white s "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin joe is out today, but sitting in with us is kevin o'leary our guest host for the hour is peter boockvar, a cnbc contributor. good morning thanks for being here. let's look at the u.s. equity futures. if you saw the market yesterday, you saw the carnage. it ended the day down 458 points for the dow. the s&p off by 60 points the nasdaq was down by 193 points you're talking about almost 2% for the dow. s&p down by 2.25 the nasdaq off by 2.75%.

at the session lows, the dow was down 763 points, the nasdaq off by 3.7%. even with those losses at the end of the day, we are talking about the major averages ending in correction territory. dow down 11% from its record high and the s&p and nasdaq off by 10% this morning it looks like a mixed picture. dow futures down by 18 points. s&p up by two. the nasdaq up by 17. no massive moves one direction or another, this is a similar story to what we're talking about at this hour let's look at what's happened overnight in asia. the nikkei was off by a half percentage point stocks were weaker in china with the shanghai composite down. if you look at the early trading in europe, red arrows across the board. biggest decliner from the major

markets is germany with the dax down 1.2%. let's look at treasury yields. the ten-year at this point is still trading below 2.8% a lot of people trying to figure out what this means as investors are rushing there to bonds because of a flight to quality concerns about what's happening with the stock market, or is this concerns about growth down the road the economicnumbers would not make you guess that we should be looking at a yelled of 2.755% on the ten-year we'll talk more about that >> big question of the morning, is the trump rally turning into the trump slump? eamon javers joins us with more from walk washington >> good morning. such a fascinating moment in washington as we saw those concerns about the president's trade agenda and some of his rhetoric around amazon impacting the stock market yesterday but peter navarro, the behind the scenes architect of the trade policy came on cnbc yesterday to say the market was

getting it all wrong here's what he said. >> the market is reacting in a way which does not comport with the strength, the unbelievable strength of president trump's economy. everything in this economy is hitting on all cylinders because of president trump's economic policies we cut taxes, that is stimulating investment in a way which will be noninflationary that will drive up productivity and wages. that's all good. mick mulvaney at omb is orchestrating one of the best deregulation events since the reagan administration. that's supply side benefit to the economy that pushing inflation down and growth up >> i talked to a white house official yesterday about the stock market slump we saw late in the day the dow down more than 700 points intraday. that official saying we don't comment on market fluctuations the white house has been eager

to comment on the stock market when the market is up. yesterday a bit more tepid in its response to the stock market navarro saying the market ultimately is getting it wrong he portrays the trump administration's trade agenda very much as having corporate america's back his argument is that corporate america has been left to fight a trade war with china and others more or less by itself by previous administrations, and this administration is stepping in to help those corporations and american workers here. they seem to be willing at the white house to accept stock market pain while they fight that trade war on behalf of american workers and american companies. the question is for the president does he want to take that stock market pain and how much tolerance does he have for it we know the president talked about the market gapes as gainsa measure of his success, or is this something he might backtrack on over the coming days

>> eamon, do we think the president will change the rhetoric, how he says it, what he says on twitter around amazon i'm thinking about mnuchin's comments to becky where mnuchin said this is a mark to market world. >> yeah. they judge his performance on the market >> they said that throughout 2017 we are at this fascinating inflection point the first year was about deregulation as you heard peter navarro talking about there and the pursuit of the tax cuts that the president got at the end of the year those things caused enthusiasm in the market. the market loved both of those big agenda items now in the beginning of the year, this year, 2018, the market looked at the trump administration and thought this will be the year of infrastructure we like that but it has turned out this is the the year returned to his campaign roots on trade. he campaigned against china and

mexico, he campaigned on behalf of american workers who lost their jobs now that the administration is turning their eyes to that agenda, the market doesn't like that as much the question is whether the president is willing to take that political pain and exercise that argument with jeff bezos to infact pain on bezos >> that is looking nixonian, that raises questions about what is happening with at&t time warner which is before the court now. if you want to say it's either -- did the president say he wanted something done with at&t time warner or is this an administration official, a bureaucrat trying to win points with the boss trying to do something like this, this raises questions about what is really happening in the situation >> one question here is is it appropriate for a president to target a political enemy by going after a corporation the

way the president is doing herement a lot of republicans spent their careers suggesting politicians should not go after american companies, they should get out of the way of american companies. now we're seeing a republican president do exactly that based on his frustrations with that company. it's a fascinating moment. we'll see where the republican party comes down on it but it has echoes of the graham family and their ownership of the "washington post" a generation or more ago. >> kevin, you had a smart thought yesterday. you turned it around >> i try to be full of them. >> you turned the whole conversation around and said maybe it is bezos's fault for buying the "washington post" and that if you were on the board of amazon you would be screaming from the rafters that this was a terrible idea because it puts the company in jeopardy. i thought about that comment >> you now agree with me of course because it's totally inappropriate for a business leader and a founder who is now

taking so much capital from the market, billions, to get involved in a lightning rod political situation which is exactly what the post is the post is throwing arrows at trump every day. >> i understand your point but what if the "washington post" was still a publicly traded company and had nothing to do with bezos >> doesn't matter. >> let's keep bezos out of it. if it was the "washington post," a publicly traded company, and the president is attacking it -- whafrnlg is t >> what is the upside for me as an amazon shareholder to have -- >> i don't want my free subscription of prime on the "washington post." >> if you're just looking at what the president is saying about the "washington post," what if the "washington post" was still a publicly traded company? is it okay for the president to attack the "washington post"

>> the preit's fair in that it's off. the editorial board of the "new york times," the "washington post," they should be independent. they should be completely transparent. this is not the case here. this is bezos owning it personally, buying it and becoming a lightning post. >> i think every newspaper in america has become a lightning post for the president's barbs. >> the question is which is inappropriate? is it inappropriate for a business person to own a newspaper or inappropriate for a president to attack a business because it irritates him >> i only care about the outcome. i think this is bad for me as a shareholder. >> you're criticizing bezos for it >> i am. because he should have thought

about the long-term implications of becoming a political lightning rod. >> why shouldn't the president have thought out the long-term implications of this >> it seems the president does whatever he likes. no one can change his mind about that that is the reality. i can determine how much weight i want to put on it. the market has slowly peeled back the concerns he had on individual companies remember when boeing was first targeted >> that's my larger company. >> now when he tweets about companies, it barely changes volume or porice this thing with the post is not going away >> amazon was down 5%. >> they have the right to say whatever they want, they're the press. >> i would saargue that -- well maybe everybody has the right to say what they want you can see the other side of it >> no. i look at the comments that came

into social media on this debate all last night, it's 50/50 people that are shash holdreholn amazon are like me, they're not happy. it's like making sausage i think it's a good concern. i bet you other boards are saying to their ceos, about this thing where you want to buy a newspaper or a local regional news outlet, let's think that through a bit. >> i can't imagine republicans five or ten years ago saying it's inappropriate for a business person to buy any business he wants in this country and do what he wants with it given the president's criticism of him i think the argument has always been in a free market society, business people should be allowed to be unfettered by the government and politicians should get out of the way of them trying to run their businesses and personal lives the way they want to. >> eamon, the bottom line to this whole tariff spat was to get a deal with china on

intellectual property. that's the end goal. will we get that >> that's a fascinating question the chinese resisted for a long time they sort of have done this dance of this is not really happening. the theft of intellectual property is not occurring. if it is, it's a bunch of private people not connected to the government peter navarro is saying they will get a deal. this is an elaborate negotiation, but i can't tell you the answer to that they're trying to bring the chinese to the table >> aimeamon, thank you very much joining us this morning is kathy wood, ceo of arc invest and hans olson from stifle our guest host for the hour is peter boockvar

hans, what do you think was happening yesterday in the markets? we saw a calm morning. >> yeah. >> we knew about the trade ramifications at that hour what was it that changed the direction? >> it's trade. it's tariffs it's the implied policy volatility going to be greater or lower than realized policy volatility i do think it's important to keep the ap pa pictupature of ts wide with this, because history suggests they gain the attention of regulators. >> it's fair in some of these situations where you look at massive monopolies the question is why are regulators drilling down is it something that free market people understand or a situation that looks vindictive?

it's tough to tease out the two of those a lot of these companies are at the tipping point where they become so systemically important and transformative in the commercial landscape that regulators and legislators are looking at do we need to step in whether it was standard oil a hundred years ago, at&t, microsoft, that was the most recent case. so this should not be surprising this is something we have to ride through whilst we figure it ou out. >> kevin, how do you play that as somebody who invests in a lot of these stocks? >> if you go back -- and i lived through a lot of corrections, the assumptions about why a market is correcting are always proven to be wrong the mar sket is very good at

sussing out its futures. i'm not sure what market is splel i smelling, but it's not the president's tweets, and it's not trade. it's more likely that maybe the downturn in this economy is closer than we think and the hint to that is in libor, not the ten-year. libor is something i look every day. the money slushing around, those are decisions made individually by the trillions every quarter. >> that's gone up 40 days in a row. >> because of enhanced economic activity the cost of capital going up or is there something else awry. >> yesterday there was quantitative tightening by the fed accelerating to 90 billion in q2, from 60 in q1 -- >> are you in the camp of four hikes in the next year >> i think they'll do two more

this year. the shrinking of the blabs she' balance sheet is a big deal. the ecb is on a path to buy 600 billion less than last year, that's trillion dollars of liquidity is no longer there that liquidity flood is becoming a drip >> that's accelerating, by the way. >> yesterday it was ramping up to 90 billion in q2. >> kathy what do you think >> i think we've been fighting this notion of the fed tightening for a while here. i think it's good news -- i think it's good news and this economy is getting stronger. i think what's happening in the market now, there's muscle memory going back to the tech and telecom bubble there was a double click in january of 2000. privacy was an issue those of white house live through that are saying could this be the same thing i think -- >> those stocks were so different at that time

>> they were that's the point that's exactly the point facebook, if you look at next year's earning and season we will be looking at next year's earning, 15 times earnings, even if earnings are hit a bit here night and day. and amazon, facebook, google, the f.a.n.g. stocks, netflix, we're moving into the tipping point of all of these moving you go to amazon, 10% of retailers online now just hitting the tipping point i think the comparison is not -- >> so you think investors are maybe overreacting to some of these situations >> yes though i will say i think maybe the privacy is an issue, but i think a bigger issue is amazon is getting into advertising now. that's a big problem for google. amazon is becoming the search engine when we want to shop what do we do we go to amazon if we're a prime shopper. that's a search engine

amazon and facebook share the advertising spotlight. amazon wants in now. >> kathy and hans, thank you guys for being here. >> thank you coming up, more coming up. spotify going public today it is not an ipo we'll say that many times today. we'll explain why. it's being called a direct listing. it is different. we'll explain what it means for invests who want to get in on the action check out this we're rebooting the "squawk box" play list. here's other old play list on spotify. tweet ustunes you want to hear your request maymick the cut who is in charge of the cut? kevin, are you in charge >> i'll be happy to be in charge as a control enthusiast,

