my son, and "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're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. equity futures indicating a positive open for the dow and s&p 500. nasdaq a little under, i don't know how much faith i would put into it, for three days in a row we've seen stronger futures in the morning, only to see a selloff by the end of the day. s&p futures up by 3 1/2. yesterday the dow was down by 1%, a also of 250 points, the biggest decline since march 1st.

most of this was coming because of boeing one stock putting pressure on the dow jones after some concerns that a trade war with china could be ignited by the decline that the trump administration is seeking in terms of the trade deficit that we have with china at one point boeing had pressure of more than 100 points on the dow. by the end of the day, it was more than 55 points. really -- >> you're not saying -- >> i'm saying by the end of the trading session. >> the selloff was -- i think it was by 10:00, we were up, then down 300 at one point. >> a story yesterday said more and more a percentage of the trades are in that last minute or two of the trading session. something like 17% of volume >> part of that is the algos >> they said a lot of it is open

outcry, where traders are gathered around, waiting to see what happens during the course of the day before making trades. >> we did january, and now we haven't done anything since january. february and march -- >> treading water. >> actually lower than we closed january. >> dow is down for march before yesterday's loss, s&p 500 and nasdaq were hanging in there. we'll see what happens overnight in asliasia, the nikki was up in europe this morning, green arrows across the major bourses. the dax is the biggest gainer, up by just over -- well, close to 0.4%. the only index down is the ibex 35 in spain. then treasury yields which have come under pressure. we've seen some downward momentum on this ten-year note yielding 2.815%,

yesterday it looked like it would break below 2.8 %. let's get you through some of the top stories tesla, more production problems going on there a new report raises big doubts about the company's model 3 production goals former and current tesla employees revealed that the automaker has been manufacturing what they say is a high volume of flawed parts needing rework and repairs putting the company under pressure tesla has denied its manufacturing teams also rework the cars, saying employers may be conflating rework versus remanufacturing. if you just look, there's been a number of relatively senior people who have been leaving the company over the past month, month and a half i was looking, the corporate treasurer left >> didn't realize that

>> i think there's some legitimate questions >> i was getting tweets about that all these senior people leaving. >> by the way, i will say given we had that conversation about elon musk's compensation package, one or two governance groups came out saying they didn't like the package. >> why >> for lots of reasons the biggest was you don't need to give that much money away to an executive some of the stuff is a check the box thing. but you only get the money if you perform. >> you know, you weren't asking your normal question there you were embracing that package, the size of that if anyone is worth that kind of money that's being you now >> i was saying, this is a strange conversation >> any ceo -- a guy -- a lefty

with a good sinker, there's a guy. or scarlett johansson, she's worth 25 million a movie nochb noon of these ceos worth more than scale except for you for elon. >> the stock fell -- >> you miss me doing that? elon as joe mentioned at the top of the show, toys "r" us has submitted its plan to liquidate its u.s. business. the retailer will close or sell its 800 stores it's owner took the company private back in 2005 price tag back then was 6$6.6 bill done, leaving it saddled from $5 billion in debt toys "r" us could keep 200 of its strongest american locations open in conjunction with the canadian business. it is in talks with lenders about that and other

possibilities. radio giant iheart radio filing for chapter 11 bankruptcy protection they have struggled with $20 billion in debt and falling revenue. the company reached an agreement with the holders of more than half of that debt to restructure its balance sheet. iheart says day-to-day operations will continue as usual as it believes it has enough cash on hand. the filing coming a decade after bain capital bought that company for $27 billion, leaving it saddled with debt. shares lost three quarters of their value in 2015, never recovering that value. trading at 48 cents on the pink sheets that's all from this sort of 2007 vintage private equity deals right before -- >> right before the collapse >> 2005 was toys "r" us. you remember that whole period of private equity deals. there was a moment in time when

bane and thomas h. lee were involved -- >> who was involved with iheart media? >> from which end in. >> who were the people in there. >> bob pitman. >> that's the guy. >> he's the ceo or chair maman. he has been in that role through a long time. >> he makes tequila, too >> what happens to all the cindy kated shows involved with that ryan seacrest, that will continue >> this company is just filing for protection it's not a liquidation this is a financial problem at the moment >> still a problem >> i'm not saying it's not but if you're a radio listener and you like your iheart radio and ryan seacrest is your guy, or whoever else you like -- >> rush limbaugh >> there you go.

>> i said earlier a lefty threw you a bone you got to -- i don't know if this is a good number. is this a good number? >> you tell me >> amazon unveiling some internal numbers on prime video. documents shared with reuters show its total audience was 26 million customers as of early 2017 do they do it just to get -- >> i had prime before they were offering video aspects of it prime delivery the u.s. audience for all prime video programming was about 26 million customers. is that cumulative >> everybody who has a prime account. >> is that good? >> what i took away from this, maybe i'm wrong, i thought they were saying 26 million people who have prime -- there's more than 26 million families in america that have prime currently, but that have prime

and used the tv service. >> if you have a watch list. >> yeah. >> it's free if you have the -- >> it does mean there is a meaningful audience, if there's -- the question is it 26 million people regularly watching or have watched it once i don't know >> i don't know. you're asking me >> there's not enough information. >> if you told me 26 million people were regularly on -- watching amazon prime shows, that's terrific. >> yeah. i don't think that's what it is. >> there's not enough information to decide. >> the senate passing a bill late yesterday to roll back some dodd-frank regulations eamon javers has that story. and an introduction to someone we may know. >> let's talk about that vote on the dodd-frank measures. this is a roll back of the protections of dodd-frank put in place after the 2008 financial

crisis the vote was 67-31 in the senate it moves over to the house of representatives. it softens a number of provisions in there that the banking division felt were ow r onerous for a number of years. the white house has signaled they will sign it. also the president yesterday out on the road but signaling that he may not be done with tax cuts, saying there may be another effort later this year he and kevin brady have been noodling over some ideas here's what the president said >> it's going to be something i think very special kevin brady is working on it with me. congress is working. the senate is working. unfortunately on the original we didn't have one democrat vote, which is pretty incredible now they're regretting it. we'll do a phase two it's going to be something >> so the president there saying there's going to be a phase two for tax cuts not clear what's in there.

a lot of people on capitol hill will tell you they're not likely to pass something that adds to the deficit between now and the election but it will give republicans something to run on going into november. so that's something to watch for. also to watch for, larry kudlow arriving in washington today he'll attend a trade meeting at the white house. larry kudlow named yesterday by the white house as the new national economic council director one question here for kudlow's tenure will be how will he and the president get along opt issue of tariffs the president has been in a protectionist frame of mind recently talking about a number of tariffs, including $60 billion in tariffs on chinese goods, restrictions on investment, restrictions on visas for chinese travelers coming to the united states. larry kudlow an opponent of an across the board tariffs, how will he deal with that mindset in the white house kudlow yesterday said he and the

president reached and understanding about their disagreements. here's what he said. >> look, i've known the president a long time. we have mutual admiration society, he is the president, it's a different role, i will abide by that. there may be agreements, disagreements, we'll talk it through. but once decisions are made, that's it. it's time to execute >> i talked to larry about this yesterday. he said ultimately he believes that his job is to argue and advocate internally for his point of view, but once the president makes a decision, that's final he will live with it, advocate for it and execute on it so that might be a little bit different than we saw gary cohn playing the role of the anti-tariff advocate inside this white house. gary cohn was reportedly doing everything he could to oppose tariffs, including efforts to postpone meetings that had been scheduled on the subject, to postpone announcements,

in-fighting internally was intense. kudlow signaling he will go with what the president wants the president said larry kudlow has come around on tariffs and now views them as favorable as a negotiating tactic, not tariffs as tariffs, but as a negotiating tactic >> that's what i was going to ask. as he gets into this role, how much -- is there a do-over on any of these topics that have been -- what may seemingly seem settled now, but perhaps when he gets in there he continues to argue the point or no? >> a lot of it is not settled. they have proposals for tariffs on chinese goods the united states reached out to china diplomatically and asked china for its suggestions on how to lower the trade deficit by 1$100 billion that's the number the president wants to see a lot of that is still in flux, in negotiation we know based on watching this president what he likes to do is plant a big flag out there and

say this is where we're going. and then he negotiates back from that position. the announcement of a new idea is often the beginning of the negotiation, which has not been the case for previous presidents this president will put a big goal out there and negotiate back he feels this helps him get further to where he wanted to be in the first place kudlow seems to be at least in line with the president and the idea using these to get other countries to come to the table and negotiate. >> the quickness with which the president moves is staggering in certain cases. what's the half life on mcmaster or -- i know it's 6:15, but when is -- >> check your watch at 6:17. >> i don't say that's bad either if i wanted to do what i wanted to do, i wanted to do it yesterday in terms of all the things trump wants to do, if you have someone not on the same page, get them out, put someone

in shulkin that seems like it's happening. >> number of cabinet secretaries have ethical issues, whether it's travel, redecorating offices, spending lavishly those things are concerning to people in the white house, rather than the rex tillerson situation where they didn't get along at all mcmasteris another one where they don't really get along, they don't seep to share some of the same ideas about the world i saw h.r. mcmaster yesterday, he came into the white house briefing room giving a group of young people a tour of the briefing room. he seemed fine but there are rumors he could be on the way out the president said this week that he's now close to getting the cabinet that he wants. more than a year into his presidency so i think people will ask the question, if you're a year into your presidency, how come you didn't have the cabinet you wanted at the beginning?

