now. ♪ ♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" right here on cnbc i'm andrew ross sorkin joe kernen, melissa lee is with us becky is off this week take a look at u.s. equity futures. see how things are setting themselves up over the weekend we've had kind of a busy weekend. masters. >> masters. >> syria trump and syria and we have mr. zuckerberg tomorrow. a little bit of theater in washington dow looks like it's going to open up 186 points higher, s&p 500 up 19 points and nasdaq 68 points overnight in asia while most people at least on this side of the world were sleeping.

hang seng 1.3% higher. the shanghai composite and nikkei up. european equities had a nice little bounce in their step. green arrows across the board there. finally, let's show you what's going on with the 10 year and the 30 year. does anyone focus on the 30 year 10 year, 2.799 30 year is not a bad mortgage to go after. in corporate news deutsche bank ceo john cryan is out he's being replaced by christian sewing they're pointing to dual presidents the changes are effective immediately. the shares are sharply higher up by 3.5%. on this week's economic agenda, the ppi on wholesale trade, cpi on wednesday. earnings kick off this week.

bed, bath, beyond. >> back again. >> back again. bed, bath, beyond reports on wednesday. blackrock on thursday and q1 kicks off on friday with the three big banks, citi, wells fargo, jpmorgan and pnc. >> 20% coupon? >> we do a quarterly walk through bed, bath. >> are you serious >> bonding experience. we like to hang out in the vaporizers. >> you guys like to hang out period beyond the show >> we do i usually go -- i like heavy duvets i like 40, 50 pounds adding on the feel safer sleep in a hotel now if they don't have a blanket, stay in a crappy hotel -- >> right >> all they had was a sheet. i was like -- >> felt naked, exposed, vulnerable. >> exposed. >> they say you sleep better with a heavy duvet. >> i agree.

>> now they make weighted duvets. >> not for warmth. nothing to do with warmth. the physical weight of the duvet. >> you know, we meet later, have tea. >> very sweet. >> it is nice. we love -- >> i had no idea. >> -- the browsing who doesn't like to browse on a rainy saturday who doesn't like to browse at bb&y. >> a lot of facebook news. the company has suspended another data analytics firm. this after cnbc learned it was using tactics like cambridge analytica. they were helping marketers find customers. facebook is suspending all the company's apps until a further audit can be completed if they refuse or fail the audit they will be banned. facebook disputed the implication that it can't control this

it can't control information that companies mislabel. you can learn more on q view on cnbc.com. you'll get ready to find out if your facebook data was collected. starting today the 87 million users who might have had their data shared will get a detailed message on their news feeds. the notice will provide a link so users can see what apps they used and what information they have shared with those apps to provide a quick way to shut off apps individually or turn off third period access. if you deleted your facebook account, you won't find out. if this is something you're interested in, go check it out on facebook later today. meantime, tomorrow's the big day for mark zuckerberg. he begins two days of testimony on capitol hill. expected to be grilled about the social network's privacy issues and guarding against political

interference in american elections. facebook hired a team to coach the 30-year-old ceo on questions lawmakers may ask. something they pretty much do as a matter of course to answer the questions. see how they react they have these things called murder boards, it has a mock hearing involving -- in this case involving the communications team, outside advisers they do a role play. it's hard to -- i mean, to me these types of testimony events are a little bit like professional wrestling you know how they end. no matter what mark zuckerberg may want, it's hard to come out the victor. >> plus, he has all of the grandstanding that someone might be on tv up for re-election. >> so it's very -- there is sort of a theater element to -- >> watching twitter, the cesspool which, you know, this

close to deleting but i do see things there that you see early on twitter it's hard for me to -- that would include that facebook has managed to really give something for everyone to hate. >> it's a bipartisan hate? >> bipartisan hate the left hates it because they think it helped trump. the right hates it for privacy and the way they're conducting sorkin, i didn't realize though that really without stealing your data and selling it, they don't really have a business model. you know what i mean no one's going to pay for it so you get it free -- >> right. >> -- once you sign up -- i'm not on it so these are all -- >> these are all conjectures. >> no, these are revelations my ear plugs i bought for swimming, they came that i bought on amazon. >> that was a big event. >> went on our account used the prime password. >> first time ever. >> came. i think it might have come -- do they deliver on sundays? >> yes

>> any time you want it. >> so amazing. what a great product anyway, so facebook, now i understand you've got to be okay with that, with, okay, you give me that free, i get to look at my friends' vacation pictures but you're going to know anything about me and everybody, i sign away my life to you, right >> here's the flip side. i think that google handles data i think, or i like to think -- >> they do. >> has handled it better, i think, than facebook but the larger point is a long time ago we all gave up our privacy -- >> you keep saying that. >> if you have a g mail account. >> i don't. >> you don't >> i don't have a yahoo! >> you only use cnbc >> if you use instagram, use this, use that. >> no. >> you go to any website that has any form of advertising, they are targeting you now no question the facebook system was misappropriated, used much more aggressively, all of that, but from a societal

perspective -- >> how do you think -- >> how do you think -- >> i'm not here to defend facebook. >> i know. how do you think she came up for some reason i didn't think she came off well. i think she canceled an interview. >> there was a page 6 item that suggested they were in talks. >> i saw that savannah guthrie and i just thought that she was like dancing around like she had -- >> she and sharyl sandberg. >> yeah, like she had something that -- didn't want to be totally forthcoming with what was happening. i don't know. >> i think they're in a pickle >> yeah. >> of their own doing. >> stock is down 100 -- not 100. my annoying facebook comparisons, it's much cheaper than it was. >> the real math -- >> still worth almost half a trillion. >> to me there are two questions, what are the fines like >> they will be big. >> how big will those be are we talking about that or fundamentally a shift in the business models as a function of whatever regulatory -- >> you don't know what it will

be for growth if you can't project what the growth is if you don't know what the business model is going to be the fines, if they're along the lines of the european fine, that could be a whole different story. much stricter european revenues in may if the u.s. moved toward the european model of privacy regulation, that could mean a lot in terms of compliance >> we're going to do this tweet. we have mike allen on. the president just tweeted this is the thing that resonates i think with a lot of people, and that is the way cars operate. and the president just tweeted this, before he tweeted it i was going to use this as an example. when a car sent to the united states from china there's a tariff of 2 1/2% when a car is sent to china from the united states there's a tariff of 25%. does that sound like free or fair trade no, it sounds like stupid trade, not snupd a good stupid.

which is that -- do they still use stupid as good it's been a while. >> dope is good. >> dope. >> that feels kind of old. >> that's old. >> so does stupid but i'm justifiably ge le ly -- finallyg around -- >> remember when michael jackson had a song named "bad. >> bad was good. >> throwing shade is bad. >> throwing shade is bad will i sound cool? >> borderline bad. >> being bad. >> is the swamp good or bad because we have somebody there waiting for us >> yeah, i know, and he is and i know he's in the swamp. i'll tell you why i thought about this earlier because you saw the jonathan swan piece that trump just came up with this 100 billion, it was like a half ass decision here's the thing when you start with the car decision and you say the car and the intellectual property. we're going to do a few things

then they go nuts over china how dare you do this this is so unfair. you're being so -- so then the guy who has a temper and a thin skin decides, you know, fine me another 100 billion. i can see how you would do that to light hiezer. they're going to play this game, fine me another. i don't need to ask jimmy carter style for consensus. tariffs are difficult. he's the president, he's the decider. he was elected >> i'm sorry, this is something you have to do, andrew if he wants to broach 100 billion in tariffs, that's his prerogative as the decider in chief, right >> but the implication of what it means to say that privately to lightheizer or to say that publicly or privately is -- >> this is the way it works. get used to it. >> 9 implicatioeion -- the

implications for millions. >> i know. he was going to be the one deciding it anyway after convening meeting after meeting. larry kudlow, peter navarro, wilbur ross. he's still going to be the one that decides if he says find me another -- >> sure. the idea that he's thin skinned it should be okay. >> you shouldn't sleep at all at night. >> it's very hard to. >> he's got the football with him at all times i mean, the football is going to be worse than -- i'm talking about the code you've got to worry. i know eamon. >> he is now worried he tweets in the middle of the night. i think he's up worrying all the time. >> he's in washington, d.c. >> look at him >> as well as a look behind. >> he had jet black hair november 10th. >> weigh in on this conversation >> reporter: i was just checking my facebook. you know -- >> you haven't deleted that yet? >> reporter: not yet not yet. looking at joe's vacation pictures on facebook look, fundamentally this trade

war talk continued straight through the weekend. we saw the president's tweet you reds it moments ago. the president is awake and tweeting now about this. it's something that's going to be on his mind throughout the day today. peter navarro, the trade czar of this white house was on "meet the press" with chuck todd chuck asked him, you know, is this serious or is this a negotiating tactic here's how he responded to that question >> basically what we have is a situation that every american understands that china is stealing our intellectual property technologies go to china and by doing that they steal jobs from america, they steal factories from america and we run an unprecedented $370 billion a year trade deficit in goods. >> peter navarro saying it is both serious and a trade tactic. larry kudlow is saying this can

be a somewhat more benign scenario than the markets have been expecting here's larry kudlow. >> this may turn out to be very benign you have to take certain risks as you go. we're taking them, making our case nothing's happened so far. we're looking at future actions. you have comment periods for another couple of months on our proposal maybe china will want to come around and talk in earnest so far it hasn't i hope it does >> so larry kudlow there emphasizing nothing has happened so far peter navarro saying it's serious but it's a negotiating tactic the president tweeting where does that leave us going into monday a little bit unclear we're going to have a national security adviser john bolton at the white house. we'll see how that plays then we'll see where it goes it's not set in stone. as you have been talking about his decisions are made hour by hour over at the white house very, very quickly things could change faster

