from capitol hill. it's tuesday, april 10, 2018 "squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box. good morning welcome back to "squawk box" here on cnbc we're live at the nasdaq market site i'm andrew ross sorkin here with joe kernen, melissa lee is here. dow futures are soaring following yesterday's late session selloff. we'll talk about what happened yesterday afternoon. this morning president xi making some meants that are leavie leah market higher. nasdaq is up 117 points. s&p 500 looking to open up about 35 points higher let's show you what happened in asia you are looking at green arrows across the board with the hang seng and the shanghai composite both up strongly

over 1.5% up european equities at this hour are also trading up sharply. we will show you that as well. green arrows there finally treasury yields rite now, the ten-year looking now at about 2.801. i still like a 30-year fixed, 3.031 is the number to beat. here are the big stories this morning china's president xi jinping speaking at a forum overnight. he vowed to open china's economy, open tariffs on imports, and he criticized isolationism the message wasn't new but it was the first time xi reiterated china's commitment to an open economy since president trump announced tariffs on chinese goods. this is the xi rally >> this is the xi rally. >> regardless of the new yesterday, which caused the

markets to reverse >> a bit of more clarity on what caused it to close lower yesterday. here's a piece that broke. this was this morning. the times story on the raid of michael cohen's house broke ahead of the closing bell, appeared to add to a late round of selling and the president said the stock market dropped a lot today as soon as they heard the noise of this nonsense that was going on it dropped a lot it was up, way up, dropped a lot at the end it's not -- there was another 400-point drop, brian ross and the -- they didn't know the timing of when -- >> this is also a 400 point drop >> brian ross is now doing documentaries or something, reassigned but it was -- now, when it's all said and done, we were talking in makeup andrew and i, it's deep what's happening here to have a raid on attorney client privilege type stuff when the client you're talking about is the president is a bold move.

but when it came out -- i don't know who leaked, but within a half hour of the story breaking, then you hear from -- is it someone on mueller's team who says this is what it revolves around, stormy daniels >> the payment that was made >> maybe we should back up and fill people in on these details. president trump firing back at the -- after the fbi raided the home and office of michael cohen. >> so i just heard that they broke into the office of one of my personal attorneys. good man it's a disgraceful situation it's a total witch hunt. i've been saying it for a long time >> according to a statement from michael cohen's attorney, the warrant is in part a referral from the office of special

counsel robert mueller related to several topics, including the payment of $130,000 to stormy daniels. stocks dropped after the news broke. the dow was 440 points higher at session highs but gave back those gains, closing 46 points higher on the day. >> it's a something naignificann up of the investigation. >> a referral to the southern district what makes that more interesting, if mueller were to be fired, or something were to happen to him, the southern district can continue to pursue this case irrespective of what's going on >> also it could be this is outside the scope of my investigation, you look at this. or if you can squeeze cohen --

>> the "washington post" says he is under investigation for bank fraud, wire fraud and campaign finance investigations >> part of the issue is if he paid off stormy daniels, that can be considered a campaign contribution that's effectively an unlisted contribution >> people minimize the seriousness -- you want more than that. people minimize the seriousness of that in terms of looking for something big. >> i imagine if you're looking for something bigger than that what you're looking for is you want to squeeze cohen. and then he will turn on the president. >> so you saw the president. they kept asking him, are you going to fire mueller. he said we'll see. we'll see. so, you know the president loves lou dobbs, over on fox business. lou always has these polls they are always like -- he asks these leading questions. do you believe blah, blah, blah. always pro trump they are usually -- 95/5

he did the same leading question do you think there's now enough behavior and conflict to finally fire rosenstein and mueller? 24 yes 76 no. so even at this point there is the notion by most people, i would say, that that will -- that's like a constitutional crisis if trump does this. i don't know whether mueller is thinking, you know, take your best shot at me or whatever. >> you don't think mueller's view is i will take this as far as i humanly can >> with impunity that will be harder on you if you take me out. >> that's why the markets sold off. i also think if the end result -- maybe mueller does want to supplant -- you get pence, i don't know how you feel about that if mueller's intention was to

get rid of -- that's not a bad way of doing it. i would like to believe mueller is doing this on the -- >> he will go where it leads >> yeah. >> one reason the market is doing better today, they don't see the "c" word >> the markets are doing better today because of xi. >> they are. >> the fog of war but we have clarity on trade >> when they leaked and said, okay, it's not about stormy daniels. it's not about this, they have found there was a contact before the election -- >> i think that helps. >> the market would not be up today if this had turned -- >> really? >> no >> no. whether you like trump or not, that's a serious constitutional crisis once the subsequent stuff comes

out on what they have on cohen, we don't know what they got. this is all conjecture we have no idea. >> we have no idea >> for you hope springs eternal. >> no. >> come on pence. you're right pence. >> nobody wants a constitutional crisis >> no good american wants a constitutional crisis. >> he's all for that >> mark zuckerberg is is going to speak -- >> his own crisis. >> yes did you see larry's comments yesterday? he's like where is the hoodie and dujeans? larry kudlow speaking on capitol hill, first time ever as he faces -- as he faces growing scrutiny for facebook's failure to protect users and data boy, julia, we would have had you at the top of every hour

until this other stuff happened. good morning >> good morning. as zuckerberg gears up for his testimony, he has been making the rounds bill nelson said he conveyed to zuckerberg his concerns over privacy an misuse of social media. hours from now zuckerberg will answer questions from the senate judiciary and commerce committees senator thune says he is interested in zuckerberg's vision for the responsibility facebook plans to take for what happens on his platform. how he will protect users data and how they intend to proactively stop harm. conduct. senator edward markeshsy wants o know if there's recourse for victims of the privacy scandal during the question and answer

session zuckerberg will face on accountability, owning the bigger problem that they didn't focus enough on preventing abuse and action the company is taking to prevent election interference and the sale of users data zuckerberg plans to safeguard the platform, limit information developers can access and building better controls he will say facebook prior tiits the community over maximizing profits. back to you. >> thank you, julia. we'll see you much today and tomorrow joining us with more is ed lee from recode. also michael furdich is joining us this morning, founder of reputation.com, beaming in from the west coast thanks for joining us.

it's such a basic question what to expect? it is sort of the question we were talking about yesterday is there any way for this to end well for facebook? >> they can only lose here on out. the best thing that mark can do is to maintain i think we're all talking about -- >> maintain what >> so they've been on this push to -- they've been on a press push they've done more press than ever before. >> is it working >> it's worked to a degree he's softening the ground for this testimony coming up i know we're talking about potential regulation, if he doesn't do enough, congress will have political will to regulate more the bigger issue is reputational risk this is the first time most americans will see mark zuckerberg in a contentious situation, but the best and worst 15 and 30 seconds of his testimony will be replayed

everywhere everyone -- no matter how good or bad it is, people might decide, wow, i don't like this mark zuckerberg guy. maybe i should not be on facebook or instagram anymore. >> michael, you buy that you think if you like or dislike mark zuckerberg that could change your decision to use facebook or not? >> let's remind ourselves about the 2012 ftc consent decree in which facebook promised to protect data of its users to a high standard. one thing we have not discussed enough is whether this $40,000 per violation penalty that could be levied against facebook is the 2$2.5 trillion pound elephat in the room that could be sir calling and may inflict heavily on what facebook has to say and what mark zuckerberg has to say. he needs to make sure he's not

hanging himself in front of congress there's a question of how likable he is. the press is wondering whether this person from silicon valley can charm congress i also think congress could flub this they could close the barn did or after the horses have gone out facebook maamassed this enormou population on its platform by making facebook as scintillating and titillating as possible. how do you do that with personality quizzes as you log in, but they don't put the privacy controls in your face as you log in if they did do that, traffic would be down. hour per user per day metric would be down. i think if congress decides to act, or if the regulators act too strongly they could protect fortress zuckerberg from the

upstart startups that could take their user share they have gotten here by making themselves scintillating and titillating. anything that starts to -- there's an inverse relationship between how scintillating they are and how much privacy control the user has >> ed, your hardest question i'm putting you -- >> what would be the hardest question to ask? >> you are now a member of congress, you're on the committee. >> from me or ed >> ed first and then out west. this is a point i made before on the show and elsewhere i think the biggest liability is mark zuckerberg and himself to facebook the fact he's the controlling shareholder. there's no check against him the tough effoest question is if facebook or you make a decision that the american public doesn't like, what is the check against

that are there shareholder lawsuits is there a boarding a shun what kind of assurances can you give the american people that, you know what? there is a way in. there's a lobbying effort that, you know, the pane could change directions >> but the incentives are aligned for him to make the right decision, if he doesn't make the right decision, people walk or are less engaged i would say that's working in facebook's favor now >> because he's the sole decisionmaker? >> no, because user engagement according to every analyst so far that has come out says user engagement has not felt the impact at all. that's henning them in this situation because it shows that there is no will among the general public to change anything >> the general public is not equipped to handle this. the main question to ask zuckerberg today if you want to know, you are prepared to be an information fiduciary. are you prepared to get past the

myth that the click to consent, a thousand word document is just a myth, there's no way the user can sign 1,000 insurance len agreements, 1,000 credit card agreements, 1,000 privacy use agreements per day and say i consent i consent and understand them lawyers, bankers, people in professions, people in your field agree to be fiduciaries on behalf of users. it's time to consider whether a company of scale like facebook, like google, like microsoft ought to be considered fiduciaries for their users. would this be in the best interest of the users? >> michael, here's a market question why has nobody emerged with a facebook like product with the exception maybe of apple in terms of how they talk about privacy. why has there been no other company out there yet that said

we will do what facebook does, we'll do it better and we'll handle your privacy concerns in a more meaningful way. if that was created, would people use it. >> there's been one that got scale. snapchat got started on the promise that your photo will disappear after a certain amount of time. your fophoto has a half life. snapchat got popular with the kids because they said i don't want this photo lasting forever, marking me forever >> for a hot minute that's how it started but that's not how it ended. snapchat is in a different place today. >> they also use data to sell advertising. >> don't be too dismissive you're right there are things that are a perfect analogy, to be sure, they're doing things with glasses, and we can do better, but it does show you that there's an appetite, if you

get the user interface right, if you get it slick, there's an ap tide amo -- appetite to have control over the destiny of your contributions. facebook could say there's an expiration date for everything you publish. you can set a date of one month, two years. so it's not on your permanent record >> one thing we learned is that people don't use the controls that exist >> not true. what we have learned is that the facebooks of the world have made them hard to use they make them hard to find. they make them very hard to understand and so you know facebook means it it's a fair question, but you know facebooks of the world mean it when they put those privacy controls in plain english all in one place in the middle of your feet as you log in every time you log in. i can't use facebook messenger on my phone because i refuse to

download the app on my phone every time someone contacts me on facebook messenger, they say, no you have to download the app. download the app they make a show of it every single time. in the same way they could make a show of it to use the privacy controls >> i think the fundamental thing to understand is whatever kind of privacy controls you offer, there's competing networks that would make things easier for users in terms of data, the fundamental gam you about tbit d the data to sell the advertisers. whatever regulations facebook wants to agree to, that's the limit. they don't want to go past that. >> ed, michael, thank you. michael coming from the east coast not the west coast today, in boston. another hot bed of technology. nice to see you. >> thanks. coming up, chinese president xi jinping speaking last night,

pledging to further open china's economy and significantly lower import tariffs including those tariffs on vehicles. futures are soaring in early trading. we'll get a live report from china and all the details next most etfs only track a benchmark. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. i am an independent financial advisor. for our firm, it's all about trust and transparency. trust that we do what's right for our clients, without the constraints imposed by the traditional brokerage houses.

