party apps to request dating that disrupted the log-in process, after getting user approval, tinder pulls names and ages and photos and interests and more from their facebook profile. the problem was resolved after several hours -- >> how did they resolve? >> give them an exemption. >> i -- >> i'm married, i don't know these things. >> where was ashley madison when i was younger, god almighty. >> good-bye, everybody ♪ >> good thursday morning, welcome to "squawk on the street." jim cramer is back at the stom change the impressive bounce is holding and futures are up and europe is up is up big as well

10-year yield back to 2.81, a trade deficit does widen for a sixth straight month shaking off the trade threat, the trump administration playing down trade war concerns and big tech helping lead stocks higher in premarket. more drastic action from the fed. jamie dimon warning that investors may be ignoring a big risk to the markets in the widely read letter. mark zuckerberg says most users should assume they have their data accessed and takes responsibility for the scandal it is good to have you back, jim as we watch those futures hold today. a lot of people looking at conflicting clues about whether or not yesterday did mark a tradeable bounce. >> i think that one of the things that happened, we've got to throw out the book on what's tradeable and what's not because i think what's happened is that -- it can look tradeable as yesterday's did in the

morning. again, you had two sessions and this is a big new change you had a declining session and ended with an up session i was just explaining to joe, we have a nafta discussion coming up what happens if the president says you know what, i think we should stop nafta and break it up and send larry out and he says, we're going to do something a little different this is the new world. if you think we have a tradeable bottom, what you have to have some handle on is what the president is going to say. and i think that you can throw out tradeable bottom -- not tradeable bottom because no one has a handle -- >> so holding key averages, put-call ratios and etf volumes. >> we did it 9-1 the late mark haines said is a bottom, 9-1. that's exactly what happened we held that bottom because we got to 9-1 negative. it's just now we bounce and my thinking is there could be a tweet any minute about nafta

and then you start the clock again. so i mean, tradeable bounce, i mean i know guy was talking to b brian this morning saying friday we could give everything up because of a strong employment number my take is the concept of the tradeable bottom has kind of -- interday, yeah, but i think that when i look at twitter every morning, i used to look at what people said about me just look at what trump says about amazon -- crooked hillary. >> is there any point the market starts to mute the tweets so to speak? >> no. does he decide a fake president? he's president of the united states >> i know but -- >> after amazon? >> you just made this point. because he tweets something doesn't mean it's likely to happen. >> but there's morgan stanley coming out with a note, here's what's going to happen

they are going to redo the contract it's going to be manageable. i mean -- >> what are you talking about the post office contract >> or pentagon -- >> no the aws/pentagon they can spend a fortune and not good as good service as amazon web. >> the post office >> this morgan stanley piece is not the way after doing my work on this, i would not say that this is going to end up bad for amazon i think that this says that -- they do very good by the post office it's clear the post office does much better than amazon. the president doesn't want to say that only because the post office is so intellectual bankrupt from the way they do pricing. >> we haven't spent so much time talking about finances maybe ever. >> that's a good point. >> at least the conversation has come around and talking about pensions and post office -- >> i'm waiting for the tweet that says snow and sleet stop amazon you know just put it out there. >> snow and sleet mean there's

no climate change but -- >> so cold and we had snow, obviously -- >> when it's cold here doesn't mean it's cold everywhere. >> even bhp broke -- they are against china watering down the coal rules, interesting. but this amazon thing, amazon would love to get out of that contract there's 50 other guys who want in ups and fedex wants it i think it will be much more in it the president may be doing what he doesn't want to do, which make it so that amazon has to take third party but the contract itself, i'm sure amazon would -- if they can get out of it, i'm taking numbers up amazon. >> numbers up or just your view of the stock price >> no, i think they could get a better deal. fex fedex does 3% of the business fedex wants more of their business not less. >> it's about the last mile,

isn't it, where they rely on the post office? >> it's a good deal for the post office we don't know the post office finances, those have always been opaq opaque >> maybe amazon just ends up doing amazon's last mile. >> the president has secret numbers we don't have. >> he does no, he doesn't, does he? >> thank you for saying that he's such a good foil because he doesn't. there's a pricing committee. it made a deal morgan stanley said it was probably 50% under what do you do if a committee gives you a price and you accept it what do you do say listen, let's break that contract -- >> the president's history as a real estate manager and developer was doing -- just that, do that all the time a lot of people did business with them.

>> i think that's true -- >> i'm not going to pay you what i said you would. >> maybe you can do that but also that allows them unlike everybody else, to go away they can go away why do people feel that bezos hadn't planned on this stuff >> there's a big piece this morning about amazon's response to all of this they are pretty aggressive about pushing back news but stayed silent against the white house and we're watching to see if the pentagon does award the deal. >> i met with google cloud and know the microsoft people, they are going to say -- encrypted. so if the president wants to throw the contract, someone a higher cost producer, they can do that and microsoft could give them a break and come in under, right? >> yep. >> what are you laughing at? >> i'm reading an e-mail that's making me laugh.

>> i'm so damned focus on tv i can't read this funny e-mail my wife sent me she sent some dog pictures. >> you need to multitask, you know that. my wife was tebding bar last night. did you see that >> i did. >> china is confident it will win any trade war with the united states. eunice is live in beijing. >> reporter: the chinese state media has been boasting that china has won round one. the official state papers have been focusing on three things, one, president trump's tweets in which he said we are not in a trade war with china commerce secretary will better ross's interview with cnbc where he suggested that these actions are all headed for negotiations and finally, larry kudlow's comments that president trump's tariffs could be a negotiating tactic that won't go into effect so the people's daily today, just a couple of hours ago, ran

a headline which reads, china stands firm and wins the first battle of the trade war. that commentary argues that the china's list hit trump where it hurts since the origins are places where people tend to vote for trump. the china daily calls the tariffs threat useless and it goes on to say that trump has already proved himself wrong because china has demonstrated it can't be coerced and it's fully determined to resip indicate unlike other countries. >> the background is the same. the communist party as well as xi jinping have been trying to portray themselves as defenders of china and china's interest to the public against the west. so they are in a position where they always want to project strength even so, we're seeing this harsh rhetoric, according to the official state media, they are still is a possibility of

negotiations the china daily said today if the trump administration is open for negotiations, it's time for trump to give up the useless tariff weapon. so in other words, guys, the door is open, but maybe with some conditions. >> eunice, thank you for that. we'll keep our eye what we're hearing out of china speaking of all of that, jamie dimon issued the annual letter to shareholders and did weigh in on several issues including trade. we should acknowledge many of the legitimate complaints around trade. as for the markets, he said many people underestimate the possibility of higher inflation and wages which means they might be underestimating the chance. the federal reserve may have to raise rates faster than we all think. dimon added he's perplexed when people are surprised by large market moves, recommended the white house consider returning to tpp, applauded thepresident on some of his deregular efforts, which has helped the bank. >> the dereg is crucial and you

can't just -- you can't emphasize it enough. there's no cases being brought against these guys, nothing. i mean, can you imagine the legal bill, what it looks like versus what it looked like two years ago, three years ago when tony west was running the show >> i think that this is a pro-trump letter i think it's a pro balance sheet letter i think the oddest thing, going back and forth with my friend will frost, your friend and your friend, that the buyback, the buyback continues right up here. my charitable trust owns it. wow, this is like fabulous, buying back stock. doesn't seem to be economic he's buying back stock but they are buying back stock. >> why do you say it isn't economic >> twice book. do you buy it back at twice book >> how many more letters do you think he's going to write? >> i got to ask the people who write for him. >> how many more years of jamie