>> take any vacation, eamon. yeah, i forgot about bolton. god almighty after syria. here's one thing >> yeah. >> i like larry's take it's like -- it's like, no, no, no it's benign but he's not bluffing it's a fine line if everybody knows you're trying to negotiate -- >> hold on you have -- >> you have navarro on the other side you see the reality show of what's actually happening inside the white house. >> you're trying to do -- you're supposedly trying to get a deal done but you need to make it look like you're ready to take real tough action. >> fwu what about nafta? >> if you bluff it's got to be credible. >> it seemed to work in nafta. we'll see. we're getting close. >> i asked larry that exact question on friday he had a brown bag session with -- it was a brown bag lunch at the white house in the roosevelt room which did not feature brown bags or lunch, but we did have a conversation i asked larry, look, you guys are saying that it's a

negotiating tactic at the same time you're saying we're serious. don't the chinese watch television can't they see that? >> it's a negotiating tactic if they say it, then it's a lousy negotiating tactic. >> we're negotiating but we're not bluffing. >> end point >> the way larry answered that question is important. it's not a bluff he said tariffs are on the table. i'm not taking tariffs off the table. the president has put them on the table and they're really there. he's saying there's a serious threat here but yet they keep wanting to hint that there's a knnegotiating tactic going on. where does this land i can't tell you. >> i didn't think that the north korean big button/small button thing was going to work and i still don't know but suddenly, you know, maybe there's a chance there maybe there's a chance with nafta. i don't know. >> the president likes the idea that he is unpredictable he understands that he's

unpredictable and he wants people to be on the edge of their seats and not really know where he's going to come down. that's why he fires off intentionally a lot of different signals all at the same time to try to keep people on edge he feels like he can negotiate a better deal if the other side is a little bit unsettled you hear this all the time everybody says the president is the best negotiator in the world and they're confident having him at the table on any negotiation there is we'll see if it works. >> eamon, thank you. >> let's get back to the markets and see how we're setting up for monday joining us is an equity strategist from oppenheimer and larry white from the stern school of business good morning let's start off with you you heard some of the confusing messages that we're getting from the administration meantime, we have china firing back they seem to be taking a little bit more of a belligerent tone over the weekend there was also a bloomberg report saying that beijing is looking right now at ways it can

use the yuan to off set any impacts of tariffs or use that as a weapon. we all know what happened with the yuan devaluation it set off global market jitters. >> so, look. i think tariffs and trade wars are risks. we're right to think and talk about them when we do think rationally about this, i think that the real potential economic impacts are small. 1$150 billion of goods subject o tariffs is tiny compared to the size of the u.s. and chinese economies. it's a $20 trillion economy with a t. in my view, i think markets are overreacting to the down side. the historical perspective tells us this is not the smooth holly tariffs in the 1930s very different economic and trade back drop. so i think to me just to be clear, by the way, any strength that does develop or materialize

after this reaction i would actually be using to lower domestic equity allocations and increase international. >> with all of that said, you're still looking to lower your risk or your exposure to the markets because of trade >> no. i'm saying that the fundamental thesis for international equities has not changed. >> right. >> so any domestic strength that does materialize here i'd be using to sell into. >> right so you want to reduce your exposure to u.s. markets >> correct. >> yes okay professor white, where do you stand in terms of all of the comparisons being made between these tariffs or threats of tariffs and the past >> well, everybody, of course, looks back to the 1930s and the tariff they tend to over emphasize the importance of smooth hauling it was a bad thing it certainly made things worse but it wasn't the solo cause of the great depression of the '30s we aren't there yet, but what

does worry me, i think i differ a little bit with him on this. we could see escalation. we're starting to see, all right, i'll raise you one. ah, you raise me one i raise you three. and that can start to spiral now let's hope, as my grandmother used to say from your lips to god's ear, let's hope this is all just a negotiating particular particular and that at the end of the day everybody steps back. you can't tell but you also have to look at reduszing exposure. i think the equity markets, investors are rethinking 16.3 or so lower pe on the s&p 500, is that the multiple you pay with this backdrop of risk right now, whether it be from the impact and the potential trade war or the fed making a misstep in it sounds like you're saying that you think that maybe not because you want to reduce exposure in the united states.

>> right so, again, you know, valuations outside the u.s. are actually more compelling than the one you cited for the u.s. growth is better beyond our borders. monetary policy is more supportive and the weakness in the dollar, the flip side of that has been appreciating currencies outside the u. sms. which also helps. >> that was true a week ago. what's different now i mean, a week ago did you want to reduce exposure >> few years ago, in fact. that's exactly my point. the fundamental thesis hasn't changed. >> gentleman, got to leave it there. thank you so much. >> two articles talking about 40%. >> 40% >> yeah. >> down side >> whew. >> and then another one today. 16 times earnings and let's say earnings are rising, but interest rates are rising. >> right. >> multiples can contract as

interest rates rise. 16 doesn't sound stratospheric. >> it doesn't sound like a housing crisis doesn't sound like 40% is in the cards. coming up, patrick reed claiming the green jacket captain america goes from red, white, and blue to green at augus augusta. man, that was hard to do. plus, a big change to credit card transactions is coming soon we'll tell you why your payments may be getting a little easier "squawk box" is right back people don't invest in stocks and bonds. they don't invest in alternatives or municipal strategies. what people really invest in

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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. ♪ ♪ squawk has sports news the green jacket goes to patrick reed the 27-year-old texan held off late charges by rickie fowler and jordan spieth to win his first career major the tournament lived up to all of the hype with tiger back and the talent in the ranks with these young guys like justin thomas, ricky fowler, justin

johnson and this guy, captain america as you've seen him in the ryder cup. you'll remember that historic match against mcilroy. the first two guys out in singles when he had to try to come back. it was a different type of green i thought yesterday. it was serious when you're playing ryder cup, getting the crowd going. yesterday it was deadly serious. it wasn't just against rory. you were even watching because you know jordan hit that tree on the 18 that's a chute that tee is so far back. to not hit a tree is a miracle. >> i was watching. as jordan -- there was a moment where you thought that he had it >> jordan -- >> it was amazing. >> jordan had to shoot to 9 under. that's how patrick started the day. he shot 71 and won it was too much to ask ricky had a better chance and almost hit it, too, but he had

to par 18. reed had not done well on 18 what my point was going to be, the venue and the tournament and something about augusta national, look at -- it's always the cream of the crop are there on the final day and it's just amazing the way that brings out the most drama so compelling. how much did you watch, the last couple of hours? >> a couple. i was sort of in and out >> my son's like -- he goes, how long -- we watched a basketball game how long is this going to be it's about seven hours and he goes, four days of seven hours? >> yeah, but i watch -- you know, i watch the golf channel before that. >> pregame. >> add another four. it's a 44 hour. >> do you want to comment real briefly about tiger? >> tiger's great he's great he didn't have guys like jordan spieth and rory mcilroy. >> back in his heyday. >> i don't know.

i don't know what happened >> so do you think that tiger's still -- >> i don't know. i'm not like our sandy camel -- >> tiger doesn't have to re-live his greatness. >> no, but he's now raising the issue he may not have been as good -- >> no, i'm not he's the greatest golfer of all time jack and him -- >> okay. >> i'm saying at 42 he's got -- you know, his club head speed is third on the tour. he's got all of these guys that are so good. they didn't have guys in their 20s. he's 42. he may win another one he may i always thought he'd beat jack. >> imagine what the ratings are for augusta? >> yeah. >> when we come back, one of the other greatest in the world, mike allen is going to join us axios out with a new report. the executive editor mike allen will be our guest. as we head to a break, a look at friday's s&p 500 winners and

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♪ ♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning welcome back to "squawk box" right here on cnbc u.s. equity futures are trending higher, much higher this morning. we are in triple digit territory.

we might be breaching or breaking the 200 mark here on the dow. nasdaq looking to break open around 70 points s&p 500 about 20 points. president trump tweeted about trade and china moments ago. the tweet went as follows, when a car is sent to the united states from china there's a tariff to be paid of 2 1/2%. when a car is sent to china from the united states there's a 25% tariff to be paid. does that sound free and fair? no, that sounds like stupid trade. axios is reporting there was little to no debate in the white housewhen the president threatened china what i want to ask you, i don't want to ruin it for axios, but the leaks keep on coming to jonathan swann and to the washington post and a lot of the leaks are designed to make it look like there's chaos whether john kelly's ready to quit was

the washington post or, you know, he's going to replace john kelly with -- or pruitt is going to go. all of these things keep coming, mike i thought mcmaster -- i thought he was a leaker, he's gone obviously that wasn't the leaker whoever is the leaker doesn't seem like they have good intentions for -- why are they in the administration that they want to undercut and sort of subvert all the time i don't understand how that works. and by them still being there almost makes it seem like some of the chaos might be true because they're still there. why are they still there >> good morning squawk squire. i can tell you there's one thing i'm not worried about. one thing no white house reporter is worried about and that is that, quote, the leaker will leave there's plenty of them, as you well know. the reason that these leaks suggest chaos is that there is chaos inside for a variety of reasons

including the fact that so many of these people who surround the president are not trump people they haven't been with him for years as you at this poitypicalt the president. a lot of them weren't on the campaign they're trying to learn his style, very improvisational. many of them coming from much more buttoned down places. and that's why you have them talking to support it's just that they're surprised they're trying to illuminate they vent. a lot of times it's almost as if we're a therapist. they can't believe what they're seeing they have to tell somebody >> that's how i try to do that for you when you come on here, mike i try to -- you know, you always -- >> you give me a nice couch here. >> you came up with squawk square you write about us i was making another point, mike, and i don't know whether this happens i guess it works until it doesn't work, but some of the

moves on north korea seemed impulsive and yet here we are possibly talking to a guy, maybe making progress, maybe i have no idea, maybe. that we haven't made in 20 years. nafta seems like we go off half cocked one way, half cocked the other way. suddenly that seems to be working. i don't know what happens with china tariffs, but is it possible that there's a method to all of this and maybe it works or it doesn't work. >> right there's less method than what people around the president will tell you is that these do deliver results. we've seen ian bremer on cnbc talking about the fact that with north korea, with the original strike on syria, with the trade negotiation with south korea, the president did get results. what we're seeing with china tariffs and i agree with the people who come on here and say it's no surprise, this is the president getting what he's wanted, what he's promised, and

the surprise is that gary cohen and others were able to hold it back for a year by distracting the president, by making case by case they bought time, bought time, bought time on this and that is the big surprise the president now is getting what he has always -- going back decades, as you know, thinks is going to work. >> yeah. >> we haven't got that much time let's go to facebook who's going to be tougher on zuckerberg the republicans or the democrats? they both have their own axe to grind with facebook. >> no, you're right about that the democrats probably will be louder about it, but this is an unusual situation where mark zuckerberg, by the way, will be up here on the hill today talking to lawmakers, a little pre-game between that twin billing of house and senate hearings over the next two days. he's a witness without a natural

ally everyone on both sides has the incentive to take a shot at him. we're told the strategy is to present humility and to make the case that they knew -- they know that mistakes were made. they're already talking about ways to correct them but to make the big point that there's now a national conversation that's going to include self-regulation by the tech conditions, government regulation they admit. facebook as we've seen on cnbc's air is willing to do moreof that and user engagement that's us. it is on us to know more about what they're doing they're going to give us more control over what's done with us. >> mike, the big question that investors are trying to figure out and that ultimately is about the viability of facebook as a business long term are, a, are there going to be massive ftc

fines? i mean, huge numbers like we've never seen before that just directly eat into profits in a way that i think are potentially at least right now unimaginable. two, the long-term business model of the company, not that it becomes a paid service but either that so mainly people leaves the business so that even self-regulations make it so difficult for them to go elsewhere. are those things on the table in your mind? >> sure they are, andrew you've written about what could happen and what should happen to facebook that's the stakes here facebook is hoping to sort of puncture this hole let the air out of this balloon. if mark zuckerberg can come across as convincing, winning, and can deflate a little bit of this, facebook will be buying its own time we're going to see not just questions about cambridge analytica but as you suggest

questions about the whole business model and facebook has pulled back on political advertising. they haven't gone as far as your idea of getting rid of political advertising altogether. >> all right, mike thank you. we'll see you in studio next time in squawk square. >> that will be fun. >> programming note, he's down at the axios center down in washington, d.c. meanwhile, don't miss president trump's economic adviser larry kudlow he'll be on "squawk on the street." business traveler alert, new data on airline quality rankings we have the details. tomorrow, it's a day filled with promise and new beginnings, challenges and opportunities. at ameriprise financial, we can't predict what tomorrow will bring. but our comprehensive approach to financial planning can help make >> that will be fun. rankings and that kind of financial confidence