transparency in the way we're compensated. our philosophy is one of service, not sales... that's why i'm independent. charles schwab is proud to support more independent financial advisors and their clients than anyone else. visit findyourindependentadvisor.com

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

promising to open the economy and cut inport tarimport tariffg like cars. the dow looking to open by 318 points martin soong joins us from china with more. good morning good morning the wto complaint you were talking about earlier on, china filing that against steel and loom tariffs that was the stick, hours before that was the carrot and a fairly big one. in a sweeping half hour long speech president xi said china is open for business, including the auto sector. >> translator: on manufacturing, we have basically opened up this sector only with a small number of exceptions, automobile,

ships, and aircraft. now, these industries are in position to open up. going forward we will ease restrictions on automobiles in particular >> it's not just that, president xi promised to lower tariffs on imported u.s. autos into china both of those moves this year, but whether or not that's soon enough or enough in total to satisfy president trump, that's yet to be seen president xi gave himself political cover saying these were planned in any case ti timed to coincide with the 40th anniversary of china's economic reforms which falls this year. >> to be clear, president xi has promised these things before this is a reiteration of past promises and there was no time frame mentioned, correct

>> there actually was. he said he would lift investment restrictions for autos as wells a lower tariffs for u.s. autos into china by this year. we are mid-april now so we're about 1/2 month8 1/2 ms away, and that's a lifetime in politics if that happens early enough before the november midterms is a question also china has a self-imposed deadline, the 40th anniversary of economic reforms falls in october. that's cutting it a little close. >> martin, the intellectual property side of all of this, was any of that new? if you give it good lip service that you will play by the rules more even if there's no proof in the pudding?

if it sounds good, member both sides can claim victory and defuse this situation without changing behavior much >> to be honest, what president xi said earlier today, i'm not sure it will be enough it will move the needle very little they said they'll do a better job, try to do a better job protecting foreign intellectual property, including u.s. intellectual property. if this ever gets to the wto, it will be touch and go if two sides agree to do business, and that deal involves on paper transfer of technology, is that enforced or not? that's an open question. >> all right >> martin, thank you >> thanks. coming up, stocks selling off into the close yesterday

almost 400 points. used to be a big number. any way, it was after reports that the fbi raided the office of president trump's personal lawyer we'll talk about the volatile session, one of many, and how you should be preparing your portfolio next as we head to break, here's yesterday's s&p 500winners and losers girl: to most, he's phil mickelson,

pro golfer. to me, he's, well, dad. so when his joint pain from psoriatic arthritis got really bad, it scared me. and what could that pain mean? joint pain could mean joint damage. enbrel helps relieve joint pain and helps stop further damage. enbrel may lower your ability to fight infections. serious, sometimes fatal events including infections, tuberculosis, lymphoma, other cancers, nervous system and blood disorders, and allergic reactions have occurred. tell your doctor if you've been some place where fungal infections are common, or if you're prone to infections, have cuts or sores, have had hepatitis b, have been treated for heart failure, or if you have persistent fever, bruising, bleeding, or paleness. don't start enbrel if you have an infection like the flu. girl: since enbrel, dad's back to being... dad. visit enbrel.com and use the joint damage simulator to see how your joint damage could be progressing. ask about enbrel. enbrel. fda approved for over 15 years.

♪ welcome back you're watching "squawk box" live from the nasdaq market site

in times square. >> good tuesday morning. look at u.s. equity futures because they are moving in a big way. up triple digits president xi making comments about perhaps being more open in the future we'll see how that results >> it's triple triple digits >> we have the dow looking like it would open up 341 points higher t the s&p 500 looking like it would open 35 points higher, and the nasdaq 116 points higher shares of tesla now. the automaker would benefit the most from lower china tariffs. it is up about $10 let's get you caught unon the market action now. here now for that is ed keon, chief investment strategist of qma, and chris retsler trying to think when you were on

last ed. we had january, the davos top, and now a change -- >> they're calling it it the davos top? >> january 26th the. >> the trump interview it was the elites that all sucked up to him and kissed his butt while there, the elites said everything is great for the first time ever. that topped it out any way, the sentiment, i like when people say this, it's like 360 degrees. no 180 degrees now all week we've been talking about whether there's something that could cause multiples to come down. because 16 doesn't seem -- it's not cheap. >> pmultiples have come down

so for the market to have a lot of risk, even on your show yesterday, that carter was on last week -- >> carter said 10% to 12% on facebook >> on facebook not the market >> he didn't change his view >> no. >> but a couple different outlets are talking about another 40% pullback in stocks what would cause that? >> it's always possible, but that would take a big shock or a recession. i think the shocks are always unpredictable by the nature of shocks >> black swan, north korea >> something like that all-out trade war. if you look at fundamentals, 15% to 20% for the year, in the long run earnings drive the stock market multiples have already come down from where they were is it possible you could get a big drop yes. but i think it's unlikely.

>> you have to say the complacency has been shaken. >> that's a good thing >> but it certainly has. i don't read the articles, oh, we'll go up forever. >> we think we'll get a 9% return when all is said and done >> for the year. >> for the year. about 10% of where we are roughly. >> that's like another 25 mr%, % >> for the whole year, 9% -- >> from where we are now >> yeah. down about 1% on the s&p >> we won't be back to the highs of january >> up 9% from january. >> we're down 10% from the highs. >> about 3% above the high we hit in january >> 3%, are you sure? >> yeah. roughly. you just buy small caps. should i even ask you about the overall market >> as a small cap manager we look at high yield market. that's not confirming there's a lot of nervousness out there

we think there's a lot of great opportunities. we put money to work in the small cap area we think that will be a beneficiary of policies, deregulation m&a will start coming back as large cap companies look to deploy money, buy growth, we think that's still supportive of that area. now, we do know and we've seen that volatility is returning to the marketplace. it is compressing multiples. you don't have this continuation of qe that suppresses volatility that has come back into the market that is welcomed for long-term investors to find opportunities to put to work >> you are saying my interview was so tough, so probing that it exposed some of the president's shortcomings on economic issues because of my skill as an interviewer? is that where you were going >> you might have punctured the

bubble may ha >> i thought he did pretty well overall. given the tough questions, shining a light on all the -- >> yeah. >> that's what you do every day, joe. shine the light. >> shine the light >> democracy dies in the darkness >> it does >> did you hear that >> that's great. >> just came up with that. >> i think i did why, is it -- >> mr. bezos >> right he wishes he never said that or bought that paper at this point probably do small caps do better in a trade war? aren't they domestic do they supply companies that would be affected >> it certainly, as we have globalized, there's more technology companies selling into those areas so far we have not seen that be the target of what the tariff talk has been about. it's more about trump's base

that the tariffs are going after. i would say it's more political as they negotiate this i don't think we fall into a major trade war. the question is going to be how long does this extend. how much does it hurt confidence it has what you'll see in earnings numbers, is guidance on the conservative side. if i was a cfo, why would i take that chance? i would rather be conservative and beat in july small caps should do well. technological motes should protect businesses, which is where we like to invest. one area that has been beaten down, semicap equipment. china has a big plan to build out its domestic sem semi production. they need the commitment to either -- >> they would buy it from the u.s. >> there's only two or three manufacturers of the equipment that you need to put in the

lines. areas like that still remain protected because they're must have >> so, keon, that's all you got? so 9% by the end of the year do you have nick else that vihar viewers? should we have you on again? 9%, that's where we are. >> that's my opinion >> from december 31st. >> that's correct. i think that's a good return. >> given your track record, that would be unbelievable. kidding. that's a weird looking chart the s&p right now is below the mid point of the recent -- i don't know what carter would say about that looks like we're ready to test -- or katie stockton. looks like an important point hering doesn't it? if it breaks below the lows, do we -- would either one of you guys have any technical expertise? >> i don't pay a lot of

attention to the charts, but there is value there my old friend, ralph, he was the famous technician. >> he was famous and infamous. you remember newton zinder >> that was a while ago. >> you're telling me it was a while ago? >> roughly contemporary. >> any way -- andrew, come on, dude >> thank you >> it's called stitching one person stops, you get on it. what were you looking at >> i was looking at a davos thing, actually. >> you were? >> facebook under fire -- >> you wrote the book. >> ken auletta will join us this morning to talk about mark zuckerberg's performance on the hill later today no better person to talk to than him. and then senator john thune, chairman of the committee hosting mr. zuckerberg, he will tell us what he wants to hear from the facebook ceo at 8:30

a.m. eastern time. and texas governor greg abbott will join us on set with an update from the front lines of nafta and happens to texas if the trade deal goes away a lot coming up on "squawk box." we're back in a moment day on t. day on t. or is it? this farmer's morning starts in outer space. where satellites feed infrared images of his land into a system built with ai. he uses watson to analyze his data with millions of weather forecasts from the cloud, and iot sensors down here, for precise monitoring of irrigation. it's a smart way to help increase yields, all before the rest of us get out of bed.