do we have lloyd blankfine has indicated an exit is not too far off a year or so from now. >> don't you think he's more of a bob iger figure? i know like fox wants iger to just stay. i don't know who wants jamie to stay maybe -- >> that's another substantial letter, almost 50-page letter. >> substantial letter. he's humbled and honored and all of that stuff. he's a winner. so maybe like winners -- there's no hall of fame for bankers, maybe you just keep playing. >> just keep playing. >> do you have to wait five years to get in the hall of fame >> do wonder if after a certain amount of time regardless it's beneficial to have something -- somebody new. >> while we're talking we have another amazon tweet from the president. >> the fake news "washington post" amazon's chief lobbyist has another phony headlines, wrong, should read trump define

as it will barriers and massive ip theft typically bad reporting. that is in fact what the lead column five and six headline reads. >> now, you correctly of course carl earlier said amazon has chosen not to engage the president in this ongoing relentless attack. marty barron has been quote d as saying mr. bezos has absolutely no role whatsoever in our coverage. >> that the idea of it is preposterous. >> where is the actual tackle on amaz amazon, because he couldn't take out the 200 day because he walked away from it. >> does reference them as being amazon's lobbiest. >> didn't mention the delivery boy comment about the post office >> true. >> this does not directly attack amazon i think that's because the 200 day helped. >> the what? >> 200 day. >> the president follows everything

if you're going to break amazon, you have to take out the 200 day. >> somebody shorting the stock >> that's not your prediction that he's moving on? >> no, he's got to have more fun. he obviously -- what happened? did he get someone else's delivery at one point? >> i don't know what happened. i'm pretty confident it has a lot to do with that newspaper. >> with bezos and not a false delivery from prime? you don't think so i've been thinking it has to be bad prime. >> just to be clear, you're describing it as fun in jest because -- you might feel differently. >> we've been buying this right down, right into this. it's not like moby dick, it's more like captain quig. >> versus the cane mutiny. >> right. >> i'm not -- i don't understand what you're talking about. i don't get that. >> possess with the whale, bit

he was possessed with a lot of things, including -- >> trump is quig, not ahab. >> on this issue just want to make sure i understand, the literary illusions. >> when we come back, mark zuckerberg admits to a big mistake over the facebook fallout but something else he said is boosting the stock white house trade adviser navarro is with us, we'll talk china and tariffs. s&p finally got its back to back wins since march 8th and 9th we're back in a minute is the monolithic view of emerging markets obsolete? at pgim, we see alpa in the trends, driving specific sectors of out performance. where a rising middle class powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim,

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ahead of his capitol hill testimony next week, mark zuk erring berg telling reporters last night, made a huge mistake in not doing enough to protect user data. saying the personal information of up to 87 million users may have been improperly shared. stocks of pre-market downplayed the impact of the delete facebook movement on usage and atd sales, didn't see a meaningful impact on the business but added when you build something unprecedented like facebook, there's going to be things you mess up. take a listen. >> i don't think there's been

meaningful impact that we observed it's not good. you know, i don't want anyone to be unhappy with our services or what we do as a company. even if we can't really measure a change and the usage of the product or the business or something like that, it's still speaks to people feeling like this is a massive breach of trust and we have a lot of work to do to prepare that. >> now the changes to the api yesterday and some of these log-in approvals, some say it's a facebook we've never known. >> i think it was very significant. i put a phonenumber or e-mail, made it so that it was easier to on board and talk to at the same time, this thing was selling at below market multiple and reaffirmed the earnings. that is a reaffirmation of earnings, said nothing material. that means typically it means to 5% decline. >> that's what the market is keying off of this morning. >> why stock is going to be up. >> you know, also, it sounds

like he's almost to the point where he's willing to have someone come in on the outside that can happen in conjunction with his congressional testimony. he's going towards that. but the fact is that i think people expected big number cuts and he said no, we're not having big number cuts. we don't sell data, which immediately the media was -- this was a pivot last night was a pf ivot i think the long knives are losing, they were using a calculation that said that everybody who possibly ever -- it could be 87, they got ahead of the thing for the first time. to me this was a seminal conference call, he gave you what he was going to say to capitol hill and people liked it and wall street what they wanted, no number cuts. >> what the bulls have been saying they believed would be the case. >> now people are saying what is cambridge analytica and the attention span of a flea on cambridge analytica is coming --

>> not just the testimony but sheryl sandberg on "today" show tomorrow. >> i knew that was going to happen and then colbert and he's got to go on fallon. this is all going to happen. this is part of the charm offensive. >> that's happening too. don't worry about that these things are so easy i gave them the whole darn playbook. >> we're going to get cramer's mad dash and count down to the opening bell after a short break. take one more look at the premarket as futures held in n'gowa dot ay. at&t provides edge-to-edge intelligence, covering virtually every part of your manufacturing business. and so this won't happen. because you've made sure this sensor and this machine are integrated. ...& she can talk to him & yes...

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we got a mad dash for this thursday jim is back. we want to talk a little micron. >> the ubs evidence lab which powers a lot of ubs' research, the evidence lab which is like the underwriter's lab or something. >> we thoutd it was more like csi for wall street. >> it could be csi ll cool j comes out today and says we dislike sell micron, sick lickal memory concerns, big estimate cuts ahead. this is -- this stock acted poorly since it reported, almost straight down. the impact of this call actually could overshadow a lot of the buy recommendations they have because we've been waiting for prices to collapse we know flash has gotten weak. this could color -- >> what is the evidence behind this call though, jim?

what are they basing it on >> it's an evidence lab. i'm aware of that. >> i don't know, david -- >> what is the actual evidence >> the evidence lab has things that they are able to see things that we can't see. they can spray and see blood spray -- >> prices coming down. >> yes. >> as a result of their forensic work. >> have you been in a lab? who are you to criticize >> i'm not. >> bunsen burner. >> this micron, if this happens and they break micron, who knows when it's going to end. >>y where does it end? >> evidence lab. we'll talk a bit more about spotify this morning, just got a filing on hilton opening bell right after this. it's great to finally meet you.

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back above the etf volume. now we've got gold down 13, 14 bucks, jim, vix a little bit as well. >> i think that every day the mood changes i think that we are at the kudlow phase, which is don't worry. don't worry, don't be happy but don't worry with good resolutions going to come. you know what, there are two things that happen when i was away that were amazing, the adp number, the strength of the jobs number, the lennar quarter, basically -- there was no holes in that. and it was really important because they even said, look, as important as higher rates are, what's far more important is the participation rate so let's look at the participation rate tomorrow. >> not to mention while you were gone, those auto sales numbers -- >> they were fabulous and gm not hurt because they make the cars there. if you have auto come back and

housing come back, that means you have rail come back. send fedex and ups up. trucks literally can't have enough trucks in the permeon a lot of positives >> there's the opening bell on the s&p 500 at the bottom of the screen the list of the top 100 venture capitalists from around the world. to your point, jim, journal today says in terms of china tariffs, it's tesla bmw dime letter that are at risk over gm and ford chrysler. >> yes. >> also a discussion about how it's less of a problem for boeing than it is airline traffic. >> wasn't that interesting of course, airbus sold out and longer term there are pe shrinkage that goes on if you

think you're going to lose china at all but the two firms came out and said don't worry about boeing. i think that's really important because a lot of people worried about boeing so don't worry about apple because they didn't hit apple. you have a lot of don't worries, soy is really interesting because you've got the american soy -- they've come on our air and said it's one third goes to china. one quarter goes to china. i think that the big issue will be can the farmers get subsidies. larry kudlow famously said industries that are challenged by tariffs, subsidize them rather than have a trade war i think those states that these people -- the farmers are from they went for trump. look for the soybean industry to be subsidized and forever hold their peace. let's not worry. >> the calendar is helping in that harvest is not enough october. so farmers do have time to plan. >> right. >> through the summer. >> so far -- >> we'll see how the negotiations -- >> so far the planning has been

