 of a percent last week according to new figures from the mortgage bankers association. due to a jump in new purchase applications while refinancing declined average 30 year mortgage rate grows four basis points during the week to 4.69%. that's the highest in more than four years u.s. air lines carry a record number of passengers this spring according to industry trade group groups, airlines for america they will carry 150 million pass

sentences sen gers from march 1st to april 30th. employment gains and household income good signal. somehow between his many business ventures elon musk finds time for comedy. the spacexceo has hired many editors from the onion this is not a joke we're telling you. musk called comedy the next frontier in an interview with the dale by beast. the onion has never been shy about securing musk. they ran a satirical story. >> is this like a peter teal thing, take them out of commission >> i don't know. >> or he likes their humor >> he loves pop culture. i wouldn't be surprised if he's

hiring them to write a comedy. >> send them to mars >> you'd like that no >> the onion secure people. >> at some point he might have tried to buy the onion, by the way. >> magazine. >> he did. >> yeah. >> folding the thing, see what it was. >> picture at the back >> rex tillerson will leave the state department at the end of march. tom friedman is "the new york times" foreign affairs columnist also the author of "thank you for being late. tom, thank you for being with us. >> great to be with you, becky. >> let's talk a little bit about your reaction to this. i saw your tweet where you said rex tillerson, the worst secretary of state ever and i am going to miss him dearly you want to explain that >> yeah, basically i think he was the worst secretary of state

certainly in the post war era, but in the context of the trump administration, you know, he was an adult i think he had a very balanced and measured view on issues like korea, on iran i think he was appropriately tough on russia at a time when the president isn't. so in terms of the kind of balance that he provided within the administration, i think he played an important role and i think that will be missed. >> what do you think about pompeo going from the cia to secretary of state >> i don't know much about his views. you know, one thing i would simply say, sort of have to give him a chance i'd love to be in the hearings i think this is actually a terrible time to be secretary of state. if trump calls you, becky, and asks you to be secretary of state, tell him you really had your heart set on agriculture because in the immediate end of

the cold war, the job was managing strength, strength of russia and strength of china the big thing most secretaries of state are spending their time on are weakness. states falling apart like stir yeah whe -- syria. the only way to fix them is to dive in with trillions of dollars. it's a terrible job to have now. again, if anybody calls, tell them you really had your heart set on agriculture. >> although -- well, agriculture with trade and tariffs, we'll see what that means for the agriculture department there are all kinds of exciting potential possibilities with things that have been happening in the middle east this is a time where you're seeing great change across that region >> it's true you do have this massive change going on in saudi arabia with muhammad bin solad

the crown prince it does appear that saudi arabia is making a turn away from the puritanical islam. huge opportunity be at this there. but you've also parallel to that got the issue of iranian expansion projecting its power across the region indirectly controlling four arab capitals reversing that requires the united states to jump into the middle east in a way that a lot of americans are weary of. there's that issue you've got the china trade issue. there's lots of opportunities there, but they're all really hard problems and they require expending a lot of capital think of north korea what are our options on north korea? we can negotiate with them we can acquiesce or we can invade no one wants to invade no one wants to acquiesce. so president trump is going to go meet with the korean leader, kim jong-un, i support that, why not, and try to negotiate something. but i would tell you, becky, i think the best trump can come

back with, this may shock him, but i think he's going to confront this is an obama-like iran deal which is that i find it impossible to believe that north korea is ready to go to zero on its nuclear weapons so it'll be some compromised deal is the best that he can engineer again, coming to terms with that, selling that to the american people. there's no easy fruit to pluck from any tree out there right now. >> hey, tom, wanted to talk to you a bit about saudi arabia last time i saw you in person you were just -- you had just spent some time with nbs. >> yes. >> you were very optimistic about some of the things that were taking place there. then you wrote another column more recently that i think was a bit more mixed then there was this front page article in "the new york times" just this week that was really scathing about how he approached this corruption campaign and what little transparency there was around it and really what type of abuse of both power and

physical abuse may have taken place there and wanted to get your reaction to that. >> andrew, i've really been saying the same thing in different ways from the very beginning. in saudi arabia three things, election, democracy which a lot of guys would think bushy beards who don't speak english and they could take over. you could have the old regime where you had each member of the family had their thief, their own ministry which they milk like a cow gave you reform at 5 miles an hour that was sending saudi arabia into a slow but steady decline or you can have mbs. he's an authoritarian modernizer he has some really good instincts and some really bad instincts. the good ones are on bringing islam back to a center the bad ones are a tendency to

make a power grab and money grab this has to do with a lot of internal dynamics. i said how this ritz carlton story ends where they put all of these billionaires to an anticorruption really matters. if it ends with opacity and abuse, as our paper has really revealed, the message to foreign investors is, geez, if i come to saudi arabia with my money or partner with a saudi, can we end up hanging upside down from the ceiling at the ritz carlton. without foreign investment, not just in aramco, you were talking about that the other day, but more broadly in the saudi economy, they can't make the reform transition. so i'm glad the paper's been exposing this. i think it's an important message to them. they need to let these guys out. they need to clean it up they need to create a transparent announcement