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offering guidance or people saying -- >> supposed to get them today. >> do you wish you had them? >> why don't they let the market decide if it's relevant or not >> if the market decided, the market would want every piece of sales data in realtime >> maybe it will get it. >> but that would put you at a competitive disadvantage >> the company gets the data i can't have it? i'm not cool with that >> any time a company draws back -- >> there's rumors and innuendo >> transparency is better. >> retailers have been cutting back on monthly comps -- >> but they do it in times of downturn >> that's why it's telling me there's bad numbers. >> you think this is bad news. >> it's bad news >> that's the way we should play this >> yes if it's great news they wouldn't be doing this. spotify going public via a direct listing on the new york

stock exchange the reference price is set at $132 last night. joining us to break down the difference between this process and a traditional ipo is kathleen smith good morning to you. so what the heck is this we tried to explain this before. i don't know if we've done a good enough job. spotify will be public but not an ipo >> it's a listing. it's a listing of a big company. we have not seen a company of this valuation possibly since the alibaba ipo in 2014. but it is a listing. so we're looking at valuation. a lot of value to enter the marketplace and it's going to happen today very important day >> what is the value just out of interest >> that will be the most important question we have today. there is not an ipo price.

there's a reference price, but the stock could trade anywhere between $100 a share -- >> i'm an investor, i should buy at any price >> no investor should buy at any price. the company is leaving it to the marketplace to determine what the valuation will be. >> so this morning if i want to own some spotify today, i can call my broker and go on e-trade or whatever it will be what am i doing? what is happening here >> you will see a trading price. the issue is like anything do you think it's worth the price at which it's trading? you need to translate that into valuation that you feel comfortable with >> makes no money, competitive market, lots of competition. who is the first person who has to decide the price? the marketmaker? >> will be the marketmaker looking at -- with any ipo and company, there's a supply/demand

period and ultimately fundamentals take over early on with this will be a lot less fundamentals and more -- >> the psychology of it all. let's talk about the trading piece. one thing that's happening as a function of this listing is that employees can get out. used to be that the reason people had an ipo -- one reason you had an ipo process people were stuck holding on to the shares for 180 days, sometimes longer, in this case it's a free for all. >> that's a big risk 91% of the shares of spotify are freely tradable today. >> all sellers >> not everyone is selling >> where is that price about >> the private market is about to be over with. >> where has the valuation been? >> it has ranged -- a wide range between $99 and $130 a share

>> so there's a reference point of some sort >> some sort it's a private market, it's not like in the public market you know the volume at which trades have been done >> i'm thinking there's some man or woman in the world today who is working at a firm and he or she will have to decide to put the capital of the company at risk at some price either they'll be a hero or zero by the end of the day. they get this wrong that firm will lose a lot of money >> there are a lot of risks in this approach. clearly the traditional ipo has a lock up of shares to control it has an overallotment option >> there's none of that here >> none of that. >> you asked the question, just in 2017, these shares traded between $37.50 to $125 that's the spread you're talk in about. >> makes you nervous if you paid over $100. >> is there any benefit --

usually there's a benefit to getting in at the ipo price. not always but sometimes is there any benefit in this tich of stru type of structure or instance? >> there may be if the price it's trading at is relative to the -- >> let's say this, if the structure is a disaster you won't see it again for ten years. >> all eyes on the structure it is going to be an important day. perhaps we'll learn some things from this direct listing >> thank you good to see you. when we come back, the chairman of the joint economic committee will join us congressman eric paulson is here to talk trade, economic growth and the president's war on amazon as we head to a break, a look at yesterday's s&p 500 winners and losers

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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning right here on "squawk box" this morning our top story, what is a huge selloff on wall street to begin the second quarter the dow closed down 1.9% at the

lows of the day the dow was down 750 points it's down more than 10% since its january high let's show you what's going on with the futures right now looks like things are up at least for now we'll see. dow about 10 points higher nasdaq up about 23 points. the s&p 500 looking to open about 5 points higher. yesterday's selling began early in the session after china announced steep tariffs on a flub of u. number of u.s. tariffs the trade war between the two countries would mean consumers here would pay higher prices for imported goods, includiand amaz sharply yesterday after the president tweeted about the company. he said only fools or worse are saying that our money-losing post office makes money with amazon they lose a fortune. this will be changed

also our fum fully tax paying retailers are closing stores all over the country not a level playing field. shares of amazon were down 5% yesterday. down again slightly this morning. also a piece in "vanity fair" yesterday with some anonymous sources saying the president made it his life's goal to go after them they use some colorful language which we can't use on a family show like this >> why do you think he's feeling that way >> as you would say from the "washington post." he was on an amazon thing i think before the "washington post" was his problem. he never -- idon't think he liked amazon >> as many viewers pointed out yesterday, bezos bought this way before the trump phenomenon in the white house it becomes a platform that is a stalking

horse. what seems to have happened is people take the view of the "washington post" as bezos' personal view, which is probably incorrect but it's not helping i don't want to berate the point but this stock is a large market cap. >> amazon. >> an important asset to the country. and i don't want to see amazon -- >> that's why it's a bit insane to see -- >> ask your -- this last week, last week, how many times did you use amazon how much times did it touch your business >> four times yesterday. >> you keep saying it's the ceo's fault, but i'm saying it's hard to see when the president is talking down and you think of it as a national jewel >> i would like the president to find something else to tweet about very soon. enough with the amazon so whatever it takes to have him go look at something else would

be good. >> all right joining us now to talk about this and much more is congressman eric paulson, he is the chairman of the joint economic committee and serves on the ways and means committee thank you for being here today >> great to be with all of you >> let's start talking about trade. kevin is saying he would like to see the president tweet about something else another thing he's fweeti intweg about is nafta and that's a big issue for you and your state of minnesota. >> all the focus on tariffs has a potential to backfire in a hurry. all indications are is the modernization or renegotiation of nafta has been proceeding orderly and hopefully will come to a conclusion. that's important for confidence of selling goods right to the borders. >> a lot of people look at the president and say it's about time people stand up for america's side on trade pacts

that have been one-sided that we have not received as many benefits from you can see where that made progress already and some issues does it make you nervous to see it negotiated this way >> i think the president is accurate in wanting to target and enforce some bad actors. broad tariffs have the opportunity to backfire in a hurry and negate gains made with the tax cut overall recently i think that makes folks worry and there's a lot of manufacturing jobs that are blue collar workers that are also making sure that we want to make sure we're importing steel at reasonable prices. supply is important. it's not just about enhancing our own steel opportunities and growing that capacity in the united states. >> were you happy to see what happened with the tariffs for both steel and aluminum? they were pared back and xep shup carved out for

lot of countries >> even though the department of defense does not support these tariffs going into place, that's where a lot of small whatever r manufacturers -- i have a lot of people in minnesota saying steel going from 6 to 8 weeks to 12 weeks waiting period that's not good for producing products in the united states and selling american >> what's the general mood you hear from constituents >> general mood about the state of the economy is good the tax cuts are having their effect there's a psychological good impact that people feel good about it there's still a nervousness about healthcare and how expensive that is for families, small businesses on the regulatory side, on the tax reform side the economy is moving in the right direction, people feel good about that. you're better off now than 15 mont months ago

>> i hav am a canadian citizen,s irish. i have a question regarding trade. number one trading partner is canada for your state. one large commodity is dairy in this nafta discussion, who ends up winning this the canadians in particular in quebec and ontario have milk yoet quotas you want to get milk powder into the country. i get it in six months what will this look like? i think it's not going to look great for the canadians. >> i think the administration has done a good job targeting dairy. >> i noticed it's reflected in my stock holdings of dairy. what is your anticipation of how this will get resolved >> in the end, we'll have a renegotiated nafta that will be signed we will have a new digital chapter. it's not tech companies that

rely on digital trade, it's e-commerce, the facilitation of movement of goods and services selling dairy, selling food. >> my take is that mexico and canada will come out of this slightly worse off by the time it's over.feeling the market i giving me. >> the president has been a right to target changes in the market over the last couple of decades where we need to make corrections. fair trade is important but you don't want to close borders. you don't want to engage in a trade and tax war. >> what's your next goal in congress what do you want to see happen we thought this would be infrastructure this year that seems to be pushed off. >> from the position of sitting on the joint economic committee we would like to see movement or indications that we also wanted to make permanency other provisions of the tax overlaul

th overhaul as long as we can give business and investors confidence of where rates will be, where investment opportunities will be, we'll see the fundamentals strong >> is that something you think you'll get done before the midterm elections or wait and see and go back to it? >> congress has a tendency to slow down and shut down during an election year which is counter intuitive i think the house will move fairly aggressively. the senate always moves slow we'll move aggressively prior to september or right by september on enacting some of these ideas. >> congressman paulsen, thank you for your time. coming up, richard turnill will be joining us and spotify begins public trading today. we'll talk about the prospects