welcome back time for eidtoday's executive ee mark zuckerberg will head to capitol hill to testify. some of the biggest names in business world have spoken out about facebook's policies. here's a look at some of those criticisms >> the idea that fake news on facebook, of which it's a very small amount of the content, influenced the election in any way is a crazy idea. >> i think the tools that have been created today are starting to erode the social fabric of how society works. >> when the ceos won't take responsibility, then you have no

choice but for the government to come in and say what's going on >> i think the management of fa facebook is committing malpractice. >> people don't want to work for facebook, a company perceive is destroying society >> we need to hear from him. the sooner the better. i expect him to testify. >> i think people have the right to know what it is, where it s how it's controlled, why it's controlled it's true for all these data providers. >> mark zuckerberg, what would you do >> what would i do i wouldn't be in the situation >> he will behave like an adult as a major corporate leader or give me a phony baloney hoodies and what will that sell? >> this was a huge breach of trust. people come to facebook every day and they depend upon us to protect their data i'm so sorry >> this was a major breach of trust. i'm really sorry this happened stay tuned all day you will be hearing a lot more, not just of that, but you will

see mark zuckerberg live it starts at 2:15 p.m. that's when the testimony begins we'll have a walk up to it throughout the day coming up, equal pay day we'll talk to the founder of jimmy chu about closing the pay gap between men and women. first a quick look at the markets. we are seeing some selling of treasuries the ten-year, 2.797. two-year at 2.291. at&t provides edge-to-edge intelligence, covering virtually every part of your manufacturing business. and so this won't happen. because you've made sure this sensor and this machine are integrated. ...& she can talk to him & yes... atta, boy. some people assign genders to machines. and you can be sure you won't have any problems... except for the daily theft of your danish. at&t provides edge to edge intelligence.

it can do so much for your business, the list goes on and on. that's the power of &. & this shipment will be delivered... anyone can get you ready, holiday inn express gets you the readiest. because ready gives a pep talk. showtime! but the readiest gives a pep rally. i cleared my inbox! holiday inn express, be the readiest.

he gets the best deal on the perfect hotel by using. tripadvisor! that's because tripadvisor lets you start your trip on the right foot... by comparing prices from over 200 booking sites to find the right hotel for you at the lowest price. saving you up to 30%! you'll be bathing in savings! tripadvisor. check the latest reviews and lowest prices. 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. sometimes, they just drop in. obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪

♪ it's equal pay day, we have new stats on the pay gap between women and men. leslie picker has the details from a new survey. hi. >> >> the study by lean in and survey monkey found 1 in 3 americans did not know the pay gap exists now, based on median incomes, women earn about 20% less than men, that equates to $400,000 in lost earnings over the course of their careers. 74 weeks worth of groceries.

why is the gap so hard to close? part of it has something to do with occupational gender segregation, with predominantly male fields garnering higher wages. raising the minimum wage has been touted as one way to help bridge the the gender gap another reason is the so-called mother hood penalty where employers have been found less likely to hire mothers than fathers. and women tend to take lower wage jobs that allow them more flexibility for child care some states have passed legislation making it easier for employees to ask for more predictable schedules without jeopardizing their jobs. now, some companies like salesforce have taken action by investigating their own workforces to see where pay gaps arise and gender transparency has been shown to narrow the gap as well. >> all right thank you very much, leslie picker let's talk more about the push for wage equality joining us now is cofounder of

jimmy choo welcome to the show. >> thank you >> you started tamar melon october 2016 or so >> correct i sold jimmy choo in 2011 and then left. i had a noncompete for awhile and then relaunched tamara mellon >> i would imagine the industry has more women in leadership roles. >> no. the surprising thing is it's actually worse so the uk just asked all companies with over 250 employees to submit their salaries and it came out that the fashion industry were the worst offenders. >> why do you think that is? >> it's, you know, they've had male executives for so long. and the men have tended to promote men. and the women have had just a pay gap for so long, i think it's really a lingering historical kind of bias that's been around. >> how do you reset the table? there was just a report, by the way, yesterday that hbo was

going to look at all of their employees and try to figure out sort of where everybody stands and then try to recalibrate. does that approach make sense to you? >> i think transparency when looking at the data is the only way to figure out how to do this and calling on companies to do internal analysis, that's a way forward. >> okay. but here's the hard question, right? let's say i'm going to hire somebody we talked about this on the show before i'm going to hire somebody you know how there's always that uncomfortable conversation with the candidate where somewhere if you're the hirer, you're trying to figure out how much the person is currently being paid then you're trying to figure out in your head, how much more do i have to pay to attract them but without paying them too much right? if they're starting at a low base and they ask for a certain number that's not high enough, is it on you the employer to say, you're not asking for enough or i need to pay you more to match the person you're going to be sitting next to over here >> well, there should be a fair

market analysis. so you shouldn't be paying someone lower just because you can get a woman for that you know, i think that when women come out of college, unfortunately, it starts there so your first salary is the most important one because then over lifetime it will go up incrementally. but unfortunately also what women tend to do is we have low self-assessment. so when women leave college and they go for their first interview, they ask for less so they have to learn to better self-assessment and actually ask for more >> how have you reset the table, so to speak, at your new company? >> well, we're talking about it which typically brands don't do. so we're doing a whole campaign around the gender gap. we're also giving 20% discount today. we don't normally discount or go on sale, so it's the one day of the year that we actually give 20% off to represent the pay gap. we were hoping this year it would decrease it didn't. we're still at 20%

actually, when we looked at the numbers, we figured out i'll be 90 by the time it closes if it continues at this rate and i want to close it by the time my daughter leaves college. she's 16 >> switching gears, how is the shoe business these days you've opted to go direct to consumer you can't go in a department store and find shoes you've got to order online has that been difficult? is that -- i mean, i would imagine the margins are great. >> it's how the next generation of brands are going to be built. so retail is suffering right now. it's in free fall. the future of retail is really the end of wholesale so this is how the next generation of brands are going to be. direct to consumer i don't design collections anymore. we just put up new things every month that are season appropriate. >> do you think long-term, though, that all of these direct to consumer brands that have emerged over the past couple of years will end up on the equivalent of what would have been a macy's or a bloomingdale's or something like that on amazon meaning, if -- i don't know if

they've already called you asking whether you'd sell. >> yes, they have called >> and what do you tell them >> it's the perception of amazon is not right for luxury yet. but i have no doubt that they will get there jeff is a very smart guy and i think they will get there. >> and how's that going to then change -- but part of the issue with amazon always has been this direct relationship that you're creating with the consumer gets intermediated by them or anybody else who jumps in the middle right? >> yes, correct. so we don't have the relationship but there are other market places that we're on which helps spread brand awareness so hopefully they'll discover you on something like amazon and then come to your site >> final question from me given we're talking about facebook all day. i imagine you're using facebook and instagram and other social media platforms to get new customers. >> that is where we're advertising today. so i don't do any more print advertising. it's all digital it's all facebook, instagram we're building the brand >> do you have any second

thoughts about using facebook as that platform? >> not at the moment obviously it's not good what's happened, but i think we'll continue because we really reach our customers, our target customers looking for luxury products on facebook >> tamara, thank you check out the 20% off sale coming up, stocks rallying after a wild session especially the last hour on wall street is your portfolio ready for a switch plus facebook ceo testifying at the senate today we'lte yl llou what to expect when "squawk box" comes right back a storyabout people and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service. priority: you

breaking overnight chinese president xi jingping announces plans to open his country's economy. then just hours later china officially files a wto trade complaint against the u.s. we'll make sense of it all straight ahead buckle up. futures soaring this morning as traders praised president xi but anything could happen by the closing bell and investors will look for any developments in the mueller investigation following an fbi raid of president trump's lawyer's home and office meantime, mark zuckerberg will head to capitol hill for a grilling by senators it's a packed day ahead and the 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 in times square i'm in with joe kernen and melissa lee in for becky quick take a look at the market. the dow looking like it would open up about 312 points higher. the s&p 500 looking to open about 33.5 points higher in the main market spark overnight coming from china. it's a speech by president xi jingping we are joined live from boao it looks nice. >> we had a bit of a stick today from china for the u.s let's talk about the first wto complaint. this is against america's tariffs on steel and aluminum. the carrot came just a couple of hours before in a sweeping speech by xi jingping opening up

the economy further to foreign investment sectors like shipbuilding, aircraft, and most conspicuously sectors like autos. president xi also offering to cut tariffs on u.s. autos imported into china. apparently in direct response to president trump's tweet just about a day and a bit ago criticizing trade with china as silly trade and complaining about tariffs on imported u.s. autos. so the question is, these initiatives, are they enough and also soon enough to avert a trade war? so far silence no response yet from the trump administration guys >> all right, martin thank you. martin sung in china meantime, washington is following a developing story president trump firing back after the fbi raided the home and office of his longtime lawyer michael khocohen. eamon javers joins us with the

latest on this story >> that's right. it was a dramatic escalation of the investigation into the president and the people around him yesterday as the fbi agents raided the office and hotel of michael cohen. the president reacting very strongly to that news yesterday at the white house he was holding an event with senior military leaders to talk about syria. but he opened up by blasting the fbi. here's what he said. >> so i just heard that they broke into the office of one of my personal attorneys. good man it's a disgraceful situation it's a total witch hunt. i've been saying it for a long time i've wanted to keep it down. we've given i believe over a million pages worth of documents to the special counsel they continue to just go forward. >> he called this an attack on our country, an attack on everything we stand for as

americans. meanwhile, michael cohen's own lawyer reacted angrily as well here's the statement from him saying exactly what the fbi swooped up here. he said the decision by the u.s. attorney's office in new york is completely inappropriate and unnecessary. it resulted in the unnecessary seizure of protected communications between a lawyer and his client so our understanding of what happened here is robert mueller, he special counsel, his office obtained some information. we don't know exactly what and refer that to the u.s. attorney's office in new york which then decided to go forward with the raid on its own so this is a spinoff, if you will, of the mueller investigation itself not something directly that robert mueller felt that he had to investigate as part of his mandate to investigate russian interference in the 2016 election so what is it that law enforcement was looking for in michael cohen's office we don't know the answer to

that we don't know exactly what they got. we know they are going to have to proceed here because of the attorney/client privilege that cohen's lawyer just talked about in the statement the fbi has to have what they call a clean team, a team of people uninvolved in the overall investigation to come in and analyze the material and separate out all legitimate attorney/client communications between cohen and trump from any of the material that they'd be looking for. remember, cohen doesn't have attorney/client privilege if he was involved himself the question is what crime is it that officials seem to think he may have committed >> u.s. attorney in new york is a trump appointee, too, right? >> right this would have had to have a judge sign off on it the u.s. attorney in new york validate it as something that is worth pursuing robert mueller's team obviously thought it was significant enough they passed it along to the u.s. attorney's office so there's a number of officials here involved who thought that this was the right way to go

here yesterday >> what are the permutations in which you think this will play out in terms of the timing which we'll learn more about what's happening either right now or will happen as a result of this? >> well, look. i mean, i think the first thing is the president's state of mind you saw a very angry president trump yesterday calling this an attack on the country. not just on him. this is an attack on the country. as he said that, he was sitting next to the top military brass in the country talking about military action by the united states so this is something in the president's mind that is extremely serious. he also openly mused yesterday about the idea of firing robert mueller. he denounced his own attorney general jeff sessions. he denounced rod rosenstein. so all of that points to a president who is very angry and i think you have to watch to see whether he takes that anger and does something with it does he lash out at rosenstein, sessions does he try to fire mueller?