>> because he was a business man. >> why did you have to fire all these people over the course of a year >> they say it might be bolton he's very aggressive and sort of hawkish. he has a mustache that i actually like. unlike that guy in pennsylvania, the porn mustache that saccone had, and then he shaved it off >> after your comments yesterday? >> i don't know. >> there are rumors that bolton would shave the mustache to get the job. >> really? i like bolton's. it's a different than the porn stash. >> if you can carry it off, you can carry it off some people can, some people can't. >> i don't think either -- you would look good with a raleigh fingers type thing thanks they've been telling me to -- i like you, they've been saying move on. let's get to the markets

we have a couple of cleanly shaven gentlemen chris retzler is here and gene goldman is here. >> they want me to say sether investme investments? >> setra >> they said "th." you both talked about the recent correction, what it was and what caused it, but you are talking about it in the rearview mirror. it feels like we're still in something. is it over >> if you look at things near-term and long-term, near-term we are worried about the markets, we feel they're due for a pause. earnings season is over. concerns about tariffs

economic data that is coming in below expectations or matching expectations near-term concerns are there long-term we're excited. tax reform, larry kudlow coming on board yesterday we're excited. i was surprised yesterday that the markets did not rally on the news of larry coming on board. yes, there's tariff issues >> pompeo came on, too he's hard line >> yes >> it's probably because of the conversations about additional ways to try an get down that trade deficit with china that conversation was taking place. >> true. larry is a supply side guy he wants to cut taxes, reduce regulations. that's great for the economy that's great for the markets >> you're a small cap guy. you need to step out of your comfort zone and talk, but small caps do lead one way or another. na they're interesting. is the correction over

>> we love the volatility that's come back into the market the first three months, it's given us an opportunity to do rotation, get out of these names that have done well for us in tech and look for more small cap value which is where we think the investment opportunity is. you had a bulk of names that did well over the last few years but the general economy is doing great. i was down in houston with evercore looking at energy companies. something who will be impacted by the steel tariffs when you talk to these companies they don't know the impact yet there is some, but there's a lot of variability in what could be carved out the pipes that are made in mexico if nafta sticks together, we'll be okay. there are some risks it's a wide range. the economy is doing well. houston is buzzing $60 barrel, if it goes lhigher, the industrial revolution could come back and technology is being used in the oil patch

which is where we do a lot of our investing, that should do well >> you're talking about that rotation out of the names that have done well, particularly from technology into areas looking for more value that's happened over the entire broad market spectrum. that's what we've seen is that because it's not a claim that you don't think technology will do well, i just you're looking for cheaper prices >> i think that certain managers are probably rebalancing their portfolios that have become overweight to certain names. we tend to traffic more the nonhousehold names, which maybe have not performed with the facebooks, googles and amazons, but we're seeing a rotation to that we're also seeing the m&a market coming back for small cap companies. there's going to be more repatriation of cash and cash floating around that the larger companies are looking to buy, higher growth opportunities, where they maybe didn't do r & d and they want to buy that business and drive synergies we're very bullish right now,

but we'll see how it plays out over the year. >> they want me to wrap. i'm trying to get the peter cetera song. >> "hard habit to break? >> this is chicago >> might be the other guy. ♪ is this it >> yes >> did you know this was coming? next time you talk to the booker, just say let's get this out front. >> grow a mustache, too? >> not a porn stash. i like the rally fingers thank you. >> thank you for playing along >> thank you when we come back, the

backlash against united airlines we'll talk about the customer service disasters with an industry veteran who wrote a book about turmoil at american airlines "squawk box" will be right back.

welcome back united airlines is vowing to make changes to its pet policy, but one day after a family's dog died in an overhead bin on a flight, the airline mistakenly sent another woman's german shepherd to japan instead of kansas city. that dog is reportedly flying back first class joining us now to talk about united's culture problem and customer service disasters is gary kennedy he served as general counsel for american airlines and is the author of "12 years of turbulence." gary, thank you for being here today. >> good morning. thank you. >> do you think we're correct in painting this as a united culture problem? >> i don't know if it's a united culture mrproblem. clearly what happened yesterday was a big mistake and they had a few of those they're working to correct those problems >> what do you think the issue

is people feel there's the potential for more air rage in the skies these days, passengers are more unhappy some flight attendants are probably unhappy, people at the gates. what's going on? is this an incorrect perception? does it get more loudly directed through social media or is this an issue across the board? >> i don't think it's a real problem. there are pore thmore than 27,00 flights in the country, 2 million people traveling each day, and this is an extraordinary event that happens. each day passengers are on planes, planes are more crowded today, but they're enjoying a meal, surfing the internet, occasionally there's a problem but overall customer service in the airline business is terrific >> i can go along with theed with this is not a united specific problem, but consumer focused businesses get more push

back on issues, but planes are more crowded than ever before, there are more delays on the tarmac than ever before. clearly shortened fuses all the way around can lead to more uncomfortable situations people have to pay to bring bags on you have people cramming stuff into the overheads so they don't have to pay those fees i can't imagine that doesn't lead to a more uncomfortable passenger experience >> there's no question there are differences today in terms of the number of passengers on the aircraft today, but the fact of the matter is there are fewer come plaplaints registered with d.o.t. today than in 2015 and 2016 there's a tremendous amount of people flying. at least 50% of the people in this country will fly at least once this year when you think about the number of daily flights and few incidents overall, clearly social media adds to the problem, but by in large every

day there's less difficulties in the air than on the roadways, highways and freeways. >> given you wrote a book about american, you understand the airlines well and the culture of them you don't think this is a culture problem at united per se, how is the culture different at the new united -- it's no longer united continental combined, but how would look at that culture versus the american culture, versus delta when it comes to service i think there's a difference >> i'll say this, from american's perspective, american spends a tremendous amount of time and effort training their customer-facing employees to handle customer situations as they arise it is front and center it is important to the airline to make sure the passengers are treated properly occasionally things don't go as they're supposed to go

i think the culture inside american airlines is to serve the passengers, serve them well, certainly the flight attendants are on the plane for the safety and security of passengers, but they also know they're dealing with people. >> that t's the other thing do you think airlines come at this like the way hotel companies do hotel companies often approach this as we're in the people-pleasing business that's the business we're in at the same time the airlines have another issue at hand, which is, as you said, the safety being a huge issue. so trying to please people and dealing with safety and as we talked about air rage and all these other things that take place when you are in these cramped spaces makes it a more complicated position >> it is more complicated. first and foremost is the issue of safety and securely which happens every day at the airlines second is pleasing the customer.

it is sort of -- it's both roles and the airline certainly american an other airlines take that role seriously. it's something they strive for every day. it's difficult you're at 35,000 feet. >> it's a seller's market now. it's not a buyer's market. >> there's no other alternative. >> you have a seat, be happy, sit there, your dog is going in the overhead bin when you shrink capacity, routes, it's a seller's market i have been talking about it >> gary, jim cramer made the point yesterday and it's a valid one that if you don't like what's happening with united, there's nothing you can do if you're somebody who goes to one of their hub airports. if you fly out of newark, they have more than 80% of the gates there. so tough luck. either travel across to manhattan and go to laguardia,

jfk or use united. you don't have an alternative. >> for certain airports that's true there's a concentration of airlines at certain hubs, that is a problem but i think the premise is wrong that the airlines believe they have a captive audience and they can treat people however they wish they work hard to make sure things go smoothly united had a bad run of it with the passenger taken off the plane, with what happened with the dog. >> i was thinking they should hire doug parker at united doug is good >> he is >> largest airline in the world. >> gary, thank you for your time >> thank you >> is the german shepherd flying in first class, was that a joke? >> that's what they said >> i have a couple german shepherds, they could be the only ones flying in first class. there would have to be a strong curtain between them and the rest of the passengers >> i don't know how that's set

up. coming up, president trump visiting a boeing plant yesterday at a testing and finishing facility in st. louis, but the stock was down sharply on fears that a trade war could impact more than $1 trillion in futures orders we'll talk about that after the break. say carl, we have a question about your brokerage fees. 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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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. welcome back right now it's time for the

squawk planner weekly jobless claims are out at 8:30 a.m. eastern time that comes along with monthly import prices and the philly fed survey at 10:00 a.m., we get the home builder sentiment survey dollar general reports before the opening bell adobe system and broadcom are out after the close. look at the u.s. equity futures, they've been higher this morning, not quite as high as they were. dow futures indicated up by 28 points s&p futures up by a half point the nasdaq down by close to ten points >> president trump visiting a boeing plant in missouri he was checking out the f 18 fighter jets that the president was talking about, having a strong military and increasing spending since being on the campaign trail joining us is hans nichols have you been on the set before with us? >> no, can you tell i'm nervous? >> you don't seem nervous. i've been watching him on another network for many years before he was an nbc guy >> the interesting thing about

the f-18 is one just crashed off the coast of florida >> just yesterday. >> the super hornet is the latest variant of that what the navy did, they went heavy on the f-18, the marines switched to the f-35 the marines are getting the f-35 sooner it's stealth, takes off vertically, but you can put it on a big decked amphibious aircraft which just so happened to be off the coast of a certain peninsula. they have a new capability >> you're talking about off the coast of -- >> the korean peninsula. i forgot andrew was here i have to wind it back keep things basic. >> thank you appreciate that. >> i'm just sucking up to joe. >> that will go a long way >> you took miklaszewski's place. >> yeah. legend >> that's great. >> what is the differential in cost

>> with the -- i'm guessing, probably in the 30 billion range. you don't know what the cost is for the f-35, it's based on how many other countries will buy it if you get the germans to buy the f-35, you can drive the costs down so they always talk about costs, bring it down and let more countries buy it >> is it significantly safer? >> we don't know the f-18 is safe, but the issue with the f-35s, there hasn't been much testing. the joke inside the pentagon is it can make you a smoothie, it can do everything up in the air. but it's expensive and unproven. if you're thinking about where the next conflict could be, whair ta they're talking about something in the air force that is low and slow right now you're sending up a ferrari for a job that a fiat can do inside the pentagon there's talk about how you will have a new

generation -- something that's older, what the afghans have now, an a-29, i didn't know i would geek out this much on the aviation side, but they have an a-29 because they're providing close air support. why send up a hundred million jet for something that a jet in the '50s can do. >> but people may not feel comfortable. the b-52, fantastic air frame. >> is there a different approach under the trump administration to how we're negotiating these deals? if you remember when the president came in originally, even when it came to air force one, he said they're ripping us off. this is terrible i'm a negotiator, we'll do this differently. all this pork that's built into

these crazy contracts, we'll change it. >> i hate to give you this too early to tell answer, but what's the difference between meaningful and significant they want a different approach but acquisition is -- we're talking 5, 10, 20-year programs. to turn that around you're talking about turning around an aircraft carrier the new head of acquisition is a guy called will roper. incredibly bright guy, mit guy, thinking about warfare, swarms of drones attack, he's in charge >> do you have any idea what kind of margin boeing and lockheed and these guys get on these types of planes? >> i don't my answer on how well boeing and lockheed are doing, the berlin air show is in a couple months go and listen. listen to the oohs and aahs, if the germans are wowed and they have to spend more, they said they will spend more, sit next to the german delegation, if

they ooh and aah when an f-35 maneuvers, buy some stock. >> you could be here every day you're like two blocks away, aren't you >> except i'm normally down the river at the pentagon. >> you have to stay nearby, right? >> you do, because mattis stops by mattis is in bahrain this morning. but he does these drive-by gaggles, he comes by at 8:00 in the morning. print colleagues are not always at their station at:00 in the morning. so tv has an advantage >> up late at night drinking >> splashing the scotch on my face aftershave >> exactly we do own you now, right if we want you here, you have to be here at cnbc? >> i wouldn't put it that way, but yeah when you say rent, i don't know. >> these are scottie dogs. you asked whether they were french bulldogs. if i had one, i do feel bad for that family.