it was a phony letter. we have no ambassador in saudi arabia we have no assistant secretary of state for the near east mbs, everybody needs a life coach. he needs one too someone he can trust and who can engage with him. tillerson wasn't that. >> he's going to be here though next week he's going to meet with the president and a number of business leaders all across the country. how should they feel given these reports about this abuse about doing business there right now >> i hope they're very blunt about it this is not an environment we can do business in we need accountability we need transparency that's the only way we can commit long-term funds to the kingdom. mbs is 32, hasn't really spent much time out of saudi arabia. did not study outside of saudi arabia like so many yawning saudis so to me, andrew, he's the only

guy there with the guts to do the mass -- the boldness to do the massive social and religious reform that he's undertaken. it's amazing and it's important and he's the only guy there with the boldness and the recklessness to engage in the kind of foreign policy engagements he's engaged in in yemen, qatar and to follow up this combination anti-corruption shakedown. you have the good mbs, you have the bad mbs. perfect is not on the menu we want to get the good and curb the bad. that's all you can do. >> in terms of where this leads, i mean, there's been a lot of tumult in the middle east including some of these charges now against maybe netanyahu. where does that leave things how does that relationship stand? what do you see as kind of the path forward there >> well, becky, it takes us back to the tillerson story think about henry kissinger back

in the '70s when he was doing diplomacy in the middle east had to talk to three people. he went to syria to negotiate with the all powerful syrian dictator he went to egypt to negotiate with an egyptian leader and he went to israel to negotiate. she was in effect a dictator now fast forward to today. syria basically you've got a prime minister who controls at damascus and the environs. in egypt you have a frightened one man ruler who i think is very worried about making any sharp moves one way or another in israel you have a beleaguered prime minister whose own party has leaders in it who come to his office to measure the carpets contemplating how they can oust him so making -- not to mention the palestinians who are completely messed up. their prime minister had an

attempt at an assassination yesterday by some other palestinian. so it makes it so hard to build anything when you're dealing with a fractured region. my motto is the middle east only puts a smile in their face when it starts with them when they take initiative. when netanyahu calls the other leader, we can come in, a.m. bri - amplify it this is mamas, don't have your daughters grow up to be secretary of state. >> china, tariffs, trade deficit this is you in "the new york times" yesterday while 2ru6trump's gut instinct o right, he's so ignorant and weirdly obsessed with protecting manley industries like coal, steal, aluminum that affect our allies, you go on, that he can't be relied upon to navigate the

china trade issue in our national interests what is the right way forward on that >> i think it's very simple. china's been eating our lunch not playing fair on trade. i'm complete by with elon musk how is it that there are four chinese 100% electric owned vehicles in america. if i want to go to china to sell my teslas there i have to partner 50-50 with a chinese j.b. partner and transfer technology to them it's that kind of stuff that's simply unfair. some things are true even if donald trump believes them and one thing that is true is china is not playing fair and i support a hard line there, but the way you do that is by embracing the trans-pacific partnership. i would have a secret negotiati negotiation, don't make it public i'd be very tough with them. i think that it's time to clean that story up. >> tom, thank you for your time. great to see you. >> pleasure. >> okay. coming up when we return, stocks on the move this morning. take a look at futures

we are in the green. triple digits on the dow up 107 points. nasdaq up 40 s&p 500 up 10. we are back in two coming up, if you brew it, they will come we take you inside jim cook's personal brew house where the founder of sam adams has aged beer that can cost up to $200 a bottle vepreview of tonight's secret lis of the super rich is straight ahead right here on "squawk box. but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data- so, multiply that by her followers, speaking engagements, work experience... credit history. that more accurately assess a business' chances of success. this is a good investment. she's a good investment. get ready, because we're helping leading companies see it- and see it through-with digital.

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and falling stocks might be worth a look this morning. bill ackman's cut a steak in payroll processor adp. pershing square owns a 7.2% share. stock is wildly unchanged this morning. signet jewelers are under pressure they did beat estimates by 3 cents with quarterly profit of $4.28 a share. however, same store sales actually declined 5.2% then the company gave lower than expected forecast for earnings for the full year and it announced a restructuring plan

that will stretch into three years. >> when we come back, the secret lives of the super rich has returned, this time with beer. not just any beer. robert frank has a preview. >> that's right, becky would you ever pay $200 for a bottle of beer ar fm d l going to taste it an herothe billionaire brewer who makes it coming right up sometimes, they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪

welcome back the secret lives of the super rich has returned, and this time

with beer. robert frank is here with a $200 brew. >> good morning, guys. we're going to try it. it's called utopias. they sell out quickly. billionaire brewer sam adam ceo jim cook shows us what goes into making a $200 bottle of beer. >> beer is my life, but i am a trained professional so i know how to drink we age it in these barrels, which are bourbon barrels that have been emptied and then filled with sam adams utopias. you don't pound it like a regular beer, you sip it maybe a teaspoon or two. get it on your palate and you let the a aeromatics fill your

head unfortunately for many of you out there you may live in one of the 15 states where sam adams utopias is illegal it's illegal because of the high alcohol in some states, the unique brewing process and as a brewer, i'm okay with that to me there's only one thing better than great, wonderful beer, it's great wonderful beer that's illegal >> and it's illegal because it's 56 proof, 28% alcohol. it's more like a liquor. it's not carbonated. >> it smells -- >> you don't have to -- >> it does not smell -- >> i can't do it. >> there's nothing -- >> it's more like a cheri or a port or fine liquor. >> this is the last bottle in manhattan. >> the bottle is cool. >> the bottle is made like the brew kettle. there's a giant version of this in their brewery. >> that's 200? >> that's $200.