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welcome back we've been watching u.s. equity futures. after a rough day yesterday, things at this point look like we're in the green across the board. these are modest advances, particularly when you consider the 460 points we lost yesterday. right now the dow futures up by 22points s&p 500 futures up by 6. nasdaq up by 30. "new york times" writer john schwartz has a new book called "this is the year i put my financial life in order. it chronicles his family journey to responsible money management. joining us with now is john schwartz john is a very smart and intelligent guy, humorous writer when you decided to write this

book -- i didn't even know you were doing this. move in mystery. >> the fact that your own personal finances were not planned for supplirprised me i have known you and i always thought you had it altogether. burr then i realized your story is not that different from many others stories. >> that's what i hoped would come across. we were a mess i was one of those people who was afraid to look inside the vanguard envelope. i didn't want to deal with it. >> what happened how did you decide you were doing this and then explain what happened it's not just a funny story, there's a lot of lessons in this >> i hope so what i was trying to do is tell the story of someone who has not been paying attention to his finances and then comes around the way that i did that is the way that i do everything as a reporter if somebody is paying me to learn something, i learn it. that's how i learned to write

about climate change, write about the space program. so i assigned myself learning about finances learning what i had not learned in the years i was coming along. >> just put it on the table. how old are you now? >> 61. >> but how much non-planning was going on for how long >> okay. i'm 58 at the time the project begins i don't have a will. i have three kids, i don't have a will, which is about as dumb as it gets i had a 401(k) i had no idea whether the 4 01 k, the pension, any of my savings were enough to get us into retirement. a retirement that would be comfortable or hamburger helper with cat food. we didn't know and there were other problems. we had had bad periods where we lost an opt. i don't mean i didn't know where to find it

i meant that we went into default on it. >> is that debt that caused that problem? >> it was moving to another city and having to try to sell the apartment, couldn't sell it for reasons of new york crazy real estate and then being left with a tenant who stopped paying and knew that he could get away it >> you took stock at 58 and you looked at your net worth, did you still have debt at that age? >> we had cleared our credit card debt which had always been too high by selling our house and moving into a smaller house. so he, in fact, we were at a good breathing spot where we had cleared off the debt,cleared off the college debt by selling this house it was a good moment to reassess, okay, going forward, where are we we were not just trying to keep our heads above water. selling the house made a difference >> two questions at this age did you feel like you were in triage mode? what were the lessons doing it

now and what have you told yourself had you been 30 to do >> it was a good time to look. it would have been much better to look 20 years before. it would have been much better to have been thinking about this instead of fretting about money and looking away, which is the way i dealt with it. if i started earlier, i would have told myself to really pay attention to the stuff i put into the 401(k). i basically used a dart board to choose my funds. because i didn't know anything they turned out to be pretty good they could have been better. then i would have told myself to do exactly what i did, which is never open those envelopes again. to not look, just let it ride. >> had you been selling down had you been moving stuff around opening the envelopes, looking and changing things? >> i had done nothing. i left the envelopes closed, but i had not made very good choices in the first place

i didn't really understand the value of a low-fee fund for instance >> the good news is you never panicked in the financial downturns and sold everything. >> no. i was intelligently lazy avoiding things where if it was intentional had been smart >> there's a trillion dollar industry that's trying to find you, provide you financial advice what happened? why didn't you connect with a final ed financial adviser? >> when i got a financial adviser in my 40s and stat down with somebody who structured college funds and stuff, he sold me some instruments that were inappropriate for what we were trying to do we gave him a lot of fees, and we ended up cashing out the funds the first year my daughter was in college and -- when we had advisers, that didn't go well

>> that's quite an indictment of that process i work with fim advised financ every day. i realize the industry has completely changed 99% of them are fiduciaries and are good >> which is terrific it would be great if people could automatically find people who act in their best interest we didn't get taken to the cleaners, we just didn't get what's right for us. >> in the education process, should kids start learning before they get to school? imts of finance. i would love to see life skills that says here's money, let's talk about it. and here's some things, some basics that you should know. we're not doing that and i'd love to see it happen. look, i'm a liberal arts graduate i love the idea of a general

liberal arts education that teaches you how to learn there are some things that could be imparted at that time good stage. >> i want to thank you the book again is called "this is the year i put my financial life in order. i'm happy that you did it's a very good education for a lot of people out there who may be in your same spot thank you. >> appreciate it. >> when we come back, do you get the post workout blues guess what, your exercise routine could be to blame. i know, it's hard to believe we've got that story next though later, is the president right to label amazon a tax avoider? we'll have grover norquist up next stay with me, mr. parker. when a critical patient is far from the hospital,

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welcome back, everybody. you know that if you're not feeling well, maybe working out is something that you should be doing to try and get yourself going, get your endorphins running and get you out of a depressive state, but did you know that if you are somebody who works out at least three times a week for 30 minutes and you suddenly stop working out, you will be more prone to falling into a depressive mood this is a new study out that takes a look at this

it says people who suddenly stop working out after being in the good habits -- >> totally going to encourage people not to work out. >> that was my point you can fall into a depression the depressive signs can show up as soon as three days. >> when i'm not with you people, i'm on a bike at this time of the morning every day. it's part of my routine. i do feel bummed out. >> are we depressing you at this point? >> i'm very depressed now. >> are you on a regular bike, peloton. >> i have a peloton. i'm just on an elliptical. the peloton thing is crazy my wife loves it but i don't do it you have to have special boots for it. >> peter, thank you. >> thanks. >> don't work out. i don't want you to get depressed. is the trump rally becoming the trump slump? whether a ggbier correction could be ahead "squawk box" returns with two very big hours coming up [phone ringing]

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a nervous start after a tech selloff. we will hear exclusively from blackrock's chief global investment strategist about the slide and where they are putting money to work in the second quarter. spotify ready to stream on wall street. the company will start trading today. we're going to hear from an early investor about the company's future in the public spotlight. plus, winner, winner, wolverine dinner. >> the wolverine nation has another championship. >> highlights are straight ahead. the second hour of "squawk box" begins right now. ♪ we are the champions, my

friends ♪ >> live from the beating heart of business, new york. this is "squawk box. good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin joe will be back tomorrow. in studio spending his morning with us is kevin o'leary, the chairman of o shares etf and co-host of "shark tank." and take a look at u.s. equities futures. if you're just waking up, you remember what happened yesterday. lots of red arrows this morning being seen to have stabilized we're not talking about a big bounce back. the dow futures up by over 10 points after that decline with the dow down by 458 points it also looks like the s&p futures are up by over 4 points and the nasdaq which was down by

2 3/4% yesterday up by 22 points this morning in our headlines at this hour we're going to be getting march auto sales figures from the major ought tow makers this morning with most expected to be posting an increase from a year ago. this is the last time we will be getting a monthly number from general motors gm plans to give numbers on a quarterly basis. gm says one month is too short of a period of time. music service spotify is going to begin trading on the new york stock exchange in an unusual direct listing rather than an ipo. the exchange has set a reference price of $132 a share although that is not necessarily where it will start trading the reference price is used by market makers when they start building their order book. we have more on spotify in just a few minutes. cbs is planning to make an all stock offer for viacom valued below viacom's market value. that's according to sources who spoke to cnbc. they say timing is uncertain but

the deal is expected to have leslie moonvest remain ceo for two years. the biggest news, tesla, their shares higher in pre-market trading making a small dent in what were some pretty bad recent losses. the ceo elon musk will focus on model 3 production issues. the company is set to release an update tesla shares have lost 19% so far this year on worries about its finances and of course those production issues. also gamestop shares under pressure this morning. the video game retailer stock was downgraded to hold from a buy where they say there are a few positive catalysts drawing the stock higher cutting the price target on the stock to $14 from $26. blackrock just releasing its outlook for the second quarter joining us with the details is richard turnill.

richard, great to see you this morning. >> great to be here. thanks for having me back. >> richard, we are starting the new quarter, starting the new month and it looks a whole lot like the last quarter and the last month with what we've seen with the stock market so far we're now talking about all three of the major averages in correction territory what do you tell investors to do at this point? >> so we're clearly seeing short-term uncertainty increase and that's uncertainty around growth, around inflation and now around trade but importantly when we look at blackrock's signals around growth, actually we're seeing a sustained economic expansion in fact, we're seeing no wavering in that sustained economic expansion that points to g7 gdp growth to 2, 2.5%. we're seeing the expansion sustained. that points to an attractive environment in equities, over

credit and over government bonds. we see this short-term volatility attracting volatility for long-term investment. >> you're basically saying that this is a buying opportunity because the stocks have sold off? >> that's right. i think it's creating a buying opportunity within the market. when we look forward we think returns are likely to be lower than the returns we've seen over the last year or two you have to recognize just how extraordinarily positive those returns were and how extraordinarily low volatility was. what matters most is the economic outlook when we look forward we see that economic outlook being positive. importantly we're seeing that being translated into strong corporate earnings, particularly in the u.s so when we think about what's going to drive returns for investors, that's much more likely to be earnings rather than valuations and that means u.s. equities, emerging market equities are attractive places

to be because that's where we see the strongest earnings growth coming through. >> let me ask you about sectorial rotation that's a big one we've seen this market for the last few years driven by a very focused amount of tech, fang stocks and everybody knows that story. yet other sectors have had enhanced cash flows quarter after quarter and have done nothing. speak of energy now. do you have any call on other sectors? because if i'm fanged out, and i am fanged out, where else can i go to get returns now? >> so, first we still see technology broadly, not just the fang stocks doing well although you're seeing sentiment hit to those stocks, we see earnings still being sustained so when we look beyond technology it's worth saying that strong earnings is not just being a tech story it's been a global story and we've seen it in many sectors. we point in particular to sectors like financial which have lagged recently where we

see the outlook for earnings being very strong, both as the economy continues to improve but also as we see interest rates gradually rise which creates a very favorable back drop for investing in financial stocks. >> let me just ask you, when you say you're fanged out, does that mean you are selling your fanged stocks or you're not allocating anymore money -- >> no, i have an investment philosophy i've learned over a long period of time that i will not let a sector become more than 20% of my holdings. for the last three years i've been selling the strength of the fang stocks. >> because as they go up you can't have it more than 20%. >> i've been concerned, i'm sure richard can speak to this, the price earnings multiples have gotten extreme once you get past 17 times you're then over the long-term nof norm the strength is remarkable these are phenomenal companies, yet if you are disciplined you maintain a 20% maximum sector. when i say i'm fanged out i

still have a huge weighting in stocks and luckily having sold them into the strength they're not taking me down as much as the index. that's why i'm asking? where else can i go? look at the earnings of energy, yet they're dead it's having some of the best cash flows in ecades why? do you have an opinion on that, richard? >> so when we look at the market right now we see it actually being driven beyond just one or two sectors. when you look at the breadth of moment momentum, it's been as broad as we've seen for many years. we tend to focus on a handful of stocks yes, they've driven a lot of their returns, but when we look at the positive cash flow in the market, we look at the positive valuations, it's worth saying the s&p 500 is now trading on 16 times earnings it's trading almost in line with the long-term average. when we look at global stocks they're trading below 15 times earnings trading below their long-term

average. we're seeing attractive valuations in many parts of the market what matters from here is that those earnings are sustained that's why we look to invest in those areas of the market where we see positive earnings growth. we see the greatest potential for sustained earnings growth. we still like tech we still think you can get strong tech earnings going forward and the stocks have rerated very significantly we think financials do well but when we look beyond the u.s. we are looking at emerging markets going forward and we look at factors style such as momentum and value and actually some of the energy stocks we talked about earlier fit into that value category we see value as a very attractive place. >> it sounds to me you're talking about incremental dollars. i like this theory about investing, what do i with cash today? you're guiding me towards pe across all sectors it sounds

like is that what i'm hearing from you? i'm trying to nail you to the wall here. >> yeah. so we like regionally two areas we think are very attractive emerging markets and the u.s. i think looks good let's focus on em right now. what's really noticeable is howell emerging markets have held up during the recent market this is an environment where em might get hit harder as growth concerns rise, as trade concerns rise, as volatility rises but actually em has out performed. why is that? part of the reason is the em valuations continue to look very attractive compared to developed markets but part of the reason is the fundamentals in emerging markets continue to get better and better they're not just driven by what's happening in the u.s. or internationally. you're getting domestic earnings growth starting to pick up in countries like india, indonesia, brazil where you've got a domestic recovery, which is in a relatively early phase of the cycle.