it kills me that that little guy at 9 -- whatever he was. these are scottie dogs don't beware the ides of march, embrace the ides the march scottie's birthday today >> most important story aside from your tie? >> nothing close look how big and grown up scottie is >> i'm not going to step on this congratulations. >> thank you this is when he used to come on. he's familiar to viewers of cnbc and "squawk box. it is just a big day it was an anniversary, now i'm getting -- >> look at you, joe. >> congratulations >> that's a young man you used to be. >> i did this is about scottie. not about me >> i know. i know >> happy birthday, scottie >> max and henry are coming up eventually >> he we've done some stuff with them >> wait until they're in high school it's a whole new ball game

happy birthday, my little guy. coming up, the end of an era. toys "r" us -- driving lessons >> gosh. >> driving lessons toys "r" us has submitted a liquidation plan that will lead to the sale or closing of u.s. stores we'll talk to jan kniffen next. and then we'll talk about larry kudlow's new gig with art laffer he will join us. and we'll nerd out some more with our defense nerd. he worked with larry on the reagan presidential campaign quk tuned, you're watching "sawbox" 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.

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♪ some haunting news this morning. for decades toys "r" us was the toy store that every kid wanted to go to right now after more than a half century as america's favorite toy store the company is officially closing down. that's the word this morning joining us now is jan kniffen,

ceo of j. rogers kniffen i know you're in mourning about this i'm heartsick over this. i went to toys "r" us yesterday before the news went official, tried to talk to employees, i have to get my kids back into some of these so they can have a last go-around >> i will miss geoffrey the giraffe. i raised two kids in the '70s. we in toys "r" us the whole time >> is he totally going away? i was reading 200 stores will stay open? >> somebody will buy the asset of some sort toys "r" us the name probably won't go away. we may see it online only or with 200 stores or a half dozen stores, something will happen there. but the geoffrey giraffe as we all knew it and the big box stores, that's gone. >> i know that we have talked about how amazon is the category killer, online shopping has changed so much. that's not the only thing at

stake here part of it is the debt that was loaded up when the company was taken private. >> they could have probably survived a long time mahad they not been loaded up with debt, but they may not have been successful by the time they were bought in '05, the category killer was already dying. walmart was the big problem, and now we have amazon as the hammer and walmart as the anvil when you're the biggest seller of toys, ie walmart is the biggest seller of toys, when you're the biggest seller in the fourth quarter and you use it as a loss leader and when you are going to win the game on toys at any expense, the guy competing with you is in trouble >> there's a separate narrative going around about the debt issue, given this happened in concert the day that iheart radio is filing for bankruptcy

as well, that private equity is responsible. this is an indictment of the private equity model >> i don't see it that way private equity succeeds, private equity fails >> if you didn't have $5 billion of debt, is there something they could have done? >> yes, they would still be probably operating, and maybe bonton wouldn't be in bankruptcy either, but it doesn't mean they would have been sueen successful against the death of the category killers over time do i think they with have been a wasting asset and low roi? yes, but they might have still been operating it's hard to kill a retailer that's not levered all you have is the inventory. if you can get it in fast enough and sell it, you can keep operating. it doesn't mean you're successful in the world of retail i think toys "r" us was already there in '05 and the trajectory was set. but, yes, as soon as you load it

up, you can go broke faster. it could also have been successful by loading it up. it could have all worked in the transaction. in this case it didn't >> do you think there really is room for a toy store that is simply a toy store >> no. >> this gets back to that question >> because you're operating all year long. the fierce competition comes into the fourth quarter when you have to make your money. suddenly there you have walmart with the lowest price on the toys, amazon with the biggest selection. you need a place to go, they may be successful, but to be a competitive toy store, not going to happen. >> i used to love to glo to gbo tolo records, and then blockbuster.

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i think we are benefiting those areas that will benefit from the stronger growth and more inflashl environment >> if you have a real knock down battle with china, that can have serious ramifications on so many different levels >> president trump closer to naming cnbc's larry kudlow, his next top economic adviser. >> for larry kudlow, it will be what is the agenda post-tax reform neighborhood, the rockefeller family is about to sell the latest sales center >> christy's good more than 2,000 objects, some of the rarest picassos and mon ets

ever sold the biggest single collection, expected to fetch over $500 million. some say it could catch up to a become dollars they will sell the collection. david rockefeller was the grandson of john d., passed away last year. his homes have been sold and everything in them will be sold with the proceeds going to charity. in a rare interview, david rockefeller jr. told me after all his dad's investments, art was the best performer >> my father when he was looking back at all the sectors of his investment, his real estate, hess stocks and bonds, his art, he actually had a colleague of his measure how well they had done as generic asset class and art won. >> now the star of the sale is my cass so's girl with a basket

of flowers >> that could sell for well over $1 million he told me the sale is bittersweet for the family, sense they are losing many of their treasures. >> there are members of the family who were really sad about. that i'm saddest about the idea of going into an empty house that used to be a beautiful house full of all these amazing pieces of art. my dad taught me not to look back >> david gave away a billion dollars to charity during his lifetime it will go to 12 charities stipulated in his will. >> i saw pictures of the house yesterday. >> they were filled with amazing treasures, his cufflinks are going on sale. you don't have to be a llnae. >> when we come back, a run down of the beg ev movebigges

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disasters. we will show you amazing views of earth we talk space exploration and humans on mars the countdown on as the second hour of "squawk box" begins right now. [ music playing >> announcer: live from the beating heart of business, new york city. this is "squawk box" >> good morning. welcome back to "squawk box. the nasdaq markets in time's square with becky quick and joe kernon the dow is up about 21 points, the nasdaq is looking off about 12 points, s&p 500 off about a point. we will tell you some of the headlines making news this hour. we have a busy week ahead, we're at the end of the week here, almost, some economic data this week from the fed meeting. it continues this morning, we will get to no less than four

reports. it all happens at 8:30 eastern time, the philly fed index and the empire index coming out, later this morning, we get the latest read on the home builder sentiment. amazons bet, production apparently paying off, according to internal documents, amazon attracted more than 5 million customers to its prime shopping service through early last year through it's video programing. so that's the separate piece that's good for them that programing is only available no prime customers consumer products, giant unilever announced plans to operate exclusively out of rotterdam. it's a part of unilever's plan to end the dual structure in place there for 88 years unilever says the choice has nothing to do with breck it and those who work in the uk will continue to do so. cnbc's larry kudlow has been named the president's top economic adviser and now over here, we're hearing tax reform

two could be on its way. >> reporter: good morning again, joe. the president talking about phase two of tax reform. larry kudlow talking of tax reform, it will be one of the things on kudlow's agenda when he gets there as the national director i am told he will be there to attend a meeting on trade. here's what he said about the gen says of this idea of doing phase 2 yesterday on cnbc. >> kevin brady was the instigator, he sold president trump on it. trumped a knowledged it at a speech some place. when i have been talking to trump in recent days, he refers to it in different times as i say, these will be serious proposals, trust me. whether or not they can get them through remains to be seen they will be serious proposals >> kudlow not saying they can get through congress in an election year but they will be serious proposals, perhaps laying down a marker for where

republicans want to go after the mid-term elections if they maintain control in the house and senate in 2018 so no specifics on exactly what phrase i phase 2 might look leak, but the president and his new chief check adviser signaling they've got something in the works there over at the white house. >> very exciting steve leishman is here, i mentioned to him, if bernie sanders were to become president in a couple years, you could easily be the national economic guy for bernie >> oh. what role are you trying out for at this point? >> see now there's that look him you are supposed to laugh. say, okay, joe >> look, i told you about the arguments i have at home because i don't talk politics. >> with the great pen littelope.

and great kids >> i'm in the middle >> the dog is in the center. >> i laughed aymon, didn't you kind of laugh? >> i was laughing with, not at >> so was i, steve you still have that look >> i'm not running for any job i got a good job right here. >> although, i hear he is running, how about biden how about biden? >> what about corker >> corker might run? >> flake >> a nice centrist >> i leike the idea that flake couldn't be a dog catcher in his oem state. >> it was javitz republicans and who is the - >> you started you started. >> sorry i'm sorry. i'm sorry. >> i'm just giving it back. >> okay. >> somebody is supposed to introduce me here, just, for the record >> i think i am. >> would you like this do that, becky, it would be kind of you

thank you. >> let's start with what we are dealing with right now, larry kudlow, the path he has for him headed to the white house. >> what larry kudlow can do as director of the nec, what they let him do and the economy market give the administration scope for more policy initiatives, here are the kudlow questions, is he a tax cutter or a promoter >> he is a tax cutter. >> he said part of his job is to promote what the administration has done already the administration has not told the story well is he a tariff slayer or tariff backer larry has to go on cnbc and promote them is he the leader or a follower there were talks of that end run out about how ross and novarro

went around the existing structure. does larry become sort of an economic chief of staff there, where there is nothing that gets to the president that doesn't get to larry first that would be an interesting sort of pillar he would have to play >> ultimately trump is the decider. >> he's the decider. but what gets to the president what sort of - >> the john really role for finance. >> he spoke of a phase 2 role of tax cuts him all that costs money. here's what larry said yesterday about his attitude towards deficits >> if you are borrowing to finance current services or day-to-day expenditures, you got problems if you are borrowing to have greater investment, legally, we are investing in america with these lower tax rates and sound money and making sure we look after interests overseas, that's the best possible bid. >> larry dismissed the tax cuts the question is this, he can convince the president, congress