as pro soy as soy is such a good business for us, but i would just emphasize, i know the farmers are saying that soy prices have come down big, they are not doing that well. i also know that the subsidies for farmers in this country have mr. agreg yan, don't worry about the farmers. the former farmers will boycot. larry favors subsidies for industries challenge d rather than trade wars. i think other than a tight fisted republican party, that would be what would happen tesla, i don't know, came out and elon musk and really challenged the bears and said he doesn't need me money, everything is coming up roses. >> there's two sides here. one side says to argue you don't need a special financing for the rest of the year should be up more others argue no ceo would take on the shorts as aggressively as

he did if he didn't know he could come through. >> well, there are a lot of -- jp morgan put on a great piece about -- tesla and pictures. and everything has been the opposite of what elon musk has said but the beliefers and true believers are always there it's easy to say i said these things and the stock went up big, you know what, we could always use some money. rainy day. rainy day. >> my guess is he would take it if he could get it maybe you drive the stock down and shorts cover with the offering. >> wow. >> right >> he plays the shorts he plays them better than the president. >> maybe >> by the way, on the subject of china overall, which we've been talking -- >> what do you got there >> take a look at hilton, only down 1%. i did want to make note of a filing by hna group, the incredibly inquisitive insurer

out of china that bought -- well assets in a lot of different industries but it has been as many chinese companies pulling back the big insurer taken over by the chinese government, hna has not been taken over but did say it plans to sell some or all of its 26% stake in hilton. so there's a lot of potential stock coming for sale there. they say they've determined to pursue a sale through one or more registered public offerings. some or all of the common stock of hilton. terms still subject to market conditions other considerations, they are getting out of hilton though. >> it's funny, you read these chinese -- who really runs these companies. one of the funniest ones i read this morning was that don't forget, if you put a tariff on boeing, the companies that buy it are airlines and the government owns 50% of the airlines so they are paying the tariff i wonder, david, whether -- what

it says about the government and hotel business >> the chinese government. >> chinese government. >> hotel business, yeah. >> because the chinese government favors the cruise business -- >> it does >> norwegian cruise on, yeah 25% of the people who take cruises are millennials. >> i thought you were going to say they were chinese. >> no, i was just talking about the experiential economy for a moment i do think the chinese are -- they are hurting -- there's a little more hurting themselves, got to hand it to the president on that. these companies all -- it's a communist country, how quickly we forget. it's a totalitarian country. >> leader for life. >> i'm not talking jamie dimon. >> leader for life and take people away like chairman wu without due process, the guy who ran before they -- he has not been heard from. >> they executed how many white collar criminals that's -- that's a capital crime white collar. >> jim, you weren't here for the

spot spotify direct list and it was interesting yesterday hit 135 and the high was 165.90 on day one of trading. >> it's a buy. >> these labels, the record companies as we still describe them, music companies, they own a good deal of this stock. sony sold 17% of its stake but they weren't -- they were waiting, we're not going to be stupid and sell on the first trade. they wanted to the underwriters -- not underwriters people involved in organizing the direct list encouraging these labels to sell put your stock up now, let's -- they didn't. then of course, when this thing started to come down -- >> they were there, started to hit it. >> that is in part why we hit 135 yesterday. sony one of them saying they sold 17% of their stake. it's going to be a gain for all of these companies because they were in it a much lower level on spotify but the stock rebounding today. >> it feels like the google deal they had an untraditional way

to -- >> they did raise capital. >> they did but it was in the '80s and then the next -- it was in the 500s. i think spotify is a great company. spotify -- remember this is the bills you don't look at. >> sort of the point today, compare it to the netflix all you can eat video, they see 300 million subs by 2021. >> i think it's possible remember, this is an artificial intelligence company they are able to figure out what you want -- >> it's a technology company. >> great technology company and software company xbl i think that's what potentially some say has allowed them to take such a leap and -- >> it scales -- >> distinguish them from their competitors. >> scales like mad apple, there was a story, they have 40 million -- >> they have 40 million. spotify has 70 million paid and 90 million doing the ad supported rightnow. >> i mean, i've met with those people and i think they have the

best model of the companies that have just come public. and i absolutely love a model where every one in my family has it and pays it separately. actually, i pay everything. >> you can do one family plan, it's $14.99. you shouldn't have them doing their own. >> tell that to them dad, i want it my way. >> it's the same, i'm trying to staff y save you money. >> david, independence is a tough thing to encourage. >> i'm trying to save you money. >> speaking of apple, both goldman and citi had notes about whether or not to focus on capital returns and buybacks or the phone cycle. almost conflicting views. >> remarkable this morning, the piece about jim -- i've always liked his work he basically says ignore the p tepid demand it's about capital redeployment. didn't say it was about services

the big bear case is the 10. now you've got people saying ignore the 10, ignore the ten? how do you like that because you have 100 billion out there in capital would be returned. this is the first ignore the ten i've seen. and it's a scary thing for the shorts because the shorts are all keen on a 10 short fall. so what do you do if the ground is set for a short fall but then a return of capital. >> we remember that net cash neutral position from the quarter prior. >> that's right, yeah. >> i think may 1st is the date -- >> we'll get -- one we're going to get a lot more detail on that return. >> we're seeing -- jp morgan, a big on the letter. >> on the letter real quickly this week, i've been covering a lot of cbs viacom the stock is down a little bit the counteroffer has yet to be made yet

as we reported yesterday, viacom wants something in excess of .62 but the key continues to be this battle and that's what it really is becoming between sherry redstone and leslie, they don't want to paint it that way. special committee says it's supportive of leslie having joe, the number two and wants it that wei way. it's shari versus leslie, that's what it's going to be. >> one is an owner and one is an employee. >> i will give you that last word there on that it's a perfect place to end. >> i'm trying to recall when a employee was able to trump the owner. i mean, even though i always felt he's one of those guys for life, no chinese premiere, jamie dimon, les. anybody who first name -- they can do it for life. >> for life. >> first name analysis. >> we thought lloyd might be but he wasn't. >> boeing, jp are leading the

dow up 133 let's get to bob pisani. >> nice open today and it's the old growth story back looks like early january look at the sectors here the stuff that moves the markets, financials and tech, banks and industrials, those are the ones that matter, lagging consumer state, looks like early january. but things are not like early january. the markets are lower and much more volatile now. and since this whole trade thing has heated up, the markets suffered a bit technology and materials and financial, here's the same thing i just put up the growth stocks are down and industrials in particular have had a tough time of it. there has been some damage over all of the market in terms of contracting multiples, markets and stocks trade on multiples, pe multiples and the markets have been coming down recently for some of these big industrial names. i know every day we use boeing

as the poster child for what's going on in the trade wars, but in early february, i just put february 1st it was a 26 multiple now it's a 23 multiple caterpillar was 18, now it's 16, united technology was 19, now it's 167 and change, now it's 20, deere 20, you get the point here the market has taken these stocks down because it perceives much higher risk i want to point out, they are not lowering any earnings numbers. this is just the market taking the overall prices down saying, we're not sure these companies should be valued the same way anymore, given the risk. maybe this will turn around but this is the way i look at the market and why i say there's very clear damage to the whole debate -- to the markets because of this whole debate around trade wars where does this end? i don't know, does the president want a trade war or not? i don't know maybe his base does. the republican party certainly does not i think this will probably play out over the next 30 days and we'll get an answer. thankfully before that we're going to get earnings. now a lot of people turning to