>> part of it is the bottle. >> is it glass or copper >> it's copper. >> pretty cool. >> no head on it or anything. >> no. all the carbonation is gone after 20 years >> wow >> breakfast of champions. >> thank you, robert >> breakfast of champions is right. coming up, the potential for a trade war. we'll get market reaction about urtrade war at the top of the ho there they are and they're talking. looks like they're plotting. is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.

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consumer outrage a dog dies after a united flight attendant puts it in an overhead bin. we'll hear from the company and the dog's owner. breaking economic news key reads on inflation and retail just minutes away. plus, the world of netflix how the streaming giant plans to revolutionize the media business yet again. 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 and welcome

back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross sorkin the futures right now for what it's worth up 115 points like yesterday when they closed down 170. but doesn't mean we don't want to check where they are. the nasdaq up about 38 s&p up about 10 or 11 and the ten year was below 285 again >> yeah. >> yield's under pressure again. we'll take a look at that in a little bit let's get you caught up on some of today's top stories it is official broadcom is scrapping its bid for qualcomm after president trump blocked the acquisition on national security grounds. broadcom will press on with the plan to move its base to the united states. it's also going to be dropping its challenge to qualcomm's board and right now both of those stocks are actually positive broadcom shares are up by just over .8 of a percent qualcomm up by about 14 cents. toys "r" us is in the

process of drafting a court motion to liquidate its business sources tell cnbc that the filing could happen as early as today. a liquidation would most likely result in toys "r" us closing all of its 800 united states stores and mortgage refinancing's falling to a decade low the news is probably not all that surprising. loan rates have risen each week this year. homeowners have less incentive to go ahead and refinance. stocks to watch, express posting better than expected earnings shares of the small cap retailer rising on that news. ford upgraded to overweight from under weight at morgan stanley the firm saying shares have fallen to an attractive level and the company has righted its earnings prospects more in three years. joe? >> now to the story that everyone is talking about this morning, a little puppy died on a united flight after a flight attendant insisted that the carrying case couldn't be

underneath the seat and had to go into the overhead bin apparently french bulldogs have some breathing problems to start with and for whatever reason, i think it was a three hour flight, houston to newark, right, and they finally agreed to put it up there, contessa brewer, and when they took it down it was no longer breathing. so this is major public relations nightmare and a tragedy for the dog and for the family. >> you know, it's just such a challenge at a time when united is trying to refocus on customer service. here's this family flying with their french bull doing from houston to new york monday night. the mother says the flight attendant demanded the dog had to go in the overhead bin. the mom was juggling a baby, little girl and kokito the dog kokito was in a small pet carrier designed to fit under the seat when the flight carrier said she insisted, passengers say they

heard barking at the beginning of the flight and they didn't know the dog had died until the plane landed in a statement united says this was a tragic incident that never should have occurred as pets should never be placed in the overhead bin. we assume full responsibility for this tragedy a spokesman says united refunded the family's tickets and the $200 fee they paid to bring kokiot on board. united last year carried 27% of all the animals that flew commercial but had 75% of the animal deaths on flights a d.o.t. report showed 24 animals died on flights, 18 of those were on united united airlines has renewed efforts, as i said, to improve customer service including compassion training for employees. you've got to wonder whether this particular flight attendant maybe didn't make the compassion training just yet. >> contessa, did you say that they refunded the passenger's ticket fares and the $125 that they charged for the pet is that it >> so far that's all the

information we have. and apologized but as anyone who's ever flown with their fur baby, an apology would not be enough you have to wonder what all the other passengers sitting around here were thinking when the flight attendant said it has to go overhead. you know if you fly with your dog, dogs don't go overhead ever. >> we've heard from a lot of passengers who were very upset according to some of the stories that are out there the flight attendant has now said she didn't know there was a dog inside there are other passengers on the plane saying -- >> the woman who sat in front of the back of the mother she clearly said, my dog is in there, my dog is in there. and remember this comes on the heels of a giant rabbit dying that was supposed to show at the iowa state fair. that happened when it was in united's care. they had some litigation and then a settlement over that. remember the doctor who got dragged off the plane when they had overbooked and they said, no, no, we have to bump you off. this video shongd everybody.