yes, indevelopmental doincremen. valuations are reasonable. monetary policy in many emerging markets very stimulative. >> you mentioned financials as a place where you'd like to put money. there have been a lot of concerns about that as we've watched libor. what is happening with libor is this a story of good news where companies are trying to bring money back to america, other people are looking to lend or is this a concerning issue where you see rates going up every single day >> well, we see the move in libor in the last few weeks is largely technically driven a large part of that is around the capital cash repat tree ati -- repatriation we're going to see a significant shift in the supply/demand balcoming through in april one of the notable features is libor has stabilized

it looks like it's finding a ceiling so we look at libor as more of a technical indicator rather than a sign of financial stress one of the things that encourages us when we look more broadly across financial markets today is we don't see those signs of financial stress more broadly. so we look at the two-year note in particular in the u.s. and what you're seeing is a big shift in expectations around the fed and for the first time we're starting to see value at that end. >> richard, thanks for your time today. >> that's great. thank you. coming up when we return, today's the day. spotify listing the day on the new york stock exchange. we'll talk about the company's future as a public company maybe what you should do about it if you're thinking of investing. then at 7:30 eastern time, a megamarket panel you can't afford to miss this given everything that's going on in the past several weeks. we're going to find out what's drawing all of this.

the nasdaq closing in and whether or notheru t tmp rally is fading. are he would in a trump slump? stay tuned you're watching squawk on cnbc welcome to holiday inn! thank you! ♪ ♪ wait, i have something for you! every stay is a special stay at holiday inn. save up to 15% when you book early at hollidayinn.com

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through most of the morning. you can see the dow futures are up by 33 points. s&p up by 6. modern advances given the significant declines where the nasdaq, the biggest decliner is down by 2 3/4% if you take a look at what's happening in europe where active trading is underway, things still in the red the dax is off the levels in the morning. down by .7 of a percent. one of the early investors in spotify, alexander bars is the ceo of epic foundation he was an early investor in the company. the listing day. a lot of commotion and questions we've been having this morning about how this is all going to play itself out. you think -- you're heavily invested you're long this company >> yeah. yeah so the question, do i think it will work sfwhel. >> do you think this listing process is going to work well?

because we've been talking about today if you were an investor would you want to get in today would you want to get in the future how is the valuation going to get set? we've seen the stock trade on the private market somewhere between $37 and $125 just last year >> so, a, it's an amazing startup. it's -- they started everything ten years ago. as an entrepreneur, you're looking at what we call the tpt, team, product and timing the team is amazing. the fact that he has decided to do the direct listing is a fair thing. it will present very well. and the product. have you ever used spotify >> yeah. >> i know daniel and i love daniel. >> so the point about the product is important because it's not another startup, it's a tech startup there's technology there the timing we're talking about the direct listing. i think it's important to see that in the world where we share everything, it's important to

see that a position like spotify is an organization that will present the movement pretty well. >> doing things for a reason what is the reason for bringing this product public this way why not a traditional price discovery through initial public offering that's what i'm struggling with. help me get there. >> yeah, because they now explained this a, they didn't have to raise money. it's i think the first discussion point with them they don't have to raise money they don't need that money today so they say why -- but still they have investors. you mentioned early investors. they have other investors that invested in it earlier. >> you have employees. but there's no lockup on everybody. >> no lockup in the past so nothing has changed so they don't se daniel sent a memo and say nothing has changed. you are able to sell some of your shares. today it's something very

similar to what happened in the last five years, ten years the point is investors, some of them, they want to spend more shares it's more equal. if you want to buy shares tomorrow, today, you can have access to those shares there is no lock up like the usual lock up you can have as an investor we'll see in a few hours the number. >> are you planning on selling into this? >> no, i won't sell into ipo shares. >> will you sell any shares in the next six months? what's your plan >> plan is to be with the team and decided with my team interestingly enough, when i had this conversation with daniel, i said, what -- do you have any preferences me holding my shares or sielling my shares he said, no, you do whatever you think. >> what's the valuation at -- at what number would you sell and what number wouldn't you sell? >> it's interesting. i will say that somewhere around -- so per share or -- enterprise value

>> i think selling at 35 billion. >> 35 billion? >> right now the range is 9 billion to the low to high of 25. >> 9 i don't know where you get this? >> it won't matter what i think. >> yeah, but i don't know where you get this. >> in recent -- like you, i tried to do some price discovery and where shares traded in private market as you suggested, they're free to trade you can buy shares, there's various platforms out there. if you just go google it, you're going to see a wide, wide range of where the shares have traded. not necessarily correctly, but, you know, the ether of the market trying to figure it out your theory, and i find it very interesting, because they're already freely trading, because you can do it now anyways, what's the difference that it moves on to an exchange? it just makes it more liquid, right? >> yeah. >> so by 2:00 this afternoon, which is what they tell me is going to be when we'll start to see these trade, we're going to find out what the value, the enterprise value of this company is and i'm as fascinated as you

are because if this works, my reason for thinking why he it it is he saved almost $70 million in listing fees basically. the rumor is he's paying about 35 million snap paid 100 million to do their deal kind of equivalent if you think about it he saved $70 million that's cool. i like that for an entrepreneur to save money. >> speak to the long-term proposition of spotify because when he started there wasn't a lot of competition in the streaming space. there was competition from others, but now there's worries about amazon, a am ma zon music, google, the video product, whether there should be one or not. >> yeah. >> what do you think >> but still it's number one by far. we mentioned apple apple is the only organization, only startup where they can get

this we can work with all platforms, all devices. you mentioned google, it's not the same you mentioned amazon, it's not the same long term we have a very unique organization able to perform and to innovate. you know this. when you start your business you know how it's important to think ahead of the others. you start everything in 2008, '06 was just crazy idea at the time that you will do something that no one else before did and what they did, it literally did start the -- >> but what he's done, oddly enough, is he's taken what is a commodity product in music, in that it's almost accessible to anybody -- if we all wanted to create a music service tomorrow we could get the music, we think. maybe not. i think we could get the licensing deal to do it. it's the technology and everything so the question is why -- why kevin, becky and i can't create a better u.i. >> i do agree with you

we all heard this on google and amazon why i cannot do this the timing is everything the size now, the volume, the candor of discussion and partnership with the label music industry and then the product itself it's interesting during the investor day who was coming on stage after danny was not cmo, it was who? the head of r&b. the cto said i want to explain why. >> you have to drive what everybody else is doing in streaming in order for this to work can there be multiple streaming services >> yeah. look at the market we're just at the beginning of it that's the point if you want to keep those shares or not or if you want to buy those shares the point is it's 70 million users, 76 million users. >> you are the best salesman for this deal i've ever heard and i've heard a lot of them you're doing a hell of a good job. >> thank you >> we'll keep our eyes on everything. >> i have to wait to see it trade. when you're paying a dividend,

let me know. >> all right when we come back, a trifecta of market pros are joining us to give us the lowdown on yesterday's selloff and this morning's volatility we'll talk jobs, earnings and the trump effect just a couple of minutes by the way, we're taking your requests tell us which song you want to see on "squawkox b's" spotify play list. join us at squawkcnbc. nah. not gonna happen. that's it. i'm calling kohler about their walk-in bath. my name is ken. how may i help you? hi, i'm calling about kohler's walk-in bath.

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coming up, markets front and center the global economy, the trump effect and what they're expecting. everything is in the genre we'll talk volatility when we return

good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. among the stories that are front and center this morning, walmart is partnering with payments company money gram to introduce

a new international money service. it will let customers send money to 200 different countries the largest trade group for the accounting profession is asking the irs for clarity on whether they allow for deduction of business meals. the law as written says entertainment expenses are not deductible but it doesn't specifically address business meals. and then two founders of cryptocurrency firm centra have been charged with fraud by the sec. sam sharma and robert farkus are accused of master minding a fraud offering the sec said that centra had no relationship with either company. centra had a number of celebrity endorser including boxer floyd mayweather. in sports news this morning, villanova defeating michigan to take home the national championship in men's college

basketball it was hardly a nail biter the wildcats led 37-28 that remained the trend for the rest of the game villanova winning 79-62. the second national title for villanova in the last three years. fans flooding the streets of philadelphia villanova students gathering in huge numbers cheering, setting off fireworks. despite the now routined caution of greasing philadelphia light poles, they found a way to climb them. >> i'm going to wait for joe to return tomorrow so he can gloat but i believe both of us happened to do better in the pool -- >> really? >> -- than mr. kernen. >> i haven't looked since my bracket got busted so early. >> joe made such a big deal of this pool. we all had to play in this pool rather than how he looked up all of this stuff. i think he came in like number 40 in the pool >> i can't gloat because i haven't looked. >> number nine today.