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boy, the executive edge this morning right here on "squawk. listen up, business travelers are getting new data on airline quality. phil lebeau joins us this morning. he's got the details on that phil >> reporter: good morning, andrew i know some people will listen to this and they'll say, are you kidding me i do not enjoy flying. how can it be that airline service is at a record high. that's according to a new study.

the annual airline quality rating coming out every year it's put out by wichita state university essentially what we saw in the last year, three things went well while one thing did not go well service was at a record high yes, the record high is because of fewer complaints to the department of transportation, fewer people being bumped, we'll talk about that. mishandled bags, record low. the one negative, the on time rate did drop but not by a whole lot. keep in mind that we are seeing a record number of people flying right now in the united states and as this continues, you will have the airlines adding more flights, more services and, yes, this ranking, this study shows that it's at a record high we talked about mishandled bags. it's at a record low some of this is because people are checking fewer bags. there are people doing more carry on bags. you have airlines like delta doing rfid tags,

system they're tracking bags. fewer lost or delayed. delta is reporting earnings later this week. it will be coming up on thursday morning. we'll be down in atlanta talking to ed bastian. airline service at an all-time high. >> i don't know. they keep losing my bags it's like 50% it seems like. was there any -- they didn't do a survey on how pets are being treated, this was just people in this one >> reporter: joe, i knew you'd have a comment or two about this no, they did not survey pets. >> they're hard. >> reporter: joe, what's interesting about this -- >> it's hard to decipher what the dogs are saying unless you've got a talking dog then up wouldn't have to work, you could retire. >> reporter: joe, what's interesting about this report, it is based strictly on statistical data through the department of transportation it is not based on anecdotal -- >> no one checks a bag anymore

if you do check one, they lose it. >> reporter: that's not true that's not true. people do check their bags. >> joe, thank you. phil, stick around you can have this debate, joseph greg bowen is here i won't even ask the question. why don't you ask him about -- >> that's not -- that was the -- >> that happened one time but i'm a dog owner. >> i have a question how many people, if you have a complaint about an experience you have actually report anything to the department of transportation as opposed to just going to twitter or facebook or calling the airline directly and how do you account for those sorts of complaints? i think people are not inclined to go to the department of transportation with a complaint. >> well, i think you're very correct. it is difficult to go and find the d.o.t. complaint system. we do track other types of complaints because believe it or not a lot of consumers complain

to us to let us know how bad their experience is. >> so, brent, one of the things that i've been grappling with is the airlines in an attempt to make it i don't want to say cheaper but in an attempt to make it more egalitarian to some degree they have made everything pieceme piecemeal, right you pay for the bag, this, all of those things, and in a way from a market perspective you'd think that's better but it's created this sort of psychological problem which is to say people have paid what is a big amount of money often times to go on these planes and then all of a sudden there's all of these -- it feels like they're trying to penny pinch it along the way. do you think there's ever a way to change that dynamic >> you know, i think it's here to stay unfortunately. a lot of the complaints we get from consumers are about the pricing structures you know, keep in mind most people don't travel all that often on airlines and the

occasional traveler is very frustrated by all of this. >> yeah. >> it's not the regulatory -- i travel a lot and i'm not as frustrated. >> do you check your bag >> because i know how to -- i know what the game is. i know what i have to do and if you know what's going on for the most part, look, you have bad situations occasionally, but i do think if you go on a plane rarely, all of these things seem terrible on their face no >> well, they do they do seem terrible and people are complaining about it you know, try to take a senior citizen like a parent to the airlines and get them to go through self-check-in, self-baggage tag, self this. what we're losing is the human element. that's the bottom line that's why people are complaining. >> do airlines get extra demerits, brent, for losing dogs >> only in this study they can

file a complaint with the department of transportation and it will result in our study so, yes, there's a way to complain about the pet situation and quite frankly, you know, the airlines just don't listen to the complaints. >> that's what i was going to say, brent final question no matter how much you complain given, dare i say monopoly, duopoly, whatever you want to call it, the incentive to fix and to change, how much does it exist at this point? >> it doesn't exist very much. you know, it's all about profitability and transferring the workload over to the traveling public. >> okay. we're going to leave it there. brent, appreciate your time this morning. phil, thank you, sir good to see you. >> i may buy a lottery ticket. >> yeah? >> just so i can have wheels up. i may because i don't know what else to do at this point either that or i'm going to have to drive anyway, coming up, get your finances in order. april is financial literacy

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april is financial literacy month in the u.s joining us now leanna hawkins

founder of blackhawk financial and author of the book "young, fun & financially free." i think i'm 0 for 3. i probably shouldn't even be conducting -- >> no, we're all young at heart. >> that's true. >> there you go. >> but i'm not a lot of fun and i'm definitely not financially free are we making any progress with young people on realizing they're not immortal set some money aside >> i think so. what's great is there are so many resources available because of the internet, social media. there's some great podcasts and tons of things for young people to become financially literate even just last year american credit card debt has now surpassed $1 trillion. >> why do we have the feeling that nobody's -- nobody young is financially literate or taking the right steps? >> the numbers don't look good so 24% of millennials are

actually considered to be basically financially literal. even though 69% of them when surveyed thought they were financially literate >> meaning what? >> so they are confident in their skills, yet when tested they actually really aren't literate so what we need to do as professionals in the financial industry is maybe help them find ways to better become more litera literate so giving them some resources. so giving them things like my money.gov has a ton of resources. things like invetopedia.com. >> how do we change the whole thing and get away from quote, unquote financial literacy because if i was in middle school or high school and somebody said take a financial literacy course, i would think this sounds boring i don't want to be involved in this >> he never did that that's the whole thing you never did take that course doesn't help on this show a lot.

>> that's why i wrote my book. you've got to make it fun, engaging, exciting experian, they do a great job on social media about teaching young people about credit, credit score it's exciting, it's fun. they do it in an engaging way. that's the way things need to be done but that's what podcasts and stuff are great for. there's a lot of motivational speakers and people in the financial world that talk about this stuff in a way that's engaging for young people and inspires them to be able to learn this stuff so they can live the life they want to have rather than doing it because their parents are telling them to >> keep it up. keep it up you've got some work left to do. keep it up thank you. appreciate it. coming up when we return, stocks bouncing back after the dow closed out last week in correction territory we'll talk strategy when "squawk" returns with two big hours ahead.

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ready for a rebound. stock futures at the open following friday's wild ride ready or not here comes earnings season. the inside line on financials coming up. plus somebody's watching you. facebook suspending another data firm after cnbc discovers it was using tactics like cambridge analytica. how can consumers keep their information safe we'll ask a top cyber expert as a second hour of "squawk box" begins right now ♪ live from the beating heart of business, new york, this is "squawk box. >> good morning. welcome to "squawk box" right

here on cnbc we're live at the nasdaq market site at times square i'm andrew ross sorkin becky is off this week we are up triple digits at this hour we were about to break 200 there on the dow for a moment. we're about 265 points up right now. nasdaq looking to open 56 points higher s&p 500 looking to open about 15 points higher. lots of news to tell you about over the weekend facebook suspending cube u after cnbc told them they were using tactics similar to cambridge analytica. a lot of people have been looking for the next version of the cambridge analytica situation and cnbc discovered it over the weekend cube u was using quizzes labeled nonprofit academic research just like cambridge analytica had been to help marketers find customers. we're going to have a lot more on mark zuckerberg's trip to capitol hill this week in just a bit. i don't know if you guys caught, there was an "snl" segment over

the weekend with a pretend version of mark. also boeing has won an order from american airlines for 47 new dreamliner jets. the order worth $12 billion at list prices. the jets will begin arriving in 2020 with american planning to faze out its current fleet that puts the average price of regular gasoline $2.74 per gallon about 30 cents above where it was just about a year ago. few stocks on the move this morning. deutsche bank replacing ceo john cryan. you said sewing. do we know >> i am not a german speaker i went with sewing >> own it. the german lender also

appointing two as dual presidents changes are effective immediately. >> i mean, the way this is being positioned is deutsche bank is going to take a step backwards, almost, in terms of the approach to life. >> it's a real, you know, retrench -- >> indictment? >> from investment banking, right? that's always been more investing banking. you've got christian sewing now on the retail side of things maybe they come back if you look at deutsche bank's stock price in the past month or so, it's really been battered. there are a lot of concerns of its exposure to libor instruments and that it would be negatively impacted. but this could signal a departure from that kind of business >> all right and it's -- we said it was surging. that's like 40 cents it's such a low price stock that is surging

novartis is buyi ining avexis novartis would pay an 88% premium. friday's closing prices. stock's almost up $100 it's developing a drug to treat spinal muscular atrophy which affected 1 out of 600,000 children born. want to get back to the broader markets. joining us is deutsche bank senior economist we can talk about what that means in a second. a you didn't come on to talk about your boss today, did you >> i did not >> but do you have a take on this >> no. i -- >> you want to avoid it? >> i'm looking to talk about what's going on with the economy. >> okay. we're going to let him off the