oscar munoz knows that there's a real challenge on his hands. i know that they've been trying. they've instituted new initiatives but high profile incidents like this just set back the whole airlines efforts to make customer service the priority >> contessa, that video of the little -- was that the actual little puppy >> yes so that dog was given as a gift to the little girl. >> little girl sorry. there she is playing with her little puppy. >> i'm looking at him there. >> playing with the puppy. >> a lot of personality. i love -- geez >> wow. >> that was just before the -- >> that was taken on cell phone video. it has been described in some reports as a puppy i don't know how old the dog was. >> two months old. >> there's a lot of attention on how did the dog die. it is true that this particular breed is known for having potential breathing problems. >> exactly. >> but we don't know that's what

happened at this point we haven't gotten results back. >> i have a question we take our dog and the family and he's nervous enough. he's rightthere. his head comes out of the little -- you know, you have to sit there and console him. that's tough enough. but with me it's like 200 -- i'm calling, got to make reservations reservations for my dog $2678950. >> joe, yeah, you pay sometimes more for your dog than you do for your own ticket. >> right could be a laptop but they charge you 250 -- they gouge you on that just to take the little dog on with you. i'm not sure they don't do anything different than if it was any other carry on. >> clearly not. >> except charge you. >> i don't understand what kind of training would have ever let this attendant think this was a good idea. >> bottom line, you know what dealing with the public is like can be bad flight attendants are mean sometimes they are mean.

>> just to -- i'm not 100% in agreement with all of that, but i have seen some pretty horrible behavior from passengers. >> that's what i mean. >> i think united has a particular problem with trying to alleviate the passengers who are angry and the staff is clearly -- >> waiting two hours on a runway. >> you don't -- they have approached this properly on a relative basis. >> we don't know. >> it feels like -- >> just because they said we would take responsibility. >> on a relative basis to where they were -- >> who got to you on this? why do you keep saying that? do you have an upgrade pending or something >> no. i'm saying a terrible thing has happened and they deserve all the criticism -- >> all you can say is you're not as stupid as you were a year ago. you completely stepped in it from a pr perspective. >> if you don't acknowledge at all that there's been any improvement, to me therefore it doesn't -- >> the problem is an incident like this still hang. >> i agree. >> what's gone wrong >> that i don't agree. >> 2017 numbers, this is not an

isolated case. now back to the markets. let's talk the dow giving up nearly half of friday's job rally. levels where it stalled out in late february. mike santoli is here to tell us the stocks are resting or latzing. are we going to hold on to this? >> i'm saying we tease it in such a way that, you know -- >> actually, that's the tease but it's probably resting at this point in a news cocoon you don't see the headlines. you would say there's some kind of a routine pull back after that rally we had coming into the week we have some round numbers on the s&p 500, 2500 on the dow they've been a little bit tricky i would say the technology leadership took a little bit of a breather yesterday and that was probably the biggest story,

that big tech didn't rescue the market from the modest loss. i do think that's not something that's the start of a trend. they started higher. record highs on amazon and a list of other stocks they did close lower the general leadership picture has been encouraging cyclical stocks, banks, tech leading. that's what you want to see if you want to get a decent message about the economy. i think the question is how high is the ceiling if this rally does keep growing higher the old highs are 3% up from here i do think that basically you're going to have a re-assessment of the valuation of the market unless it's big tech carrying us there. maybe s&p 3,000 is maybe your up side case based on where the stocks traded on a pe basis and current earnings looking like right now. i think it's basically a somewhat routine pull back for now. policy though has gone last year from being something that could be very friendly to something that you have to be a little bit more weary of.

the two top policy things were deregulation and tax cuts. this year it's about how bad my trade tensions get it's just a little bit of a different orientation. >> how about financing in the state of dormancy >> yes. >> it's not resting, it's in a state of inaction. >> i mean, it's there. it's acting. >> resting sounds like you've expended a bunch of -- >> resting on your laurels. >> i think there's argument that is the case. the nasdaq was up five days in a row. >> that's not dormant, that's resting. >> dormancy, you know, the seeds are there in the winter. you don't see them but -- >> in the spring maybe there will be growth. >> mike, stay with us. let's bring in a couple more voice toss this conversation mike ryan is the chief investment strategist at ubs josh fineman is chief economist at deutsch asset management. what do you feel like? >> i tend to agree with mike i think it's a rest. i don't think it's any cause for

great concern. i do think what you are seeing is rather than categorizing it as a lull in the markets, i think you're going through this transition phase remember throughout much of this expansion what we've seen is below average growth, docile inflation and very low rate growth we're going through the growing pains. i think the market's going through a transition phase leadership is shifting we're emphasizing the areas that are going to benefit from the stronger growth, more normal interest rate. >> josh, do you agree with that? we have pbi numbers coming out today. what we've seen from the last few reports that show us anything it's been more moderate? >> that's true i think some people were worried were we going to get a breakout of inflation i think those fears are over blown. it's likely to maybe grind up but not a breakout look, i think the economy is doing well, not just in the u.s. but globally i think we're in a cyclical strong phase more synchronized than any time

since the financial crisis that drop should be favorable for risk assets. the worry is did we overheat down the road? i think that's something we certainly weren't worried about for a long time. it's at least on the radar screen as you pointed out, the trade tensions that's an underlying, you know, worry that the market's going to have to deal with. >> mike, i wonder what we should make of the fact that the over seas markets have started to look worse everybody is talking about the globally synchronized growth >> as you look at emerging markets, they're improving, not decelerating what you're going through is as the u.s. goes through the policy reset implications across the globe. what does it mean for ecb, emerging market rates. over time we work through that i think the fed will go through this in a very pragmatic manner. we continue to see the fed resetting rates for a gradual pace the emerging markets will fair

