live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and mike santoli. let's look at the u.s. equity futures. yesterday there was a bit of a pullback in the markets. only the slightest one for the dow. you did see the s&p 500 and nasdaq slightly higher mixed day. you can see that same story carrying out this morning in reverse. dow futures higher, up by 12 points s&p seeing a slight pullback of 1.5 points same story for the nasdaq. we'll see as we continue to get earnings in how this shapes i. look overnight in asia looks like the nikkei was up, just slightly. up by 0.10%.

na hang seng up by 1.4% shanghai up by 0.85% right now in some early trading in europe, slightly higher stocks for most of these markets. the dax is the one exception, down by 0.10%. stocks higher in france, london, italy and spain. let's check out treasury yields. up across the curve yesterday, yields across the board were higher the ten-year yielding 2.89%. >> oil is crazy. we'll talk about that in a second 69 when it gets high, it can never be low again because how could it be? when it's low, it's like it's never going high again people are always wrong. been moving higher we'll talk to john kilduff in a couple minutes we're following the latest on that fatal situation with

southwest with the engine explosion. the faa is ordering ultrasonic inspections of 220 jet engines after investigators discovered that a broken fan blade caused the southwest engine to explode. the inspections will take place within the next six months we need more details >> i thought these engines were ordered to be inspected after the last accident issue that happened with them back in 2016. at that point southwest said it would take more than a year, it would take 18 months to complete those inspections. >> they're looking at -- they found metal fatigue apparently where the blade -- i guess it's war the blade is hooked into the circular thing i guess there's tests that you can do, sophisticated, that can look at metal and see whether it is fatigue >> also some questions about the engine cover so if a blade comes off, why wouldn't it be contained >> i can't imagine

that would have to be some cover. >> i guess they must figure you do this many inspections, it's a decent sampling to see if there's -- >> is that it? 220 engines? >> the issue with some of the southwest planes s they're taking short flights, they're put through a lot of ups and downs. 40,000 cycles for the engine impacted two days ago. another nike top executive is out the vice president of footwear, greg thompson, has left the company. this is the sixth high-level departure from the company in a month. it's unclear why he's leaving, but his exit comes as ceo mark parker is working to clean up the company's corporate culture. amazon hitting a big milestone.

amazon says it has more than 100 million prime members globally that's a big deal because prime members spend about $600 more per year than non-members. amazon shares back above 1500. this is the lead story on drudge amazon ceo jeff bezos also disclosed that amazon music now has tens of millions of paid subscribers. by way of comparison, spotify expects to hit 100 million paid subscribers by the end of the year american express posting first quarter profits that easily beat the street's expectations as the improving u.s. economy contributed to higher spending by card oholder. amex spent 2.3 billion on customer awards because they are seeking affluent customers. alcoa came out with their

first quarter results, they were helped by rising aluminum prices and they raised their full-year outlook but said there is uncertainty in the global supply chain due to trade sanctions and supply disruptions. a bit of the positive and potential negative with some of those. >> aluminum prices up like 10% in two weeks >> alcoa shares up about 5.5% today. procter & gamble buying the consumer health business of germany's merck kgaa for 2$2.4 billion. that's the german merck, unrelated to the u.s. company of the same name. those two companies have sparred over the use of the name for 125 years. that deal, which adds vitamins and supplements to procter & gamble's lineup of over-the-counter medicines is one of the largest in recent years. procter & gamble is also moving up its earnings report to this morning. president trump and japanese

prime minister shinzo abe agreeing to step up trade talks. they held a joint news conference at the president's mar-a-lago home last night pretty nice room i was looking at some tweets, eamon javers they had one of those things over the president wish the east room was this nice were you in that room? >> i was not in the room mar-a-lago is a very nice place. >> some of your colleagues were in there, weren't they >> yeah. >> i thought i saw you in there. maybe like a where's waldo back there. >> no, probably another handsome guy you saw. >> you were on the 16th tee? where were you >> i was here. we have a live shot position, which is some distance away. if we want to be on camera, we can't be in the room the security lockdown is for multiple hours >> you love that like oxygen for you.