hook because, you know, it's hard to make a comment about the boss on day one. but next time. we'll do that. you see where the markets are setting themselves up. it seems like we're back what's going on? just explain your sort of view of the world >> go ahead. >> i'm going to you. >> okay. so look. i think uncertainty right before earning season, you've got a lot of things going on but i'm still constructive on this market. i think earnings are going to drive this market. you've got a lot of tail winds here but right now there's so much negativity about what's going to happen in the future >> we had a report -- who was it guggenheim report. >> it's now the trump dump 45% downside in the market you know, people are hanging, they've got a picture of someone hanging on a ledge he's got like three fingers left >> and as a long-term investor,

i think don't get out now. look for opportunities buy stocks that have been sold off for no reason. look for a bank of america that's down 10% which had nothing to do with it. when he was elected, they said get out of the market. >> it's like, here you are telling us another forecast when your last one was -- and when he made that point that we were at 16.3 times earnings, that made me think that's not expensive. with earnings rising and multiples of 16. now, interest rates are raises so multiples can retract but without a housing crisis looming, i don't see why 16 -- how could 16 -- >> it was 18 before. it's 16 now. >> we have a bond market bubble globally that is the next housing crisis >> but that's been on the table for quite a while. where are you? >> yeah. i think you're seeing responses to some uncertainties on the

trade side there is some growing concern that the global growth momentum has peaked and it's coming off a little bit but from our standpoint, global growth remains solid just shy of 4% for this year the economy expected to grow 2.9% growth. so i think you're building in on the trade. >> are you doing anything differently? are you buying like this gentleman is here? >> from my perspective, where we think it should be >> doesn't it mean you have to touch fang tech. even in fang -- >> does that imply you don't like fang? >> no, i do. i would nibble at facebook at these levels >> why ahead of the testimony would you nibble >> there's a lot of power here with the network if they can get it right, the

stock over time rebounds but i also like the goggles of the world. there are parts of google that -- >> you don't think google is going to get wrapped up in this? >> they all could. at the end of the day, does ibm get stuck with something like this or oracle i think as we get more regulation and people understand the data -- >> but the business models don't revolve around having your data. and google and facebook's does if there's any change to that, it changes the business model. you also have companies that google has youtube and they also have the cloud business there are other parts of the business that have quite a bit -- >> take the cloud business out of it which i agree is a huge driver any of the -- every advertising business that exists out there including going on cnbc.com, all of it has to do with some degree of ad targeting. right? and using information of some

sort to target you and the question is long-term whether the government or the public is going to allow the kind of targeting that goes on today. whether it's going to get even better or it's going to get worse. that's the ultimate question >> it's the same thing of do you know what the earnings of any company is going to be so i think as we go through this and people understand the implications on the downside and upside, it's up to analysts and us to make a concerted effort. and this is not -- this is the reason you diversify and look at other opportunities as well. >> matt, we're having a domestic conversation right here. where do you go internationally? sort of how are you diversifying the portfolio right now? >> so i'm from an economist perspective. >> i know. but in terms of looking at sort of the global economy.

>> you know, europe growth we still think is good. it's coming off a little bit emerging market growth has been solid from an economic fundamental perspective. but i still think the u.s. economy, we think it's going 2.9% growth. >> what about next year? >> we have 2.5% growth next year >> you all think it's front end loaded you're not buying the 3.5% that we could do year after year. >> i think it's difficult. >> how's the labor market? tight? not tight? >> labor market is tight >> it is so we're lucky to keep it flat >> yes and flat participation rate is signaling an offset of the down trend. >> he didn't want to say anything after you tried -- started out trying to get him to talk about the new guy and he's just hiding behind sarat after that. like hope they don't is ask me about anything else. they're asking me about cryan. >> love talking about the participation rate >> yeah.

is it sewing do you know the guy's name >> i actually don't. >> you should. he's the new guy this is different than the "two and a half men" cryer. >> cryan >> i'm crying. >> so is poor matt >> we all are at this point. >> he's a senior economist he's never even met the guy. >> i know. we can talk about -- >> ask him about the new boss, he's never -- >> it's tough, i know. >> we did ask john riding once, he was at bear stearns he didn't come on for, like, five years he's on today. >> you're unviinvited any day y want jobs friday, maybe, you should come on. >> are you buying amazon, you should ask he's on economist. >> i know. but i'm trying to understand the way he's thinking about the u.s. and europe

>> you need that financially literacy book from leanne. >> i do. we got to go thank you, guys. thank you very much. in washington news this morning, the white house is looking to renegotiate on the spending deal. elan moye joins us now >> we will be getting the latest outlook for the economy and the budget later on today. it should include the tax law and the $1.3 trillion spending deal that just passed. we'll see if e we can hit that now he's looking at ways to roll it back. how he's doing that is looking at making lawmakers go back and cut the spending they all just agreed to. a source confirmed they have discussed this with kevin mccarthy over the phone and that house republicans are taking this, quote, seriously

why would they even think about doing this president trump had threatened to veto the deal the republicans had to compromise with democrats in order to keep the government open to roll back the deal, however, republicans may only need a simple majority in the senate which means they could do this all by themselves. guys, this is definitely still a long shot, but republicans are trying to prove they are still the party of fiscal responsibility >> thank you ylan mui for us. coming up, jpmorgan and citi looking to post. you're watching "squawk box" here on cnbc

at crowne plaza, we know business travel isn't just business. there's this. a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly.

you know what's not awesome? gig-speed internet. crowne plaza. 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. futures right now, the dow indicated to bounce 180 points if that were to hold when we get to 9:30. the s&p indicated up 17. the nasdaq indicated up 60 in case you forgot, since 500 points isn't what it used to be, dow was down 500 at one point on

friday >> at one point it was down 700. so we'll see how it holds today. meantime, financial earnings kickoff at the end ofthe week with jpmorgan and citi a few of the names. let's look at what's working in the sector joining us now jason goldberg at barclays good to have you with us >> good morning, melissa >> we just had a guest on saying he likes bank of america it's been down 10% after all the trade tensions has nothing to do with trade that's absolutely true but this is a sector trading along with this volatility how do you separate what your forecasts are with this banks versus what is actually going on in the markets >> the markets have been volati volatile but it's actually quite strong we have kickoff on friday. e expect to see margin expansion given the backup in rates. you know, you haven't seen three straight years of market expansion since the 1970s. long growth while a bit more subdued than one would have

hoped. you've seen loans up each of the last nine weeks. banks actually benefit from the market that's off of a tough comp a year ago coming out of the election expansion is controlled. and they're buying back a lot of stock. plus this would be the first of rates. >> at the same time if loan growth remains subdued or goes down because of a lack of confidence because of what is going on in the world, then they're not going to benefit from those >> certainly they've been -- lending has been constrained after a pretty good 2015 and 2016 you did see a slowdown next year amid this. we think it'll take times to come through it takes some time to put plans in place you're starting to see this start to turn to cni we think that will continue through the remainder of the year >> jamie dimon said even at two times tangible book value, he

thinks that jpmorgan stock woul be a buy would you say it is worth that even at that turn? >> absolutely. if you look at returns on the banks, they've steadily improved tces for jpmorgan should be approaching 17% in the next year or so. given that, in access and think about the banks in general, they still have a lot of excess capital. so over the next -- you saw repurchasing from the banks. with the results this june, we expect dividend increases for this group. >> what should we expect on friday >> we follow the 22 largest bank we think the majority of them will exceed expectations this quarter they've done that the last few quarters. so we think generally the companies at least with citi and jpmorgan relative to the consensus. wells fargo going through some issues at the moment with this

asset cap. this will be the first quarter of that. a little maneuvering they need to do. >> we all know q1 is going to be good do you think the banks are going to be optimistic we've got a glimpse from annual letters from various ceos who remain optimistic. but in terms of the impact of trade and all the other things going on, do you think they'll be as optimistic about q2 and going forward? >> we do think they'll be optimistic trade has introduced an element in the stock market. you know, we'll see -- i think fundamentals have been strong. anything that adversely experienced, i think it's unclear of how much of a negative impact this will have generally speaking just talking to small market businesses, you know, there tends to be a nice degree of optimism out there. >> jason, great to see you thank you. coming up, when we return, there's a new must see deejay in town you might know who we're thinking about right here. those in the know on wall street might already know him that story next.

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♪ with some ice in it. welcome back to "squawk box. david solomon, the soon to be sole number two to goldman sachs' ceo still time to pursue his hobby. deejaying. solomon performed a set of music at a lounge over the weekend for a charity event sponsored by hamilton college dressed in all black wearing a baseball hat as well solomon opened with a house version of the pink panther theme. this all courtesy of reuters they had a report about it over the weekend. >> that's not video, by the way. >> what'd you say? >> it's just an effect >> it was just an effect it was just an image we were bouncing >> there

see? >> got it. >> in case there was any confusion. >> this is you >> joe looked like he was going to say something snide >> no, no, no. far be it for me -- no, no, no >> moving on -- >> don't you want your bankers to know a little house music >> i don't know about techno don't know much about it it's not my hobby. i wouldn't know how to -- >> i think it's great. >> yeah? >> i love it i mean, i love -- >> the fact he has -- >> i love that david has this side hobby >> renaissance man >> you know anything about techno >> no. some people know about golf. some people deejay >> i just have one band i like techno autobahn that was the techno band in "big lebowski." >> okay. >> this is exciting news >> it is actually. >> this is the most important news of the entire morning >> signing your credit card will now be a thing of the past

vowing that signatures are not a way to verify identity american express, visa, discover, and mastercard will stop requiring them for credit card transactions. >> isn't this beautiful? >> i thought it was stupid to sign nobody checks anything who checks >> it's beautiful. no more signatures at the restaurant, you're just going to put the tip down. but i assume they're going to try to bring over the machine and you have to put your pin in more often >> like in europe. >> i find i have to use the pin more these days. >> but it's so easy for you. 1111 it's so easy for you to do -- >> that's not my code. >> not your code. >> 1234. >> nope. though you know the most popular is -- >> 0000? >> no. it's the opposite. 9876 i think >> oh, damn it really >> is that yours coming up, viacom wants cbs to raise its acquisition offer what

oh, god. we're going to do the techno stuff now. shares of merck are popping on drug data. and larry fink is out with his -- oh, no. another one. with his annual letter those stories coming up. stay tuned you're watching "squawk box" on cnbc you know what's awesome? gig-speed internet.