try to have rosenstein fire mueller? those are things to watch throughout the day today the president's legal team will of course be giving him their advice i saw the president's other attorney he was very closed mouth about what he was doing there but he was in the press office yesterday briefing some of the press staff at the white house a few hours before this story broke. so they were clearly aware of the sensitivity around this. >> and it was surreal because it was on a serious strategy session. and the -- well, right at the open of talking about what to do with syria because of a horrific, you know, allegedly chemical attack on civilians and that began the conversation. i already heard this morning the usual suspects and you know the people i'm talking about. >> uh-huh. >> there hasn't been a retaliatory strike against syria but they're saying it's a wag the dog attack so i don't know. you know, it's unfortunate and

obviously mueller and the u.s. attorney didn't -- i guess you wouldn't obviously take world events into account, but it makes it more difficult to do anything to syria now. because it's going to be a wag the dog -- everybody's going to say it's wag the dog, he's diverting attention away from the investigation if it were to happen >> if you're mueller in new york you can't take world events in consideration because of the nature of the presidency itself. there's always something on the president's plate that's dramatic and significant any time you're moving against a president, you know what you're getting into here. and i think that underscores the significance of this raid yesterday. the idea they went forward with it at all i think is remarkable and tells you that they were convinced that this is something they had to do what exactly they found, what exactly they were looking for, all of those are questions that are totally unanswered as of right now. we have to wait and see as developments unfold. >> all right

thank you. let's get you caught up on the market at this hour. reacting to twists and turns out of washington and the speech by jingping overnight joining us is global strategist from jpmorgan. and chairman of s&p advisory services glad to have you both. gabriela, when it comes to a constitutional crisis and a trade war with china, i mean, that seems like that goes beyond noise for the markets. >> well, i think especially the trade issue. because it really comes to the heart of the question of whether we can really sustain very positive momentum in u.s. and global growth. i think at this moment we should still be very careful about using the "w" word meaning starting to say this is an actual trade war we are not there yet we've actually seen some pretty constructive progress there overnight with china but also on the issue of nafta some very constructive steps there. so we're not there at the point of talking about trade war it's just that these headlines

are not going to go away and the trade issue is very important to our growth outlook >> we have our first tweet of the morning we have two. >> you say from. from who do you think at this hour >> they're quick ones. attorney/client privilege dead exclamation point. and in all caps, a total witch hunt that's what we have so far >> so reiterating the comments he made yesterday. >> but it looks like he may have just hit send. >> there could be more to come >> i'm listening >> going to monitor. >> if i'm looking down, it's not because i'm not -- no. >> of course not have you recommended to clients that they change any of their allegations based on what is going on now and the expectation of just a higher market vol timt in general >> we are thinking about higher market volatility. trade is one reason why. but i think there's more to it

we've got a surprise this year and the next couple of years certainly a higher volatility environment. it still leaves us pro-risk mean we want some overweight to the equity >> so meaning what >> so ten percentage points over equities over bonds, take that down to five percentage points >> everybody's expecting a good q1 in terms of the outlook, are you -- can we get any sense? i know it's -- we haven't got the conference call, but it seems logical. you should be cautious there's no reason to set the bar high at a time when market

volatility is elevated >> indeed. look, this quarter 16.3% is the expectation. it's a lot better than what we saw in december. and there's only one sector that's showing anything negative and that's real estate really nobody cares. the reality is banks look really good yeah could -- management always does that they always try and basically, you know, underpromise, overdeliver. the expectation of why they'd change that, i don't see why but i will say this. if you think they're coming in at 16%, they're not. they're going to come in at 18%, perhaps 19%. earnings will be really strong the consumer has made its best showing in one of several quarters so i think, you know, touching on the point, you got to separate the noise from what's really going on with the fundamentals and the one final thing i would say is this. and i think i caught it earlier. which is i'm not sure the full market is aware that we've just gone down basically when you

reset the pe to 16 times i would argue that's cheap that was cheap considering the earnings story we should be trading at a better premium than that. that's where we're seeing it these days >> three more rate increases for whatever it is that's what i was kind of saying yesterday. 16 is not just extravagantly -- you know, you wouldn't call it irrational >> is there a return at this point for 16 given higher market volatility i mean, should there be a discount for valuations with higher market volatility whether it be from constitutional crisis or rates or whatever >> if you've got 20% earnings and 16% on that, you got 20% to play with there if earnings are going up >> i think it's hard to say you'll get significant multiple expansion. but yes, you do still have that

earnings buffer there that's really interesting i think even if you start thinking about 2019, perhaps, post-corporate tax bump that we'll get in 2018 this year. we still see signs that revenue growth is pretty solid still so even looking beyond just this year, i think you still have a nice buffer for next year as well >> and rates are kind of tethered from europe still because people will buy over here we're still above some of those. but then the question is there's no housing bubble, but there's a mueller investigation. there's no -- whatever caused our problems in the past, that's not the same thing there's two things to be worried about. >> you mean more worried about a trade war or mueller >> i'd be more worried about mueller. i have no idea what's happening. how about you? >> i think i'd be more worried about a trade war. >> come on you heard how conciliatory -- and it's not just president xi you heard trump say i love president xi, we're great friends. >> it's like, we're great

friends before i get my schihiv out. please >> can it get worse with china any concessions are better than the status quo for the last 10, 15 years we're -- you know, they're doing very well. >> status quo is not well. okay we will see. meantime, we have another big corporate story to tell you about. of course, facebook. mark zuckerberg heading to capitol hill to testify before congress beginning at 2:15 eastern time this afternoon kayla tausche has been following zuck and he's not in a hoody i've been watching not only on television, kayla, you follow zuck but on the reality show that is your instagram account >> i try to take you behind the labyrinth halls of congress. his first visit to the hot seat is going to take place this afternoon 2:15 p.m. eastern time 44 senators from two committees

will question the ceo for nearly three hours about the company's business model and those recent customer breaches. as a precursor to this marathon high stakes meetings yesterday chuck grassley told me yesterday zuckerberg seemed calm in their meeting yesterday afternoon which only concerned how the hearing would be organized, not what its substance would be. florida democrat and ranking member on senate commerce bill nelson said in his meeting, the two discussed regulation in depth. here was nelson's impression >> my personal opinion of him was that he was forthright and honest to the degree that he could. but i think there are going to be a lot of challenges for his company in the future. >> many of those challenges still yet to be defined. the task of that will fall to congress, but i'm told zuckerberg's key themes today

will be accountability and action we'll see how that goes over with the two committees. >> okay. kayla, thank you for that. we're going to see a lot more of you throughout the day covering mr. zuckerberg's testimony we have much more coming up on the zuckerberg big day on capitol hill including the one and only ken auletta is going to be joining us. he has a lot to say about all of this that's at 7:30 eastern time. then at 8:30, you don't want to miss this. the commerce committee chairman john thune first on cnbc he's going to be asking the questions of mr. zuckerberg. we're going to get a little preview from him before that >> you never get too old to learn. because the lady with former jimmy choo, exclusively facebook you got a new product, a luxury product, exclusively advertising on facebook. and she can pinpoint exactly what it costs to get -- >> yeah. >> i was like, listening, going

i'm missing out on new products. certainly some really nice ladies shoes meantime, we are talking trade and autos. our own phil lebeau is in the driver's seat this morning phil, what's going on? >> negotiators between the u.s., canada, and mexico are reportedly close to a deal to rework nafta but at the same time the autos keep coming in from mexico the latest import numbers showing that our demand for mexican-made cars and trucks not slowing down that story when "squawk box" returns. - i love my grandma. - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up!

- anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life.

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

sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. welcome back to "squawk box. as nafta talks wrap up, exports in the first three months of the year have grown. especially in the auto sector. >> specifically exports from automakers at plants in mexico coming to the u.s. and then sold here in the united states. this is e the latest data from the mexican automotive association. in the first quarter, experts from mexico to the united states up 5.3%. basically you're looking at just under 600,000 vehicles from mexico to the u.s. that works out to be about 14.6% of the autos that were sold in the united states. mexico auto imports climb even

as these nafta negotiations continue yesterday the mexico economy minister said he believes there's an 80% chance of a new deal will be interesting to see whether or not a new deal severely pulls back on the number of autos that are built in mexico. i don't think that's going to happen take a look at mexico auto production and they are now almost to the point of passing up south korea to become the sixth largest country in the world when it comes to auto production 3.85 million vehicles built there last year. it's going to increase this year and by the way, of that almost 4 million vehicles built in mexico, 2.1 million of them were sold here in the united states take a look at general motors and fiat chrysler. two of the automakers that have kept their operations running. in fact, expanding those operations in terms of exporting more vehicles up here. pickup trucks in heavy demand up here that's what gm and chrysler build down there in mexico

because of that, they increased their numbers last year. so many automakers increase their production south of the border melissa? >> and phil, if we can switch gears a moment to talk about president xi and what he has proposed for the auto sector of course tesla could benefit from lower tariffs but also gm which operates a joint venture. could we see the automakers change the course of how they do business in china if these trade restrictions are lifted? >> depends on how much they're lifted and to what degree and how quickly that happens look for general motors, it's been in china since the early '90s and it has a joint venture set up there with a chinese automaker. it's been very successful. would general motors like to increase its ownership stake if that's possible? probably it's been extremely successful for general motors it's opened a couple of new plants in the last few years to increase production there. in regards to tesla, the

question becomes what happens with import tariffs dpop they dramatically drop down to 10% or 15% which would be an improvement by still a tariff. and also would they still be required to have a joint venture partner in china >> big question. thanks we are going to talk to something on nafta governor greg abbott will join us "squawk box" will be right back.

where can investors seek predictable income in an uncertain world? pgim sees alpha in real assets. like agriculture to feed the world. and energy to fuel its growth. real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies to pursue consistent returns over time from over one hundred fifty billion dollars in real assets. partner with pgim. the global investment management businesses of prudential.

coming up, china trade president trump the mueller investigation. mark zuckerberg. the biggest stories to make the markets move one way or another today. up at this point dow futures by more than 333 points ♪k.uawk box" will be right bac ♪ when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. 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.