pretty well. we now have more emphasis in the emerging markets because we think the improving growth dynamics and better valuation favors those markets. >> what about the emerging markets and do you worry at all with some of these trade concerns that they'd get hurt a little bit more? >> josh and i were chatting about this backstage i'd say the biggest concern is it on the trade front. we want to be careful because these trade tiffts don't always escalate we're seeing policy makers in the past i think there's more of a concern there. that said, i still think that we're not going to translate into a full blown trade war and therefore we still think the emerging market dynamics is still favorable. >> in terms of josh just looking at some of these issues, the trade potential for all of these things, you still don't rate it very high. it's odd lows of recession in

the next 12 to 18 months. >> i do. i think we have a chance of this being the longest in u.s. history buy means it has to last until the summer of 2019 i think there's a good chance it will the trade stuff, i agree not all trade tifts turn to trade wars the difference this time is the mind set of this administration seems to be much more, you know, viewing trade as a zero sum game trade deficits as some sort of a barometer of weakness. that is a very protectionist mind set i think we have to be a little bit more concerned about that. >> josh and mike, thank you very much mike, good to see you. >> coming up, the saudi crown prince will visit the white house next week. it's a trip of high stakes, especially for the energy market also u.s. foreign policy and companies that do business in that region. we will get ready for our next interview. stay tedun, you're watching "squawk box" next on cnbc.

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mbs is not a democrat. he's an authoritarian monetizer. he has bad instincts and good instincts. the bad are on social integration. the bad ones are to make a power and money grab >> that was tom friedman on stocks with the saudi crown principles. a look at what's on the agenda. cnbc's hadley gallon bemble is >> mbs will be here. going to be meeting with the press and business leaders given this what i thought was a relatively scathing piece earlier this week about the

abuse that took place of so many former government officials or others and the money grab that didn't take place, i think there's real concern among the investment community i think this has lingered but people haven't spoken out loud about it, about whether they actually should invest in saudi. >> i don't think you're wrong at all. at the end of the day there's a lingering concern in saudi arabia, people have been cautiously optimistic about what we've seen over the last several months but after the ritz carlton, i think you saw those people really concerned about whether they could continue investing in this country, not even looking at the broader picture. but i think what he's trying to do now, this trip is all about optics he's got to get in here. he has to woo congressional leaders. this is an interesting question about what's going to happen next we're not talking about oil now, we're talking about the fact that their domestic consumption requires a whole lot of energy they're going to spend 88

billion. they want to bypass 1, 2, 3 and process their own. >> this aramco ipo delay, and it will take place in saudi we hear which means you're not going to get the valuation you need to fund so many of these things plus this other -- >> why not do this if you're going to mess it up. they can't afford to mess this up. >> just even on the corruption campaign, is there anything you think he can or would be willing to do to create that level of transparency so that the investment community looks and says, okay, we're on board. >> in their minds they are being transparent. in their minds by creating the extra judges and court, they are trying to be transparent you have to remember, it is an autocracy. what they giveth, they can taketh away. they made billions of dollars. >> that's really telling. >> yeah. >> they feel -- >> they feel they are being transparent. >> there will always be a little

bit lost in translation? >> frankly they make billions of dollars off of this country. private sector people and now most of the population is under 30 and they want to know why their country does not look like dubai. >> when i was there in the fall and when i left there, this was a week or two before the ritz carlton situation. >> we were all there together. >> we were all there together. there was such a sense of good will among investors all over the world i felt or i would have guessed that you would have had an influx of foreign investment over the next six months to a year huge amounts 50, $100 billion kind of thing. >> yeah. >> that hasn't happened. >> i think it's more difficult they've done so much in the last year and a half in terms of basically going into these organizations, going into the bureaucracy which was incredibly full of red tape and making it easy to start a business western investors are extremely

cautious the ritz carlton didn't play well >> the ritz carlton didn't play well with over seas investors in particular >> yes. >> how did it play with people there? >> you're not going to walk out and talk about this on camera, but i think certainly in the private sector it remains incredibly cautious and worried. it doesn't do anything for them to do that. >> what's your sense of the aramco situation it feels like the entire economy, at least the future of his vision 2030 plan rests in large part on a successful ipo and successful valuation for this company. >> i think they're going to win. i think they're going to take it to 2019. i think there's no sense in pushing it if you look at the last two years or so and the messages that we've gotten from the energy minister, they've been overly cautious. we don't want to set a deadline or draw a line in the sand that's for that specific reason, because nobody wants to be left holding the bag if this thing doesn't work out. >> we need more coverage from

that part of the world >> we do, indeed i'm goingto be there to provid it in abu dhabi. >> what do you mean? >> we have a bureau. we're starting a show every day from the region. >> bureau in abu dhabi. >> yes, sir, i'm going to be the point person there. >> yes, indeedy. this is all happening. >> was not my idea just great minds. >> great minds think alike. >> okay. excellent. we look forward to that. we do? >> he's going to be out there with me. >> no. no he's going to want to go to you every day to talk. >> i'm available fees? what did you have in mind? i don't know. $4.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.