>> way to go. >> in the 20s? >> all right i'll take it >> anyway, i'd say gloat again tomorrow when he's back. in the meantime -- i don't think gloating is necessary. >> you're still doing it right now. >> sure it is. >> back to the markets right now and another down day for the major averages with the dow and s&p 500 and nasdaq all in correction territory joining us right now trying to figure out what the heck to do, darryl kronk the chief investment officer at wells fargo investment management group and john fargo is at huntington bank and mike ryan chief investment officer at ubs. it sounds like a generic question on a day like today it is the question you wake up, saw what happened yesterday and do what about it >> first of all, not over react. we have to get used to the fact that as we go through the growing pains we'll see the bounce in volatility. >> growth transition, we've been talkingning we're

in is that a slowing? what transition are you talking about? >> the economy for a long time, we operated below capacity we had subtrend growth rates, low inflation and monetary policy we've seen a global growth is expanded we're seeing better growth we're seeing normalizing inflation and policy is being reset. it's not surprising to see the bounces in volatility. we have the headlines coming out because of some of the things being postured by the administration >> what inning do you think we're in >> i'd say we're probably in the bottom of the seventh, top of the eighth i think kevin was right earlier. i wake up every morning like kevin does and i look at libor and i look at ted spreads and i look at cds spreads and some of the traditional stress and strain indicators. they've all been showing some signs of strain just in the last week or two. you couple that with the yield curve flattening, two-tenths spread on 48 basis points, the

lowest in the spread cycle there are some things that as an investor you have to pay attention to it doesn't mean the cycle is over, it means you can't ignore them in the cycle. >> here's the question that i always wonder when you say you're end of the seventh, beginning of the eighth. you're starting to see the signs. maybe they're cracks, maybe they're not. you could make that argument 2005 or six but you needed to hang on, oddly enough, for another year and a half before things went the wrong way otherwise you would have missed the ups, right >> correct. >> the question is, what do you do >> more like 2015, 2016 especially where it became prevalent when you had a mid cycle slowdown as far as we're concerned at huntington, we want to reconfirm that we are not at the end of a business cycle we want to reconfirm we see accelerating economic growth here in the states. >> how do you do that? >> reconfirm with the clients. communicate. heavy communication. >> talking with clients, you're still ordering >> first off, our investment team has to reconfirm what we

believe, accelerating -- >> reconfirm meaning -- who are you reconfirming with? >> with ourselves. >> with yourselves >> we're reconfirming with ourselves that the thesis we're using to invest other people's money. >> how's that process going? >> that process is going very well that process is going very well. >> so if there's a -- we've been taking an informal poll the last couple of days asking is there another sector or sectors that may take up leadership now given that we started to see some cracks in the traditional all tech all the time story, and that's a pretty big debate because -- well, you can talk about financials and talk about energy they are sort of lifeless even though cash flow earnings are growing. gentlemen, what do you think is there a chance for rotation here are we going back to just where fang leads again after the politicalness is out. >> i think fang needs to -- and tech overall needs to stabilize. we're back down to where tech is about a 17.9, 18 times forward

multiple you're exactly right if you take tech and financials, they're 40% of the market cap. 41 to be exact without those two stabilizing being the leadership, it is difficult for the indices to lead to the highs. >> where are you on energy >> energy we're under weight right now and we've been under weight for over a year energy is 5.8, 5.9 of the index. >> the lowest in history. >> yeah. >> even if you get strength out of it it's not going to -- >> one of the things we're noticing in energy, energy seems to be trading on the forward curve. every time the price goes up to 64 the december price stays $3 below it that's what energy is trading on to us. >> it's been a long time sings the index had energy pegged so low and yet it is a core staple of the economy. >> thus far you're talking domestic stocks. anybody saying i'm going to rotate out a little bit to diversify?

>> we're over weight in the markets. they're a bit behind where we are in the developed world they don't have the revaluation that we've seen in most of the developed countries and despite the fact that the fed is in the process that we talked about normalizing rates, we don't think that will create a terrible head wind put on top of that some of the reform measures starting to see some emerging market countries, that's a pretty powerful combination for emerging markets. >> we went over weight as well last august in emerging markets also when we saw china start to accelerate last august >> what about small cap stocks do you think the tax reform has had full impact on free cash flow in the russell 2000 yet or is it too early? >> first of all, we'll find out over the course of the next couple of quarters because obviously q1 earnings are where we're going to see the impact of tax reform to be felt. i think it's too early to see what the impact will be. our view it will be 8 to 9% additional earnings growth

coming purely from tax reform. how much is between the global multi-nationals that benefit from this repatriation, that's going to be part of it certainly it's going to help a lot of the domestic companies because of the lowering of the rates. >> we like small caps here based on where they trade today, concern, to your end targets about 14, 14.5% up side. >> my investment thesis also, yet none of us have been rewarded for that. >> smalls have performed better in the long term. >> the last four sessions it's been remarkable. >> only down .8 versus the s&p down. >> they're one of the groups that hasn't broken their february lows as well, haven't broken that number we're with you we're with you over weight in small caps we went there earlier this year. >> i also point out that in this under performance emerging markets as well, so this is not the classic derisking kind of environment. it's one where you see people looking where they can get earnings growth. >> is there any area where you

say, enough, i'm out of here any industry given what's going on in the world right now? >> well, we did it with reads and gold earlier this year. >> got out >> got out. we were concerned with general yields rising what it would do with reats >> we would underweight utilities, staples and energy and have been. they've under performed, if you look at it over the last 12 months, they've under performed 15% relative to the broad industry. >> thematically, stay in equities through this correction noga tracttive yet on fixed income to move a major allocation there all of you seem to say put some more weighting in em because it's a cheaper pe. is that a theme we can agree on? >> i'll go back to that. we're also under weight. utilities are under weight, telecon. i want to be careful when you say you're stepping away from.

we're stepping back from technology we haven't moved to under weight we recognize that this notion that secular weight is on sale. >> you're talking about fang stocks, technology broadly >> we still think there's some strong drivers in it you think about business investment spending is strong. we're going to continue to see a powerful move towards mobility those are sector forces. >> keep in mind that if we believe we're late in cycle you want sectors and industries that can drive top line revenue growth cyclicals can do that in that type of environment. we're waiting for that switch that you talked about earlier. >> i have a feeling we might see that in the next couple of quarters people are going to covet a return of capital. >> mike, john, darryl, thank you very much. appreciate it very much. when we come back, some cracks in the manhattan real estate market. sales taking a turn for the worst. robert frank here with a preview. it was the biggest decline in manhattan apartment sales in ten years.

we'll take a look at what's spooking buyers. what apartments are hit hardest. we'll even show you a few bargains, bargains being a relative term coming up after the break. ♪ some moments can change everything. you can't always predict them, but you can game plan for them. for 150 years, generations of families have chosen pacific life for retirement and life insurance solutions to help them reach their goals. being ready for wherever life leads. that's the power of pacific. ask a financial advisor about pacific life.

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welcome back to "squawk box. the new york city ultra high end market has seen better days. robert frank has chilling numbers. >> everyone knew this would be a weak quarter not this weak. it was the worst decline since the financial crisis the worst sales total in more than six years apartment sales in manhattan took a dive in the first quarter down 25% over last year. the average sale price fell 8% it will now cost you a mere 1,933,000 for the average apartment in manhattan brokers saying there are three things going on here one, you have the federal tax cuts that hits high tech states like new york you had a big drop in closings for new developments you have these volatile stock markets which new yorkers are especially sensitive to. this is a market where the bottom is actually doing the best and the higher up you go is fairing the worst. prices for luxury apartments

fell 21% we are now sitting on the market for five months. there is a year and a half supply now of luxury apartments and another 4,000 units coming online this year it's just going to get worse bargains at the top. this penthouse condo on green street, 7500 square feet, 4 bed, four bath, outdoor deck was listed to 20, just dropped to 13 just over the weekend i had some people, some brokers sending me things where they were cutting prices by 50% just to get things moving >> million dollar range and higher. >> now at 13 >> yeah. new developments. >> yes. >> the break even point for the developers -- >> yes. >> -- around -- >> what on a square footage basis? >> around $3500 now. building costs and land costs mean that unless you're charging 3500 to 4,000 square foot you're not breaking even. that forces them to build very

expensive, very large geared towards the wealthy. everyone built way too much of that over the past five years. initially out of the recession that was the segment that was doing the best plus the costs were so high the average sale price in manhattan is 1700 a square foot. >> there's a hidden problem with this i went and looked at one of these and i didn't realize this until this occurred. i'm looking at a place like that, cut in half in price. >> yeah. >> what's not cut in half is the maintenance, taxes. >> yeah. >> so you're taking on a huge burden, taking on after the development isn't sold out after two years in this case i owned the entire maintenance of the building regardless of whether anybody else bought a unit. >> that's right. >> i said to the guy, i'm sorry, sir, you're screwed because i'm not going to be the guy to buy the first unit you've got to sell them all. >> it's not so much the property taxes. property taxes in new york are fairly low because the income tax is so high. >> maintenance. >> a lot of these apartments, 6, $10,000 a month and that's just

money out the door. >> if those really expensive places are going from 20 to 13, what does that do to a $10 million place, $8 million place, $5 million. >> the 5 to 20 is the weakest right now. so if something is 7 or 8, the discounts now are running -- over half the apartments sold in the quarter were sold for less than the ask the discounts running at the highest it's been. >> is it because we've scared away the russians and foreign buyers >> that's part of it it's a different market. 2014 turns out to have been the peak for new york city real estate and the sellers have just not really adjusted. >> is it working. >> 2014. >> what has happened though to the ecosystem around manhattan so westchester, long island, new jersey, what do you see happening in the burbs >> well, where there's good value and where there's sort of household formation and first-time buyers opportunities, those markets are doing well

because, again, the bottom of the market right now is the strongest. people buying their first apartment, renting their first apartment, getting their first home so actually we're seeing fairly strong results in connecticut, in westchester, in jersey city in the parts outlying new york city but, again, it's the entry level. that's true for new york city. the 1 to $2 million apartments, the entry level, that's doing well there are still bidding wars those things are moving fast the higher up you go, that's a more discretionary buyer. >> are we going to see bankruptcies for closures all of a sudden people are going to be going to these foreclosure auctions for these apartments that used to be $20 million and they're going to pick them off at 5 >> over the weekend i had strange e-mails from brokers, one in chelsea where there was an apartment listed for 18 they were trying to sell it that weekend for 9. >> wow >> i don't know what's going on there, but there's clearly more debt in that area. >> right >> right now everyone's got to

accept lower returns from manhattan real estate. that's what's going to be short term eventually we could get there. >> smells like a buying opportunity. >> you never liked buying houses. >> my problem was i looked at -- many times i'd go and say, this looks great. you want 14 million for it i'm interested i'll rent it from you because i know you can't get more than 21,000 a month if you do the math, it's only worth 7 million. somehow it's coming back to roost. it's hard to get anything under 21,000 a month anywhere. that tells you interest's something wrong. >> do we think people are leaving the city to go to connecticut? >> no. there's demand there's huge demand. millennials especially want to be in new york city, it's just the prices are way out of line with both rents and with people's affordability to buy those places so the prices have to adjust and that means developers and all the people -- >> the prices have to come down? >> have to come down. >> then maybe sales will pick

up but right now the quarter that lee men went bankrupt, this is the worst quarter since lehman went bankrupt. >> so funny how it changes on a dime one day it's smoking hot and then it's not. i think we're in the then it's not moment. >> how long does the then it's not moment last? impossible question. >> because there's so much more supply, 4,000 new units. all of these towers planned four or five years. the next two or three quarters at least. >> thank you >> thank you >> when we come back, some stocks to watch ahead on wall street investors tuning in to spotify as the company gets ready for the first day of trading. amazon in the cross hairs, and it's not just president trump. lawmakers on both sides of the aisle raising concerns over the online giant that holds workers and merchants. we'll have the details coming up "squk x"ilbeig bk.awbo wl rhtac most etfs only track a benchmark. flexshares etfs are built around the way investors think.