you know what's not awesome? 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. ♪ good morning welcome back to "squawk box" here on cnbc we're live at the nasdaq market site in times square among the stories front and center, viacom asked cbs to raise their acquisition offer. they had offered for each share. now asking for 0.68 cbs shares you always say when a family controlled environment, kwoyou w who wins the family if the family wants this to happen, it will happen

but we will see how it all transpires meantime, shares of dow component merck are on the rise in premarket trading follows positive results for its cancer drug keytruda in a trial involving the treatment of non-small cell lung cancer treatment resulted in significantly longer survival rates. blackrock making china a priority that's a message in the ceo letter by larry fink one of three major trends looked at the other is the increasingly powerful role of technology. time to talk trade over the weekend president trump predicting that china may ease trade barriers then tweeting, when a car is sent to the united states from china, there is a tariff to be paid when a car is sent to china from the united states, it's 25%. does that sound like fair trade? no it sounds like stupid trade. going on for years joining us now michael froman.

we will refer to you as ambassador, mr. ambassador but i always think -- i don't know i think your job's more important as trade rep but i don't think it's as good as, like, i don't know, the ambassador you're an ambassador but you didn't really get to be -- like italy. who would not want to be ambassador to italy? >> exactly no big fancy house or anything like that. >> and you've got to do this hard stuff negotiating and it's thankless anyway, you got the title. >> well worth it >> we'll get to china in a second i want to talk-and-a-ha nafta i think you have insight into this do you know what changed and what's in this possible agreement that now seems like there's a better chance of getting now? do we know anything? have they told us anything >> well, about 90% of the text being negotiated in nafta right now comes from the transpacific partnership which canada and

mexico were very much part of. that ought to be a relatively easy part to land. it's the last 10% that's the most difficult and perhaps the most important and it's issues that the administration has put on the table like the sunset provision that the whole agreement would go away in five years unless all three countries affirmatively act. and the rules around what they call rules of origin or what constitutes an auto for the purpose of nafta and how much of it has to be made in the united states or the three countries all together all these issues are imminently resolvable with a bit of creativity and flexibility on everybody's part we haven't seen a lot of that yet, but there certainly is an interest on all sides of trying to get this done from the u.s. perspective, they can focus on china >> that's what you think is happening. so because of china, you think it's more likely that they want to have a favorable outcome on nafta near term so then the focus can be on china. >> i think they like to clear the decks. obviously it's of interest to mexico and canada as well.

mexico's got an upcoming presidential election. they'd like to get this done with to be frank, i think they're running out of time. because right now they're just talking about an agreement in principle. it takes time to really paper the agreement and it's in the details that the real, hard negotiation happens. we're running out of time for that to happen and for there to be a vote on it before our own midterm elections. then who knows what happens with congress through this midterm election they may be facing a democratic house, maybe even a democratic senate in that context what the future remains is open. >> when you were trade rep under president obama, were you frustrated with some of the actions that china, that we just take for granted that they're going to do? >> absolutely. i think we ought to stipulate that the concerns of the trump administration has raised about china are real and legitimate. and they're concerns that previous administrations, certainly obama and bush and clinton before that, have all worked on and made some progress on the question is whether the

trump administration is approaching it in a way that's most likely to achieve success and that remains to be seen. because certainly china's feeling even more confident in its system and its approach now than ever. over the last year it's gained a lot of confidence. and as the u.s. has retreated, china has begun to step forward. >> i guess the speech which is going to happen later this evening or tuesday china time, but in terms of reading how the chinese have reacted, how much of what they are saying do you think is bluster there's a report this morning in bloomberg saying they are evaluating the possibility of devaluating the yuan >> it would. it would hurt them as well talk about that and dumping u.s. treasuries is oftentimes

exaggera exaggerated. but having said that, they have made it very clear from the start of this effort that if the u.s. announces tariffs against it, it will announce tariffs in the same amount against the united states. and it has dozens of ways even i don't tariffs tomake life difficult for american exporters and american firms who want to do business in china so there is a way of getting through this, but just the tit for tat kind of threats are not likely to produce an ultimate result during the obama administration, we were about 90% done with a bilateral agreement with china that would have addressed a lot of these issues like technology transfer, disciplines on state owned enterprises, ipr intellectual property rights the trump administration has yet to pick up on that agreement but there are ways of moving forward with the chinese if you have a sophisticated diplomatic approach and if you can mobilize international support for it so far right now we're the ones who look isolated and china's getting a lot of sympathy from the europeans and others

and that's not the way it should be >> china appealed to the eu. do you think that -- will we eventually move in that direction? it wouldn't be that hard to involve our allies, would it >> well, i think that is where our -- we would be most effective is if we can mobilize not only the europeans, canada, and japan, but major developing countries like india, brazil, south africa, indonesia. when china is criticized by them, they really listen they care about what other developing countries in their view think of them that takes a lot of diplomatic effort so far through our actions we've alienated a number of our partners and put them in the camp of being sympathetic to china rather than being critical of it. >> all right so just -- you had your pick what country would you pick, since you're already an ambassador if you could say that's the one i want, which one would you pick >> pick to be a -- oh. to be ambassador oh, well, look

of course i just like to stay in the united states of america >> oh, come on >> i was very happy to as a representative >> i would pick italy. >> easily. by a mile. >> but it might be too hard. >> italy is great. >> i've always said malta. manageable you know, it's an island it's in the mediterranean. >> right >> you know, i think they use -- i don't know -- >> all right different question. >> are you submitting your name for nomination >> andrew wonders why i'm trump friendly i'm trying to be in the 4% that's not spewing bile all day long >> here's the key question for joe. i'll ask it for him. >> it's expensive. >> which one has the best embassy? >> well, i have to say the u.s. ambassador to italy has a pretty spectacular home. >> he knows. >> i can see it. you've thought about this. you're already an ambassador you don't even need new cards which will save money.

all right. thank you. >> thank you >> i want italy too. but i don't know coming up -- >> i don't speak italian and i can't afford to pay for the wine >> that's another problem. >> it's a lot of problems. >> yeah. facebook suspending another data firm after cnbc found it was using tactics like cambridge analytica. how can consumers keep their information safe we'll ask a top cyber expert next and since the scandal first broke, stock is down look at that stay tuned you're watching cnbc my mom's pain from

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♪ we're not allowed to do beatles, i guess it's a cover, isn't it welcome back to "squawk box. futures right now indicated up 180. 180 points on the dow. the s&p indicated up 16. and the nasdaq up 55 making headlines this morning, youtube is being accused of violating u.s. laws aimed at protecting children's privacy online a coalition nearly two dozen

campaign groups are set to file a complaint with the federal trade commission today reports say youtube plans to release a new version of its kids app where parents can turn off computer generated recommendations and only see channels curated by humans facebook will tell users if their information may have been improperly shared with cambridge analytica. this coming as mark zuckerberg heading to capitol hill. here to help us understand what zuckerberg and his company need to accomplish this week and months ahead is founder of digital security firm zero fox good morning to you, foster. thanks for joining us this morning. to the extent that you can help us understand, is there a way for mark zuckerberg to win this week >> well, that's a good question. yeah, sure, of course. he's in the game he's playing he could win look, a few things i think he's got to be humble. i think he's getting good advice

already. he's got to come across as personable and humble. he's got to admit mistakes and the plan they have to right the ship >> and righting the ship do you see a business model which is as successful as the one that they have now which allows for the kind of remarkable advertising group they've had over the last several years due to the targeting they've had without the targeting? >> yes 100% sheryl sandberg went on record in the last week saying they had not been focused on data protection and privacy the last ten years. part of the strategy has to change and has to include that one of the things that facebook's got to figure out is they can't do this on their own. this isn't facebook versus the world. security is not in their dna they're not a security company they've got to continue to open up their ecosystem and let real players in to help fight this battle. >> what does that mean

opening up their system sounds actually less secure you're saying you want to open it up to bring in who? >> no. i mean, look there's over 600 companies in silicon valley that have been funded to help with the cyber security challenges. and so facebook just like any other organization needs more additional help than just their internal teams i'll give you a great example. right now the top three social media companies in the world, facebook, twitter, snapchat, all do not have chief information security officers. all three are flying this plane without pilots that's a huge challenge and a potential crisis >> that's because they recently left it's not because they've never had those positions, correct >> that's right. that's right so in part at the bare minimum, leadership is changing and strategy should change with it. >> can you make a distinction for us between facebook, snap, twitter, and google and amazon

in terms of their security and the way you think not just the technicals work but the philosophy >> sure. facebook has the most resources deployed on the security front so the teams at snap, the teams at twitter it's not like they're any less capable than the teams at amazon, google, or facebook. they're just smaller snap in general is smaller across the board so they have less resources to deploy and they follow the same challenge set that small and medium businesses here in the united states and world have they're getting attacked by large organizations, sophisticated adversaries. and the bigger you are, the more resources you have and i think they're still trying to figure this out. >> do you think that when we see facebook report its next quarter, that we're going to hear about a meaningful reduction either in the number

of people who have accounts meaning that they've deleted them completely or the amount of usage as a function of this news that's emerged over the past month? >> i don't think you'll see either not either because what they have the ability to do for instance instagram is one of the big platforms they're changing really quickly right now the fact that they own multiple platforms, they can divert traffic and get you re-engaged in instagram because you're on facebook they can devert back to instagram so they don't see meaningful drops >> but you think that there is a meaningful drop, then, on facebook the flagship property >> no, i don't think it'll be a meaningful drop at all if anything you'll see in their announcement, they ma have an increased cost of operations >> but the public doesn't care about this as much as we do when we're talking about it right now and whatever is going to happen this week? >> i don't think the public has an alternative

>> interesting foster, we appreciate your time this morning thank you, sir >> thanks. good morning all right. coming up, bracing for a trade war. the nation's ports are closely watching the rhetoric coming out of washington and beijing. we'll be joined from the port of charleston great city, brian. good morning >> yeah, and i want to show you the sights and sounds of money see all these trucks coming in, all these boxes that we see behind us here each one of those is money 150,000 a day come through here. did you know that one-fourth of the entire u.s. economy at some point comes through a port like the port of charleston we'll talk about that and the size and scope of imports and exports and the risks of tariffs on trade coming up after the break when "squawk box" rolls on as the sun comes up here in charleston where joe's friend bill murray apparently lives