and markets that there is more scope for further tax cutting in the united states. >> did that really -- is that in the lexicon now? >> i use it. >> it's out there. >> and you don't laugh when someone -- >> joe, on so many levels, we're beyond laughing. you know him >> yep all right. >> on so many levels >> i leak it it's a good word. >> it's a good word. >> what was the other one? strategery >> underestimate >> i like that in terms of the market's convictions on things, already you seen a little pushback on the market in terms of what the deficit could mean down the road not a lot of it. >> let's go back to the rogue book that said 90% of the gdp is the limit. it's not the limit even ken would argue it's not the limit. the average they came up with above which sometimes the

economies do worse the only thing that i can think of in all reading i've done about deficits is it only matters when the marks say it matters and it's hard to know what that point is and what some of the arguments are for those in favor of cutting deficits is don't play with fire within it comes to the mark making that decision take a look, you can see corporate tax cuts receipts are already on the way down him okay that looks to be the initial leading edge i don't know how far that goes here >> here's my question,ing is mnuchin said the forecasts, they will see a decline >> i you asked him that question. >> is that bicker or smaller than those forecasts >> it's too early to tell. we have to watch that. in '81 they freaked out about the reagan tax cuts. they had to take some of it back we'll see what happens here, whether or not the tax cuts numbers create -- remember we're paying already something like 200 basis points more than the

germans paid for their debt him some of that is the difference in the policy, ecb versus fed poles. >> you think all of it >> i think just about all of it. >> where would you rather put your money if you were an investor buying ten-year treasury bonds >> you are sort of criticing yourself with your answer there, becky, if the rates are lower there? >> they're lower there because o - >> because they're paying less for their money. >> you know what larry's phrase is owe glow king dollar. >> he says he believes in the strong dollar. >> that can help us. >> that hurts the trade. >> that won't hurt the trade imbalance. >> the question is whether or not the markets believe we were on a sustainable deficit path and then they will give us cheaper rates for our money if we end up being on -- if the idea we're on an unsustainable

path, i think there is a differential premium in that >> how do you think larry will spread his appearances on cnbc around he used love "squawk box," then he was on with kudlow and cramer, is he always going to be on cramer? you know >> sometimes it goes the other way where you have to viend of be careful you are not showing -- kind of be careful you are not showing too much favoritism. >> i don't think he will go on the others. >> hopefully not, really >> i'm talking about other cnbc shows. >> you are wondering which cnbc shows? >> yes, i will be very hurt, don't we want him here >> always. we want everybody here >> that was luke warm. >> we always want larry. >> i want him. i want him tomorrow. >> in case he is listening, we do want you tomorrow, this is fantastic. please come back >> remember where you came 25

years, is this show. >> it's a funny show sometimes i have to ask myself, are we live on television? >> it's the commercial break >> we have to go to special brake. okay coming up when we return, fears of a coin trade war weighing on the mark jet scream. we will hear from two mark effect e experts on what you should be doing with your money. as we head to that brake, here's larry kudlow on china in the rule breaker >> he has not played by the rules for a long time. i've talked about that intellectual property rights, corps technologies, other barriers, transshipments to get ouarnd things. so china needs to come up with something. i believe that at cognizant, we're helping today's leading life sciences companies

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>> i think the market is going through a transition phase it's shifting. we will identify the stronger growth, more normal interest rate >> if you have a real, knock down battle with china, that can have serious ramifications on so many different levels. >> president trump closer to naming cnbc's larry kudlow the next top check mom you called? oh hi sweetie, i just want to show you something. xfinity mobile: find my phone.

[ phone rings ] look at you. this tech stuff is easy. [ whirring sound ] you want a cookie? it's a drone! i know. find your phone easily with the xfinity voice remote. one more way comcast is working to fit into your life, not the other way around. >> president trump just tweeting larry kudlow will be my chief economic adviser as director of the national economic council. our country will have many years of great economic and financial success, with low tax, un paralleled innovation and fair trade and ever expanding labor force leading the way #maga. just tweeted that was moments ago

i wish he was watching and said that probably big news, anyway. >> okay. separately, let's talk markets broader marks slipping again, care larry kudlow says great things yet to come >> if you keep tax rates minimum, if you keep regulations and government spending minimum, if you keep the dollar sound and steady, you are going to have a terrific economy if government has a modest approach and lets people do what they need to do and allows the freedom to do it, we will do great in this country. we are already, i believe, on the front end of a tremendous investment boom. >> sam stoebl is here, chief investment strategist cra and does this change your thinking about the way the markets should be priced right now? >> no, i don't really think so it was interesting what larry

was saying all translates to lessafairre allowing the economys to do things without a lot of overhang, but at the same time, yes, he is going to be working with the president, wants to be supporting him whatever he says i believe is something to move the agenda forward. >> is there a larry kudlow bump coming, a larry kudlow rally >> i think what's going on, we're still in a pretty healthy economic environment some of the numbers seem to have pulled back a little bit very recently generally, we're in a longer-term expansion, profit group looks good, the only thing that causes us any sort of worry is slightly higher -- well not slightly higher, decently higher valuations that give a little more room on the downside for marks move it's part of the reason we're seeing the weakness this year. >> are you doing anything?

-- >> we maintained a full equity waiting in our allocations, in those equitys we've erred on the defensive side >> so what does that mean? >> that means twisting to hard core stable companies primarily in the u.s >> you are trying to get away from that? >> sorry >> are there industries or particular names are you getting away from? >> it's basically a general style of investing the sectors that generally have that sort of characteristic is consumer staples health care, but generally we're finding it with pretty much all industries. there are companies on that side that will be more stable, less dead on the balance sheet. >> that are slightly higher volatility. >> we talked with a portfolio manager this morning who said they have been focused on getting out some of the names that have performed very well. in general, you can look at some of the technologynames that

continue to perform and keep your averages up second quarter lating in some of the names nay said were value names. does that strategy sound >> i think it makes sense few look at the difference between the tra determine growth names and the value names in this marketplace, that spread has opened up a little bit so there is an advantage tilting a little bit towards the valuation side remember value as a style of investing has basically not work for five, six years now, therefore, growth has gotten a decent amount of growth ahead of it >> that provides an opportunity for investors, i don't think it's a strong opportunity. on the margin, that makes some sense. >> sam, those charts the nasdaq is back all way. the other ones, what happens after a flag you see that it goes up, it comes down. then it looks, few draw, it looks like a flack -- flag is that correction over? >> that's the nasdaq that's back. if you look at the other ones, it's right in the middle of the

decline. here's the dow so what usually happens after a flag formation leak tha like thu know we are calming it rotational in nature with the way it breaks, usually is in the trend that was prior to that formation. so right now the implication would be that we end up continuing to move higher, because we can have corrections that take place in price but also in time and we need to do a lot of backing and filling we dropped 10% in the quebecest sense world war ii, only 13 calendar days, that was leak ripping off a band aid that took a lot of investors by surprise, we will need some time to work our way back into it >> the nasdaq represents the growth versus value thing. is that why that comes back first? >> i think that's a part of the story. what is going on with technology

is kind of interesting we were talking about it over the brake, this is a back part of an check cycle. we are looking for excesses. one of the things popping up as we do our work is this portion of companies that actually can't cover their interest costs with their current cash flow from earnings historically, that's about three-to-four percent. that's today sitting at a pretty high level i thought it was going to be retail, energy actually it turns out it is tech and health care. newer companies a greater portion of the mark that is on that newer side that's getting those lofty valuations it feels kind of leak the 90s, they're dead in finance. the tail end, some of the heighth going into these newer companies without fully developed business models is interesting. it seems similar >> are either of you trying to

trade around the impact of what the tariffs may or may not mean? >> well, we actually reduced our recommended exposure to large caps prior to the global trade situation mainly because we ffeo growth expectations, you had much better opportunities in mid and small cap stocks relative to the large cap. >> so actually we have been outlining this a year-and-a-half now, basically since trump went into office as one of the tregers is the global trade will be 30% of the world economy, a series of deal after deal after deal we are now at a point where there is not that many more big deals to streak, in fact, it seems like we are going back to the negotiating deals. what that led us to do is focus portfolios a little more local and regional in nature that smaller cap that's also a lot of larger cap businesses, they have smartened up to regionalized operations. >> you saw this thing about trump making up the trade issue

with trudeau he's in the meeting with trudeau. he said i didn't know. i just made it up that we had a deficit. i just made it up. >> he said this in a campaign. >> he admitted a fundraising event. i had no idea. i made up the whole thing. what do you think about that, joseph >> i have known him a long time. >> and >> there are ways to be effective at -- sometimes i'm not saying the end always justifies the means, but if your heart is in the right place, good things can happen >> i will start lying all the time when my heart is in the right place. jason, sam, thank you both. when we come back, we have stocks to watch and house ways an means chair kevin brady in discussions with president trump on a few round of tax reform is eighter is it a serious prop

barring shanshan feng chip coming up, sensors that can president-elect disaster we'll introduce you to the company protecting our technology grid from a meltdown. the ceo o itrof itron joins us n the evolution of great cities the evolution of great cities after the yup in just one day, we process, approve and pay. one day pay. only from aflac

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two stocks on the move this morning, williams sonoma reported a quarterly profit beating stills by 7 cents the retailer gave a better than expected full year forecast and tailored brands is rallying in pre market trade they reported same sales in men's wear house and joseph. a bank divisions. when we come back, life on one australian him rock. a new geonet series on planet earth told through the eyes of people who have seen it through space. a producer and farmer astronaut jayleninger will join us after this brake