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breaking news due in just a couple of seconds. producer price index and retail sales. rick santelli is standing by rick, the numbers please >> our february read on ppi, headline number up .2. if we strip off the all important food and energy, it is also up .2 if we look at what's transpiring with regard to trade on month over month, it's up .4 so ex food and energy trade number up .4 that's pretty interesting. if we look at year over year, we're looking at 2.5 year over year ex food and energy, 2.7 ex food and energy and up 2.8 on final demand you could argue all the year

over year numbers, all three, are a bit hotter than expected let's go over to our february read on retail sales down .1. that's a disappointment. we were expecting a number closer to 3 or 4 tenths higher than last month. we did gain a couple of tenths on the revision. stayed negative. minus .3 and minus .1. you take out auto and gas it climbs another tenth to .3 both of those had positive revisions. if we look at the control group, which might be an easy way to look at this our last look was unchanged. this time it was actually up .1 but that's several tenths shy of what we were expecting what is the fallout in the market we've actually seen the long end move lower in yields, a basis point or two, whereas, the two year note yield of 2.27 has stuck tight. maybe it's the inflation data,

albeit a little cooler on the headline, was a little hotter on some of the comps. maybe long end is looking at growth we'll have to see if the market digests it we'll have to give up 10 points on the dow they're up a little over 90, now up a little over 80. andrew, back to you. >> rickster, great, great analysis mr. liesman is here with some additional analysis. can you top that >> almost never. almost never. >> impossible really. >> the reason why rick does what he does there, he does such a great job at it. his initial read on the data is usually spotless. >> should we skip you? >> i want to add one thing here which is that there's a lot of negatives in the retail sales report it's a bit of a quandary there was the question as to whether or not the tax cuts would start to take effect and be seen in the consumer spending data it may be that there was some delay. i know there was some delay in getting refunds out. so the issue is whether or not what was lost in february, and

that's a big miss, this positive 0.3. negative 0.1 big decline in autos which was unexpected it was expected but bigger than what was expected and whether or not we're going to see that rebound in march and see the consumer, lots of jobs, decent wage increases and tax cuts should add up to more consumer spending i'll stop right there. >> all right joining us now is jill lavornia, predicts all of this stuff texas chief economist for the americas so everybody, joe, focuses on acceleration of fed tightening, whether we're going to see anything like that the ppi, still nothing going on there? >> no. >> retail sales were supposed to be plus but they're volatile. >> steve heard me before we came on. >> he was ranting, raging. >> relative ranting. they're random number generators retail sales is a terrible release. gets revised you have to have strong consumer

spending you have record high consumer confidence when do you have high consumer confidence and people not spend? >> even when you have low consumer confidence people spend. >> they spend more when confidence is high >> just spend. >> joe, on this fed hike, there's no question. i'm hearing four hikes, five hikes, that's absurd i would not be surprised if the ten year yield made its high for the year historically about 80% of the time the ten year note makes its entry year high in the first half there's no inflation the fed shouldn't revise up stocks next week if they do, it's going to be a problem for the stock market >> earlier just someone happened to mention that the -- some of the global stock markets aren't going quite as well. someone also mentioned not related to that that it's going to be the longest recovery in history if we make it until next year, until the summer. >> we're going to hit the number two spot, june i believe is the spot. >> if there's no inflation and a

possibility that these years of outsized growth may be moderate or something, then you don't even have the strong economy argument to raise. >> so i think we've got the economy getting better the tax cuts will work will help on the equipment side. >> no way we get a recession next year? >> no. no nothing to suggest the yield curve still has some steepness. nothing to suggest a recession if the fed was to go aggressively the market would price more hikes next year, we'd have the risk of a slowdown in late '19-'20 the economy is very healthy. when you look at all of the sentiments you look at capital tension plans. they're all booming. you'll see it in the data. the market is worried about the central banks. that's what's been happening. >> you haven't even mentioned trade or china. >> those things are -- make great theater but in terms of the broad economy, no. i don't see those as being

factors at all. >> even the laymen when you talk about trade in china say if they stop buying more bonds they all say that. >> no. >> you'll walk out on the street -- >> it sounds good but it's not a very sophisticated argument. >> what about if they stop buying our beef, pork, chicken >> if you look at the futures market and forward rates, we have as much tightening priced into the market. you have to go all the way back to 2010. the yield curve is flat. we're worried about the era of easy money coming to an end. it's really about liquidity. that's what's causing market's indigestion. if there's a trade war of course, that seems to me to be a very low probability event. >> it doesn't seem like the fed is going to raise rates at a precipitous rate either. >> i would say there's no inflation. they've under shot their inflation target for seven years. we could run it at 2.5 for the next seven years just to keep it

at -- >> let me ask. powell is legitimately worried about low inflation. the fed not hitting its target is something that clearly animates his outlook for policy and the idea that we're not at 2 and not making any apparent progress there is something that is going to keep him from doing four for sure. >> at that meeting he will raise -- >> and maybe not do three this year possibility -- >> i've been saying two. >> he wants to hit that target he also believes, by the way, very strongly in this excess capacity out there in the prime age male work force. there's a big deal -- >> you said you don't believe there's going to be a trade war. what do you think a trade war looks like i've been on this rant all week. i don't think a trade war is some kind of all out war, i think it's a handful of important but what seemingly seem like small skirmishes. >> can i answer that 3,000 tariffs. this is not that, at least not