good morning and welcome back to "squawk box" here on cnbc we're live at the nasdaq market site in times square we are setting up for a higher open across the board. this thanks in part for what xi jingping said overnight. essentially extending an olive branch to the united states in this potentially looming trade war. the dow looking at about 340 points at the open

s&p 500 looking to add about 35 points nasdaq looking to be up by about 109 points some of the stories front and center this morning, investor carl icahn striking a multi-billion-dollar bill this morning. agreed to sell federal-mogul to tenneco for $5.4 billion after the deal closes, tenneco will separate into two independently publicly traded companies. ant financial is prepared to raise $5 billion in a funding round according to "the wall street journal." it could value payments company at close to $150 billion ant was carved out of alibaba seven years ago. and mcdonald's is planning an expansion of its nordic region business. they plan to open new restaurants over the next ten years expanding its customer

base by a third in denmark, norway, sweden, and finland. >> i would change the name at this point, i think. is it a really tiny, unimportant financial company? or is it like calling a bald guy curly? >> i don't know. i don't know the history of ant. >> ant financial i mean, you need prudential. like the rock. you know what i mean gibraltar. >> i was going to say sometimes maybe the monolith isn't attractive anymore >> like marcus with goldman sachs. like a friendlier -- >> speck flea financial ant is -- >> started in china, so i don't know what it represents. >> i know that but here if you're going to translate into a global company, ant is not -- >> well, formerly alipay

somebody did change the name to ant. >> all right never mind >> maybe it's like a mondelez type of decision sometimes name changes aren't good let's get back to the markets and the wild swings we've been watching. dom chu is looking at other swings when did you leave down there? >> everyone's asking me was it fun down there the non-glitzy side of covering stories like that is we were on the ground for less than 20 hours and i was on the 6:30 flight home on thursday evening. >> you walked the grounds though. >> no. i did not get to step foot on the grounds this time around. >> now you are depressing. you got nothing. >> i got nothing except maybe centipede financial. that's something we could talk about in the future. >> right that means there could be a thousand shoes to drop or a hundred i don't know. >> a hundred we could go that route >> in the financial crisis >> let's get back like you said.

the markets. as you guys have been pointing out for the last hour and a half or so and certainly on "worldwide exchange" this morning, the idea we will open 340 points to the upside is reassuring for the bulls because we're going to make back a good chunk of the losses from yesterday's highs going down at the market close yesterday we were only up 46 by the time things were done if we open up by that 340 points, all we have left is another 50 points to get back what we saw as the highs yesterday. just to put in perspective, big rally today. no doubt about it. but we're yet to be at those levels we saw yesterday at the highs of the session we also want to put the longer term in perspective. we put the dow up there. let's look at the s&p 500 over the course of the past one year. we are seeing some key support levels hold still. if you look at the s&p, 2595 that is where that 200-day moving average or the longer term trend line -- it's still upsloping for the markets -- is

looking to hold. we're above there right now. we will be solidly above it for the open we'll see if those stick another is to look at the market leadership for the overall month we've seen this month. if you look at the s&p 500, down about 5% the big spdr off xlk was down 8.5%. the worst performing sector in the s&p. meanwhile the only that is up over the course of the last month there. market leadership is certainly a big point of contention here tech certainly the downside mover here utilities holding up relatively well >> dom, thank you for that report we want to talk a little bit about zuck right now but you asked about ant financial. i want to tell you it's the name draws from theroots catering t

small merchants that sell goods through alibaba. this idea you're an ant, a little start-up. i like the idea you're a little ant that's going to grow there you go >> little ants don't really grow >> meantime, we showed you a live shot -- >> you're still an ant what do you think an ant turns into an elephant >> you know, i don't know. you become a bigger ant. >> he's just the messenger. >> mark zuckerberg heading to capitol hill we are looking at those live pictures as the sun rises on the capitol. the facebook chief will appear before the senate judiciary commerce committee that's starting at 2:15 eastern time joining us now with what we can expect from zuckerberg and what the hearings mean, ken auletta he's author of "frenimes." thanks for joining us this morning. help us understand this. you know mark. tell us about his own disposition in terms of his

ability to handle what i imagine will be withering questions this afternoon and tomorrow >> he's basically a prop for those who are going to perform on stage today the senators and they're going to hit him with a series of weathering questions. the question is will they be good questions or posed questions to make themselves look good. but when you think about him as a prop, he's an inexperienced prop he like the people at google and the people in most of silicon valley are very inexperienced in terms of dealing with the government in fact, they grew up with a sense of disdain for the government that it's inefficient. we're not going to make political contributions. we're not going to hire lobbyists. they've been forced to change that to make political contributions and hire lobbyists. but essentially he's a teenager in terms of his experience dealing with public affairs.

so i think you're going to see a guy who probably is not very experienced. will not handle this as well as he might when he's asked those posed questions by people who are kind of preying and trying to show off, how will he handle it will he blow up? >> do you think there's been a transformation of mark zuckerberg even in the last several weeks as you've seen him go on this apology tour? we just learned this morning that he actually personally apologized to individuals in myanmar. the reason i ask is you spent a lot of time watching all sorts of tridents over the years you covered the antitrust trial bill gates started in one way and has transformed himself. do you think that mark zuckerberg is going through that right now? >> he might be you know, he was a psychological major at harvard before he dropped out. and he is someone who when you

talk to him does tend to look at you as opposed to many people in the valley who look at the floor when you're talking to them. but he's inexperienced and he's a guy who his motto was move fast and break things they've changed that but breaking things means that you're going to disrupt. and you enshrine the ability to disrupt the current way of doing things so is he going to be happy talking to members of congress, the current ways of doing things no. >> what do you think the implication is here not just for facebook but the industry at large. regulation coming, what does it look like? >> i don't know what it looks like i'm sure the regulators don't know yet what it looks like. the most extreme position is antitrust. break them up. then you've got things like do you do what the european union is doing which is regulating privacy? and that's a real question and one of the issues which doesn't get enough attention when sheryl sandberg said the

other day that, you know, if you don't want ads you have to pay for facebook 97% of facebook's revenues come from advertising and advertising gets that revenue because it can target people because it has that data. if you're going to deprive them that data, then you're going to affect their ability to raise money through advertising. >> is there a way to build the mouse trap that also protects privacy? we had a guest on this morning talking about how they advertise. they said facebook the targeting works. and by the way, this was the goal this was always the goal to have better targeted advertising not just from the advertiser size, but at least the way i remember when we used to talk about this >> in order to have ads you're more interested in, you have to know something about that person to know something about that

person requires the data, personal data. and that's the kind of tradeoff and a question we have to face as a society in europe they made that decision in western europe which is you have to -- we're going to protect the consumer and they're forcing facebook to behave under their privacy laws. the question is will those privacy laws now extend to the u.s. you wrote a column today and i think it's an apt column that the public doesn't seem to have an interest in privacy the congress now seems to have an interest in privacy well, they move along the lines of what western europe has moved. >> we're going to be talking to john thune a little bit later about the questions he is planning to ask. but if you had a question for mr. sek zuckerberg, what would be >> god, i have so many my mind is a jumble of questions for the guy. essentially you're doing this contrition tour, mr. zuckerberg. what is really going to change are you prepared to accept less

data from -- in order to protect privacy? >> well, the problem here, ken, is that the message that would, you know, allay the concerns of congress seems almost to be at the opposite extreme of the message that would allay shareholders, right? if he's saying to congress, yeah, i'm willing to accept change and regulation and hire more people. all those things are terrible news for shareholders. so he can get up there and it could be a success in the eye of congress and his performance but it could be a disaster in the eyes of shareholders >> i think you're looking at balancing acts here. i mean, it's a seesaw. if you restrict privacy, you're going to restrict the amount of money you can bring in and therefore you're going to restrict the shareholders rights to those benefits they seek by investing in facebook. that's just inevitable then you say sheryl sandberg said the other day, well, if you don't want advertising go to subscription can the public afford

subscriptions? that's the big question. >> you know this landscape better than just about anybody is there any other competitor out there whether it be snap or twitter or google that you think both either gets caught up in this or actually decides to take a decisive step or turn, if you will, on the privacy front and therefore somehow captures market share one of the questions i have -- it's sort of a piece of what the column was i'm not even sure if this other option was available, people would necessarily take it. >> well, if you think back when evan spiegel started snapchat, he made the argument we are not going to collect the kind of data that facebook does. we're going to protect your privacy more then he said how do i get revenues and in order to get revenues, they needed advertising. in order to get advertising they needed data. he shifted his position not the same to facebook but closer to facebook's position on data. i don't see another -- i mean, i don't see another competitor

right now who is going to come in and take over now, if you were wrong in your column today and i don't think you were, that people exit facebook in droves, then maybe there's an opening for another social network >> ken auletta, we'll be watching today we appreciate your perspective thank you so much. coming up, geopolitical risks. president trump is expected to respond to the suspected chemical attacks in syria as early as today why investors need to pay attention next you're watching "squawk box" on cnbc

welcome back to "squawk box. the futures right now are higher we've been holding onto these gains all morning long and actually strengthening looks like we're at the highs of the remarket session the dow looking to add 361 points at the open nasdaq looking to be open 111. and the s&p up 37. >> add that to the 40 we gained

yesterday, we're at 400. president trump says he's going to decide soon about possible action against syria after a suspected chemical attack killed dozens including civilians. joining us now to talk about syria, brookings foreign policy senior fellow michael hanlin what do you think, michael, that happened there are military installations that cruise missiles can be -- we can almost guarantee that we can hit these without a lot of lateral damage as we did last time is that going to be the minimum that we do and do you expect that to be what we will see in the next 24 hours or so? >> i think that's where the smart money would be, you know, going back to the future it wasn't all that decisive in

the end. although the one difference is that president assad does these his air force to compensate for his relatively small army. as you know, he comes from the group in syria that's a small minority relative to the sunni group. nonetheless, he's got to worry about his ability to win on the ground without his big weapons and we can target those big weapons pretty well. it's not just the punitive damage we would do today it's the message we could send to him saying we could keep this up if need be. on the other hand, president trump doesn't really want to keep it up and reignite a full scale war. right now assad's been winning if we took enough of his weapons away to call into doubt the military balance, you could see a worsening of the civilian toll we might deter the chemical weapons use but essentially contribute to a full bore civil conflict of the type that's been gradually winding down in parts

of syria the last few months it's a tough call. >> you know bolton and mattis are telling him all this stuff as well. you saw russia is as -- these are all exactly what you'd expect it almost gets -- i don't know if i'd say don't do anything we're talking to them saying we're going to do this because we don't want to surprise them we don't want to start world war iii. we're talking to the russians about what we're going to do as well, right? >> i think we might let the russians know once the cruise missiles are in the air. i'm not sure we would trust them with information of where we're thinking of targeting in advance. but the bigger question as you're alluding to is what's this going to do for the broader strategy towards the war and right now we've largely defeated ie sis eed isis on thd but not all the way.