'

good morning, everybody, welcome back to "squawk box" here on cnbc we are live from the nasdaq markets set in time's square

among the stories front and center the international energ agency boosting its forecast for global demand. it estimates demand will be set at 99.3 million barrels a day for all of 2018. that's slightly higher than estimated a month ago. up from last year. wells fargo is reportedly facing new sanctions from u.s. regulators wellsfar go will be cited on auto loans that customers were forced to accept last year wells fargo said a third party vendor wrongly attached those policies to loans. and blue cross is helping consumers pick up their subscriptions. a subsidiary part in other words with lyft to offer rides to drug stores it will begin with a test it sets up in a handful of cities. okay president trump says phase 2 of tax reform is in the

works. good morning. >> reporter: good morning, andrew, this is sounding more like a real possibly now house ways an means chairman confirming kevin brady is in talks with the white house on tax proposal it would focus on making the individual tax cuts permanent. right now they expire after 2025 and would support business innovation and encourage households to save more. unclear if this will happen before or after the mid-terms, it is the most concrete seen so far republicans want to build on the legislative achievement of 2017 president trump talked about phase 2 many times now, many thought he was joking, including myself but the president sounded serious at a speech in missouri yesterday at a boeing factory. >> it will be something i think is very special. kevin brady is working on it with me. congress is working the senate is working unfortunately on the original, we didn't have one democrat vote

which is pretty incredible now they're regretting it. but we're going to do a phase 2 and it's going to be something >> now, newly minted nec director larry kudlow did say here on cnbc, it will be substantive. it's not just a political bargaining chip. he says as you know the legislative pathway is murky at best especially if they want to do it before november and especially if they don't have help from democrats. >> it's tougher this year, no doubt. kind of weird. i saw something on it that one of the other take aways from the pennsylvania surprise, whatever you want to call it, was that the glow of the tax cuts have supposedly becoming more and more popular didn't help the republican in pennsylvania and they're wondering whether by the time the mid-terms roll around, will it be the economy stupid or will it be everything else >> that's the question >> i'm not calling you stupid.

>> reporter: i didn't take it personally >> that is the question, republicans want to double down on the economic tax cut message, it one that will resonate particularly among the suburban voters that seem to be the ones that could provide sort of that swing vote you know, pennsylvania republicans say it was a very unusual special case in which a democrat was running as a more moderate, close to a conservative even rung against nancy pelosi him we'll see if that message translates, clearly conservatives are putting a lot of money behind messaging the tax cuts and maybe taking them forward. >> all right thank you. appreciate that. >> reporter: sure thing. moving on think, cities can provide smart grid networks that detect and respond to trouble spots and contain damage, joining us for more on how smart technologies can address technologies, the president of itron. i will go down one of my trips down memory lane

i remember itron, when was that? >> 1977. >> fine 77 we used to have itron, on all the time now when this show first started, i had a beeper where i had to go to a pay phone >> no, if someone needed for cnbc, i would have to go to a pay phone to make the calm him things were different. you guys came one a meter reader where a guy, the itron guy kould would come and put the data on this wireless thing so he didn't have to copy down to measure your meters for water or gas, that's what i think is itron him i bet it's different now, isn't it >> it is, we've moved from that time of collecting basic gas and water information to understanding that as we connect more devices, much like a point of sale device is now able see what goes on inside a retail location him when we put a smart

device at the edge of the new yorker, we can see how electricity, gas and water is flowing through the nova scotia. there is a tremendous amount of waste and efficiency that can be driven >> innovation and software and all the things that you probably have been doing since the last time you were on you need to save 20 to 30% of energy. >> consumers with better information can save five to 20 percent on their energy. 3 to 7% of electricity is lost over 70% of the water leaks behind the meter so if we can identify where those problems exist, we can create a lot. >> we can lever annual our crap my old infrastructure, we can leverage, make it last longer and new infrastructure based on data >> exactly we can figure out how to target those investments and the numbers are overwhelming if you say a trillion dollar investment is required.

where can we point that investment most effectively by looking at the data we are check zplg what cities are catching on saying we need help with this? >> well, we have a product in charlotte, envision charlotte, where they're saving 19% of their energy and houston after hurricane harvey, they've recovered liability by 25% in florida when irma hit them, 4.4 million commerce were out, 1 million were restored before the storm an passed over their territory 2 million in 24 hours. >> what does it cost to put in a smart system bhand does it entail >> smart systems are based on operating efficiency, check operation more effectively, they're in the hundreds of millions of dollars for large facilities to put them in, the overall benefits are very, very strong some we have 130% of benefits in a city like detroit and these programs are now expanding beyond just metering

to other smart cities. >> -- to put this in with the federal expend cures they're putting to work every year >> it does that utility customer base in cities are water utilities are also cities. so they're asking the question as long as we're collecting better water information, why couldn't i do public safety, air quall, all those sorts of things, what other sensors and information could be gathered here >> i understand the big number, literally on a per gadget basis, what is the cost is there a way to -- >> sure, in north america, install end points is about $100 >> $100. got it how long does it last? >> 15 to 20 years. >> each device >> yes >> is that different for water versus electricity it's all $100 a pop no matter what it is >> water meters typically last longer >> so for disaster prepared

nrksz what can i try do? >> sure, the ability to sense when the power is out at each end point to be able to trace back to where the outage has occurred, to better target crews to dispatch them more excessively, once restoration has begun. >> they didn't say they were coming they were walking around my yard it's not advised i said, are you going to fix it today? they go, we're not sure where it's down. so we're looking here. they had to find the point where it was out >> there's two trends we've seen one is city versus less and less money to put to work as public finances have gotten squeezed since the great recession. the second is companies say they have more money to put to work after the capital expenditures, if those are your two big client bases, how is has that played out? >> first, our utility customers are rated on their invested

capital. we have our forward backlog is on the order of $3 billion of business already contracted for. so we've got sa good view of that in the city space, there are funding restrictions with relooking at private funding partnerships, envision charlotte are examples of that there are opportunities for private ownership and more innovative financial models in order to invest in this infrastructure. >> people talk about the grid being way behind, the danger to our grid how much money would it cost to upgrade our grid to whatever you think is the most modern way to do it? >> yeah, i mentioned >> it can never go down from a solar flash or from anything we have no idea how to live without it anymore i don't think. >> yeah. i mean i think this is great i was able to testify in front of the senate energy commission three weeks ago. the discussion was the water grids are critical for our 21st century economy the discussion has been on roads, bridges, other physical infrastructure.

i think it's important to understand our grid is essential to our life. there are numbers as high as a trillion dollars for the electricity grid to bring it up to date. it's frankly an overwhelming number again, our ability to target where that investment can most effectively be made? >> it's a patchwork story no matter how you do it are there certain areas that are significantly more advanced than other in terms of the network? >> the southeast is. texas made a big early push. in each case we are involved with a very large project with con c c -- con ed. to target where power is out and how to get it restored. >> you can get by without power and water. but the wifi in my house needs

to be the other stuff. >> that needs to take precedence over, right, even heat i don't think is as important. we don't have wifi, it's like, you know, everything shuts down. anyway, phil, you know what i'm saying are your kids like that yet? water, heat. >> i know, water is the thing. >> probably more important >> i'm kidding you, but if wifi goes down. >> thanks. >> water first then heat >> it is, down here. you got shelter, warmth, food, water. >> wifi. it's nice to have. >> i know. >> wait until have you teenagers. coming up, kudlow headed to washington what it means for the markets and economic policy in america meantime, before we go to break, take a quick look at futures we are agreeing on the dow the nasdaq is off about 10 we'll be back in a moment. up next, space, the final

frontier the race is on to launch humans into the galaxy. we get an inside look at boeing's starliner and find out if humans on mars is truly possible the countdown is on at "squawk x"s blast off right after the break. and the wolf huffed and puffed... like you do sometimes, grandpa? well, when you have copd, it can be hard to breathe. it can be hard to get air out, which can make it hard to get air in.

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welcome back to "squawk. the u.s. launches humans into space. they are waiting until august to test the crew vehicles we got an inside look at the starleaner at kennedy space factory. good morning. >> reporter: good morning, andrew, president trump talked about going to the moon and mars and beyond, here's the thing, right now the u.s. does not even currently have the capability to send astronauts to the international space station. we lost the ability to send humans into space from u.s. soil back in 2011 when the space shuttle program ended. instead, we have been spending a lot of money to the russians to do that for us but that may be about to change. so meet starliner.

this is the new boeing spacecraft that after years of development, if all goes according to plan, will be making its first manned flight before the year is out starliner is one of two spacecraft the other is spacex's new dragon castle produced for nasa's commercial crew program that is a program that is being watched closely because it represents a human model. >> every other model has been cost plus. the responsibility of the contractor was deliver the transportation 34r568 to nasa for their uchls it's a model where we retain the asset, they take it for their use in that particular mission. >> reporter: now, if you notice starliner's program manager used to work on the shuttle program by the way, took place in this very factory here's the plan, boeing is producing three capsules which

will be leaving here in the coming weeks ahead of major milestone tests the crew module, one of which is behind me, will be able to fit up to seven people it will be re-usable up to ten times and if everything is successful, boeing is looking at this not only for nasa missions but for other business opportunities in the future as well that's one thing we will discuss even more later this morning on ""squawk alley." meantime, this crew capsule will be going up over the next eight hours on cranes and moving over to the heat shield on the other side as it continues to get put towing for all of these tests before the year is out >> thank you so much we live on one strange rock. that's the story of planet earth's unique feature told from people in space. the net geo series "one strange rock." jay logged more than 50

million miles in space jane, why don't we start with how you developed this area, telling it through the eyes of people that were there >> we wanted to look at how unique our planet is, but from outside the only people that have seen it are astronauts. so we asked them the questions about how interconnected our world is >> jerry, your story is amaze from your time in space. i tried to think about it from your perspective, you were 41-years-old in 1997 when you said good-bye to your pregnant wife and 14-month-old child and wound 133 days in space, setting the record >> a tough mission we video here fires, near scrubbing of oxygen systems. we got by, by the skin of our teeth. so there was a lot of drama the one strange rock documentary kind of re-attach mid-tow the feelings i had in the middle of that fire, i

was screaming, we will get that fire out i think of that as basic survival instinct we all have. my second thought will i see my boy again? that is per pitchuation of the species. that was probably the overwhelming force in me to get that fire out and do everything right. so it's fun to do this documentary series because it's amazing. i'm with my colleagues we're reflecting we have time to take it all in and to just, you know, be in total awe of the earth and the planet and how we got here as living beings, also, which is my part my section is survival and so you can understand from that story i just said, you know, that was my own survival. >> what happened with the fire >> the fire was a big, it was supposed to be a back-up oxygen generator, my main me failed the space station, designed life