tech which is going to be 24, 25% increase in earnings apple will be may 1st. they are a regular consistent dividend increaser look at apple in the last several years, every year they increase the dividends about 10%. i don't know what they'll do on may 1st. that's going to be the earnings but i'll bet you if you have the regular pattern it's going to be close to 70 cents for their earnings numbers that they'll announce and we'll keep an eye on that. remember the repatriating a lot of money what do we expect tomorrow could have big market moving news because we have the jobs report and wages report and fed chairman jay powell will speak in the afternoon on the state of the economy. 161 points on the upside back to you. >> i will take it. want to get to a faber report this morning part of my job, i talk to a lot of bankers and lawyers who deal in m and a it seems everybody is fairly busy, some working on deals they

are not talking about but large conceivably interesting transactions but something that's come up of late of in single one of apparent conversations i've been told concern on the regulatory front that far exceeds anything people in this industry have seen previously why? i guess it's not that hard to imagine. if you are a company that is potentially engaged in or considering doing a large transaction, that will have meaningful implications for the industry of which you're a part. you'll wonder, what's the administration going to say? what can i expect on the antitrust front. what am i getting myself into? apparently those conversations are taking up a larger amount of time than even discussions around things like price or social issues. why? there's a few things that happened that give deal makers pause or those companies that are considering it let's look at them one is that block of course of the qualcomm broadcom potential potential transaction.

stepping in there was highly unusual and we detailed in so many different reports over the course of that but it did send shivers down the spine of any number of different companies saying if that got blocked could i conceivably run afoul of concerns about national security the doj case against at&t is ongoing. 14 witnesses in and i'm told right now, at&t looks pretty good they are kind of taking the government's witnesses and turning them around often times on tuesday the government had a better day apparently but that's another case it was not expected in any way, shape or form. it did come and it is now being litigated if you're a company considering something, you're looking and wondering. what we've been talking about every day, continued attacks on amazon by president trump on various forms of its business, questions about whether or not that is in fact relevant well it is relevant if you are a

company haconsidering doing something in the public realm. for all of these reasons it's figuring prominently in conversations taking place will it have the effect of stopping or slowing deal making? it's possible. it is possible finally jim, qualcomm nxp is another one -- >> i was hoping you would get to that. >> could hurt the deal maker. >> stock is being killed. >> nxp trading around 115.62 april 17th is the deadline as of now that the antitrust regulators in china have to rule on this deal i have so many people asking me questions, i'm asking so many questions, you know what i'm getting? nothing. it is -- it's a dead silence out there and i believe that may very well be the case for qualcomm in terms of what they are hearing in terms of what they would need to do or anything else. we'll see. when the 17th comes, according to some lawyers who were steeped in chinese antitrust law,

doesn't mean it ends, it means they could continue the conversations it would appear on the 25th that two companies have to reamend their merger agreement to extend it would appear nxp would want to do that. otherwise they can't collect a $4 a share break-up fee if it is turned down. but jim, if this deal were to be turned down by the chinese -- >> oh, man. >> first of all it wouldn't seem to be any reason other than the increased tensions between the two countries. it would be strange. the chinese wouldn't get their piece of flesh which would benefit them from saying yes with some conditions we'll see. it would be a bad thing and it would chill any deal making on either side that involves china or the u.s. so to speak. >> i've been watching this one this is really the make or break. nxpi is mostly about near field communications and auto. i mean, jesus, really nothing, no national security there i'm surprised you brought up the reference because that really does -- >> which one >> the pound of flesh.

>> yes. >> they bleed. >> they do bleed. >> so does qualcomm potentially. >> qualcomm, if they have to do concessions, no offense to shakespeare -- they got the bard deal through, medical devices were listed. >> it's amazing how you get it all in there. >> let's get to rick santelli with a few quotes from shakespeare up his sleeve as well in chicago. >> how's it going, guys? if you look at this morning's number, we had our february read on the trade balance, which was a deficit which was 57.6 billion with a minus sign. the last time it was at this level, a long time ago, october of '08 that chart starts a couple months earlier to give you a context of where we stand. look at the two-day of two year note yields we're hovering at 2.30 and haven't closed 2.30 or higher since 21st of march

they surmounted what had been home for 22 sessions, 2.80 if we look at the two day of bunds, traded darn close to 54 basis points we all know it's been hovering right at and slightly below 50 haven't had a 54 close since the 21st of march. let's look what's going on with the hyg. i've been paying a lot of attention to this high yield/jump on etf. but for a good reason. gives us a nice feel for the anxiety levels with regard to how stocks and the credit markets and fixed income all fit together see the rounding smile right above 84.90. that's a good thing. we didn't make a new low closing price for that index and it's important. dollar index, hey, we're popping just like stocks, some of that is leading up into tomorrow's employment number as you see on the chart, we are now hovering

on the february 1st chart below the spike in the middle. that's a mid-point for closes for the dollar index watch that level around 10:40 eastern, trump trade adviser talked about a lot these talked about a lot these days, peter navarro. we'll have him on a conversation about tariffs. carl, jim, david, back to you. >> we can't wait for it, rick. thank you very much. following rick's interview, we'll talk to the national association of manufacturers ceo jaye tim mon jay timmons. dow up 133, holding on to meso opening highs. back in a minute. think your large cap equity fund has exposure to energy infrastructure mlps? think again. it's time to shake up your lineup. the alerian mlp etf can diversify your equity portfolio

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any time you have boeing in the green, it does help. up almost 2% here, back to 333 the dow is up 151. 'lgest 11. wel t op trading with jim after a short break.

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let's get to stop trading with jim >> etfs have really changed the way we think one of the biggest changes is that wells fargo has hurt the banking group. when i see ubs going from mutual to buy, that really helps the etf more than anything if you can get wells fargo moving, you can get all the banks moving very significant

>> upgrade citi too. what's on "mad" tonight? >> one of the stocks down the most is ollie's bargains and pennsylvania realty. this is sears, jcpenney. what do you do jcpenney less on the ropes >> jim, nice to have you back. >> man, next time. there's no earnings. >> no blackout window. >> little did i know any new tweet on amazon? >> twoowe'll see you tonight, 6 p.m. when we come back, peter navarro. the dow up 152 ♪

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education to take your trading to the next level. only with td ameritrade. ♪ good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen, david faber at the new york stock exchange. markets continuing to build on yesterday's big reversal to the upside, erasing that 2% intraday

dp deficit to close green almost closing in on a thousand points from the session lows of wednesday. we'll watch that road map begins with fears of a trade war. easing stocks, extending the rally after yesterday's comeback >> plus, failing to gain traction nike admitting to the company's shortcoming and promoting diversity and gender equality. we've got new details on the company's plan to turn it around >> and still under pressure, facebook ups the number of people likely impacted by its growing data scandal what the ceo mark zuckerberg said about that breach jamie dimon unveiling his annual letter to shareholders. wilfred frost joins us with more >> hey, carl so jamie dimon has a positive outlook for the economy for the next year or so. this was in part due to tax reform, which he described as, quote, critical, and in spite of recent volatility. in fact, there was support for president trump's attempts to renegotiate the terms of trade,

the cause of that volatility, which he elaborated on moments ago. >> there are legitimate complaints about trade the president has pointed them out. his staff has pointed them out those around intellectual property, nontariff barriers, lack of reciprocity in what you can own. we should acknowledge that i think the chinese know that. our view is that you should really tell them what you really want, tell them when you want it, and tell them what you're going to do about it they may have legitimate complaints too listen to the other side a little bit don't be one sided about it. and work out a deal. >> on china, he pointed out that it is the second largest economy in the world and is home to 20% of the fortune 500 economies yet, it still considers itself a developing nation. it should not be subject to the same wto standards as the united states and other developed countries. on markets, he fears that, quote, many people underestimate the possibility of higher inflation and wages, which means