air swept. >> you don't want to be locked down for too long. loo look, the relationship between donald trump and shinzo abe has been described as a bromance the white house points out this is the leader who spent the most time with the president of the united states. the two men bonded over golf yesterday. their wives shared an outing yesterday. despite that they were not able to come to terms on trade, which is what the japanese hoped to do the japanese were hoping to convince the united states to reenter negotiations on tpp, the president signaling he's not really willing to do that. he wants a bilateral agreement between the two countries, and also the japanese were hoping to get a carve out on tariffs, the the the 232 tariffs. they wanted an exemption similar to the ones that the u.s. granted the u.s. allies. the president didn't give in to that either. >> we are doing 232 on steel and

aluminum, and if we can come to an arrangement on a new deal between the united states and japan, that would certainly be something we would discuss, aluminum tariffs and steel tafr r tariffs, i would be looking forward at some point in the future taking them off >> so the japanese wanted an exception now. the president saying no, citing the massive trade deficit between the united states and japan, saying that's too high. once that deficit comes down, he signaled he would be willing to talk about removing those tariffs, but not right now that's what the japanese had hoped for this week at mar-a-lago a lot of warm words between the two leaders, but not a lot of brass tacks negotiations leading to progress. >> talked about a lot of stuff a lot about north korea, obviously. that matters to japan. >> yeah.

evenasked -- the first questioner asked shinzo abe whether he asked president trump about the aluminum and steel tariffs. it is uncomfortable because they're still in effect on japan. >> right yea yeah >> north korea is a huge focus here the president not pinning down when this will happen. he does say he will meet with kim jong-un, and abe praised his courage for having those negotiations, but the japanese are watching warily. >> thanks, eamon you're free for the rest of the day now if you want to -- i don't know -- >> is that right we'll tell the bosses. >> it's okay with me

>> no, i have to work the rest of the day >> you do? that sounds horrible can you imagine? that would be terrible >> rub it in >> yeah. >> though he was sending some nice pictures yesterday of the surroundings we'll check in with eamon later this morning the broader markets continue to digest earnings and try to figure out where to head from there. joining us to talk about this is karen cavanaugh, senior market strategist at voiya, and julia emanu emanuel. welcome to both of you strong earnings, strong economy, then all these global headlines that keep popping up you think eventually the earnings economy and low interest rates will win out and we will see new highs this year, julian >> we do but the lesson of 2018 is the low volatility environment is behind us so geopolitics totally matters

if you look at the markets this week, it matters a lot to the bond markets and the commodity markets. the now worry and worries are not a bad thing in bull markets is whether inflation is going to come back as a result of geopolitics. ultimately with this kind of earnings strength, and the economy set to grow closer to 3% than 2%, we think that's compelling value for the stock market >> a lot of this will be riding on what we hear on these earnings calls, what you hear from companies in terms of extechtatiexte expectations for growth. what do you think we need to be hearing? >> we need to be looking forward. investors will wanted to see that 2019 is also going to be good in order for them to get excited about things we have high expectations already. we want further earnings growth. i agree with julian, but also

add that the tax cuts will kick in i think 3% is in the bag for 2018 and i don't see that we'll drop off in growth. i think it will get better as these tax cuts work their way through the economy. >> you're expecting new highs, too? >> i am. i absolutely am. i'm not that worried about inflation. we still have slack in the labor market the difference between the u6 and the u3 is large. we can get more workers into the employment area. i think there's a lot of global forces, technology, and inflation is really not a worry now. what is more of a worry is the fed is aggressive and very determined to raise interest rates so they have some ammunition if things go badly. and right now that flattening yield curve is probably the thing that's rattling the most investors. >> the message yesterday, bill dudley basically saying we're on target to get the short-term rates up to 3%

they seem not to be dependent on what the data comes in like. what is the bond market's message? the fed will get to a point where it snuffs out any threat of inflation, that's why the curve is so flat, it's not really a commentary on how growth looks going out >> you're walking that fine line when the yield curve is this flat traditionally when you get to an inversion or near zero, that signals recession, 12 months away for us, it's good the last couple of days that you had many fed officials talking about this talking about it is good the real problem here is the geopolitical uncertainty is raising the price of oil it's raising aluminum prices and copper prices, and does that feed in and change the calculus where they have to stay more aggressive and ultimately enthe cycle at some point.