three-to-five years so things were failing it was a big blowtorch-like fire, three-foot flames, sparks off the end of it. total blackout when i put my first oxygen mask on to get some of the respirator going, activated, and i get nothing. i breathe again, check the lever, it's correct. just compresses around my face i got a failed respirator. during that next 50 seconds of my life, it's still, i don't care what year it was. it's still flame by flame. >> every day shoump it? >> yeah. andrew, i'm going to bed at fight. i can't sleep. okay are you in space i float on my wall you're relaxing. i think about it you get a different perspective of things. are you at home up on a space station. myself, two russian colleagues for close to five months then you come back home again, you appreciate the planet. you try to convey this stuff to

people it's very hard to do because it is miraculous looking down at creation and looking out at the universe and trying to make sense of all of this and so in a documentary, you know you can put these things together and share that so i project it. this is going around the world, literally. we got creative people astronauts are more, you know, logos kind of thing and the philosophical. we're logical. they're much more pathos a little bit of heart. they put the heart and the logic into it. i think we're not robots we have the ethos there. logos. pathos, a way to communicate. >> you welcome that we're re-engaging? >> i am very welcome you know i can criticize the way we went about it as you know, we had boeing, lockheed martin, mcdonald douglas, a lot of companies that

knew what they were doing. we could get that starleaner quicker. it's been about six years, we can't get a man in space from u.s. soil that is a travesty but that's water under the bridge >> what do you think of elon musk's plan to put people on mars >> i love it john kennedy, we choose to go to the moon, not because it's easy but because it's hard. he went on in that speech and said and by doing hard things, we're going to bring out the best in us that's what our businesses do here in america. >> it's long term. we have fear term problems, that's why people criticize money in the pie things. you got to do it >> push technology >> there are so many things. >> you got to make many earthquake the leader. >> this series is about the earth. it's using space to look at the earth and it's about all of the ways that the earth is completely connected together. it's a perfectly calibrated machine the earth. we look at everything from fire to oxygen to the way dust

circulates around the planet it's all about our feeling of awe for the planet >> when you think of all the right stuff, you think of the apollo movies. >> i think of how good gravity was, i don't know if you saw it. >> grav try s /* /- gravity is good >> thank you >> thank you >> thank you >> all right "squawk box" will be right back.

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coming up, is a trade war with coin coming former senator and ambassador to china max fox will join us plus much more on larry kudlow heading to washington. "squawk box" returns in just a moment say carl, we have a question about your brokerage fees. 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, it's official, president trump naming larry kudlow as his chief economic adviser. a developing story, the end of an era. toys 'r' us preparing to close its doors. plus, coup the countdown, we're 30 minutes away from key economic data on jobs as the final hour of "squawk box" begins right now [ music playing >> announcer: live from the most powerful city in the world, new york, this is "squawk box. [ music playing [ music playing >> good morning, welcome back to "squawk box" here on cnbc. live from the nasdaq markets's, time's square, i'm here with andrew ross sorkin and becky quick the futures are up 29 points on the dow and the nasdaq which has been stronger than the other on a relative basis is down the dow and the s&p are up. the s&p is up by a quarter of a

point or so. treasury yields, i thought we might see a 270 at some point in the ten year 281. 281 right now. >> okay. let's get you through some of the top stories of the morning, president trump announcing larry kudlow as his national council it does not require senate confirmation, so he's in he'll be in washington later this afternoon. also, toys 'r' us admitting its plan to liquidate u.s. businesses the retailer will close roughly 800 stores although there is some speculation the brands and 200 stores may remain. we will see that among the stocks to watch, hasbro and matel speaking of failing businesses, radio giant high heaiheartmedia

say the day-to-day operations will continue as usual and they believe they have enough cash on hand. william sonoma, the retailer is giving a better than expected full-year forecast that stock is up by 4% and a small cap stock, but a big mover this morning sears, swinging to a profit with a smaller than expected drop in same store sales a company which has long struggled with debt also announced $540 million in new loan agreements. sears market capitalization is below $300 million right now dom chu joins us with the utility, he wrote this for sure, while utilities are getting a charge right now dom. >> i did not, but i can appreciate the punniness of what just happened. as we take a look overall why we

are watching you siltutilities. the only gainers in that down session we've had. but you take a look at the way things have been trading for some of these particular segments on the markets like utilities. you look at the ticker xlu, interday dripping lower. then the xlu this particular etf really tracks these particular utility-type stocks. it's only down 3% over the last year into the great performer but as you can see, it's riding the five-day winning streak. if you put it in context with treasury yields. they had three straight days of declines it is still elevated we have been coming down over the course of the last few days. then let's put it all in perspective with regard to yields and the stockmarket versus treasury mark if you look at the spider s&p

mark it rallied pushing interest rates or dividend yields down. 1.77%t the positive yield. meanwhile, two-year treasury yields, ten 842.8% 30 year long bond north of 3%. to put it in perspective with the stockmarket. the utilities is up 3.5% on average. as we look at whether or not this is risk aversion in the marketplace, it may pay to look at some of the these utility stocks, they have some of the proxys to see if safety is coming bam we will see if they can sustain that five-day winning streak over to you. >> when have a couple legends, trueing, investing legends, who is your pick since you won before >> it's still influx i will say this, i won the tv

bracket challenge back in 2011 at the time i picked uconn >> i apt an answer works are you leaning towards? >> i haven't made aition ask i have to lock it in in the next few hours. >> make it before the final four. >> before 12:15. >> thanks, dom joining us right now is rich bernstein, ceo at richard bernstein advisers and jason trener, ceo and managing partner, guys it's good to see both of you. let's talk a bit about what dom was mentioning with some of these issues, one thing boiling it down, it used to be in several weeks, treasury yield went, that would dictate the market now that's flipped now they're both moving lower in tandem or highner tandem >> well, i think you know dom's chart was very interesting i would never criticize cnbc for being too short term

but if you look at utilities and reits and telecom, the orient sectors, since the trough in june of '16, they're the three worst performing sectors let's take individuals for a second, where have they been plowing into income oriented strategies inflation is the kryptonite of income i think that's why you are seeing all this volatility i think exactly what you said, people get scared. nobody is set for increase in inflaex, anywhere, pension funds, nobody is so when you find the yes bond sell-off, people get very scared because it's against the way they're positioned. >> although the inflation numbers that we've gotten, the lost couple ones have been tameer than we saw in january and february >> that's true i think you have a good situation, where the fed doesn't have to slam on the brakes they can normalize rates at a measured pace, by the same

token, i say the inflation is monetary, have you negative real rates, fiscal policy is very stimulative. regulatory policy, very stimulative and trade, too, at the margin is somewhat inflationary if you are talking about tariffs and all the rest of it so i think it takes time in an economy this size to get inflation. i think the mix seems clear to me that that's the path. >> so what do you do with your portfolio? >> well, first of all, i think it was a manager expectations in terms of what the market is going to give you. i think multiples, it will be difficult to get multiple expoongs from here >> expansion from here i think it will get some multiple contraction we are a long way away from that it will be harder repeat what did last year. >> rich, what would you do to change the portfolio >> our portfolios have been

accepting nominal growth in the past year, year-and-a-half, two years. i think we're okay in this what i said is important, for individual investors who become income myopic. that's all they want income, income, income they said 2008 scared them they can't take risk they're close to retirement. >> when you say income you can talking dividends? >> and the fixed income. it's incredible to see how most individual investors are giving up outside of tech tech is a different story. it's all that income i think that is the big risk that's out there >> that's the rick that's been there for a long time. you have been saying a fixed income through all of this, you have been hurt badly, if you switch now. >> that's the thing, people haven't switched >> right >> there is no realization the world is going to change we're at the point in the cycle where these normal things begin to occur inflation begins to peck up. this cycle have been very

elongated. it's an extended seek him. so things happen slowly than people think this whole shift has been imperceptible to the human eye if you look at asset returns, it says there has been something happening. >> jason, let's switch topics. you had an interesting switch. you talked about the idea the s&p 500 can be at risk of taking private. that's tongue in cheek what are you talking about these companies no longer publicly traded >> i think a part of the reason why there isn't a then-year bull market, there is not the euphoria that would normally be associated with that, is there is a lot of companies that would capture the company imagination, uber, airbnb that have all remained private when you look at the number of public companies that has fallen from 8800 in 1997 to about 5200 today. there's i think 3600 companies in the wilshire 5,000. so a lot of companies are not

5,000 companies. the wilshire 5,000 so the point is a lot of companies are staying private a lot longer than they normally would and that's in my opinion not a particularly good thing for the capital markets. >> although if you look at those companies, if uber and the other ones had gone public earlier, it would have been the retail sector holding the bag when it came in. >> absolutely true, except they would have had a shot at the appreciation and so this is one -- and there is less trance parent sichlt there are other things i think you need a vibrant public market. that's my business you know, but, yeah, i mean, so again, but there are -- >> we haven't talked about that by the way >> in my opinion, though, that itself the rise of the private equity industry in many ways crowded out the markets. >> you still have a private e i equity market or the fact that it's broken? >> i would argue there is a

number of things going on, one the cost versus gone up dramatically then have you also had a lot of capital light companies, they don't need as much capital some private equity can stand in. >> have you more vc money to, who wanted to be second round. >> some of it is actually feempl when you look at pension and endowments they tell you the markets are too vom tile and private equity is fine but with the private equity guys are doing is buying public equity they won't spend two basis index fund but they're willing to pay two and 20 and lock it up to have a private equity guy buy public equities for them. >> that's no good. >> it makes no sense completely irrational. >> the capacity becomes the selling point. >> right >> it's just as volatile the values are inextricably linked you can't have a private equity

mark accelerate without the public market. >> exactly >> if everyone believes a lie, it becomes the truth so in my opinion that's major appeal for a lot of these companies. >> yeah. >> jason, rich, thank you both for being here today. when we return, larry kudlow the talk of the town, here in washington all over. we will look at his agenda, president trump's top economic adviser. what it means next first as we head to break, take a look back at larry's comments in recent here right here on cnbc >> the king dollar is nice and hefty and strong, all that is a good sign. >> another kudlow call to action trip, trip, trip >> trip, trip, trip. >> i walled say onlae st time, free market capitalism is the best path to prosperity.ialled free market capitalism is the best path to prosperitalled say,

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welcome back to "squawk box. this morning we got headlines for you. the sec has charged blood testing theranos and holmes. holmes will give up control and

reduce her equities. they charged sony bellwani and will pursue charges against him. i believe -- i could be wrong about this -- my understanding is theettlement effectively includes -- >> if you want to hear what they were tell zplg the question is the sec not enforcing the law, what is going on here? you allow a $500,000 fine. >> it's getting shut down the company is get okay -- >> there is more in the backgrounds we are not hearing. >> it seems like a slap on the wrist. is she worth any money she was at one time worth $4 billion. >> i remember a part of the issue was there was a moment within the private market of affairs that she did sell some some she did -- there is some cash she has >> i think she never sold any. i believe. i'm not 100% sure.