they might be underestimating the chance that the federal reserve may have to raise rates faster than we all think but overall, he's relaxed about markets and, quote, a little perplexed when people are surprised by large market moves. he also made clear he still prefers stock buybacks as a tool for returning capital. quote, even at or above two times tangible book value. he forecasts 17% r.o.e. for the foreseeable future shares up about 1.5% today guys >> all right thank you very much. meantime, as carl mentioned, stocks are surging this morning as the trump administration has played down trade war concerns the dow up triple digits after erasing that 510-point deficit yesterday. stunning turnaround. stocks are now trading at two-week highs let's bring in bob dahl. is it the idea that the trade back and forth, the tit-for-tat

with chan is heading more toward a negotiation than all-out trade war? >> that's certainly markets as you know, sara remember this news from china came out yesterday morning, middle of the night. very low liquidity so we traded down very quickly and a substantial amount i think we're in a fragile, volatile sort of stage since the correction, my view was the 2532 low, the 2875 will be the high and the low perhaps for the year we're going to just bounce around there so i think we've probably seen the low in the last few days has been a successful test of it >> why why is wall street looking at this glass half full is it really the comments of larry kudlow and peter navarro that this is just a negotiating point? why isn't the worst being priced in >> well, because the probability of the worst is not real high in the market's view.

i would concur with that look, remember the art of the deal you go out there with trumpets and bull horns, and you argue 20 and your negotiator on the other side argues 10, you settle at 15 i think that's where this is going. the market is looking at other things beyond trade. >> i want to bring in tom lee, who is here, to join the conversation tom, good morning. >> good morning. >> welcome so do you agree this is just art of the deal and a brilliant negotiating strategy for getting a better trade deal and terms with china >> i agree that it's actually important for the u.s. to negotiate better trade deals because in some ways, we do have unfair trade agreements. i think it's market expectations and perceptions around that that's caused a lot of turmoil ultimately, i think it's a good thing. >> how effective is it to come

out, talk tough, but at the same time publicly talk the markets down by saying we don't mean to be as tough as we sound? >> well, i guess it reflects a certain style of leadership in the white house today. i mean, i don't know if that's what other administrations would do, but again, probably not against the idea of improving our trade relationships. improving the terms of our trade relationships. i think ultimately it may lead to some good things. >> and your expectation, kudlow talks about a pot of gold being at the end of that process but how much collateral damage can happen to stocks in the meantime >> as you can see now, just even talk of this makes markets nervous. i think that's why what's unusual is the volatility has picked up for equities, but the volatility has been quite low for bonds. that divergence actually is usually a viable signal. it's something we've been studying it looks like it's creating a buying opportunity

>> bob, wilfred laid out some of the commentary from jamie dimon warning about the risk of rising inflation and tighter monetary policy is that a concern for you going forward in stocks? i know you're looking at a period of a little lower volatility, but that sounds like a dangerous scenario, which could lead to bigger swings. >> i don't disagree, sara. i think part of the reason we've had six years in a row of rising p.e. ratios as we've had falling interest rates and falling inflation. that game is over. so our guess is the p.e. ratio on the stock market, the end of the year, will be lower than it was on january 1st but thankfully, we got good earnings to make up for some of that the reason for pressure on valuations, rising interest rates, rising inflation. not the horrendous levels but enough to pay attention. >> you also think earnings are going to come in better? we've seen them being revised higher at this point >> yeah, you raise a very good, subtle point

earnings, no question about it, are going to be good the question is can they beat these higher expectations. that's what moved markets and that's the right question. our guess is we'll have good earning. whether we can beat the high expectations is another story. >> hey, bob. to the degree we retest some of these headline averages, moving averages over time, the more you test them and bounce, is that a positive sign? or the more you test them, is there more chance you eventually fail >> the successful test raises the probability that we've had success and the tests end up being successful there are never any guarantees on these technical movers, as we know i think the test even in early february, the secondary test later in the week, the test at a much higher level a month ago, this test, they're just adding up of course, you also look for

less volume, fewer stocks, the classic technical divergence no guarantees, but it raises the probability every time it happens, carl. >> tom, heading into earnings season, as we just discussed, where are we on the forward p.e., and are things perhaps not, you know, set up for positive surprises >> i just don't think that's very demanding i think investors have good risk-reward on stocks here expectations have come down. i think we're going to get good news out of earnings while interest rates really haven't pushed up, i think underlying inflation trends are positive that's good for a lot of sectors that generate money from higher rates. i think you still want to be tilted toward value and maybe have less exposure to f.a.n.g. >> i know you like the acronyms. what are you in, c.r.a.p.? >> icrap >> conceivably, they're going to

have good quarters, including facebook, where zuckerberg said he hasn't really seen any erosion in the underlying base >> fundamentals are still very strong in f.a.n.g. these companies have built really good defensible channels, but valuations are demanding i think when you think about rising rates, investors may not be as eager to pay for high multiple stocks. >> everyone wants to know, tom, where you are on bitcoin this morning. you do have a note that you think capital gains have amplified selling, and it might get better after tax day >> yeah, we just published a piece looking at what do u.s. households owe for capital gains on bitcoin and cryptocurrency profits. we think a low estimate is around $25 billion, which is almost a 20% boost to what the irs tax receipts will be for capital gains this year. it's a huge amount, but for the cryptocurrency cryptocurren cryptocurrency market, that's huge >> so your confidence is not shaken your target for this year. >> no, we're still pretty

confident. the port trends important trendn with crypto is adoption is still growing, it's a big millennial story. we have big pressure because of taxes. >> some selling pressure it's been cut in half in the last few months. tom lee, thank you very much bob dahl, good to see you as always as well mark zuckerberg discussing facebook's ongoing data privacy controversy with some reporters yesterday, revealing that users' public data was more widely compromised than previously thought. julia boorstin is here with more >> hi, carl. facebook says the data of as many as 87 million of its users may have been improperly shared with cambridge analytica the good news, mark zuckerberg says, is that the company has not felt any meaningful impact of this scandal in its usage or the business as a result of this it was that comment that i believe did help drive those facebook shares higher they're now up over 3%

zuckerberg did say, though, he made a huge mistake in not understanding the scope of his responsibility to protect user data now he says facebook is investing in hiring with 20,000 people in its security force by the end of the year. and he says they'll give all of facebook users the same controls that will be required by new european privacy rules zuckerberg says he needs to chair if i h clarify how facebook works and uses data. >> we have to ensure all those developers protect people's information too. and it's not enough to have rules requiring they protect the information. it's not enough to believe them when they tell us they're protecting information we actually have to ensure that everyone in our ecosystem protects people's information. >> zuckerberg was pressed if he should still be the ceo of facebook he said yes. now it's all about learning from his mistakes and that as the founder of the company, he's still the right guy. >> the reality of a lot of this

is that when you're building something like facebook that is unprecedented in the world, there are going to be things you mess up. >> zuckerberg also warned that security will be a never-ending battle for the company this, of course, comes as he gets ready to head to capitol hill to testify on both tuesday and wednesday. carl >> julia, we'll see you in a bit. thank you very much. let's get to seema mody, get a quick market flash >> an interesting stock move in light of tensions between china and the u.s. a filing shows that the chinese conglomerate h&a group is looking to sell its stake in hilton the market expectation is hilton will likely absorb the shares versus finding another third party to purchase its stake. but h&a has been under pressure by the chinese government to dispose a large majority of its foreign assets to pay back a bunch of debt it currently sits

on in fact, in the last six weeks, it says it's selling shares in park hotels and hilton grand vacations, which owns a number of timeshares. hilton shares were down about 3% on this news of course, timing very interesting in lieu of u.s./china relations being a big talker today, carl >> all right seema, thankst we'll ta -- thanks. when when he come back, fierce of a trade war appearing to ease. we'll get the white house's take on the tariff threats out of china with peter navarro we'll talk to rick santelli in about 15 minutes dow up 219 as we see another session with the dow moving at leas20t 0 points back in a minute welcome to holiday inn! thank you!