there are still al qaeda on the field. and president trump's thinking of pulling all the way out which would give opportunity they don't currently hold >> are you 100% sure that this was assad and that russia knew that this chemical attack was -- they're complicit in this as the president said even putin is complicit. >> i'd say i'm 90% sure it was assad's army that carried out the attack and i'm 70% sure that russia knew about it in advance >> what was the point? what was the rationale and did it relate to the president's comments in the past couple of weeks that we want to exit syria it seems weird that -- why do it i guess they still want to try and win the civil war and this helps, i guess >> yeah. and they've been getting away with it. charles lister compiled 300 sptzed uses of chemical weapons over the course of this

conflict many of them even in the last year since president trump's original response to the horrible attack that we saw early in his presidency. so it's happening all the time and assad is sort of adjusting seeing what he can get away with and whae wt we respond to. we need a broader strategy to protect some of the innocent civilians in the east, north, and south even if we can't get rid of assad in this horrible war. >> i'd ask you how long it takes for the left to say wag the dog, but they've already said it. >> it's going to take years to wind this war down too >> no, no. we're going hear this is a diversion from the mueller investigation. they already said it yesterday as i said, some of the usual suspects that go there immediately. anyway, thank you. appreciate it. >> my pleasure thank you. coming up this morning, stocks to watch plus continuing coverage of the markets. we could be in for another wild ride today

stocks selling off into close yesterday following reports they raided the office of president trump's personal lawyer. this morning futures are bouncing back. this on comments from china's president overnight. dow looking to be up 366 points at the open. you're watching "squawk box" on cnbc ♪ can i get some help. watch his head. ♪ i'm so happy. ♪ whatever they went through, they went through together. welcome guys. life well planned. see what a raymond james financial advisor can do for you.

anyone can get you ready, holiday inn express gets you the readiest. because ready gives a pep talk. showtime! but the readiest gives a pep rally. i cleared my inbox! holiday inn express, be the readiest. holiday inn express, ♪ ♪ wake up early, o. ♪ slap on some cologne ♪ i'm 85 and i wanna go home ♪ ♪ just got a job ♪ as a lifeguard in savannah ♪ ♪ i'm 85 and i wanna go home ♪ ♪ dropping sick beats, they call me dj nana ♪ ♪ 85 and i wanna go don't get mad. get e*trade, kiddo. swho live within five miles of custyour business?-54, like these two... and that guy. or maybe you want to reach women, ages 18 to 34, who are interested in fitness... namaste. whichever audience you're looking for, we'll find them

we're the finders. we work here at comcast spotlight, and we have the best tools for getting your advertising message out there. anywhere, any way your audience watches. consider them found. you know what's not awesome? gig-speed internet. when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. let's take a look at stocks to watch this morning. payment systems maker verifone has agreed to be taken private

they will be led by francisco partners for $2.58 billion in cash that works out to $23.04 per share. that's nearly a 54% premium over yesterday's close. tupperware is making more optimistic comments about its longer term prospects. that stock down almost 7%. philip morris international was rated buy at deutsche bank that stock is up by 0.8% coming up, the big drivers of the morning's market rally. plus synchronize your watches. we're counting down to mark zuckerberg on capitol hill today. he's going to answer questions by senators including john thune. that senator will join us in the next half hour with a preview of what to expect

stay tube ned. you're watching "squawk" right here on cnbc

new this morning, chinese president xi jingping says the economy is open for business speaking for the first time

since the trade tit for tat with the u.s. >> we will ease as soon as possible restrictions in automobiles in particular. >> the futures pointing to a triple digit gain at the open. >> but will the rally hold investors watching in washington >> this is a pure and simple witch hunt >> after the fbi raids the office of the president's longtime lawyer, the president speaking out on twitter this morning. the latest coming up plus mark zuckerberg takes center stage the facebook ceo will field questions from senators. we have one of those senators in the next half hour the final hour of "squawk box" begins right now ♪ from the most powerful city in the world, new york, this is "squawk box. >> good morning and welcome to

"squawk box. i'm joe kernen along with andrew ross sorkin and melissa lee. becky is off we're seeing markets up now. up 363 now on the dow. you can see the s&p regaining from that late selloff yesterday. about 36 points. the nasdaq up 110. there's three big stories that we're watching this hour first, chinese president xi jingping's speech. that's number one which was -- had to be seen as somewhat conciliatory did not ramp up the rhetoric the second, the fbi raid of the home and office of president trump's longtime lawyer michael cohen. finally, mark zuckerberg is on capitol hill this morning. those are the top three.

let's start with the china story. jingping vowed to open the economy, lower tariffs he also criticized isolationism. the message wasn't new but it was the first time the president has reiterated the commitment to open trade soon after the speech, china filed the complaint against u.s. steel and aluminum tariffs beijing says they violate international trade rules. they have requested 60 days of consultations with the u.s. to reach a resolution after which china could request is ruling from the panel of trade experts. meantime, the other we're watching this morning, president trump firing back after the fbi raided the home and office of michael cohen. here's what he tweeted this morning. attorney/client privilege is

dead then he went on to say, a total witch hunt, three exclamation points a referral by the special counsel robert mueller in connection to several topics including a $130,000 payment made to stormy daniels who alleges she had an affair with president trump. meantime, mark zuckerberg is testifying before congress for the first time ever as the company faces growing scrutiny julia boorstin is live in washington with a look at what to expect. julia? >> melissa, mark zuckerberg is prepping this morning to face questions from senators demanding answers about facebook's failures. its lam lack of privacy safeguards and use to manipulate elections. just hours from now he'll testify in front of the committees yesterday he made the rounds on cap toil hill meeting with senators john thune, chuck grassley, and bill nelson. nelson told reporters that zuckerberg knows there's going to be a hard look at regulation.

in prepare d remarks he outline facebook's plans to prevent situations like the sale of the data of as many as 87 million users to cambridge analytica quote, i've directed our teams to invest so much in security on top of other investments we're making that it will significantly impact our profitability going forward. zuckerberg will highlight changes the company's making to limit the information developers can access, investigating other apps, and building better controls to prevent situations like the cambridge analytica scandal. a facebook source tells me zuckerberg will stress the company's accountability melissa? >> all right, julia. thank you. julia boorstin let's look at the case for and against facebook

gentlemen, great to have you with us. ron, by the way, is going to outperform on the stock. ron, i'll start it off with you. you're at a of outperform rs we mentioned. have you choianged anything abot the way you perceived the stock? if you didn't, that means facebook would have the status quo of regulatory environment it has currently. >> thanks for having me. so on the stock itself, i think you're going to see continued head winds here. particularly from a headline perspective around the news flow the next several months. frankly when we look out for the next several years at facebook and we think about the number of users and it hasn't really changed. as long as usage can maintain what it's doing of course it did come down here but purposefully. as long as users can continue in the utility and the advertisers can remain on the site, we think they can manage through this you're right the risk is certainly increased

here in the short to medium term >> why is everything the same right now? these are, what? 12-month targets that you guys put out on the street in general. i understand your notion that in several years, it will do "x," "y," and "z. that's several years though. the next several months is what we're worried about in terms of regulatory changes and changes potentially to the business model. >> yeah. no, you're exactly right just yesterday i was look at our model. we were saying what if you invest -- what if facebook invests an additional $2 million in their r&d. >> what happens? >> our multiple on 2019 went up by a turn. instead of training at 18 times, it's trading at 19 times we think this is on gap earnings we think that's not that big of a risk or we're getting close to a point where there's a lot of valuation support. we think the company is doing a good job at managing this. we'll see what happens today. >> brian, you've had a sell

rating on this stock prior to even the cambridge analytica news came out. and you had already been projecting maher gin compressions and increased costs. how much more on those fronts are you expecting from facebook this year in light of what is happening? >> yeah. those are real factors the underlying premise to my negative view on the stock going back to july which is when i downgraded it to sell, you know, everyone's looking at this very optimistically is the industry only has so much money there's only so much share for facebook to take that's just -- it's just understanding the industry there's a limit. and so that means that necessarily faster growth in the near term means less growth to be had in the near term. that's the first thing then you have maher gin compression. costs are higher i'm not actually projecting a meaningful negative impact on the current revenue or cost

space. i think this will contribute to the concerns i will point out, though, i disagree strongly about facebook, how well they're managing the situation currently and how well the company is managed. the new risk i did not fully appreciate until this data privacy issue was brought back to our attention the company is not well managed i do not believe that -- one of zuckerberg or sandberg will not be in the same job in 12 months' time >> hold on say that again you believe that zuckerberg or sandberg won't be in the same job they are in 12 months from now? >> correct there are systemic problems with facebook when you look at how they adhere to political advertising laws, to the fair housing act. when you look how they manage their advertising data and products when you look at their inability to take down, this is systemic this is a real issue

i don't think investors fully appreciate that risk >> this isyou can make the same argument of uber to some degree. when there were blocking rights and there was an insurrection inside the board you could have that again. i'm guessing base odden what you're saying. also, sheryl sandberg has been at mark's side for the last decade he has praised her repeatedly. are you really convinced that someone's going to go? >> well, it's not necessarily going, but their role will change in a meaningful way what i'm saying is that these signs you put them all together, the company is not well managed. certainly there won't be -- this is not the last time we're going to see problem from them this is only the latest symptom of a greater set of problems and that is not appreciated by investors right now. >> ron, what can facebook ceo mark zuckerberg say on capitol hill that could -- it feels like if he is to appease senators

today, he is not going to be appeasing shareholders if he says to the senators, i'm sorry. we're going to pour more money into it. we're going to dent our profitability. those are all messages that may be received well on capitol hill but received very poorly by shareholders can he walk that line? >> yeah, well, i mean, i think he's said as much in terms of impacting profitability. i argue anyone who coming into 2018 didn't think it was a risk given what happened to google last year, i don't think anyone's that surprised. what could mark say later today? i think obviously he's going to come in apologizing. that's what he's done. but frankly you look at the steps they've made in terms of testing a new advertising tool increasing the transparency in terms of advertisers and things along those lines and limiting usage of your data, we're going to hear more of that. 2018 was the year he said he'd

focus on facebook. frankly i think he's done a good job thus far and i think that's going to continue here. >> you mentioned tweaking your model to see, you know, if facebook spent an additional $2 billion. what if facebook also spent the same amount of money applying gdpr to the united states as it will in europe what sort of impact will that have >> yeah, that gdpr coming out the end of may, that's going to be interesting the key thing there is transparency to make sure all the users and all the 2.1 billion-plus users on facebook know they're using -- you are giving them their data and frankly at the end of the day, i actually think users and, you know, across the internet and whether it be facebook, instagram, snap, et cetera, are aware privacy is different today than even five years ago or 20 and so, you know, ensuring that you are transparent and making sure users know what you're doing with the data is something that's going to come through

frankly, i think people are very aware of it and they're going to accept it. >> we're going to leave it there. ron and brian, our thanks to you. >> thank you in a programming note, we are going to talk a lot more about facebook with senator john thune. he is the chair of the commerce committee and he will be in the room asking mark zuckerberg questions today. but senator thune will join us first at 8:30 a.m. eastern we've already -- we talked to ron josey and brian wheezer. next up, the nib out with information on small business in america. i got you at least kate rogers -- everybody at home is like, what is that? kate whab did you find >> we'll tell you what's behind taking a leg lower we'll tell you what's behind that coming up next on "squawk box. people don't invest in stocks and bonds.