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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. let's talk trade brian sullivan joins us live from the port of charleston this morning. hey, bri >> hey, melissa. thanks very much we don't know if there's going to be tariffs. the question is this will tariffs slow down economic activity i know folks here at the port of charleston as well as down south, they're hoping that it does not because imports and exports are a massive part of this economy how massive? well, check this out

for every $1 billion in exports, 15,000 jobs are created. 26% of the entire american economy at some point is coming or going from a sea port like this one i mean, you look behind us these things, the teus, those are 40s. those are the big ones here. about 75,000 of the big ones 150,000 equivalent of the small ones go in and out of here every single month you know what that means that means jobs. truck drivers. shipping operators all the folks that are working here at the port, nearly 600 people just managing the logistics. so when you look at the amount of jobs created by global trade, it's not just about the stuff we make it's not just about the stuff that's in those bo accidenxes. it's about the workers who get paid every time they come here slap one of the boxes on their truck. that's food on the table and a mortgage paid. hundreds of thousands of jobs across just the southeast alone. and there is a real fear here,

guys, that if we see these tariffs -- if we see these tariffs implemented, it will slow this down which has a very real impact on a lot of families that rely on this global trade every single day 24/7 >> pit was weird we had the first year where it was all about the stock market some said we're worried about trade. nothing's happening. that seems to be the agenda for the second year, brian and there are affeceffects on r people you get a 40% move in the stock market, maybe that's the time when you do try to take care of some of these long simmering issues >> well, joe, i'm sure you've been to charleston, right? >> right >> you've been around here >> when i was in kiowa yeah it's a great place. >> this is boomtown usa as you

know i feel like half of new jersey has now moved down here. the reason they're moving down here is because of job growth. i think the reason we pick charleston is not just because it's a nice place. but because this port here has more impact on its state than any other port and any other state in the country what goes through here is just under 10% of everything produced, gross state product, of the state of south carolina the other ports i'm not saying aren't important, but for this state it matters a lot a lot of jobs. look at these trucks they're just coming and going every couple seconds throwing boxes on there these new ships we're going to show you later on today, 14,000 of those things on one ship. this will be the deepest harbor in the united states by the way, after they spend about $500 million deepening it. a lot of investment, a lot on the line tariffs, jobs. it's about people making real livings. it's not just some esoteric

thing. >> a lot of things with the company you like to talk about there. that korean automaker that you see there. >> i see it. >> yeah. you zoom in on that? i think i know where he's talking about there. i'm going to climb that later on >> you've got, like, a mixed -- it's like half honda and half hyundai. hyundai. >> tomato, toe-ma-toe. >> sullivan, when are you coming back i refuse to do the pro mow in the morning unless it's you there. when are you coming back >> i might spend an extra day here i'm trying to be back on wednesday morning. we'll see. i walked here, so it takes awhile to get back to jersey it's a nice place to be. i don't want to leave. >> but it's 20 degrees god almighty >> strauss-kait's not warm. i have to say. this is not the south. >> global warming. thank you, sully we will see you wednesday. >> thank you, joe.

thanks for having my back. >> thank you not doing it tomorrow then either let's look at some stocks to watch this morning general motors was upgraded to overweight from equal weight by morgan stanley saying pickup truck sales will ramp up once an infrastructure bill is passed by lawmakers. that's an interesting reason to make the call. is it really going to happen >> it's a general economic activity up. pickup trucks usually go up -- sales go up. >> i saw some very weird things recently one is all our automakers, they don't make cars. they're all making suvs. did you see that >> i did >> all switching to suvs that's not good for emissions, andrew and the other thing i saw, apple was mad at scott pruitt for the power stuff. because they've made so many investments in these things that if you continue to use cheap fossil fuels, none of these things that apple spent all this money on are ever going to be

economically feasible. it's like, hey, no fair. i need these -- we need to move to these green things. you know, right? i mean, they're mad because their investments aren't going to pay off if it's not subsidized for all the stuff that costs way more per amp or whatever the hell you measure energy >> if you change the economics of it in the middle of the game, there's a question of fairness >> i want my subsidies i can't -- don't change -- >> if you move the goal pos,st you move the goal posts. coming up, dow futures indicating -

all right. we're getting a bounce this morning. dow points to a triple digit gain at the open after closing last week in correction territory. a market rundown straight ahead. the hits keep coming facebook suspending another data firm after cnbc finds it used tactics similar to cambridge analytica. meantime, mark zuckerberg is on the hill. what should the social media ceo say to congress? we'll have the debate when the last hour of "squawk box" begins right now. ♪ lye live from the most busy

city in the world, new york city, this is "squawk box." >> no one cares if we play this music. no one's going to get mad for royalties. back to "squawk box" from the market site in times square. i'm joe kernen along with andrew ross sorkin. he's here. >> don't you forget it >> and melissa lee becky is off today the futures right now are bouncing a little bit. we were down 500 on friday we were 700 down on the lows now 200. you were jonesing for 200, andrew there it is. we'll see by the end of the day. i have no idea do you could be up 800 or down 800. >> it's like buying a lottery ticket >> maybe a little better than that you're doomed with that, andrew. zero chance. you might as well, you know, you're going to get struck by a piece of that space station. where was it south pacific, right >> that's a lot of water >> you were inside >> you stayed inside

>> yeah. >> in doorways because you have a chance >> a bathtub let's get you caught up on today's top stories. it is all about facebook this morning. the social media company suspending another data analytics firm this after cnbc discovered it was using tactics just like cambridge analytica. cubeyou is the name of the company. used personality quizzes labeled for nonprofit academic research. guess what it was using it to help marketers find customers facebook is suspending all the company's apps until a further audit can be completed if they refuse or fail the audit, they will be banned facebook disputed the implication it can't use over the apps telling cnbc it can't control information that companies mislabel separately starting today, the 87 million users who might have had their data shared will get a detailed message on their news feed today the notice will provide a link so users can see what apps they

use and what information they have shared with those apps. it's going to provide a quick way to shut off apps individually or turn off third party access to apps completely. so we'll watch for that. and then the big drama starts tomorrow mark zuckerberg beginning two days of testimony on capitol hill he's expected to be grilled about the social network's privacy issues in guarding against political interference facebook hired a team of law firms but the big one wilmerhale coaching the ceo on questions the lawmakers may ask. how to react if interrupted, mock hearings involving the communications team and outside adviser who role play members of congress in d.c. they call this murder board. we will talk more about facebook in the next half hour with management guru mary uhl-bien.

the treatment resulted in significantly longer survival rates. th that stock is up 2.6%. viacom has asked cbs to offer. they had offered 0.55 shares for viacom shares. viacom is now looking for 0.68 shares dick parsons was named to the board as independent director. all right. earnings season kicking off this week blackrock, delta air lines, citigroup all reporting. now what's at stake with the broader markets. >> i think that price target from him has remained unchanged, though, since the market has tripled off the 2009 levels. >> the guy you're talking about. not the guy from -- >> you're talking about goo guggenhe guggenheim >> i'm talking about both. >> look, i think the market goes down 10% and kind of stays at

the lower end of the range i do think you have this start to service but i think at least we can change the conversation potentially a little bit because the market has remained stuck in what i'm calling a box. if you look at an eight month chart of the s&p 500, you'll see since the beginning of february, as a matter of fact, today is the two month mark of those lows of february 9th. we've still held that, but that box has contained the market we have managed to stay above the lower end of that box. the bad news is we're still trapped there. it doesn't seem as if we necessarily have the impetus to shoot out of it. but earnings give us a chance to do it. i do think we're stuck in the middle in other ways too s&p now trades at 16 times forward earnings that's down from over 18 in january. but that is exactly at the five-year average for a forward pe with rates a little bit higher that's one reason the market remains perhaps a little bit

stymied. then global growth, "the wall street journal" highlighting this, has gone from potentially too hot to at least temporarily lukewarm so i think the market has been contending with all of these different things and probably the formula for getting out of this box is some combination of earnings coming in as or better than expected which looks likely fear which means investor fear i think a lot of us talk about how much downside we have is good in terms of creating this sentiment backdrop for a potential recovery and then time. because as time goes on and corporate earnings build up a bit, that multiple gets a bit of help >> all right let's try to get a snapshot of the economy. joining us now former council of economics adviser chairman austan goolsbee. one professor we have here but he had a real job at one point. and former assistant treasury secretary phillip swagle so battle of the professors. but probably a lot to agree on, i think. can i get a snapshot from you,

austan of where we are right now 4% unemployment, some wage gain starting to be apparent but not enough necessarily for inflation. what's your outlook from here on out with where we are? >> my outlook is that the economy's going pretty well, not as good as what the biggest optimists think. not as good as what the fed's forecast is. so i think it's going okay it's going fine. but i think as each month goes by and we get either a disappointing jobs number or we've had some tough retail sales for a few months in a row, i think people are going to realize that there's a danger the fed gets too far out in front of his skis. >> we only had one bad jobs report the one before that was crazy good >> yeah. crazy good then the one before that was a little disappointing so i think it's going fine i just don't think it's going great. >> what do you think

got to go professor phil and professor austan professor phil >> i'm a touch more optimistic than austan. i would say this late in the cycle to be above 200,000 on job growth, that's pretty good i think the fed has a lot to be happy with the administration should have a lot to be happy with if they weren't kind of crossing their own message here with trade. >> what is -- austan, i'll let phil respond to what you say what is the fly in the ointment for you, austan? why will growth be less than forecast is it just demographics or trade or what? >> you know, i think you got three things going on. one is demographics as you highlight. two, i think we're still dealing with the aftermath of the biggest popped bubble we've had in more than a half a century. and so people got to shift what they're doing, the economy's got to change focus. that's not a fast process. and then three, self-inflicted

gunshot wounds from trade wars, some other craziness everybody's on edge. you could see that in the markets. you could see that when you talk to people in the business community. as you know, they want to say, yes, it's great they cut the regulations, they cut our taxes. we're ready to roll. and yet they can't because every monday or friday or wednesday, here comes the twitter storm and it's just debilitating and so i think those three things mean the economy's going fine but it's just not -- i i don't think we're going to be three-plus percent growth. >> as a former member of hank paulson's group, do you see a way this can end as a win/win for both >> you know, i do. i look at china and i say they have a lot to gain with better protection of intellectual property

all the things we're complaining about, you know, ten years ago they didn't care about they wanted to steal our stuff now they create stuff. they innovate. and so they fundamentally should have a big interest in the same things we do somehow working with them and maybe mixing the kind of public message of sticks with a private message of cooperation and explaining to them their interest. >> in terms of the war of words, can president xi look like he's backed down in any way at this point? >> that's the challenge. how do we present them with a path forward that doesn't, you know, that doesn't look like we're winning and they're losing >> what does that path look like >> you think donald trump didn't think this through >> yeah. there's some chance. you know, i would say, again, the shared gains right? trade is fundamentally win/win that's the path we need to lay out. say, look. they keep doing the things they've done in the past, they're going to lose and we have the same interests between