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stocks extending their gains this morning, boosted by big technology also some easing of those concerns over trade. when it comes to a brewing trade war with china, barclays saying that tesla could be the u.s. automaker at most risk elon musk himself said march, quote, current rules make things very difficult it's like competing in an olympic race wearing lead shoes. in that case, referring to some of the tariffs on the chinese side for more, we're joined by jim stewart. his column upcoming this week will focus on tesla. in fact, some nice drives you took in a model 3. you speak so often of the

promise of autonomous vehicles this is not autonomy, but it is moving towards it, isn't it? >> it's moving there i think that's probably the most important message i took out of this this is not self-driving auto pilot is a misnomer but it is -- if you've never done it, i have to say it's a kind of freakish experience to be sitting there you have your hands on the wheel, but it starts moving on its own. the car is moving in the lane. it's going, it's stopping. you know, it's incredible. the can pacify pacity is pretty especially lane changing you still have to be vigilant. i was kind of hypervigilant, bing what it does is it enhances human skills first of all, it can see more things than you do in the lane changing, it eliminates the blind spot. there is no blind spot when you have all these detectors looking all around the car but i did have a near miss changing lanes because there was a very speeding car coming up in the lane it can't yet detect how fast a car is approaching

so you still have to look in the rearview mirror. you still have to be alert it's going to -- i can see that it would make the driving experience safer once you get used to it, but you also can't get lulled into thinking, oh, the car is going to do everything i can text i can eat. i can watch harry potter on the monitor. >> you also enjoyed the driving experience itself. >> oh, i love the car. it is beautiful. when i first saw the 3, i thought, well, it's not quite as disting distinctive as the s >> it's a lot cheaper. >> you're driving the souped up one. >> i was driving a pretty high-end model which is not all that cheap i thought it seemed like really good value to me it is beautiful. the interior is so spacious, calming. i found it very easy to use on a first try with the interface only on the screen i mean, it's a great car i can see why it is going to be a formidable, competitive challenge. by the way, you know, the chinese, they already have high tariffs on the tesla they want to make them even higher they're only going to be hurting

their own people >> does that enthusiasm translate to the stock for you >> well, you know, i don't own individual stocks. tesla is, you know, clearly a speculative play, but i certainly like the story i think tesla has, you know, already shown it can surmount formidable odds. it certainly looked like the selloff was overdone earlier this week, and it has jumped up on that. but it's out there in, you know, very high valuation territory, high risk, but i can see -- and it also has the story going for it those kind of stories always make me a little nervous but look at amazon that was a story stock for years. it's done very well. >> what about the trade factor here, which we're all focused on this week. automakers like tesla find themselves in the crosshairs how do you see it playing out? >> i did a fair amount of research into the history of tariff wars and trade wars the one thing i really take away from it is that generally speaking, the parties to the war

never win. maybe one could say they got an advantage over the other it's the buy standarystanders te wars >> like brazilian farmers? >> brazil, canada, mexico. these big exporters of commodities. ironically, we're going to be helping some of the very people, very countries we're supposedly engaged in tough negotiations with on other fronts so that is nonsensical i do feel -- we know larry kudlow has moved into the white house. he's a known champion of free trade. he understands this, i think, which has been very reassuring to markets i think when he spoke yesterday, that carried, you know, considerable weight with investors. i think there's hope, certainly among investors, that we do not get into this war. no one is going to come out ahead. the final thing i'll say is when there is a war, the winner is usually the more powerful trading partner. china and the u.s., they're both pretty evenly matched, but which population is going to take more

pain before they cry uncle an authoritarian dictatorship that can impose hardship on the population or a democracy where, you know, farm states are going to vote somebody out that crushes their economy. you know, i rest my case there >> although maintaining social order is a key for xi and having people working is a key to maintaining social order >> maybe it's more about which market throws the biggest tantrum. >> you mean which stock market >> there's been pain on both sides. >> it's not good for stock investors in either country. no question about that >> jim, thanks >> sure. >> jim stewart when we come back, the fix at nike. new details on what the company is doing to clean up its corporate culture. getting another check on stocks at this hour going strong here after that big u-turn we saw in yesterday's session. the dow is up 187 points, almost 0.75%. "squawk on the street" will be right back

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at commodities >> good morning to you, carl that's right the stock market moving higher this morning most commodity etfs are as well. take a look at shares of the xop, up over 1% in early trade this is the oil and gas exploration etf, which is actually down about 9% in the last three months because of the volatility that we've seen in the equity markets and the impact that's had on oil prices. now, equity moves have been dragging energy around with them because of concerns of a trade war. that suggests, number one, a stronger dollar, bearish for crude. number two, a reduction in demand forecasts, also bearish but today oil higher alongside stocks an added bonus, it is not one of the commodities targeted by the chinese for tariffs. that's because the market is so large that the chinese reduction of u.s. crude imports would be absorbed elsewhere now, energy is being highlighted as one of the potential bright spots in the market this year with crude prices stabilizing a little bit, thought to be moving higher in the coming months. energy stocks are going to move along with it. so watch the xop, guys >> we will do so

jackie, thank you. got an update for you on the recent nike scandal involving employee complaints about equality and a boy's club culture. now nike's human resources chief speaking out on the company's shortcomings and promoting diversity, telling employees in a memo that the sports apparel giant has failed to gain diversity. this comes after allegations of workplace misconduct in this memo to staff, matheson says nike wants to, quote, create a culture of true inclusion. she also pointed out that 29% of the company's vice presidents are women, even though the total work force is half and half. half women, half men in the u.s., only 16% of vice presidents are nonwhite. nike will make some changes, including targeting training programs and mandatory training

for so-called unconscious bias guys, my take on this story, which has been developing and the journal has really led with over the past few weeks, is it's not doing much harm to the stock or to the business nike came out with a blowout earnings quarter thanks to double-digit growth from china and western europe the stock is actually the second best performer in the dow this year after boeing. but this is embarrassing it's a black eye and it's a warning shot for other consumer companies and consumer brands that millennial customers are going to increasingly care, and employees as well, about diversity within the organization, and they're going to have to pay attention i think nike is going to be a poster child, and it's going to lead when it comes to making these kind of changes. >> interesting how they've sort of escaped the trade discussion despite relying heavily on china. of course, their products not specifically targeted this time, as far as we know. >> and that's a way bigger risk, obviously, for the business than these culture problems, but clearly nike was out front in promoting the tpp, the

transpacific partnership remember, president obama actually traveled to nike's campus when he announced the tpp. so clearly this trade policy is moving the other way nike and other consumer brands like apple stand to lose so far american apparel consumer products has been left out of the tariffs, but who knows if this thing escalates, it could be dangerous >> all right sara, good stuff we're watching nike. when we come back, white house trade policy adviser peter navarro is back with us. he'll talk to rick santelli about china's retaliatory countermeasures and a lot more dow up 207 "squawk on the street" is back in a moment.