which is why how the course of negotiations, whether it's north korea, iran, china, russia, what have you, that's why the next several months are important >> we have had a lot of people who have come in and said that it is the small caps that outperform this year sure enough russell 2000 is less than 2% off its highs. is that still a play you like? >> absolutely. small businesses are the backbone of the u.s. economy if you look over the last eight years, they've added more jobs than large companies these small companies have been burdened by regulations, taxes the tax cuts are working their way through the economy. if you keep your eye on the small business, that's where the action will be and therefore small caps are attractive, but also emerging markets and international stocks have compelling valuations everyone is worried about the large caps, but there's another spectrum of asset classes out there. >> ifr russell 2000,

it has a higher percentage of financial stocks than the large caps do. do you think that will ab rotation or it can participate as well? >> for us, the small cap story s is the aspect with all geopolitics around now, small cap derives its core revenues from u.s. growth internally driven growth that's the reason you want to tilt that way. >> you like energy, too. oil prices up towards $70. >> we do we liked it for the balance of the year for us the story started as a demad demand driven story. if you owned energy futures and rolled them on a 12-month basis, your return right now is 10%, regardless of how the price of the commodity moves. it's one of those areas that has

been very underinvested in terms of actual investment and also holdings by funds. >> you said it instastarted as a demand issue, is it now more of a supply issue >> it is becoming a supply issue because you have this deadline on may 12th regarding iran tensions are rising. traditionally when you see geopolitical tension it feeds into the oil market. we would almost prefer that not be the driver of the story demand alone will keep these stocks moving higher, particularly since they're only 6% weight in the s&p 500 versus a historical average closer to 9% or 10%. >> karen, energy is your forgave result what's your second most favorite >> i would say financials. or tech. a little toss-up financials, just because they really are showing strong earnings so i think -- and we are seeing yields go higher i think there will be time for

financials >> voya. voya that works that stupid -- it's in my head >> you will sing it all day. >> i do. who came up with that? some advertising guy >> the little orange character, right? >> yeah. the thing -- the music that -- i look at you, i hear it >> you sound angry >> well, what happened -- it's an ear worm? >> i'll do something to you. ♪ it's a small world >> that's not worse. ♪ 1-877 cars for kids >> you're lucky. ♪ visiting angels >> karen, thank you for coming in ♪ 588-2300-empire >> let's go back to voya >> you love that look at her.

your overseers are going, karen is great book her again got nothing for you. >> etig is coming up with a jingle any minute now. coming up a new cryptocurrency project is getting some big named backers, including a billionaire. later we'll talk geopolitics, taxes and trade with senator bob corker, chairman of the foreign relations committee. "squawk box" coming right back alerts -- wouldn't you like one from the market

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>> i agree >> here's the reason we do it. it gives you street cred why should we listen to your opinion -- >> with your house, could you -- you couldn't scrounge up -- thousandaire becky quick >> i don't know what my metro card balance is right now. >> billionaire -- there i go again. philanthropist stanley druckenmiller and kevin warsh invested in a cryptocurrency project called basis this is along with in other investors including alphabet's venture capital arm. basis is developing a cryptocurrency whose supply is controlled by an algorithm rather than a central bank the goal for basis is to prevent

the wide price swings by linking a digital coins price to a measure like the us dollar or the consumer price index all these other cryptocurrencies are like bets. >> speculative >> chuck e. cleheese. >> how do you use it for currency if you're paying for something, and by the time you pay for it, it's half as much or three times as much. both have criticized bitcoin for the dramatic price fluctuations. >> that was a long read. well done. >> not really. i was all over the place far be it for me to be crass >> that's reductionist >> that's true word a wordsmith >> it is street cred why are we listening to them they've been right in the past >> this is like the hard money