the two of us. >> it's an interesting argument that people make that china now has a stake in this because they have their own intellectual property to protect and they have made tremendous gains in the fields of artificial intelligence, self-driving vehicles, et cetera. at the same time, phil, they don't export a lot of that technology a lot of that technology remains domestic can you really make that same argument because china is protecting its own intellectual property within its borders presumably >> yeah. no, i get that that today they don't export this stuff they export products with the technology and in the future, they'll become increasingly important. if vietnam or indonesia or other emerging market countries start stealing chinese technology, they're going to face the same problems we're facing with china now. and so that's the message that i'd like to hear from the administration is how this can be good for both countries. >> you're doing so well, austan without any of the gratuitous nastiness. then it reared its ugly head >> i appreciate that >> republicans are complaining

more about the tariffs you got a lot of people on your side >> they are. >> you've got people on your side of the aisle that some guys in some of the rust belt states that say it's about time you probably think we have -- if there was a -- you probably have a problem with the way it's being done, not with facing the issue that there is a problem with china is that fair to say? i' >> i've -- on the issue of intellectual property, i and phil and others in government did put a focus on that. my thing, here's a thing that it's not just the u.s. all the advanced world agrees with that. so how do you come out of the box with all of our allies against us china literally went to the eu and asked them for their support in opposing what we're doing start with a coalition and i think you could make some progress but i actually think donald

trump is -- as on many of these things, i think he's going to kind of forget this and move on to the next thing because the reaction was so bad in the markets and among his own people. >> you must be really conflicted this whole hannity and kimmel thing. have you been following this >> i followed that some. >> you're buddies with sean. it looked like sean came out on top there. i saw some kind of a weird apology from jimmy kimmel. it wasn't an apology it was snarky. what do you think happened you think the -- >> look. i don't know anything. i have always -- when i was in the government and when i was out, i have always thought that even that mild jokes, they're going to make fun of the first lady's accent. but joking about the family, i'm not a big fan of that. >> but then the stuff after that was really, like, i don't know >> i don't understand quite what happened i think maybe there was some history between the two of them.

>> well, that's not the way -- >> i'm glad jimmy kimmel said he's -- >> lucky he's a liberal. if a conservative ever used that tactic, that line of joking, he'd be losing his job i mean -- >> yeah. they said a lot worse about michelle obama and i wasn't a fan when they did that >> no, i'm talking about subsequent to that, some of the -- you know. pretty racy stuff. anyway thanks, austan you knew -- you never know, do you? did you think i'd bring up hannity with you you didn't, did you? >> no. we had a friendly day, joe i don't know what happened >> anyway, thanks, austan. thank you, phillip, as well. programming note don't miss president trump's economic adviser larry the legend kudlow on "squawk on the street" today. we can't say that anymore. now he's like an administration official just regular larry kudlow, 10:00 a.m. eastern time. we'll be back.

he's wrapping up his trip in the united states. we're going to talk about that and so much more when we return. ♪ 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, the global investment management businesses of prudential. at crowne plaza, we know business travel isn't just business. there's this.

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welcome back to "squawk box. here's how we're setting up for this monday trading session. the dow looking to add about 160 at the open. this of course after friday's massive declines down more than 500. down 700 at some points in the session. the s&p now looking to open higher by 13 points. nasdaq looking to add about 50 points at the open we're going to talk about saudi prince mohammad bin salman wrapping up his u.s. tour over the weekend with a trip in houston. joining us now is the founder of

the arabia foundation. grade the trip thus far. >> i think it was a great success. he didn't just meet oil people he met bankers and technology people and the leaders of the technology industry and entertainment industry he went cross country. it was important for him, i think, to meet the leaders of the american business community. important for them to meet him, get a feel of the person who is really driving change and reform in saudi arabia and opening up the markets. i think it went very well, really, across the board >> so the big question going forward is whether you think the result of this pr campaign and i think that's what we should call it given that it was basically photo op after photo op after photo op is whether it results in money, direct investment from this side of the world going to that side of the world going to saudi rather than the opposite way around. if you talk to so many of the

ceos who met with mbs, they all said they wanted to have the meeting. the reason they wanted to take the picture was for the opposite they wanted his money in their companies. >> well, it always is, you know, you give and you take. obviously saudi arabia is a big investor in many industries. so they're interested to meet him. but also he's interested to sell his story. and he's interested to sell his program. and we don't expect money to come in tomorrow, but i think the positive impression that he makes and he does make the positive impression a lot of people he meets ends up having eventually a very positive impact on foreign direct investment to the kingdom. so these things are never automatic. but they come with time. >> right what about the question about the rule of law? and the reason i raise it is because of course the rounding up or arrest of so many both members of the family and others who ended up being at the ritz there and still questions that

persist. i heard whispers throughout the entire trip that questions were raised very politely when they could. they would talk about rule of law but this or that i didn't hear many people saying okay we get there's transparency now. >> look, andrew. saudi arabia has a hundred years of a track record protecting foreign direct investment. from the oil companies that invest in the 1930s, it was probably the only or one of the only oil producing countries that didn't nationalize its oil industry so none of what happened in the ritz touched foreign investment. it was partially a political move, also, to send the message to elites in saudi arabia to affect behavioral change but it did not touch foreign investment i think foreign investors understand that. you look at the track record of the country and you see that foreign investment has been protected under the rule of law for over a hundred years before

it was fashionable to protect foreign investment in third world countries. >> what's your take on foreign companies who have deals with prince that he has some side arrangement in secret with a third party in this case the government meaning if you were a u.s. investor or company who was going to do a transaction with him, would you now without knowing whatever this third party arrangement is >> well, the third party arrangement that he or anybody else would have signed is retroactive. in other words, it's backward looking. not forward looking. but i think what this means is that foreign investors -- >> are you sure about that >> well, i'm sure about that because people were held because of historical behavior >> you don't believe there's a -- hold on just so we're clear, you don't believe there's an ongoing lien effectively against any of his or other people's businesses in terms of cash that had to go out

to the government on reoccurring basis? >> no. i think he and others have made settlements. and they have transferred assets to the government. now, they are confidential, these arrangements between the people and the government. but backward looking steps at the same time i think it also eliminates the opaqueness about doing business in saudi arabia the need to pay commissions. the need to pay kickbacks. i think it'll make it a much more level playing field for foreign investors. a much more transparent space for investors. saudi arabia has had a lot of corruption and back door deals in the past 10, 20 years so i think that is a big positive for foreign investment. >> okay. we appreciate your time. and of course your perspective we look forward to talking to you more about this in the future thank you. >> thank you, andrew coming up, today's top stories. be right back. ♪ play "do it like this".

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good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square, i'm joe kernen along with andrew ross sorkin and melissa lee. becky is off today among the stories front and center, gasoline prices are higher than they've fwhnin awhi. up 8 cents the price of regular is put at $2.74 a gallon hilton's largest shareholders have begun a secondary offering of 63 million shares and china's hna group has said friday in an s.e.c. filing it would sell some or all of its hilton stakes separately hilton raised its forecasts for revenue per available room rev par. you know what i thought it was revenue per average room because they're superior, luxe, suites it's not per average room. it's per available room.

anyway, that is the key hotel industry metric. it now expects 3.5% to 4% for the current quarter from the prior forecast of 1% to 3% and chicago fed president charlie evans says he's optimistic that the fed's 2% inflation target will be reached and under that scenario, he says continued gradual rate increases would be appropriate all right. now finally, it's time >> it is my favorite time of the year it's tax season. >> it is the most wonderful. >> it is not really. the odds of getting audited this year, the lowest in a decade robert frank joins us now with why that's a good and bad thing. i'm worried you're just encouraging people to cheat, cheat, cheat >> well, it could be it's going to get a little harder to cheat now. we'll explain why. the irs is going to receive about 130 million tax returns this year. the good news for taxpayers, fewer of them are going to be audited. cuts mean fewer auditors the chance of being audited have

dropped by more than half for the wealthy. in 2011 the irs audited one in eight returns for filers of more than a million or more last year that figure dropped to 1 in 25. those who make more than $200,000 have seen their chance drop from 4% to 1% this marks a sudden reversal under the obama administration when formed a global high wealth group to target those big earners who use private companies and offshoring to avoid taxes. between 2008 and 2012, audits for the top earners jumped 50% now it's at it's lower level in a decade it's probably going to drop further because the budget dropped to $11 billion the drop has cost the agencies between $4 billion to $8 billion in uncollected taxes but the wealthy still pay the vast majority of the taxes in 2018 the top 20% will pay 87% of the income taxes but they earn 52% of the nation's income.

the top 1% they're going to pay 43% of all the taxes. and the top 0.1%, those making over $3.2 million, pay $22 million. >> so what are you saying? i want to know about my chances of getting audited >> assuming that you're in the very, very top end, your chances of being audited are less than half what they were three years ago. and it's about 1 in 25 will be audited. less than 4%. >> have you filed yet? there's still time to decide which way you go >> here's the issue -- >> i'm already on somebody's list >> but the issue -- this is for last year's taxes. going forward, you know, the audit is triggered by over-reporting your deductions or under-reporting your income it's going to be harder to over-report your deductions. because they're wiped out.

but where the gaming is going to be is in the s-corps, the llc, and partnerships who get much lower treatment. >> that's you, right >> you're already a media conglomerate, right? >> i have some of that, but you know >> were you on lois lerner's list were you on a conservative -- i don't see you. you should be safe >> we'll see we'll see. >> probably sent money back to you for all you do >> we can only hope. melissa, save me >> robert, thank you let's get back to the broader markets now. joining with ining us, john rid of portfolio management. guys, good to have you this morning. john, i'm curious your take on what jerome powell said last week that seemed to help spark that selloff we saw on friday in terms of -- it sounded to me and to other market participants that perhaps what he's saying is

that the bar is going to be higher for the fed to curtail its rate hike path because of the market volatility. >> let me -- i'll leave the market to phil since he's here but i will say i didn't see anything different in powell than we have seen in his humphrey hawkins testimony he's very clear. there's no greenspan speak or yellen speak he's very clear. he uses english and he said, look we're pretty close to full employment inflation is going to rise in the next few months and it's probably going to be appropriate that we continue to gradually hike rates and in terms of the market, what we haven't seen any sign of is a powell put where he's hemmed a little bit because of the market volatility now, we're down, what? 10% from the highs in the move it's been a long time since we've had that kind of correction

that's very healthy for a fed chairperson to be speaking in english and not getting too worked up over what we've seen in the markets and focus on inflation. >> in the context of today's volatility with the potential trade wars, et cetera, i mean, not having a powell put is problematic, isn't it, for investors? >> i agree with john that we're not dealing with the greenspan-esque or yellen-esque or bernanke-esque confiscation this is a clear guy who's telling us what's going on our view based upon the data, based upon what he said is that we're looking at three quarter point hikes this year. three quarter point hikes next year that takes the funds rate up to 3% by the end of next year that's fine. the economy right now, you talked about the trade wars, the concern there. we had a stumble with the jobs number we're likely to have some weather-related negative impact on consumer spending in the