i'm brian sullivan here's your cnbc news update

yulia skripal, who was poisoned along with her father, a former russian spy, issued a statement. quote, i woke up over a week ago and am glad to say my strength is growing daily i'm sure you appreciate this episode is somewhat disorienting and hope you respect my privacy and that of my family. the poisoning increasing tensions between russia and the west three buses believed to be carrying expelled american diplomats departing from the embassy in moscow. the u.s. and south korea holding military drills in that country. the exercise held twice a year involve about 24,000 u.s. troops alongside 300,000 south korean forces and britain's prince charles and his wife camila took to the beaches of australia's gold coast where they met with members of the welsh team in the commonwealth games as well as some junior lifesavers the prince opened up the games

on wednesday that is your cnbc news update at this hour. back to you, carl. >> all right, brian. thanks so much welcome back to "squawk on the street." i'm carl quintanilla with sara eisen, david faber at the new york stock exchange. fifth day in a row where the dow has moved 200 points or more we'll see if we hang on to these gains. about 900 points off wednesday's low. let's get to the cme group and rick santelli for an important interview with peter navarro hey, rick. >> hi, carl. yes, indeed. thank you. peter navarro, welcome you're a popular man right now in more ways than one. thank you for joining me this morning. >> my good friend rick how are you. how are things out in the midwest? >> things in the midwest -- and that'll be part of the discussion today there's a lot of uncertainty in the midwest. we'll get to that. i guess the best place to start, peter, as i step back and try to look at all the comments i hear about what the trump administration is trying to accomplish on trade, what i see

is the big issue is pitying the process and the procedures, which many people are not comfortable with versus the actual policy which many, including jamie dimon, seem to be okay with maybe we can talk about that the process of how you are advising the president with regard to what you'd like to accomplish but how you're going about doing it >> sure, sure, rick. let's start from the biggest picture of all we've got four points of the compass strategy to drive economic growth, wages, and jobs here in the great united states. president trump has cut taxes, deregulation, unleashing our energy sector. when it comes to trade, the vision here, the strategic vision is to get to a world not dominated by massive trade imbalances driven by unfair, nonreciprocal trade practices, but rather to a world of free trade. in order to get from here to

there, president donald j. trump is doing what he said he was going to do on the campaign trail, which is taking steps through trade policy, through active trade policy, to try to bring that world about it's very bullish for this economy. the four-point compass plan is very bullish we think that corporate america and workers will be much better off if we can get to that place, and we've been moving to that place. >> let me interrupt you. i agree with everything you've said the president talked about many of these issues, especially with trade and china in particular and europe as well and other points around the globe, about how trade could improve. the issue is many of his critics, especially economists, have two big issues. they feel it's just too spur of the moment, too flippant, that he just speaks very off the cuff regarding this and that his poster for this is the trade balance with individual

countries. economists seem to have a problem with that. can you address those two issues >> sure. let's talk about process first it's counterfactual that any of this thing is unsystemic we go back to the campaign where president trump identified back in june of 2016 exactly what he would be doing if he were elected president. all of the things that were in that speech are coming to fruition, including 232 investigations on steel and aluminum, 301 investigation on intellectual property. he said exactly -- now, what happened when betohe took office we went into a process which was over many months the good news here is from the inner agency process, every agency of government as well as everybody inside this perimeter of the white house is united behind the goal of reducing chinese intellectual property theft and ending this pernicious practice of forced technology

transfer this has been a lengthy process. even now when the president has imposed $50 billion in tariffs to basically recover the harm china does to us with its unfair trade practices, we're going to go through 60 days of comment, hear from everybody about that, and see where we are at the end of it. meanwhile, there's going to be discussions ongoing between ambassador lighthizer and treasury secretary mnuchin on our side and officials on the other side, to get to some place where china stops doing what it's doing in terms of its aggressive attacks on the economy. >> basically from that timetable, we have months and months before the words actually get put in a form where they could have some bite between then and now, you think a lot can change am i saying that -- am i interpreting -- >> and let's think about process. let's go back to january this administration, president trump, had the courage to impose

tariffs on solar and washing machines he was criticized for that, but that was a process that went on many months before through the international trade commission very orderly and systemic. they came up with a good decision president trump implemented it and what happened? we got a flood of new investment into this country -- >> no, and i see that. peter, today we had the most recent read on the trade balance, which of course is a deficit. it was a little north of 57 billion. if you go back, and i think we have the chart, that actually is the widest the trade deficit has been in 9 1/2 years. october of '08 once again, i get back to the fact that if you really describe what a trade deficit, whether it's month over month, year over year, with any given or group of countries, economists would fill chapters of books explaining it. they have a real problem thinking that this is a zero-sum game but i think to explain it to people and to talk to his base,

you put it a certain way but do you think that in your mind the issue is not necessarily a zero-sum game with the trade deficit. is it more than that can you express it in more macro terms that economists might be more receptive to? >> sure. a couple things. let's talk about why deficits matter and why we need to get to a balanced trade situation if you think about trade deficits, our view is that for every billion dollars of deficit that we run that's driven by unfair trade practices, basically ships off about 6,000 jobs to other countries. so if you aggregate that up with the european deficit of $150 billion trade deficit in goods, that's over a million jobs we lose because of unfair trade so that's not a sustainable

equilibrium. what we're trying to do with that deficit, which is close to about $500 billion a year, is get that down. there's another big reason warren buffett refers to a phenomenon called conquest by purchase what it means is if you run unsustainable, big deficits year in, year out and foreigners accumulate trillions of dollars of our wealth essentially, they come back, and they buy our assets here and basically over time it's like a reverse mortgage in which eventually we have to turn over the keys both to our house and our cars and our factories. so we need to get to a world where we have not these massive trade imbalances, rick, that are driven by unfair trade practices but to fair, reciprocal, and balanced trade that's going to be great for the stock market it's going to be great for corporate america. >> real quickly, natural gas -- let me interrupt you we're almost out of time, peter. natural gas has always been a

favorite of mine years ago i did a conversion of a truck to natural gas we have a lot of lng i would suspect as wilbur ross pointed out with one of our very own reporters that one of the ways to get this trade imbalance more under control would be to arrange to have more lng exports to china your final thoughts on energy, and then i'd like to go to one more area that's more midwest concerning >> sure, rick. the third point of that four-point growth compass is unleashing our energy sector it's amazing what president trump has done in creating an energy sector and natural gas petroleum. you we' now we're exporting that to the world. we're very bullish on that we'd love to export more lng, not just to china, but to the rest of the world. solving our trade deficit with china with lng, though, won't happen it'll help shave a little bit

off it, but that shouldn't be viewed as a panacea. we're going to do everything we can to sell china more lng, more agricultural products, and more manufacturing goods. so that's important. >> with the midwest, this is a biggie i have such a fondness for farmers and ag business in general. i spent many years in that business, in the investment business plantings are going to start soon even though historically there's been a rather tight global soybean market, the issue has boiled down to that farmers may be collateral damage in these negotiations you know, we live in a world of disrupters and different chains that get u surped asurped and r quickly. it's an unbelievable process, and we've been a leader in that. what would you tell the ag business regarding their concerns -- they also agree, they'd like things better, but

they don't want to have it all necessarily come off their backs. >> that's a great question, rick let me assure you, as president trump has said, and we have a secretary of agriculture who has given very, very strong support to this policy with respect to china. the secretary is doing everything he possibly can with the president's help to make sure that we have the backs of farmers. we have the backs of farmers in this administration. they are incredibly important to the fabric of this society and economy. we will do everything that we can to help them i should say lastly on this, it's unfortunate that rather than china simply negotiate these things that they do fairly that they're basically responding to our legitimate defense with attacks on american farmers. i don't think the american people are going to view that kindly when they evaluate china. >> no, i understand. but we're all grown-ups in this room we understand how things get in the end, the issue isn't