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shares down more than 60% this year constellation brands were downgraded to hold the spirits producer has seen its stock jump 41% oil field services company schlumberger are upgraded. that was after a recent pull back. coming up, the white house versus amazon. we're back in a moment nah. not gonna happen.

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is this the trump slump? stocks look to stage a comeback after all three indexes closed in correction territory. full market coverage straight ahead. the white house versus amazon. >> amazon doesn't pay the kind of sales tax it could.

>> we will talk to americans for tax reform founder grover norquist. breaking job news this hour. fresh data on the state of small business hiring. we're going to bring you the numbers. the final hour of "squawk box" begins right now live from the most powerful city in the world, new york. this is "squawk box. good morning welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site in new york city. joe's out but sitting in with us, kevin o'leary and, yes, mr. wonderful of "shark tank." get a quick check on the market and show you what's going on things looking up. a little bit better after what was a roller coaster of a day yesterday. >> we did come up off the lows we were down by 740 points. >> i guess we could call it that.

>> dow looking like it would open up 40 points. nasdaq open 32 points higher s&p 500 looking to open 7 points higher this morning. our top story is the markets. all three of the major indexes closing in correction territory yesterday. we have full coverage of yesterday's selloff. ylan mui is live jim yuri is live what the heck happened yesterday? >> it started off in very low volume day all of europe was closed the volume was lower as people realized it was a wipeout. there were big orders an $8 billion notional order it underscores how on low volume days you can have outside moves. that doesn't mean the next day is like all is forgotten we're reminded that we're still in a risky and volatile time if we take out yesterday's lows,

that will validate yesterday's move and then i'll become a lot more worried until that happens, i'm not particularly worried. >> this morning things have stabilized but we're not bouncing back from yesterday's declines. >> that's on top of a 30 tick rally. the 13 ticks right now it's a little bit encouraging. i'd say above 90 in the s&ps takes away the short term downward momentum. above 2600 again, then i think we can forget about the awfulness yesterday. >> i know you're in the pits and in the throws of everything that's happening with all of these issues you're watching technical issues and fund flows was there anything from the news perspective that sparked all of this >> for me it's two different transitions that are currently happening and ongoing. the one is we're transitioning from really, really low interest rates to only kind of low interest rates that's somewhat of a big deal. the second thing is we've had very clear leadership with the fang stocks, particularly the

amazons of the world those definitely had rallied too much market position is one of the biggest things that causes market corrections, of course, p and the talk about amazon, yes, that started the ball rolling down the hill, but i think it's more those are losing leadership opportunities. we're looking for someone else to take it i think banks are going to be the ones that does it. >> jim, great to see you thank you. >> thank you, becky. folks, a big loser in yesterday's trading session as jim mentioned, amazon. take a look at the shares of the ecommerce giant. it had the worst daily performance since february of 2016 down by 5% president trump has stepped up his attack on amazon ylan mui has the story on why they're such a political punching bag. >> reporter: it's not just president trump, we have lawmakers on both ends of the political spectrum asking if amazon has gotten too big or too powerful on the left is bernie sanders

who this week agreed with the president that the online giant is hurting retail. >> we're seeing this incredibly large company getting involved in almost every area of commerce and i think it is important to take a look at the power amazon has. >> senator elizabeth warren has been worrying about this since 2016 platforms that can become, quote, a tool to snuff out competition. meanwhile on the right yesterday we heard similar concerns from senator marco rubio. he tweeted that potential new economy monopolies will require close monitoring amazon's growth has meant lower prices but that can mean less competition. this tweet gets to the heart of what one expert calls amazon's antitrust paradox. companies can over charge for their products but amazon is

getting slammed for lowering prices too much which is good for consumers. so we're just starting to hear is monopsony using pricing power to squeeze suppliers, vendors or amazon workers. that is hard to prove than a traditional monopoly if the trump administration oo chooses to take on amazon, they will be the first one to be taken on with a monopsony. >> that sounds like walmart. amazon is not the first to come along and disrupt like this. >> absolutely not. people talked about the walmart effect you heard this term used around google and some of the practices around its search platform and the companies that were allowed to come up along the side bars with ads so it is not the first time that companies have been considered or discussed as potential

monopsonies but it is hard to prove and consumer -- >> is monopsony a term >> reporter: it is a real term. >> monopsony >> reporter: it sounds -- >> sounds like the muppets ylan, thank you very much. joining us right now to talk about this and much more is americans for tax reform president grover norquist. always good to see you. >> good to see you. >> what do you think on this entire issue obviously a lot of different quarters taking shot with amazon let's start with what the president tweeted his concerns about amazon in terms of whether or not they collect taxes and whether or not amazon is good for americans or not what do you think? >> okay. there are a couple issues here and they're getting mashed together and it's becoming confusing. i think the president misses what's happening there's been a debate about whether or not alabama can force businesses in new york to

collect alabama sales taxes if you buy a catalog sale from new york or an internet sale this used to be catalog sales, now it's internet. and the supreme court ruled that you can beat up anybody you want to in your state you can tax them if they have a physical presence, if they have a store, but if they don't have a physical presence alabama can't force new york businesses to pay taxes in new york in alabama. you can't export and tax people who don't live or work or domiciled in your state. you want competition between the states, you don't want them to be able to reach into other states and grab stuff. that's the law of the land now -- >> can i ask one point of clarity because i'm confused by that because in new york, i mean, at the ikea that's in new jersey, they have people that are spotting you there if you spend a bunch of money, new york wants the taxes cut for

that for years in new jersey i've been buyipaying taxes and i thik new jersey catches people on that and new york catches people on that if you buy a car over state lines. >> yes, they do that going back to furniture and other things. >> okay. >> on amazon -- >> this is the case of the retailer, not of the consumer. >> yes i understand the distinction the state can go after the consumer they can go and wait for ups or fed ex to deliver your package and say you owe us a sales tax they don't do that because you vote what they want to do is go after some business in maine, ll bean, where nobody votes in alabama who works for ll bean. so this is an -- this is the perfect tax for a politician we're going to tax businesses and people who can't vote against us how about that >> right >> and they've been talking about this for quite a long time i served on a congressional group which has studied all of this and recommended against allowing states to abuse people

in other states. amazon used to just operate out of the west coast and ship stuff to other places. it didn't have opt to collect sales taxes because it wasn't in the 50 states. now it's moved into all 50 states it is collecting sales taxes it is an advocate of changing the law to force its smaller competitors to pay this. >> right. >> the only thing i found amazon for all of their own items they charge sales tax for somebody else selling on amazon, they don't do that if they started collecting on that it would disadvantage the smaller guys. >> the idea of taxing sales now is what amazon wants the president is going to make amazon rich. a lot of people sell through amazon and if you have a little business in florida and be you sell to 50 states and thousands of counties and you're supposed to know how to collect all the sales tax, well, amazon has got a computer set up that can do that for you you can pay amazon for the

privilege of having them do your taxes so amazon will be richer and better off if we force its competitors, smaller competitors -- the states and cities aren't raising much money with that. it's not a big deal. with a amazon in all 50 states with a physical presence in those states it is now legitimately paying sales taxes because it's there, okay it's not -- you're not taxing across state lines anymore so the president's going to be mad at amazon if he wants, but not for this reason. if he pushes for taxing internet sales allowing overcoming that supreme court decision saying, no, you can too tax across state lines, amazon's a big winner the big loser are the people bernie sanders claims to support. >> just to put a fine point on it are you suggesting the president's misinformed? >> a whole bunch of people are misinformed because it used to be true that amazon when it was

only based in one city and then exported from that, they were not required to collect sales taxes. >> grover, i want to go back to the point you made about the importance of the platform so it has a nexus in 50 states, it does pay taxes, but i'm going to take it from a different approach all of my private companies now have between 20 and 30% of their revenue on the amazon platform this is an embedded infrastructure in america now that can't be reversed the reason these companies were able to compete and build a platform was the fact that amazon provided the logistics for them to start at 1 million in sales and grow to 500 million. it's very hard to build that infrastructure over and over again. amazon provided for that this notion that somehow we're going to take this platform, rip it to pieces, call it a monopoly, all of this stuff is just going to destroy small businesses in america that are creating all the jobs. so i don't -- this is a circular

madness that's going on right now. this genie is out of the bottle, kids, it's over. we need this platform and it's an amazing company i deal with it every single day. so all of this stuff is just noise in a big way that's hurting the stock price. nestpa is that the case >> yes the monopsony, they taught that to me at harvard as another excuse to regulate the economy back then it was sears&robuck. you can be a monopsony and still go out of business they were requiring manufacturers to keep prices down so that sears could keep prices down. walmart has done the same thing. having a much more efficient and effective retail system has made the rest of the economy come much more effective and efficient and productive so squeezing out inefficiencies

is helpful now there's one other piece that the president's laid on top of this, and that is amazon sends a lot of its packages through the government post office, ups or fed ex that is massively subsidized when you send a letter to your mom or get mail from companies and stuff, they charge the people who do the mail, have a legal monopoly on first class mail and take that and subsidize the packages and amazon is getting subsidized by the post office because everybody uses their package system. >> grover, i was going to flip it around and suggest every time i send a piece of mail, actually, first class mail, that i'm subsidizing -- that i'm actually being subsidized oftentimes if you were to separate the costs of physically delivering the mail versus the packages, the entire system subsidizes

each other that's how it works. no >> well, they take revenue from the mail where they have the monopoly they don't have a monopoly in packages they have to compete in packages, ups, fed ex, companies like that. >> you believe the post office is losing money on the amazon packages >> if they were to charge the same amount to cover the same amount of overhead on packages that they do on first class mail, their monopoly, everything would cost $1.50 more so they are cross subsidizing packages >> right. >> there's an argument for getting the post office out of packages, period, or get rid of the monopoly on mail, but that's a whole nother debate we've had for decades. to conflate that with amazon -- >> what's your take on the overlay -- >> i thought you were going to say the washington post is the third leg in this stool which is how important or not is that in this debate around what's going

to happen to this company in one way or another. >> i think that the washington post has a political viewpoint that is hostile to the republican party and trump and the narrative they run every day is the other team. so i can see them making enemies for amazon that amazon doesn't need and doesn't have. >> i rest my case, your honor. >> i think that puts a political spin on the economic stuff. >> you don't think there's anything nixonian about this >> the fact that the washington post is going after another republican president i think it's best not to regulate, tax, annoy amazon or other companies independent of the political affiliation of anything they own. >> grover, thank you for joining us >> thanks. >> lots more on that topic when we come back good news for the trucking

industry morgan, what have you got coming up >> well, andrew, if you want to know how strong the economy is, weather inflation is reemerging. looks no further than trucking we have the ceo of ryder coming up and so much more exclusively after the break. ♪ some moments can change everything. you can't always predict them, but you can game plan for them. for 150 years, generations of families have chosen pacific life for retirement and life insurance solutions to help them reach their goals. being ready for wherever life leads. that's the power of pacific. ask a financial advisor about pacific life. well, it'sonce again.eason >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all.