they don't invest in alternatives or municipal strategies. what people really invest in is what they hope to get out of life. but helping them get there means you can't approach investing from just one point of view. because it's only when you collaborate and cross-pollinate many points of view that something wonderful can happen. those people might just get what they want out of life. or they could get even more. this is a tomato you can track

from farm, to pot, to jar, to table. and serve with confidence that it's safe. this is a diamond you can follow from mine to finger, and trust it never fell into the wrong hands. ♪ ♪ this is a shipment transferred two hundred times, transparently tracked from port to port. this is the ibm blockchain, built for smarter business. built to run on the ibm cloud.

tyou know what's not awesome? builtgig-speed internet.ss. 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. some stocks to watch this morning. nike's buying invertex

deals were not disclosed they make software to scan a customer's body for product fittings this is the second purchase nike has made in the past month as part of the customer direct offensive strategy carl icahn striking a deal this morning icahn enterprises agreed to sell federal-mogul to tenneco it's a wholly owned subsidiary of icahn's company the -- check out shares of nvidia based in part on long-term data and trends >> out with the latest business survey been going up. >> the monthly read on sentiment

for march found a decline to 104.7. this is still above the historical average of 98 it's coming off of last month's report which saw the highest levels and second ever by tax reform. this is our first read on sentiment, as well, since the tariffs were announced and given response to those measures, this drop seems fairly insignificant. the nfib said trade and exporting in particular ranked number 75 out of 75 issues pulled in its latest problem and priorities survey. this means to me it may be less trade and manufacturing focus than other groups. the biggest gains this month were seen to increase employment and current job openings the biggest declines were in those who expect economy to improve and who believe now is a good time to expand their businesses skilled labor remains the

biggest problem with red tape and taxes which moved into the number three spot receiving the least amount of votes since 1982 due to tax reform. so the trade response in particular is really interesting to me. you've seen them come out strongly i guess they say they're glad the administration is looking at small business issues and intellectual properties in particular to me that says they've got fewer members that are perhaps exporting, importing, manufacturing. >> so the drop is seen good overall. >> this is still well above historical average and this is the 16th month of reads above that 100 level just so, so high i've been looking at this for almost ten years now it's been holding steady since the election but it's a conservative group. so their membership is much more conservative than others >> thank you for that report when we return, mark zuckerberg set to testify in less than six hours. senator john thune is going to be in the room asking the

facebook ceo questions and he's going to join us first in just a little bit about ten minutes from now to tell us exactly what he plans to ask. at least that's what we're going to ask him we'll have that interview.

welcome back i like that animation. let's get a check on the

markets. question need a bear too we had the bull there. >> there you go. >> we do have one. >> we have it for selloffs >> all right we got to use this one today because we're up 345 points on the dow. nasdaq indicated up 102. we closed up 40 or so yesterday. we were up 400 went down 360. now we're back 350 this morning. kind of amazing that -- is that, like, computerized stuff to get back to exactly where we were before >> i don't know. but we've holding onto those gains steadily all morning long. >> it's not a key level as far as i know. >> it's not key, but it's we earned it yesterday through a session grinding higher after, you know, a previous -- it's been your mother, your sister, your mother. it's been a sort of a market

that can't decide. >> you like volatility >> yeah. you know jack found out after he made chinatown that the same thing had happened his mother was his sister. coming up, march ppi data out in a few minutes a lot more wheezer we'll bring you a live report -- >> the musical group not the analyst. >> we had on brian wheezer and we're going to play every wheezer song that we know. plus texas governor greg abbott is here. mexico is texas's biggest trading partner. we're going to ask about nafta stick around more music ♪ what are the ingredients of a life well lived?

is it the places you go? the things you own? or the people that fill it with meaning? for 150 years, generations of families have chosen pacific life for retirement and life insurance solutions. protecting what's most important to you. that's the power of pacific. ask a financial advisor about pacific life.

♪ you know this group. they have a lot of hits. good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square time now to find out what's working.

during this time of market volatility, best thing to do would be to short it when it's going to go down 800 points and go long when it's going to be up -- no that's not joining us now michael lippert from baron funds know i knowing what your rationale is, you should add to them is it as simple as that? unless the world's ending. that only happens once >> that overly simplifies it a bit, but you want to buy stocks you like when they're weaker think of selling stocks when they're stronger but it's hard to trade in my view short-term market volatility which is what we've seen the last month or two we're not heavily engaged in movement it's going to make doubles or triples. but if you have a 30% move, that can be actual. >> but you have been long right

through the cycles for the last few years as well. >> correct that's what i do >> but you can be 100% cash, right? >> in theory >> are you -- what's the maximum amount of cash you have and where are you now? >> my crash levels right now are in the 5% to 6% range. i've also been benefitting from inflows into the fort folio. we certainly see the market is a little more volatile and we're trying to be patient >> you like certain things you like tech a lot. >> i do. i've talked about it on your show before. we're secular growth investors right? that's not cyclical growth what's driving the cyclical growth what's driving the changes in our society. >> what is >> it's the digital transformation you heard salesforce on their call, they talked about that on and on we see it in every area of our lives. not just our business lives but consumer lives the way businesses use

applications differently to make better business decisions. and the fact that businesses today because they're digital are connected to their customers whether they're consumers or business customers in a way that technology wasn't before >> social media, what's next it's too late for me >> the buzz words of today, you know, we went from big data being the buzz words that's the next future beyond that, you know, who knows. >> we're all on that, aren't we? >> i think we are early on that. i think we're at the first stages of computers and algorithms helping us use our data better to reach better decisions. that's the goal of it. right? everyone has the flip side of it, but that's the goal. >> is facebook one of your holdehol holdings or not? >> i want to be clear. we owned facebook, but, you know, a fund like mine is

compared against an index. about half our index weight. right now there's significant uncertainty on facebook. andrew, i read your piece this morning. you know, what will happen with consumer trust and certainly what will happen with the regulatory environment is hard to say >> right thank you. >> thank you we're just seconds away from the march ppi and rick santelli will give it to us he's at the cme in chicago rick, what is it >> all right final demand month over month up 0.3%. we were looking for a number up 0.1%. how about we go ex food energy and trade. that's up 0.4% up 0.3% on year over year final demand up 2.7% on ex-food and energy. 2.9% these are all hotter every metric is hotter than we were expecting and there were zero revisions

for last month now, we've been through this ordeal before. this isn't the hottest ppi especially in the headlines we've had. but as a composite, it's warm here will it translate on march cpi do we have a response in the marketplace? it's always a good arbiter, isn't it we gained a basis point on 30-year bonds to 302 we'll have to let the markets simmer on this we're still down a fifth of a cent in the dollar index and of course on the trade side, looks like the markets are having a bit more comfort this morning. as we see that president xi seems to have acquiesced to some extent or at least not displayed some of the rhetoric in the speech he gave last night. >> reaction on the 2-year yield

is what? >> 230 up a basis point came in at 229 >> all right thanks, rick rick santelli at the cme let's bring in steve leisman here your interpretation, steve >> i think this sets us up for what the markets are really watching tomorrow which is cpi some of the pricing declines that we had are dropping out of the index and we're looking for a ratchet up tomorrow in the headline from 1.8% to 2.1% this may and may not you don't know the connection between wholesale prices kind of tenuous at best but looking through these numbers here, you see not a single thing spiking it up but a variety of things that are in the 0.2% to 0.3% neighborhood. rick really broke it down quite nicely foods were up 2.2% in the month. we were looking i think for a decline among most economists.

not precisely clear what was going on there that's likely to reverse in the coming months. then what i think we're looking for here is a consensus on the effects of trade first of all, we don't know what's going to happen second of all, there's two different impulses that happen here the first one is one where you could imagine it would raise prices through the economy but the second one is potential to depress economic growth which is essentially deflation we don't have a consensus in part because we don't have a consensus what is going to happen with the comments of xi last night. did i say that right xi as in s-h-e >> yes >> thank you it's not as far as hoped, but we have to think about the outcomes here >> this is going to put the markets on edge a little bit until maybe we get tomorrow's number the notion that we are, in fact, really on track with the fed's

course and the bar is going to be higher for the fed to deviate from that course >> this is one of those weird things, melissa. the market knows what's coming tomorrow is on the way in a perfectly efficient market a la economist george lucas -- not george lucas robert lucas, sorry. >> i was like, wow, "star wars." >> we would already have priced in the numbers for tomorrow and would expect a higher number but again, we don't know sometimes when it seems what it's expecting, it gets spooked. maybe today puts it more on edge for potential inflation. >> okay. steve, thank you for that. meantime, the countdown is on facebook ceo mark zuckerberg is going to be in the hot seat as he is grilled by the committees. that gets started at 2:15 eastern time you can see it all right here on cnbc during "power lunch." joining us right now first on cnbc, chairman of the senate commerce science and transportation committee a man who's going to be asking

mr. zuckerberg many-a-question senator, good morning. thank you for joining us help us understand what do you want to hear or what do you want to understand when you speak with the head of facebook >> i think one of the things we want to understand is how pervasive this is. it started out facebook indicated there were 300,000 of their users basically who had entered into this agreement with this app or this analytics firm. and then that information which was ultimately given to someone else turned out to be 50 million and then 87 million people whose data may have been misused i'm trying to determine what that universe is are there other firms or businesses out there that have had access to people's information that may have been misused. secondly of course what is facebook doing to prevent their data from being misused in the future those are things we want to find out at the hearing and two, what proactively

facebook intends to do to prevent the kind of -- or stop the kind of harmful conduct that we've seen and now they're having to respond to months and years later. i think we need to find out what steps they'll take to deal with this going forward >> senator, the larger question for silicon valley and perhaps the markets right now is trying to understand to the extent that after these hearings, you start talking or thinking about regulation, what that would look like would you be in support of regular lating the companies and if so, how >> to be determined. i would certainly hope -- i'm not somebody who always agrees with regulation. i'm a light touch person when it comes to regulation. i think we will find out through the course of this process what step ifs there are some that need to be taken in terms of potentially a regulation but we've seen europe go down that path. they've instituted a bunch of regulations in the european union. some of which perhaps may be applicable here. some of which may not.