about us trying to make things more fair. another way to put it is get everybody else in europe and japan and china's giant thumb off the scale and let things fall where they should peter navarro, thank you for all your time. i appreciate it. and we're going to go back to sara >> growth is good, rick. >> that's right. >> all right rick santelli, peter navarro, thank you very much. we've got steve liesman and kayla with us for reaction guys, these advisers, navarro, kudlow, lately have moved markets when it comes to talking about trade. kayla, anything stand out to you? he says the vision is for free trade. >> right first i want to fact check something he said. he said when the administration announced tariffs on solar panels and washing machines back in january that the cause and effect of that was to have investment from companies flood into the u.s. lg and samsung had previously announced that they were planning some production plants

in the u.s that was months before the u.s. came out and announced its tariff i just want to make that clear the second point that i think is important is we're seeing each of the advisers to the president sort of projecting their own views on to the president and on to the administration. we did hear peter navarro say that the ultimate goal of the administration's strategy is free trade but it seems that larry kudlow, for him, the guide post is growth for peter navarro, still, the guide post is right sizing trade deficits, which are driving his view of where trade policy should go. so it is very clear that they have very different approaches to this strategy, and they are using those brushes to sort of paint where the administration is headed here >> yeah, and we did hear, steve, some talk about why trade deficits are bad and why they cost workers jobs. we saw the trade deficit this morning go up to a 9 1/2-year high he also said we have the backs of farmers i'm not sure that farmers would agree with that right now. what stood out to you? >> well, i mean, a couple

things i'm not sure if we're hearing a kinder and gentler peter navarro here he moved a little bit from talking about the evils of overall trade deficits to talking about the unfair trade parts of the trade deficits, which is a little new and maybe backing up a little bit here i was just looking at the data he did say we have $150 billion trade deficit with europe. that is against a total trade back and forth of $1.1 trillion. europe is our number one export economy, at least it was in 2016 so perhaps peter is getting an idea of the other side of some of the policies that are out there. indeed, when larry comes forward, larry kudlow, i mean, and says this is all negotiation, it's a softening. i think that's what the market and corporations want to hear. who knows why the market was down 500 and rebounded around

those remarks. certainly, i think some of the people inside the administration -- i don't know if kayla thinks this is true, but they may have been sing jeda little bit by market reaction. these are people who support a lot of what the administration is doing, but i think they're getting a little bit of backlash, certainly when it comes to some of the calls on the red phone, perhaps >> yeah, steve, i think you're right about that i think it is certainly the preference of the administration, even if they can't state it outright because we have a free market economy. it is the preference of the preference of the administration to see the stock market rise on news of their announcements. while, you know, you can't take a single day's market activity to draw from that a bigger picture strategy, but i do think that the repeated down days that we saw throughout the month of march amid all of the various tariff announcements have given some administration officials perhaps pause about how long

they take to vet some of these strategies, how careful they need to be about the rollout, and what the ultimate market effect and perhaps more importantly interpretation of those policies is. >> there's the market effect, the political effect as we move closer to the midterms good stuff, guys appreciate that reaction to navarro. on the other side of this break, we'll talk to jay timmons of the national association of manufacturers about peter navarro's comments dow hanging in there, up 184 s&p up almost 10 be right back. weeds. nature's boomerang. at roundup®, we know they keep coming back. you never invited this stubborn little rascal to your patio. so, draw the line.

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one of wall street's biggest bulls says a key event next week could spark a rally. more "squawk on the street" is coming up.

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adviser just sold rick santelli that the -- the proposed china tariffs do runt risk of hurting u.s. manufacturers jay timmons is the president and ceo of the national association of manufacturers jay, good to you have back >> good morning, carl. >> you did tweet yesterday or the day before that a bilateral trade agreement is the way to get this done. in the meantime, tariffs are likely to create some new challenges, significant costs for manufacturers and consumers. how worried are you about those getting in the way >> well, look, i don't think tariffs are ever a good idea but it's been put on the table for a very specific reason by this administration. i think you have to rewind the calendar about 20 years, look at the agreement that president clinton negotiated with china own permanent normalized trade relations and you real dwliz iz was not a rules based system put in place we're paying the price for that today. the administration is trying to

address those shortcomings and this is the way that they propose to do it you're right, we talked about at the national association of manufacturers, we've talked about a morrow bust, bilateral trade agreement with china for quite a while. i wrote the president about that very issue in january. >> so do you believe tariffs are the only way to get them there >> well, you know, that is what's on the table right now. and i think you have to deal with what's out there. the administration obviously thinks so. i was happy to see peter navarro for the first time that i've heard it, perhaps he said it before, actually lay out principles of the administration, his compass theory i thought that was good. i thought it was good that he said that the administration believes in free trade i think that's a good reaffirmation of who we are as a country, how our economic system has helped lift millions of americans to new levels of prosperity

free trade is good for this country. it also has to be fair china has not played by the rules. and it's time that we deal with those and, frankly, we're happy that the administration is getting tough on china it's about time. we're not thrilled about the tariffs. but -- or the tariff talk. but we are hopeful that this will lead to a very sol aid and rules based system in the future. >> sounds like you sort of back the strategy here. what damage will we see to your association and your manufacturers if both sides implement the tariffs that have been threatened? >> again, i think tariffs are just bad all the way around. they're bad for manufacturers. they're bad for consumers. they're bad for farmers. i actually come from a farm state. those folks will be hurt very significantly if tariffs are put into place but clearly the president has the attention of the chinese and we think that this can lead to some productive discussions in the future and we certainly

would like to offer our input towards those discussions. >> you feel like members are pushing you to be more vocal what would force them -- what would force you to increase the amplitude of your rhetoric on this stuff if we start moving closer to tariffs? >> carl, i think that's a good question quite frankly, we've been very vocal for the entire time i've been at the nam, certainly 10 to 15 years about unfair trading practices by china whether that is counterfeiting or subsidization or the threat of intellectual property. my manufacturers say they can't do business or actually lost their intellectual property because it's been stolen by the chinese. this is a big problem and there has to be attention paid to it again, i don't like tariffs. i don't think tariffs are the way to go. i think you heard from larry kudlow that tariffs are not a good way to proceed. but it has the attention of the

chinese and lets use this to sit down, have a discussion about a rules based system, a bilateral trade agreement that is based on the rules that will level the playing field for the united states >> finally, we talk a lot about china. all these nafta headlines are starting to get interesting. trudeau is on the tape today saying talks are moving forward in a significant way we've heard about auto content in the last 24 hours perhaps an agreement in principle that can be announced in peru. you are optimistic >> i've actually always been optimistic that we will come to an agreement for a new and revised nafta. the agreement is 25 years old. so if you think about when the agreement was actually inked, that was before we even had modern day cell phones and other technology autos were autos they were not technology machines as they are today so we're very optimistic that

something can be done on nafta but to your point or to the point that apparently has been made earlier today, we have to be very careful not to impose too many restrictions on the ability of manufacturers to be competitive in the united states and some of the earlier proposals would have done just that i'm anxious to see what is evolving on this and i'm hopeful it will be an agreement we can all applaud in the end >> jay, thanks as always we'll see you next time. >> thank you so much >> jay timmons when we come back, market reaction to navarro and white house trade policy we'll talk about that as stocks come back from yesterday's low don't go away. one second.

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