>> in her statement she says i want to move back into the future of blood testing. was there ever anything? >> she's not allowed >> was there ever anything >> they sent things out to be tested they took the original machine to doctor it up like the new lab there. this is like flat out fraud across the board >> you think a criminal case is coming?. >> we know there is a criminal investigation in san francisco we hear nothing if they're not leaking. it seems they got off late >> all of our favorite wall street editorial board, remember, andrew said that before although i pointed it out. some of the stuff i guarantee it's not in your favor >> every time this man writes, it's thoughtful. i don't always agree with it he makes you think >> it's the goal of a columnist. this climate change stuff. >> i disagree. he makes you think

anyway >> i don't want you to agree >> yeah. >> anyway, larry kudlow, you know him do you need to recuse yourself or can you give us an objective? >> i don't think so, i have been at his house a few times i'm a larry fan, i'll admit that he's a pro growth guy. so am i, he thinks most social problems is a strong economy that helps people move up quick, find their first jobs, so i'm glad that he's in there, he's a guy that trump needs to be hearing from, definitely >> okay. seeing what just happened recently in terms of the turnover i thinkcnbc.com had a piece th trump administration is teetering on total collapse. but someone wrote that >> i think it's teetering on becoming more of a trump administration he's getting rid of all the people known in the world, whose status depended on them being a check on trump you know, tillerson was one,

gary cohn was another. there's two left, mattis and h.r. macmasters supposed to be the guys standing between trump and the nuclear button they'll be around a while. will have a more trumpy administration it leaves me with trepidation, i'll admit it. i don't like his trade policies. >> is that what you leak >> it's mostly what i don't like >> the tweets. >> hold on, what about what we talked about this morning? a line to trudeau -- lying to trudeau, admitting it at a fundraiser. >> you can keep your health plan some of it works for him >> it was a that ina tape in benghazi how many former lies of politicians. how about stock an a lists you don't hear people lie. >> does that make it okay? >> no, no, don't be -- don't

think oh my god, i'm shocked, there is gambling going on here. >> i don't think the act is the big destabilizing thing. i think it's the policy. >> literally >> he puts his best economic foot forward when he is talking about job creation, congratulates them for investing in the country pick a fight isn't the best thing, especially when you need to win the mid-term in order to save your presidency >> i've read there is no buffer anymore. there are fewer and fewer of those and the real trump -- can the country be, can withstands a total unbridaled trump presidency >> no, it would be a disaster if he does what he says he wants to on trade i think larry is right this is largely a negotiating ploy i'm glad larry will be in there. the best thing he can do is make sure trump is hearing from businesses, farmers, trade groups who say why a trade war

isn't -- >> do you think he's a stabilizing influence at this point? >> he seems used up, when he was in there, he was the salvation of the administration. i think he's used up, don't you? >> what will take over maybe nick mulvaney is in the cards for chief of staff >> yeah, i have no idea. i moon i have people i'd recommend, but i would love to see bob corkner there as chief of staff >> for the entertainment factor? >> no, he actually is a guy that get along with trump if he wants. >> that's true >> republican presidents have a good history of bringing in senators as cheer chief of staff when they're in trouble. reagan did it with howard baker. >> that's interesting. >> they're from the statement state. bring in him to save the white house. >> it looked leak he migike he back on retirement until

michelle bachmann what is so far ahead. i think he was thinking of re-visiting that i just want to -- we all get up every morning thinking the world will survive another day, but is it for the next two-and-a-half or six years? i mean this is a roller coaster ride >> it depends what he does look, i'm enough of a free trader that i want american businesses -- i want american businesses to get if china and sell the way chinese companies do here. if he can achieve that without causing a disaster that will be a tremendous feat. >> like tax reform was a big feat if he does that, we will be in a good place if he goes the other way, we are in deep dodoo. >> the ones that here life depends on impeachment he's going over to negotiate with kim jong-un over a future

oblivion that must be hor faying to people that view him as insane, stupid or whatever it is the country is not coming together any time soon >> it is a problem the republicans were not enthused in this pennsylvania election that's whole reason the democrat won. although trump voters don't vote mid-terms. i don't know about north korea have the north koreans actually confirmed this meeting is on i've heard nothing from them i only heard from south korea. >> it may not happen at all. we'll know by may, won't we? if it doesn't happen, then what? >> i don't know. i guess -- i'd be surprised if it doesn't >> i would be shocked if it does there is no deal that can happen >> you'd be shocked if it does >> you don't think there will be a meeting at all >> the president looked good in a spect cam. kim jong-un doesn't look good in a spectacle. >> you done think the spec cam

plays to kim jong-un that it puts him on a world stage? >> that's what they say. that's diplomats think that's important. oh, gosh, he's seen as an equal. trump will tower over him to begin with just them shaking hands will be not a flattering picture for kim jong-un. >> come back, there are so many things to talk about anyway, thanks for bng weiith us >> when we come back, braking nick comuzzi, key data on jobs and trade moments.

>> i think the market is going through a transition phase the leadership is shifting they will benefit from the strong normal inflationary environment. >> if you have a real knock down battle with chosen, that can have ramifications on so many different levels

>> president trump is close to naming larry cuz low the next top economic adviser >> for larry kudlow, it will be what is the agenda for the white house post-tax reform. coming up, weekly jobless claims minutes away. mark moving data perhaps when we come right back. sometimes, they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪

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jobs will claims and import prices about to get the take rick santelli has those numbers. take it away, please. >> reporter: hi, becky a litany of numbers actually. let's start out with empire, a march read a nice pop 22.5 about 7 points higher than we expected. let's look at philly, philly fed is not out yet let's look at import prices for the month of february up .4. if we look at ex-petroleum they're off .5, year over year they're up 3.5 a lot of the numbers are a little hotter. that's inlean. up .4 and up .5, up more than we

expected at the .3 export prices, we look at month over month up .2, a tenth light. export prices year over year, .1 less than the last look. finally, jobless claims, a drop of 4,000 to 230,000 to now 226,000 continuing claims move from 1.875 all the way up to 1.879 million. so not a big change there. hey, philly hit the wires. 22.3 vs. 23. so that's right around expectations, two pine 3 and that is also a march read. all the other reads were february if you are around 10:30 eastern, watch me, we will have a conversation with peter novarro. >> we will be watching that. >> you and nonovarro

santelli >> yes, you'd be surprised >> today or tomorrow >> today >> today we can't waste an time, we have to get busy on this economic and finance are no exception today i think we will concentrate more on the side getting less coverage. >> i want to ask you what we seen with the treasury mark, yesterday the ten-year might hid 2.7% what is at play? what is pushing things around? >> reporter: you know, becky, being an old trader, when things get in consolidation ranges and extreme levels, i pay attention. in this case the extreme levels are the 280s period, 280-289, this could be the 15 -- 1-5 -- trading day. over two weeks and a day of

trading days that we close in the 280s and when you consider 195 is a high yield close for the year, we haven't settled at 3% since the last day of 2013. that was one day i think it's significant the, we are holding the range versus the fact we are testing the bottom ends i wouldn't get too pulled up to buy treasuries looking for lower yields even with the quiet data i think it was significant yields moved over and the yield curve flattened on relatively expected week ppi. it means the inflation aspects are more concentrated on focus to the shortened to the long en. if you think breaks may end that 280 what you would be looking for is weak data on the economy. >> rick. thank you. we will be watching at 10:30 with peter novarro thank you. back here on set, steve leishman has been looking at the numbers.

>> i want to flag the import numbers a little more than expected it's not petroleum it fell half a point non-petroleum up a half a point. ex-autos up a half a point i flagged this not necessarily for now. if there are imports from tariffs, they will show up, too early, flagging is something to watch. imports are something less than 15% of the economy it's not that big of a deal. if it were britain, it would be a bigger deal. one thing, jobless claims down in the 226 areas what do we do if payroll what is happening with gdp take a look at rapid update. we are down to 1.8%, 1.8%. that's come down we were up in the high 2s. it's come down, especially with the consumer coming down i want to show you who is where. we have action economics at 2.4. steven stanley of 2.2.

atlanta fed 1.9. you remember what atlanta fed was earlier? 5.4. >> they have a problem that i've written about in their modem they're not going to fix it. i don't know what's going on bank of america, michelle meyer at 1.7 let me shut this bank of america? >> no, atlanta feds. >> you have to follow them the rapid update is more accurate than the ongoing what's important we are fighting at least at this point first quarter weakness it could be a piece of it. right now that weakness seems concentrated on the consumers. you have to watch that i will tell you a story a week from now or a month from now, it's the same story last year. do you follow the strong job growth or weak economic numbers? this conflict is brewing right now. i'm not ready to say it just yes. i want a little more data on the first quarter. if that's what we did last year. >> what was your conclusion?