but i'm not rushing to do that i know there are people who say we ought to regulate these social media platforms i'm not convinced that's the case but i do think we have to be open to if there are steps that need to be taken as a result of coming out of this that will make these social media platforms more responsible, if you will, and more transparent i think more than anything else what most people are looking for at this hearing today and what most people are looking for from mark zuckerberg and other social media platforms is transparency accountability if they sign user agreements, what are they consenting to? and how is that data going to be used >> at this point is it -- i know it's early going, but is it safe to say everything is on the table? you mentioned the general data protection regulations that go into effect in europe at the end of may could that be on the table as well adopting similar measures? and i know you mentioned parts of it. but is everything in consideration? >> i think at this point, yes.

we're open to what may come next obviously we want to get to the bottom of this it starts today. i give mark zuckerberg credit for taking this head on. we will bring in other businesses and firms that had access to this data, misused this data. we had hearings on radicalization on social media platforms. facebook, of course, has been accused in the last year or so of political bias. there's lots of issues related to social media platforms that have come to the surface now and created an environment where we need to do more oversight. the question coming out of that is will it lead to regulation legislation? i don't know the answer to that. but obviously europe has moved forward and we'll see what they're doing. >> senator, you're talking about this in the context of facebook and cambridge analytica.

do you imagine follhauling in ft of your committee leaders from google, twitter, snap, amazon, et cetera? >> well, we had tried in this hearing to get participation from other social media platforms as you can about understand they were not -- they were reluctant to participate at this point what i will say is all the social media platforms when it comes to this issue of privacy which is becoming more important in people's lives particularly as we become more aware of how this data is used and in some cases misused, i think there's going to be more of an emphasis on that. i suspect in the future other social media platforms along the lines of those you mentioned may, in fact, come forward or may be called forward to explain to us what it is they are doing to protect users' privacy. and how might their platforms been used like facebook was. >> facebook, of course,

controlled wholly by mark s zuckerberg given the structure of the company do you have any problem with his leadership or continuing leadership of facebook >> well, he's the founder. he's the face of facebook. there are 1.4 billion users of his product every day. i think it's important in this case that he comes forward, owns this issue, takes responsibility for it which he appears to be doing. i met with him yesterday i think he gets it he understands that they haven't been forthcoming enough and that's got to change and what happens in the future with respect to his company, i suppose, is up to him and his board and shareholders and everyone else. but i think at least for now, he seems comfortable being the face of the company and at least up until now most of his users can be comfortable >> what did you talk about in your meeting

>> first the hearing two, privacy three, how can a user be meaningfully consenting to these agreements in some cases they sign agreements they don't necessarily know what that me s means. >> did he appreciate that point that when you do press consent, you're often consenting to pages of multiple agreements that frankly oftentimes we don't really understand. >> i think he does understand that i think he was -- i think in the future at least, the platform, the company is going to be way more forthcoming when it comes to how do you -- you know, what protections do you build in. what safeguards you build in to know what users are consenting to i think what he gets as well which we talked about yesterday is the importance of him being the person to come forward and just explain this to the american people.

obviously to the congress but to the american people through their representatives and directly to them because obviously there was going to be a lot of interest in this >> a lot of wall street analysts that follow facebook have said there has been no dropoff in user engagements or monthly active users because of that do you take a look at that data and say maybe the public doesn't really care? maybe this is not an area where we go full throttle in terms of regulation because it doesn't seem that people are walking with their feet at all. >> yeah, it seems -- i think a lot of this is baked in. i think that most people understand that on some level when they click on this, that they're allowing somebody to have access to certain information. i think the question is how much information and how is it being used or misused. and i think those are the issues that we have to get to you're right i think people are -- when you have $1.4 billi1.4 billion user this platform a day, there are a

whole bunch of people understanding the connectivity they get and the benefits they get from using facebook are something they are willing to give up some of the privacy and sacrifice a little bit of their -- that information. >> senator, final question i just have to touch on it before you go. because we haven't touched on it it's a different topic on "meet the press" on sunday, your colleague refused to be critical of pruitt's -- what some people call excessive spending at the epa. i want to know whether you agreed with him. >> well, i think the president obviously determines whether or not scott pruitt stays or goes my understanding at least is the administration are looking into or has some sort of investigation under way to look at some of these allegations that have been raised. you know, obviously i think in terms of the things he's done there, he's doing many of the right things with respect to the economy. but obviously these are -- these

other issues that have come up are not things you can condone i think he's got to answer for that and be accountable for that >> we're going to leave the conversation there good luck in hearings today. of course we will all be watching thank you. >> thanks, guys. see ya when we return, jim cramer will join us live from the new york stock exchange. you'll see what he's watching ahead of the opening bell on wall street. here are the futures right now we'll be right back. ♪ play "do it like this".

[music plays] [dog barks] [concert roaring] [music stops] dinner in 5. when everything's connected. it's simple. easy. awesome.

let's get down to the new york stock exchange. jim cramer has been up for about seven hours. once again, i was looking at your tweets. you got up at 3:00 a.m. to say i love larry, i don't necessarily agree with everything larry kudlow says. because people are saying -- i don't know what are they telling you? because of your friendship, you got to stay objective or something? see, i don't disagree with larry on anything. you don't disagree with him that the private sector is the path to prosperity. do you, jim? what do you disagree with? >> our common ground was always pro-growth lower taxes for dividends. lower taxes for capital gains. the idea that if you get a lot of growth, it creates a lot of opportunity. at the same time we were anti-tariff. but i totally understand i've changed my view because of how bad i think china is you know what?

look you know, we're all going to decide that xi is a great guy and i think that's probably a mistake. i think it's a win for what larry was talking about though >> right well, it is a little weird that -- think of all the things, you know, we were worried about trump. if they all went bad like the big button, small button stuff then talking north korea that didn't turn out as bad as we thought this china thing it looks like maybe at least for automakers could get better here right? some of this craziness seems to work from time to time >> i did last night's show based on the idea, look. the president got no -- nothing on the fact that the chinese decided not to send anything to be weaponized in north korea fundamentally backing north korea for ages it was just overlooked i was wondering how much the market would be up today if it weren't for the fbi raid >> i don't know what to think of that none of us know. it's like a black box.

>> all i know is we'd be up 500. >> right all right, jim they tell me we've got to go but go to -- just take a little cat nap between now and when the "squawk on the street" comes on. >> and there's nothing wrong with being friendly with larry i'm not going there, okay? >> i'm getting up just to, you know, bodily functions he's on -- >> tmi >> is that tmi >> yeah. way tmi. >> i brush my teeth more now >> see you later when we come back, big interview. why texas has so much riding on nafta negotiations the governor of the lone star state greg abbott is here. we are going to talk to him live t s aerhereak ? 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.

president trump wants a deal on nafta by the end of next week joining us now texas governor greg abbott. texas open the front line of the negotiations mexico is texas's largest trading partner. great to have you here on set, governor you're bringing in the opening button. >> i did the closing bell yesterday. i'm glad to be here on a day when it looks like the market will open up in a big time

you need to have me back every single day so we can have this opening every day! >> coincidence i think not you like the prospects of nafta? >> i think nafta is working out well there's been great work that is accomplished it looks like we'll cross the go line in a way that will make nafta better texas has a lot on the line here we export almost $100 billion of goods and services every single year to mexico for example, canada is our second largest trading partner we have traded in a surplus with mexico that will continue to grow texas has a lot on the line. u.s. has a lot on the line i think we'll negotiate a deal that will be beneficial for everybody. >> were there shortfalls or would you have -- if you had the choice of not knowing anything or not doing it at all you would rather keep it the way it was >> it had to be updated. the iphone didn't exist.

amazon didn't exist. all the intellectual property issues didn't exist at the time nafta was negotiated it had to be updated it looks like it will be updated in a way that will continue very robust trade between the u.s., mexico, and canada. >> in the meantime, you're looking for your own trading partners you're the first governor to india. >> first american governor to meet with prime minister modi. i had a conversation that lasted well over an hour. we talked about trade. we talked about international security we talked about the way that texas and india can collaborate together think about this, texas is the fastest growing economy in the united states. it is the fastest growing economy in the entire world. we're to do $3.5 billion in trade exports to india we want to hitch our wagon to the multidecade growth that india is going to have texas leads the nation in job growth already when we hitch our wagon to

india, we'll be expending even more while i was in india, india received their first receipt from lng from texas. the first of the 20 year contract it will be oil, gas, cotton texas leads exports in we'll have a robust trade relationship with india for decades. >> when the president talks about the wall, you give a thumbs up every time it comes up or such an important trading partner you say let's be -- >> remember this, george w. bush, he was the one who installed the fence between texas and mexico so this is really nothing new. it's a matter of tone. texas has a different tone with mexico because we are neighbors. because of our robust trade relationship but we need greater security -- >> the fact is, yes. we do need greater security. the fact is that people coming

across the border illegally increased 200% from last march to this march and heroin coming across the border has increased more than 200% between this march and last march. >> the national guard is coming. >> the national guard is there. >> how is that going to change the dynamic? is that more important than the wall >> we need border security let me tell you this, andrew we put the national guard on the border multiple times. first, by rick perry and then by myself every time we've expended national guard on the border, cross border activity has gone down we have fully expected it to go down now we want legal immigration. we want legal trade. we don't want illegal immigration. we want to control our border like every other nation in the entire world controls their border. >> the most cost effective way to do it with people or wall >> i haven't done the math on it all i know and what texas feels and americans feel, we need to

control it. >> governor, thank you good luck.

we're finally back out in our yard, but so are they. the triple threat of dandelions, lurking crabgrass and weak, thin grass! introducing the all new scotts turf builder triple action. this single-step breakthrough changes everything. it kills weeds, prevents crabgrass for up to 4 months, and feeds so grass can thrive, all guaranteed. only from scotts. our backyard is back. this is a scotts yard. welcome back to ""squawk box."" we have a big day ahead, of course mark zuckerberg will be testifying at 2:15 p.m. eastern

time you don't want to miss that. we'll have it live right here on cnbc what looks like it's going to be a big market open of this morning. we'll be watching over the next half hour to see how things open up but make sure you join us tomorrow "squawk on the street" begins right now ♪ good tuesday morning welcome to "squawk on the street." stocks are set to erase their losses for april with futures up strong a lot to watch as the president speaks on fbi and mueller and mark zuckerberg speaks on capitol hill nice gains in europe our program begins with the xi rally. stocks set to soar at the open boosted by optimistic news out of china easing trade war fears.