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

now you can get it, too. welcome to the party. welcome back to "squawk box," everybody. take a look at the futures they've picked up a little bit of steam but we're still talking about dow futures up by 58 points after losing 458 points yesterday. s&p futures up by close to 10. the nasdaq up by close to 45 points index that was under pressure yesterday down by 2 3/4% we'll see how things hold as we get close to the opening bell. the trucking industry is in over drive with the peddle to the medal. morgan brennan is joining us

plus deal news what's going on? >> we'll start with what's going on with the state of freight experts are telling us that, quote, capacity crunch, more freight needing to be moved. general mills to tyson to ross weather's played a role, strong consumer confidence. also, a major new rule that took effect this week that forces more big rigs to be equipped with devices that electronically track driver hours throw in a driver shortage that's only getting worse. trucking rates have skyrocketed. take a look at this chart. up more than 30% over the past year according to d.a.t. solutions. perhaps it's not surprising that you're seeing deals getting struck, new services being offered. case in point, ryder systems this morning announced $120 million deal to buy msd group. it will make ryder as a player

for the last mile deliveries it's launching a new air bnb platform it will expand to other cities from there. >> we have heard about other platforms like this, other companies trying to do the same thing. >> and trucking industry is ripe for technological disruption that's what you're seeing. that's why you're seeing a company like ryder coming out with an app-based solution to try and match up trucks when they're idol with some of the freight that needs to get moved. becoming a bigger issue right now. >> isn't this what technology can solve, get rid of the driver and put convoys down highways all night long isn't this a big opportunity right now? this is the best thing for self-driving cars or trucks. >> i think this is one of the hottest discussions happening in trucking which is why we do have the ceo of ryder coming on. >> coming on right now. >> what a tease. we want to bring him in. our next guest, ryder systems

ceo robert sanchez is joining us i don't know if you were listening to this conversation, but actually let's go straight to mr. wonderful's question, which is in the future do you think that everyone will just be convoying or caravanning together and it will all be automated? >> yeah, i'm not sure everyone will be, but certainly there's going to be a portion of the industry running on autonomous vehicles that's in the future, there's no doubt. >> do you say to yourself, you want to be the fleet and sell the vehicles to another operator or do you think in the long term that you could end up becoming the fleet itself in the same way that waymo might become the uber of autonomous vehicles >> we're very well positioned to do any one of those. we do business with 50,000

companies big and small. we manage a fleet of over 230,000 vehicles today over time that could mean we're providing those vehicles to our customers who will be managing their own fleet or it could be that we will be the manager certainly of a portion of that fleet and just providing freight movement to our customers. so that's a lot of the disruption that we're seeing in the industry, that the announcement that we made today with the acquisition of mxd, which is a last mile big and bulky delivery company for ecommerce, that positions us well to jump into the ecommerce space, especially for the movement of some of the larger furniture and appliances that are now really moving under more of an ecommerce environment. >> i'm glad you brought up this mxd group acquisition, robert, because certainly we've seen a number of companies -- a number of retailers, amazon included, that are expanding their offerings in big and bulky things like furniture,

televisions, et cetera is that who you're looking to target in terms of having this type of infrastructure in place? >> well, yes in some cases it's going to be the eretailers but in other cases it can be the more traditional retailers who are looking to expand what they normally use or normal supply chain, expand that to also be able to handle ecommerce and go through more of what you call an omni channel solution. we're going to be very well positioned to provide that we provide supply chain solutions today to many of the large companies in the fortune 500 and this just gives us another service to be able to add to what we do for them today. >> we've got reports overnight that president trump is pushing for a preliminary deal on nafta by the middle of the month, taking a look at that, taking a look at the tariffs back and forth that's happening between the u.s. and china right now what is your take on trade are trade tensions rising or are you not so concerned about it? >> you know, last few days, last few weeks because of some of the tweets certainly we've seen a little more tension around trade

especially with china, but trade is so vital to this economy that i don't see this administration putting the kibosh on trade that could really hurt the economic activity that we're seeing today. i mean, the economy has heated up over the last several quarters you're seeing as you mentioned in the last segment earlier freight is very strong right now. that is typically synonymous with a very strong economy as more product is moving around so i don't see certainly the wisdom in doing something that's going to hurt that nafta is an important part of doing what ryder does. we support a lot of companies in mexico that bring product into the u.s. a lot of u.s. companies have made meaningful investments in production down there that over time you may see some more of the new investment coming to the u.s. but certainly not hurt the investment that's already been made in mexico >> okay. thank you for coming on. it's a longer conversation i wanted to ask you about elon

musk getting into this business, convoy with their apps a longer conversation. come on back in the meantime, we should tell you that we have a lot more coming up in the next half hour. you're responsible for this, mr. wonderful. the big business of cheating how extramarital affairs site is trying to make a comeback after millions of accounts are hacked back in 2015 we're going to talk to the cto of the site parent company by the way, you're listening to "working man" by rush. this song was tweeted to us by jennifer what song do you want to hear? we're rebooting sqwkua's spotify list we're taking requests. back in a moment is the monolithic view of emerging markets obsolete? at pgim, we see alpa in the trends, driving specific sectors

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♪ ♪ good morning, welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site at times square i'm andrew ross sorkin along with becky quick and mr. wonderful, kevin o'leary, sitting in for mr. kernen who will be back tomorrow. futures after a heck of a day yesterday down day today looking up at least right now. dow up 80 points

nasdaq up 55 points. couple stories front and center. march auto sales figures this morning, but it's going to be the last time we're going to get monthly figures from general motors gm deciding to discontinue reporting on a monthly basis it doesn't contain an accurate picture of sales mr. wonderful says this is bad news, right? >> yeah. more transparency is all tways better there's no reason to do this if the numbers are good. >> i'm not here yet. but this is bad because economist rely on the total vehicle numbers as the first indicator for the month, one of the first, and i'm not sure yet, i've been talking to phil lebeau about this, getting rid of the number may mean that economists don't have the total vehicle sales. >> what do you -- what do you think of the idea the government is going to get the numbers, right? those numbers are still going to be delivered to the government and not the public >> i don't think it's a

government number that we report every month when we do that first vehicle sales. they'll report it through the retail sales channel. >> okay. >> anyway, it's another piece of data we don't have. >> steve, the issue is why should the government get the data and i can't as an investor? why is that okay >> i think that's okay in a lot of senses -- >> it's not okay. >> -- in the sense that the government has a public good that it releases to everybody at the same time. i don't have a problem with that as spekt of it what i have a problem is transparency. >> what retailers have done with that, home depot, walmart, it was usually an indication that they saw stormy signs on the horizon, right maybe not necessarily that this month's numbers are going to be bad or next month. hey, maybe we're at peak auto type of questions. that's the issue that it raises. we need to become less transparent is what i would worry about. >> i get that. gm's ideas that quarterly data is sometimes more accurate in terms of what it shows in the monthly data

what i want is the aggregate number. >> meantime, new york fed has unveiled the competitors of the libor interest rates called the secured overnight financing rate for the first time is that going to -- do you know, is it going to have -- libor stands for something is it going to be an acronym >> sobor something like that. something they've done to make a more accurate and less -- what's the word i'm looking for. >> sobor >> manipulative. >> soboring. >> 1.80% hoping that over time it will be used instead of libor. >> sofor. >> is this a new number you're going to look at, mr. wonderful? >> anything that measures the cost of interbank borrowing is going to be great interest i don't care what they call it i'll watch every day. >> health care companies getting a raise next year. that's more than the increase that had been proposed by the centers for medicare and

medicaid services which run those programs reflects the fastest growth in medicare costs that impacts how high premiums are for policyholders. >> news breaking on the state of small business in america. job growth actually declining in the month of march wage growth remaining largely consistent joining us to talk more about it is marty nusey the ceo of paychex thanks for being here today. >> thanks, becky good to be here. >> let's talk about these numbers and what you see happening with them. why would we see some sort of a pull back in jobs or not the same growth that we're seeing in big businesses what's happening >> well, i think when you look at small business you know there's a lot of optimism there. over 50% of small businesses are still hiring and looking for it, but the number one problem now is finding and recruiting the best workers thar qua jerers thd for the jobs small businesses have a tougher time than large businesses when the unemployment rate is where it's been at 4.51%

it's tough to find to recruit the workers. small businesses don't have the recruiting strength and necessarily not the benefits that will pull these hard to find workers inasmuch as large businesses. >> you mentioned benefits and that's an interesting part of it if we are talking about wage growth remaining steady, that means that some of the small businesses can't pay up quite as much as maybe some of the big businesses can, whether that's through benefits or whether it's through actual salary? >> yeah. i think that happens you know, for wages, now we saw some good news in wages in the one month. if you take one month annualized what we're seeing from february to march is almost 3% wage increase as opposed to the annual, which was about 2.7% we may see some acceleration, which you'd expect in wages as we try to find these qualified workers. i do think the benefit packages sometimes in small businesses can be tougher they don't have the clout to have the 401ks they're difficult to find.