yet. >> i don't even think smoot holly -- the fed let the money supply fall by 1/3 in 1930 smoot holly is just a distraction. having said that, andrew, to your question, look, i can't -- i don't think we should set any risk parameters or any investment on the worst case scenario the worst case scenario is trade war. anything less than that hasn't happened before. i wondered if your series of retaliations that you think might happen would be so bad as what we're dealing with de facto. left and right, not really standing up for ourselves already. maybe we -- >> joe, why can't we deal with it through the organizations that we created? >> did you know -- did you watch the -- do you watch the nightly news >> sometimes. >> did you know liesman went to 3% for the year? >> i saw that yesterday. >> you did see it? >> yes >> i mean, it was covered across

all the -- >> do i get a fudge factor for the weak first quarter that's the only thing i have to say. >> no. you can't have any fudge but it's pi day. not what you think. >> not apple. >> p-i. >> 3.14. >> 3.141 because it's 3.141. >> how far can you go? >> i can do ten. 3.14159259. >> joe, how do you respond to that, joe? what is your response? >> which question is this? >> key lime. key lime pi. >> pi. i do what's your favorite >> apple pie >> i try to avoid it it's more time at the gym. >> that's right. >> joe, 3% growth this year? >> absolutely. >> 3.1459 -- >> i'll take 2.99.

>> you take the over or under on pi >> that was a good movie pi. >> was it? >> the live of pi. >> that's a thesis >> i want to see that. >> thank you, joe. when we come back, senator bob corker live from washington. his committee will be in charge of confirming pridt trp'esenums new pick for secretary of state. we're going to talk politics and foreign policy with him next

welcome back to "squawk box. futures right now after those numbers we've had at 8:30 have gone back to where they were 1.05 up on the dow and s&p. up 35 points or so our next guest expects the senate foreign relations committee to move quickly on mike pompeo. want to welcome the chair of that committee, senator bob corker of tennessee. good morning to you. >> good morning. good to be with you. >> thank you >> first of all, before we get to mr. pompeo, your quick thoughts on the firing of mr. tillerson, both in terms of the position itself and to the degree you want to comment on how it was done. >> so, you know, i was a supporter of tillerson we talked often. i thought he gave sound advice to the president but there's always been a little bit of something there that seemed to be a little bit of a reprieve.

beginning in december they seemed to be working better together, but they've never perfectly geehawed i've talked to both of them about it as we've moved along. while it was sort of surprising the way that it happened, i wasn't surprised that it happened and, you know, look, he's a patriot. i think that he's done the best he could for our nation. i think he's proud he was able to serve our country for 14 months, but, you know, we're getting ready to move on to another secretary of state >> and how do you think that would change under pompeo? >> well, i don't know pompeo that well. people that know him say he's very smart, but i think just philosophically i think he's more aligned with the president and one of the questions he'll get in our hearing, will he accentuate the tendencies of the president? will he give him the full range of options that he has available to him but my guess is he'll be confirmed. i think what will happen is that

the secretary of state, people around the world think he speaks more fully for the president and he probably is more aligned with him. there probably is a little bit less tension you want to make sure the secretary of state is laying out all of the options for the president. i think tillerson did that. >> one of the critiques of tillerson is that he didn't push back more and try to support the state department, didn't fill so many of the positions during this period. he talked about how he was trying to reimagine the department. >> yeah. >> how do you think that changes in a pompeo-led state department >> so i think secretary tillerson, it was admirable that he wanted to change the way the state department worked and align it in a different way, and that's what a ceo of a corporation would do coming in, but the fact is he wasn't going to be there for ten years. no doubt it bogged him down. it created a lot of ill will within the department and foreign policy establishment i think to a certain degree the

president didn't like the fact that so many positions went unfilled you know, as it turns out, he'd of been a lot better off focusing on the issues that we have around the world and i think he knows that. so it was problematic and we still have a lot of the unfilled positions. some of that is new to the white house. the oge, the guys that approve all of these things, but it has been a problem >> senator, you know, i don't want to characterize your relationship with president trump but, you know, it's been out in the open for, i don't know, six, seven months, it's had its ups and downs, that's one way of putting it right now. you sort of warm up to him, there's other times where you guys are, i don't know, not quite as friendly as before. but going into north korea and this negotiation and knowing that sometimes he's impulsive or perhaps his own -- you know, he's going to make the decision anyway as president so sometimes

he may not ask for as much input from everybody else. so this is a guy going in to negotiate with kim jong-un are you comfortable with such a high stakes negotiation being handled by what you know about president trump? >> first of all, joe, about the relationship, we've never stopped talking. he called me friday night. called me yesterday morning at 10:00. we've talked all the way through. our relationship is very direct, very frank i think people would be surprised to see how much -- know how much we talk. and this whole situation with secretary tillerson, we talked often. the president and i have talked often. i've been very aware of the situation there and tried to bridge the two to move ahead as it relates to north korea, look, the president is very entrepreneurial, let's face it just like, you know, he'll just pick up the phone and call you about something that typically a chief of staff or someone else