advocate's dream, the digital engineering solution to what they wish gold had done over the years. anchor the value of money. for the first time this year, adults in china will spend more time on their mobile devices than they are watching television, that's according to a new forecast from e-marketer it says adults in china will spend two hours and 39 minutes a day on mobile devices this year, up 11% from last year. it expects a drop off of 2% in minutes watching television. this trend is being driven by faster mobile networks, widespread smart phone adoption and the popularity of streaming video platforms fueled by investments from tencent and alibaba. >> i have a big problem and need help from someone with my stupid iphone 8 every one of my -- you know where you do texts, you have the person's name, it says maybe what do you mean >> it says maybe on every one of

them >> maybe it went through >> no, maybe it's that person. there's some weird thing that's not sink siynced up >> are they in your contacts -- >> i'll show it to you i googled it to try to fix it. nothing works. i'm mad. i'm angry. i did the new ios thing -- >> that's why. >> even my kids. i don't always remember their phone numbers, i hit that thing on messages, you have a choice it's blank i'll show you. >> i'm not the one to help >> everyone is maybe that person >> this is not like some existential -- this is about my iphone not working because of some stupid glitch before i had that little -- that weird sign that would come up when you hit it, that happened i fixed that >> let's reach out to

squawkapedia, if you can help joe, let us know >> apple is down today on this >> because of this >> yes when we come back, crude prices climbing to the highest level we've seen since late 2014 yes. that's why we're playing this song, that's when this song by taylor swift was at the top of the billboard charts we'll talk about what is causing the rice after this. and later do alpha males deliver alpha? we have the results of a new study on how testosterone levels could impact hedge fund performance. right now as we head to break a look at yesterday's s&p 500 winners and losers

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. welcome back you're watching "squawk box" live from the nasdaq market site in times square. ♪ >> welcome back. right now it's time for the squawk planner on the data front we'll get weekly jobless claims and the philly fed survey. those numbers hit at 8:30 a.m. eastern time several central bankers are set

to speak today, including lael brainard and randy quarles some of the companies reporting quarterly results today include blackstone, bny mellon and quest diagnostics. yesterday was a mixed day for the markets with the dow slightly low every and ter and s&p slightly higher. today, moderate declines we are getting some new details on why 21st century fox rejected a takeover bid from cnbc's parent company, comcast they say they didn't take up the offer because of antitrust concerns we learned the comcast offer was a 16.5% higher number than

disney's bid crude seeing its highest trade since late 2014. joining us now with a look at what's driving up the price of oil is john kilduff, cnbc contributor and founding partne. i'm working on my iphone, you can take over? >> joe, please >> is this an iphone 8 or 7 >> i don't know. >> you should get an android >> i think it's an 8 >> i'm really savvy, as you can tell to talk about supply or demand is fruitless we have to talk both something is happening on both of those fronts. list everything on both of those that have been bullish recently and what's changed since the last time you were on, and what do you think the near or intermediate term objective could be could it be -- 70 looks easy saudis want 100? >> saudis want between 80 and

100. >> that where we're headed >> they are going to the whip here to try to get prices higher and higher what they're capitalizing on is their own production restraint, getting a good measure of help from other non -- >> you're talking about a horse, not a weird perverted 50 shades of drgray -- >> the rest of us were right with you >> the kentucky derby is coming up, i think on nbc >> all right >> threw you off, didn't i >> a little bit. the cat tlalyst has been the implosion of venezuela's state-run oil company. people are quitting en masse no that the military has taken

over they would basically do a foreclosure deal and take it over and run it themselves that's not happening so the saudis are capitalizing on that lost production. >> how much production are we talking about? >> upwards of 800 to a million barrels a day, and going down. it's key oil >> so we always talked about -- the last few years about how u.s. production could open the spigots again. >> we are at a record. we're at 10.6 million barrels a day. we could become the world's number one oil producer. there is a lot of demand out there, including here. last week highest gasoline demand ever for a week forget not summer, not this time of year, period. numbers that jumped off the paper. we're doing a lot with that. it's not just internal