some of them from health insurance and so forth, they don't have quite as many to attract the workers that are harder to locate out there. >> is that a sign of rising inflation? just to put a fine point on all of this. that's one of the things that's been a huge concern. are we going to see inflation coming more rampantly than we have to this point is that what you think is happening here >> well, i don't -- you know, still with the wages you'd want to see them a lot stronger, i think, than just under 3% before you think that a lot of inflation is coming. it certainly indicates it's rising, the wages are raiising. the nfib index is high for optimism consumer confidence is very high consumer spending isn't quite as high so i think these businesses are producing but they're not quite seeing the demand yet that they'd like to see. >> marty, thank you for your time today >> okay. thanks meantime, president trump's trade advisers speaking on the market and economy

here's what peter navarro told cnbc. >> the market is reacting in a way which does not comport with the strength, the unl believe annual strength of president trump's economy. everything in this economy is hitting on all cylinders because of president trump's economic policies we cut taxes, that's stimulating investment in a way which will be noninflationary that's going to drive up productivity and wages that's all good. >> want to bring in steve liesman right now. they have a take on mr. navarro's take. >> so i'm trying to be kind here, but a lot of people accuse peter navarro of not understanding trade, of having the basic ideas wrong about global trade this quote from him suggests he doesn't understand markets either i'll let mr. wonderful comment on that, but my experience is that when a market doesn't -- or judges a policy badly, the problem is not the markets understanding of the policy, the problem is more likely the

policy and i'll remind you for example of the europeans during the financial crisis when they kept saying we're doing something, we're doing something. the banks, we're doing testing of the tanks and the banks would tank the bureaucrats didn't get it. peter navarro is being accused of getting these wrong, the wrong aim for policy the idea that a trade deficit goes up when growth goes up. the idea that trade deficits are the wrong targets for policy and.concern -- what i'm hearing from economists, becky, is a spectrum not from this policy is good or bad to the spectrum is we're confused about the policy to this policy is bad. i want to read you some of the quotes that i've gotten the last couple of days guys in the center, jpmorgan told me yesterday, we had a hard time pinning down a specific gdp number for the impact on tariffs on the economy we don't really have a sense of how bad the policy development can get. moving on to mark zandi from

moody's. the fallout from the tariffs will be felt but readily absorbed by the way by the tax increases. however, there's an uncomfortably high and rising threat that the trade tensions escalate and do much more economic damage. what's happened here in the last couple of days, i don't know how all of this is appreciated, is the market has started to trade the tail risk. it remains the tail risk a trade war is not the most likely outcome here, but in the absence of lack of understanding of the policy of the trump administration, the market is trading the tail risk, and i have only one thing to close with where's larry kudlow when you need him where's larry? >> on the job. that must have been a tough job -- >> can i just do a cramer thing? they have no idea. they have no idea. it's unbelievable. the idea that you guys have to read the kato institute.

these are libertarian smart ph.d. economists and what they say about peter navarro. the idea that this gentleman is guiding the president on trade is worrisome to a lot of people. >> look, we can talk about larry, he only got into this role larry specifically said when he started this job he has an opinion but once the president has made the decision, he's all on board. >> in larry we trust that he'll be involved in making the sausage. >> thank you, thank you, mr. wonderful. we need him and kevin hassett is a free trader. he comes from aei. i don't think you get in the door of aei without being a free trader. >> that's the battle. >> i think the battle is not over. >> let's continue this conversation steven is here what do you think about this, steven by the way, he is the equity strategist at jeffries. >> ithink overall anything tha puts any kind of concern or as steve was mentioning, any kind of additional tail risk, again,

gt mark the market is going to take a stance you've seen volatility rise from levels that were ridiculously low and now we're getting back to more normal levels. >> that's what i'm trying to figure out are we desensitized with any volatility we've seen a lot of 2% and plus moves. >> that's how the market has been prior to last year, prior to 2017. think about the rotation that we had in 2016, the rotation that we had in 2015 these are kind of just normal markets. >> maybe just the points are bigger now because we're at higher levels to the 345rmarket >> the point levels are higher that's one thing you have to look at the percentage changes just kind of think of the vix and nix going back to 1990 the average is 20. 9 is not the right number. 39's not the right number. it's somewhere in between. why can't 20 be more of the right number here when you have a lot of uncertainty and, again,

the market's going to -- you know, it's going to kind of pick up, the volatility is going to pick up. in addition, i think one of the big things we saw was a huge amount of money coming in in january. the large cap core category took in $29 billion this is an unwind of all of that. >> is that something that o worry about or not what do you tell people? >> i think we are worried about volatility picking up. i think it's an opportunity for people to take advantage of the volatility, to make changes whether it's sector allocation, whether it's between small and large, whether it's between high quality/low quitaly. you have more opportunities. last year you didn't have the opportunities. >> thank you for joining us. >> thank you. >> stick around, "squawk box" will be right back obvious.

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coming up, you're not going to miss this after the briefs this is different kind of briefs how ashley madison is trying to build back its trust after a massive hack attack. we're going to talk ttohe president and cto of ashley madison's parent company we're going to do it right after the break.

back to squawk after exposing the personal data of 32 million users. ashley madison is a website known for hooking up married individuals. joining us is the president and cto of ashley madison parent company of ruby life thank you for coming on. mr. wonderful wanted you on the program today. it was very important to have this discussion. we want to understand what's happened since the data breach. >> well, a lot is happening. 2017 we've been focusing on the member we've had incredible growth. 2016 we were kind of wondering

what ashley was going to be and we came back in 2017 to put what the members wanted, which was married dating in 2017 we saw an enormous growth in our domestic markets 18.1% revenue growth within the canadian market and 17.7 revenue growth from 2016 to 2017. >> remarkable story. first of all, when the breach did happen though, how many marriages went under because there was an exposed marriage that wasn't maybe as healthy a marriage as people -- as some of the spouses thought? >> i think that's really hard to say, but what we do is focus on the members and focus on security discretion. every single day we kind of work to rebuild from the ground up. >> that was the worry. when that first happened, that was the worry. people said, well, if you were -- if this whole thing was about extramarital affairs, we're not going to -- i'm not going to use this site because there was a hack and i don't want to get -- i don't -- right?

isn't that what -- that was the issue. >> i think what we've learned from this, this is my take, tell me if i'm wrong, since when caesar dated cleopatra married people have been cheating. this is bred into all societies. you got hacked it was a global story. my dad read about it in switzerland. he didn't know it existed. all of a sudden you start growing in italy, france, germany, england because they learned of your business from the hack is that not what happened? it looks like that to me because your growth rates are insane now again. you've come back people cheat you profit from it yes or no? >> that is correct infidelity has been around since the beginning of time. it's been around before ashley madison. in 2017 we did see tremendous growth member rates. we started the year off at 10,000 members a day signing up for ashley madison in april. by the end of the year in november we were signing up over 20,000 people every day on the site. >> do you think there's more cheating going on today because

of online dating sites like yours? >> i don't know if there's more cheating going on. i think within the realm of balancing out the community and what is available for males and females on the site is something that is new. for example, our site now -- go ahead. our site now is right at 1.13 females to every 1 male. >> what do we know about cheating from a global perspective, meaning, you know, u.s. versus canadian cheating versus italian cheating, u.k. cheating where's -- where's the action? >> yeah, it's very interesting i can tell you we operate in 50 different countries, 19 different languages. you know, we have strong presence in latin america, asian markets, australia, europe, you know, everywhere that people are infidelity happens. >> so the brand, the brand ashley is associated with infidelity that's caused you some problems,

i assume, in financial services markets. can you attract debt, can you go public will there be a time where people say cheating is cheating, this company knows how to monetize it. i'm all right with it. are you getting towards that kns how to monetize it, i am already with it. >> we operate like a start up of the capitalization of the firm that's been around for 15 years. never say never of something like that. we don't have any needs for looking for that right now >> do you look at other dating sites, tinder and the bumble of the world and others, could they steal apart of their business or you could steal their part of the business or you think the brand is to distinct >> well, i think the brapd distinct what we exist is bringing people off those traditional dating

sites and bringing like-minded individuals together looking for the same thing >> we'll leave the conversation there. i think if it goes too much further will be dangerous. we appreciate your time. congratulations on this success, your suck seecess means more chg so i don't know what i am thinking about -- great to see you, hope to talk to you soon >> when we rur wlletn,e' take you inside mr. wonderful retreat. that's next on "squawk box."

our special guest is kevin o'leary. he brought his own entrepreneurs down to south beach this year. here is what happens this year's mr. wonderful retreat. birds get together once a year to see the size of their species and judge their strengths. >> welcome to sunny miami. cannot think of a better place to do this i thought one of the reasons we would gather is to bring the big platform >> my biggest goal is to make sure you understand what's the benefits of selling on amazon. look at all the questions you

got. they were eating you alive >> that's wonderful. we want to work with them >> we had a relationship since we made a deal on "shark tank" in 2016. >> the resources kevin brought here are great >> give me the update, what's new? >> we have been busy taking you demands and orders >> how long have you been in the store for? >> it just ended >> how many months >> three months. >> thanks for coming in. >> thank you >> i find companies that are center is building a portfolio and this is my portfolio it is a fantastic group of people >> kevin this is like your annual meeting where you get to do a report card and see how everybody is doing what did you take away from the portfolio system >> i was able to attract facebook, amazon and twitter and platforms to address this on best practices

number two, which was the unintended outcome which was the most important each entrepreneur share their experiences in life, business and raising kids and the things they do struggle to make this work which was really powerful it made me believe that i am going to do this on an an ynual bases to bring all of my companies together because we learn a lot of best practices. you are trying to teach each other how to do it that's what's important. >> we'll have more in just a moment >> coming up, we are counting down to the opening bell check out the futures, we are up of triple digits you can see dow is up of 114 points we are back in just a moment ens this is your new name. this is your new house. and a perfectly inconspicuous suv. you must become invisible.

[hero] i'll take my chances.

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they cannot talk their books they have to answer my questions. >> kevin, thank you, it has been wonderful. >> that does it today. you can see the futures picked up now and dow is up triple digits, 120 points nasdaq is up by 62 make sure you join us back here tomorrow, right now it is time for "squawk on the street. ♪ good tuesday morning, i am carl quintanilla with melissa lee and david cramer with the stock exchange david is off today all three majors are red for the year and spotify is in focused europe is back to work catching up in the red. th