>> the jobs number, playing the second quarter rebound made you money. it made you money, it was not worrying and fearing -- we had recession fears. the fed held off on the q1 numbers, they came back in queuqueu2. have you as to watch the source of the weakness, if it's equipment spending which is one area, that's in line with the q1 perennial weakness we had. it doesn't make sense, one explanation for yesterday's retail tax numbers, late tax refunds, we'll see if the consumer comes back. >> that's a good point thank you, steve. >> my pleasure >> thank you because i couldn't see that. how are you doing? >> let's bring in someone who knew incoming nec director larry kudlow long before cnbc first met him. arthur laper is chairman of laper associates so we're talking pre bear

stearns, are we going all the way back to reagan, art? >> we're going further than reagan i've known larry 40-plus years, phenomenal person. >> and consistent, i would think in his core beliefs, which i guess a big question is whether some of his core beliefs will be tested over the next months or years? >> i think he's given the right advice this is the day larry lived for, hess job it's perfect for him he can explain things simply, clearly. he is also very well trained he's worked in these markets forever and ever and ever in this arena, public policy arena. it's just perfect. trump couldn't be better served than by having larry kudlow. >> you always hear, oh my god, he's a tv guy. well long before he was a tv guy, he was an economist and in

public service and everything else, but -- >> but >> no, instead of saying being a tv guy is bad, have you ever seen -- when he used to have robert riesch on, for example, who could be more polar opposite than robert riesch or someone like that? do you ever see larry get flustered or had attacks on robert it never happens, it's always i love you, i respect you, but i got -- so that works when you're trying to get your own way in government i think. >> larry can you do slow a jack pemp ronald reagan optimist. he sees the bet in people and the world. that's what he will take to trump who also sees the best in the world. it's a phenomenal combination. larry always calls it straight, yet he's a good team player. on the outside keel e he'he'll straight and he will go along with him as a team player within the constraints.

he's a perfect job person for this job just perfect >> arthur, i have a policy question, though, i love larry in part by the way because we can discuss these things rationally sometimes we disagree on the policy parts of things, it is fact based nobody is saying the other person is spewing fake news. i do want to know from a policy perspective how ideological you think it is or if the facts change whether you think he will change >> lar i have not ideological i don't believe. he's an economist. he believes in incentives and incentives matter, how you place them determines the outcome. that's what he does, if you look at his book on kennedy and reagan it is very fact-based he is fact based i don't think he is ideological. he can change his mind when the facts change easily, but it changes a lot of facts, he is

food quicked soic in anyway, shape or form. he does change his mind. he sees true pick. that's true of all of us >> i seen it he goes from he thinks tax cuts are good to really, really good. he's changed his mind on that >> i love it >> i'm glad you got the humor there. >> yes, i did. it fits right into my model as well obviously larry and i argue about how much we should cut taxes. >> i want to get to that, arthur is there additional scope you think in this economy for president trump and larry kudlow and the republican congress to engineer further tax cuts or is there some limit created by the deficit to go -- >> there is a lot of tax reform to be done for example in '86 we took it from 14 brackets to two brackets this administration in the last tax bill kept it seven brackets. what you want to do is reduce the bracket, get rid of the

exemptions and loop scholes and favor grabbers and lobbyists, all of that broaden the base like we did in '86, lower the rates. that's exactly what we want. when you look at some of these loopholes, they're outstandingly large. they make no sense whatsoever. i think there is plenty of room for another tax bill the next tax bill could in fact outdo this one, it could be leak our '86 act we drop the rate down 28%, two brackets, 15 and 28 we did it revenue neutral. it was the best tax bill on earth. as far as this president is concerned, i think he's got the best record in his first two years in office. i think on economics he's been spectacular. larry has been a large reason why he is that spectacular larry has been supporting him on the outside through logic, not ideology as you say, but because he believes the trump president is correct on economics and he has been a major contributor to the economic policy.

a perfect match made in heaven >> larry is wise and he's spiritual because of a lot of things that went on in his life. i think, though, he can look -- i'm worried that at some point morally larry might say, i hope this is the honeymoon period and they've known each other but he will be tested and at times and whether he sticks with something, maybe he disagrees with it. but at the end at some point i think the policies are right, he needs to be able to stay in and not make a, you know a statement. i'm just worried that -- >> larry is not going to grandstand here. he's not i've talked to him about this exact issue. i no at the president has as well larry can be grand the standing on his own with you guys, when he's an employee, he must realize the president was elected. he wasn't. >> remember, there are morally there are people that don't think trump should be normalized

because he's immoral >> i will tell you one of the moments that to me gave larry even more credibility in this role i'm sure it gave him less with trump. but after the situation with billy bush, frankly. if you remember that >> i do. >> he came on our air and was remarkably critical of the president. he felt he felt uncomfortable supporting him at that time. now you can say he went back on that later but i know there were a lot of other people >> arthur, that's critical question right now if you don't mind. >> that's what i was getting t >> when it comes to things like not necessarily some of these other personal issues, but things like tariffs, do you think larry will stand as a kind of pillar of free marks, anti-tariff, and be able to not just fight, arthur, but win that fight inside white house

>> reporter: well, as you know, larry is very persuasive he is very evidence-based. he feels strongly about tariffs and trade wars and free trade. he does. i think he believes and i believe very strongly that the president is using tariffs as an employee to get better trade deals. nafta is an awful contract and awful, awful deal. tpp was terrible i was very involved in that. all the anti-free trade items were left off the table. we had this horrible bill than didn't look at non-tariff barriers in japan. i think the president wants to renegotiate these to get real free trade that's my view of the world. i believe larry shares that view i think that's ma she should be advising the president on. but he should be a team player all the time that's what it means when you accept this job. >> arthur, thank you for being on when we return, don't miss the trump trade by at the per

navarro. he will be on ""squawk on the street." i don't know about the conversations pet ter and larry will have. first foerrm ambassador senator max baucus will be on when we return

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. welcome back to "squawk

box. president trump is getting ready to take action against china, talks of empty tariffs and restrictions could mean possible tension between china and u.s., the former ambassador to cone max baucus good morning to you, sir >> good morning. >> so give it to us straight if these tariffs get implemented, what itself the repercussion one way or the other? >> wel, frankly, if you are talking about the 25% tariff on steel and 10 on alluminum, i don't think a lot will happen to be honest. first the jobs will not come back they knew the numbers people talk about because most of those jobs are lost a long time ago the steel, alluminum industry has been automated very few of those jobs are coming back. second, it's not going to have a great effect on china because china, we in the united states take about two% of our impovertys are from china i

don't think it can and all these countries. i think to the trade concerns when the president implemts actions against china, for china's violation of intlektual transfer -- intellectual transfer >> are we making too much of the issue? it will not impact us, china, what are we worried about? >> well, i think the worry is if other countries retaliate. i don't know how much they are we haven't seen the details of the trump tariff proposal. we'll see. my gut guess is the reaction the fallout will not be as much to worry about the real problems could be in the next couple, three weeks. when other action, sorry -- >> no, what i was going to say, if you consider what trump is

saying as a grand negotiation a bargaining chip in a larger dance on anindividual, not multi-lateral basics an individual country-by-country negotiation. how does this change the dynamic? you spent some time with the leadership in china, how do they view this? >> well, frankly, i don't think it's very wise, china is a huge country. when you go to china, are you so impressed with scale they don't take anything lying down and becoming more and more proud of themselves and more confident with each passing year and with president xi doesn't have a limit on his terms. if we try to individualize our action against china alone, they will say we're a big country, we can go -- >> let me put it in different context. i don't know if you've been following this qualcomm broadcom deal that has gone south

broadcom will be a u.s. based company soon and what's clear is deals like this are not going to happen in part because of what they are talking about third party relationships and third party in this case i think is china. how much of that will have a ramification to us one way or the other? >> i think it's going to be very significant because china is going hell bent in developing these new technologies, ai, virtual reality, big data, you name it. and they are going to not share those technologies and keep them themselves the big worry is that a lot of chinese investment in the u.s. will be investing in u.s. companies and taking those technologies back to china as way, a technology war. we americans have to recognize and deal with carefully and comprehensively. i frankly approve of the action to stop the broadcom take over of qualcomm. i think it's the right thing to do but really the main question,

where do we go next and how do we manage this we're going to say, china, you can't invest in the americans and china will say you americans can't inviest in china it will hurt us both. >> thank you, ambassador, good to see you. >> you bet. >> when we return this morning, jim cramer spending the week on the west coast talking to lots of technology leaders and he will join us live after this ets? at pgim, we see alpa in the trends, driving specific sectors of out performance. where a rising middle class powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential.

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. let's get to jim cramer in san francisco. since we spoke to you 24 hours, who did you see? what did you talk about? what nuggets can you give us today, jim >> well, i think that i can safely say that paypal has gotten through whatever problems felt was going to have with ebay the ebay separation which is a 2020-21 issue is not nearly as important as people think. it was clear that dan shulman has got many, many things they are going to work in his favor once that relationship really does break apart and the stock is such a buy versus the other payments processors that you've got to go in there and take

some. >> larry, it's official. it was -- why was it kudlow and cramer and not cramer and kudlow do you remember? >> what we did was -- we hired an ncaa football ref with a coin flip if it was heads cramer and tails kudlow and cramer and that's how it came out. i didn't want it to be alphabetical that was unfair. we brought a real ref with a real coin. there's tape of it i didn't make it up. come on, that's ridiculous no, there's tape of the coin flip and against me. >> anyway -- >> super bowl. >> now i'm used to it and you have villanova, don't you all the way? >> have to have to. how can you not? >> i couldn't. >> i figure you have to too. i'm not going to root for them thank you, jim, we'll see you in a few minutes. >> tonight on "mad money", don't miss the ceos of intel, hp and clorox company, alofl them.

you're watching "squawk box" on cnbc in the eastern united states supported by innovative packaging that extends the shelf life of foods and infrastructure upgrades that help us share our produce with the world. all across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov we've been preparing for this day. over the years, paul and i have met regularly with our ameriprise advisor. we plan for everything from retirement to college savings. giving us the ability to add on for an important member of our family. welcome home mom. with the right financial advisor, life can be brilliant.

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s&p up by 2.5. nasdaq down but at this point only three points. also, wti at this point looks like it is up about 40 cents 61.36 a barrel is the last trade. finally take a quick look at 10-year, pz been trading just above 2.8%. >> join us tomorrow. quts squawk on the street" begins right now ♪ >> good thursday morning, welcome to "squawk on the street." i'm carl quintanilla and cramer at one market in san francisco looking forward to having him on set tomorrow rick san telli with peter navarro. can't miss that. futures in a tight range overnight. s&p trying t