will do. tillerson was very process oriented big corporations think about things for a long time you're not going to build a big production facility in siberia without planning it out for years. it was just a very, very different approach i'm not concerned about the meetings we'll have plenty of people here who have the institutional knowledge around north korea to -- there will be precursors i'm glad that it's happening and think there may be an opening. there's no question with tillerson, mattis, plenty of others have put on more pressure. >> 60 years we've gotten nowhere and now we're going in we do have a couple of nuclear powers theoretically and a lot is at stake with that. but then again, the potential for up side, we haven't seen any potential for up side in 60

years. if there's down side, you know how they'll run with that. >> well, you know, joe, it's hard to see how there's a lot of down side. >> right i agree. >> the guy's building nuclear weapons. >> right >> the ability to leverage them, re-energi re-energize. >> the democrats are horrified that donald trump is the guy negotiating this, they're horrified at the potential of what can go wrong because they think he's insane. >> well, the -- again, there will be i am sure tremendous amounts of work. i know a lot of people have talked to the president about the foreplay that needs to occur here to make sure it works out properly. >> senator, can you hang on for one sehk you'll want to listen to this news just crossing the wires as we speak. the drama between russia and the u.s. over the double agent -- >> u.k. >> i'm sorry, u.k., who was allegedly assassinated theresa may says the country will expel 23 russian diplomats. it's the single biggest

expulsion for the u.k. since the cold war in addition, she said the u.k. will harden its defenses they won't attend the world cup in russia. the u.k. is revoking a meeting with russian foreign minister sergei lavrov your take on this, senator >> when you have a foreign intety they strongly believe has come into your country and attempted to assassinate someone, you have to take action i'm glad they're doing it. prime minister cameron was before our committee yesterday on another topic we talked extensively about it before the hearing and during it some i think this is an appropriate response and i'm glad that prime minister may has taken these steps. we all need to be pushing back against the nefarious activity that russia is displaying right now. >> do you think the uk is taking more forceful steps than the u.s. is, for example, in some of the issues that we have? >> this caps the bill that we

passed it's an acronym for what we've done with russia, iran and other countries. north korea. look, it's strong medicine and we are -- we have put in place very, very strong sanctions. there's going to be additional sanctions coming forth relative to oligarchs playing inappropriate roles. so i think we are pushing back there's no question that, you know, president trump maybe hasn't used the rhetoric people would like for him to use and i would like to see him step forward but our country as a whole is pushing back very strongly against their nefarious activities here and we all need to be wary of what they're going to do with the elections i know we're watching as not good things are happening. people -- what -- i had dinner last night with another senator on the intel committee their whole goal is to cause disruption and pit people against each other they're able to do it with these global bots on the internet. we've been a target of that.

so, look, they're bad actors they love to see strife. that's what they're doing. >> okay. senator, thank you great to see you, sir. when we come bk,ac jim cramer will join us live from san francisco. 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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to jim cramer in san francisco. fun fact, 13 years ago today, "mad money" aired for the first time happy anniversary. i had one yesterday. 13 is a good number, jim nothing wrong with that. anyway, congrats >> i agree my daughter was born on friday the 13th so i always think it's a positive day thank you for the shout-out. >> yeah. yesterday, i mean, this pompeo stuff, you immediately -- and you aren't a guy that cares about washington that much all the time necessarily but this is a china deal for you. couldn't you connect the dots to where we might have to think about what this means? >> well, look, i think that the administration has not said we need a war over trade. the administration is saying we've been in a war over trade and we have chosen not to fight back for whatever interest and that's over. and i agree with your comments

earlier which is that maybe this is going to end up being better for america. we have rolled over for a long time i know my position is the peter navarro position not necessarily the larry kudlow position but let's call them out. that's what pompeo is going to do >> if we were to lose our chips or if we were to suddenly be way behind technologically in the most important stuff that we're going into from here on out, if we were behind, i can't assume they'd ever be nice to us or share anything i think they want to fail us >> they are our financial enemy around the globe we just choose not to recognize it or our head is in the sand. we have russian news today i fear china much more than i fear russia because russia is not an economic power like china. and we all ignore what china wants to do. i've got applied materials on

yesterday. clearly saying, listen, you don't want to give them the first run of technology. that should belong to the united states the people in the industry all know it. it's always surprising people in the media don't. >> we'll see you in a couple minutes. >> thank you for the anniversary shoutout >> 13 aryes. it's been 13 years and an 8x10 -- no, that's we'll be right back. our investors lped stay confident for over 80 years. call us or your advisor. t. rowe price. invest with confidence. show of hands. let's get started. who wants customizable options chains? ones that make it fast and easy to analyze and take action? how about some of the lowest options fees?

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outperform, up nearly 3% welcome back let's get final check on the markets this morning the futures have been in positive territory all morning long the dow is up by almost triple digits right now up about 100 points above fair value. s&p futures up by 8. stick around right to "squawk on the street." make sure you join us back here tomorrow ♪ good wednesday morning welcome to "squawk on the street." i'm carl quintanilla cramer is at one market in san francisco. futures rebounding after tuesday's late-day loss. the president eyes some tariffs on chinese goods broadcom ends its bid for qualcomm and more. europe relatively flat theresa may expelling 23 russian diplomats over the