first quarter. so i think three quarter point hikes this year is appropriate in terms of inflation, the core pce is going to be dropping off some low inflation data from a year ago so those numbers are likely to move up towards the fed's 2% inflation target by the end of the year but we don't see a spike in inflation. 2.5%, 3% core pce over the course of the next year. this thing is moving along at a reasonable pace. >> the notion there's no powell put, i think that markets had believed before that under yellen there was a yellen put in that market volatility or what the markets had done was one input that the fed had been looking at if that goes away, we are really looking at a completely different fed. it's not so much more of the same janet yellen to jerome powell this is different, isn't it? >> well, so, okay. we have to focus on valuation then and do what we get paid to do. the volatility we had in the market last year with the vix between 8 and 10, that was ab

normally low those days are behind us we're back to a more normal environment. >> so what kind do you talk about? >> we saw 12% correction in the market we thought we would see 10% or 15% this year. that's exactly the sort of thing we're expecting to see now, with first quarter earnings starting later this week, there's a 17% year over year increase we could be high as 20% this year $155 in earnings versus $130 last year is a pretty good increase given moderate inflation. price earnings ratios down here at 16 times earnings are still reasonable so the market -- i don't think we need a fed put in order for the market to do and investors to do what they need to do >> that's what i've been saying today too. that -- so rates are going up. so the 16 multiple may stay at 16 but if you're going up 20% on earnings, then it's hard to see a 40% drop in the stock market >> exactly.

>> there would have to be something really scary it's not a housing bubble. that got us -- the bond bubble >> if this tariff thing goes really, really nasty it's a very low probability risk, but -- >> i'm worried of the bond market bubble than that. globally >> but i don't -- i mean -- interest rates are going to be corrected slowly you know, i think the 10-year yield gets to 3%, 3.25% this year maybe even gets to 4% next year. but a 4% bond yield, turn it upside down. in treasury terms that means your treasuries are selling at 25% that coupon and that coupon doesn't grow that's the metric in which you need to -- >> i can't connect the dots to where phil's earnings number gets significantly cut by the trade war. what would that be more than $100 billion sounds like it would be -- you

need to get to a trillion dollars of tariffs >> and the reality is, joe, that you look at this last trade number we saw the other day. $57.5 billion. that's the worst number in a decade now, you look at the impact on gdp in the fourth quarter. the large trade number what we had 2.9% gdp growth which is pretty good and if you look at the impact on net trade, that took more than 100 basis points out of gdp growth we could have had a 4% gdp if trade was normal if you just look at the spike in imports, the spike in imports took almost 2% out of gdp. so the fact that the administration is focused upon trying to smooth that out to some degree is not a bad thing if we can avoid a trade war. and that's the fine line that kudlow and the administration are going to have to try to walk >> all right phil and john, thank you >> thank you when we come back, mark s zuckerberg, he's on the hot seat >> users will be able to delete

their data >> no. >> why not >> because it's mine you gave it to me. no backsies. and if you don't like it, you can zuck it. >> that was "snl's" take but what should the facebook ceo really say when he appears before congress? we'll ask mary uhl-bien after the break.

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private data tonight i'd like to apologize to all 87 million of you. one by one i'm sorry, ethan cooper of vann nice, california, for saying you visit your girlfriend's album cancun especially an average photo of her for 2.3 minutes. >> that was "snl" poking fun at mark zuckerberg over the weekend. tomorrow the social media company's real chief executive is going to be heading to capitol hill to field lawmakers' questions about the scandal. it is an event investors are going to be watching closely facebook share price down more than 13% over the last month on that news. joining us right now is mary uhl-bien, she's the managing professor at texas christian university good morning to you. we've been trying to think through the permutations which this testimony is going to go over the next two days and from an investor standpoint trying to think also through the implications for facebook, a

this point in the ball game, do you think meaningful regulation is coming or do you think this is just theater? >> there's no question regulation is coming but that's not just because of this incident. that was already in discussion you know, we're going through a time of digital revolution just like we went through the industrial revolution. after that we had the rise of things like labor laws and consumer protection laws so it only makes sense that now we're going to start having privacy laws implemented as we get more and more into the internet >> and what do you think those laws are going to look like and what do you think the implications therefore would be on the business model of companies like facebook? >> well, tech companies actually have been looking into this for awhile so they've been researching the different kinds of regulation they think might work. they want to play an active role in that regulation they know that they will be protected by it. so you hear companies like

facebook saying we actually would welcome it because it would help us to know what we should be doing. the internet is such an interesting thing. because when it started, we were all excited about it people were jumping on we're now in a different stage of it where we're past the excitement and the thrill and we're more at the reality of it. and that reality is beginning to reveal that it can have some pretty bad uses. so -- >> do you think the public cares? we care. >> i think it cares a lot. i think, again, users are getting more savvy you know, think about facebook so when somebody plays a game farmville or when they fill out a survey like they did with the cambridge analytica case, they don't know what is really going on from their standpoint, it's just this none thifun thing to do. i'm going to fill this out and find out about my personality. they have no idea that information is being used. and i think it's the role of the media to expose is that.

and it needs to be more of a role of these tech companies >> mary, if we don't see a drop in user engagement or a drop in monthly active users, isn't that proof that people don't really care and so what is the impetus of lawmakers if their constituents are not walking with their feet to enact any sort of change? >> yeah. and that's the interesting thing about the delete facebook movement what we know now is that it hasn't really impacted facebook so far we heard from zuckerberg last week that the numbers are still up those are the numbers to look for. to look for usage and what happens in the advertising the reason it hasn't dropped off and it looks like people don't care is because there is no alternative. the interesting thing about this story is there are some opportunities right now. and if there's some really strong entrepreneurial companies that could get a leg hold in this, i think they would have a tremendous opportunity to think about disrupting facebook. >> who would you put on that list

>> there isn't anybody i know of right now. you know, facebook is a behemoth if you look at how zuckerberg handled this, it was interesting. when this first broke, this news first broke, he tried to come out and deny so i think they were really thinking that this was not a big deal and they mishandled that terribly then they tried to make up for it and if you look at the apology that they've been doing, it's really not been very effective in my opinion. you know, they come out and say they it's a breach of trust. well, who uses that kind of word this is -- in fact, if you watch him, he says it's a huge breach of trust and the reason they did that was they were trying to indicate this wasn't a data breach. they started by saying it's not a data breach. it's not our fault so then in doing that and getting too technical, they were caught up with the term breach they started talking breach of trust. i just don't think the handling of that has been very good so most people are doing a wait

and see. let's see what happens with this >> what do you think about the potential for serious fines by the ftc? you think that's possible with this administration? >> i think it's -- yes, i think it's very possible not only possible, likely. so the kinds of things we're talking about in terms of laws are fines for companies because we've seen one breach after another. and there's no consequence for it but the other thing that's being discussed is the idea of informed consent so informed consent is people knowing what their data's being used for and i think that that is something that should happen this professor who took the data for -- did the survey for cambridge analytica, he's trained as an academic he should know that he should do informed consent but clearly facebook has not been holding people to that standard >> there's an interesting article in the journal today, talks about the idea of every company like a

facebook having an almost fiduciary responsibility what would be in the best interest of the user if you started the conversation there, internally within these companies, you might get to a different outcome. does that make sense to you? how would that work? >> it does and it actually fits really nicely with acebook one of the reasons that they got in trouble is because, as they say, they've been too idealistic when they started facebook, they felt they were bringing the world together that they were opening things up and it was going to create all of these great things. when they first heard about the russia interference, the potential election interference zuckerberg said that's a crazy idea what he needs to understand, it's a crazy world we're in now. so they need to really change the way they view this and understand the negative consequences and there's precedent for that

this isn't very much different from other companies that know their products can cause harm. the reality this product can cause harm i think they're starting to come around to that. >> all right we'll leave the conversation there. thank you. >> thank you. >> appreciate it when we return, less than 40 minutes ago until the opening bell on wall street. we'll find out what jim cramer is watching. here are the futures now up roughly 175 points. i don't know how we can prepare. you have to deal with that 'lbeig bk. wel rhtac ♪ can i get some help. watch his head. ♪ i'm so happy. ♪ whatever they went through, they went through together. welcome guys.

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to the new york stock exchange and jim cramer joins us now. this is not your first rodeo this is not your first wrestle mania. i think it's wrestle mania 34, jim. i've seen twice now that the market could go down 40% i saw it from the big body builder and mark up watch. what would happen to have, jim could you see the possibility of the -- are we 40 percent

overvalued would tariffs do that? what would you see causing that? >> i think that let's say that chinese decide to make it so that apple's iphones are too expensive by putting a giant tariff apple has done big cascade because of etf i don't see it happening down 40% would be hard to imagine there's a lot of cash on the sidelines. these are things when you left the office on friday it had residence. you come on monday after the calm talk on sunday no residence. so i come back and i say we got to take the 40% off the table somehow. the way i would do it is say we're about to have earnings season i think that these things happen in the vacuum of no earnings season but a week from now we'll have things to base it on. i bet things turn out to be better than people expect. >> that's what i thought, too. 16 is not cheap. 16 times earnings. when something scary happens you

go to 10 like you need a housing bubble to get to 10 or something. >> yeah. and you need short rates and take them to 3.5 right now it scares a lot of people. but, you know, a lot of bad things have to happen. a huge number of bad things happen maybe it could. that's a huge lone. coming up larry kudlow done good he made something of himself he'll join the "squawk on the street" gang at 10:00 a.m. eastern. we'll be right back.

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i said there might be breakfast. i was really looking forward to breakfast. i know... voya. helping you to and through retirement. half hour until the bell rings. looking to add 166 right at the higher nasdaq up by 49 points it will be a reversal from friday's sell-off here there's a lot of time in the day to trade. >> you don't need to change your settings. >> i don't >> no. >> oh, no. i'll get up as early as i do today. >> yeah. >> i'll be here tomorrow

>> yeah. >> it's easier than changing it. >> right good. >> thank you we'll see you tomorrow andrew, leave yours set at 5:45. we'll see you. make sure you join us tomorrow "squawk on the street" is next ♪ good monday morning. bulls will try to reset here after friday's losses. futures are up as we buckle up for an eventful week bank earnings on friday. zuckerberg on the hill tomorrow. larry kudlow with us in the next hour europe is fairly choppy. gold just about unchanged. we begin