consumption. high levels of u.s. gasoline exports. so we're supplying the world mexico in particular some traditional sources of supply or excess supply that would keep a lid on prices are having issues. mexican refiners, the venezuela situation and now the saudis are going for the jugular here and trying to goose the price higher >> how long-term is this situation going to stick around? how quickly could this get back to a situation where, okay, more people bring more wells online >> now we're getting to a price point where it's hard for the saudis to herd the cats and keep everybody in the deal. you will see more and more production coming on the russian oil companies will start to squawk and want out of the deal they'll have a challenge and interestingly enough the saudis were warned that they're sowing the seeds of their own demise again, because this will bring on deep water u.s., deep

water brazil, because they will sell forward the futures curve and lock it in they won't carewhere the price goes because they'll have their hedges in place allowing them to pump it at 50, 40, 30, and getting paid 50, 60, $70 a barrel >> it seems investment demand is huge people are riding this trade now. you look at the future positioning, all the rest of it. is this back to a momentum story, self-fulfilling type of thing? >> looks like commodities are having their day in the sun again. you have seen what's happened with aluminum and some other metals, even cocoa has skyrocketed. there appears to be an inflation hedge under way. this reminds me of 2008 when we saw record amounts of money flowing into commodities it came out in a big way the s&p positioning of the energy companies had fallen to around 5%.

that's on its way back to folks who don't play the commodities pure play like i do, this is the time to get into these energy companies the pricing they're trading at now across the board does not reflect where we have been, where we are now, and potentially where we're going. >> are we -- i thought we were in the driver's seat we were the swing producer the minute we got to 50, everybody would be switching things back on we could increase supply and hold prices down >> we are. >> venezuela is the only difference >> it's the killer we are always pricing the marginal barrel in crude oil, gasoline and heating oil we are just being edged out barely if the situation in venezuela can stabilize, some other countries like iraq come on and do more. if libya and nigeria can stay stable we will be back in the driver's seat also, too this is a seasonal play now we typically see crude oil, gasoline prices rally into

memorial day an then fall off. sometimes precipitously over the course of the summer just when you think that summer demand should be enough to pull it out of the fire, it doesn't. that's the thing to watch out for. we're at a lofty level now people need to be careful. it's neck and neck >> what's the low going to be for 2018 we already are there we'll stay above -- >> we could get back into the 50s. >> really? >> yes >> all right 50 to 100? >> i'm comfortable with that as a range. >> that's great. that's what i expected and you're a cnbc contributor with calls like that >> i'm telling you where we are now and going. >> you might as well be honest no one knows we'll just have to see >> commodity is a cyclical trending business. it's a big ship that gets turned by certain factors sometimes geopolitical risk is front and center and we're scared to death of bombs raining

out of the sky in the middle east, sometimes that's fine. so thei risk premium inflates ad deflates right now it's inflated because of the way the saudis are eyeing iran there's an inherent geopolitical price baked in so this causes reactions >> not to mention investor psychology >> but in commodities, high prices get more production online low prices get it shut in. so prices go up and back down. >> all right >> no problem. when we come back, amazon revealing that it has 100 million prime members worldwide. that's a lot higher than the street was expecting the stock getting a big boost this morning as a result we'll talk about the next phase of amazon's retail dominance at the top of the hour. then at&t ceo randall stephenson is set to take the stand today in the antitrust trial over the proposed merger

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♪ welcome back let's look at the u.s. equity futures at this hour right now things look like they're slightly weaker. looks like the dow futures are down by 12 points. >> i'm for the executive edge. and we will start with some stocks to watch. kinder morgan's adjusted first quarter earnings beat forecasts. the energy infrastructure company is also raising its dividend by 60%. unilever reported a 5% drop in first quarter revenues citing currency headwinds and the impact of the sale of its spreads business they are also launching a $7 billion stock buyback. nestle reported better than expected first quarter sales

thanks to a boost from consumers in the u.s. spending more on their pets >> then there is martin shkreli, he's been sent to a low-security federal prison in new jersey he was denied a transfer request to a minimum security camp in pennsylvania camps are considered safer for inmates and more pleasant places to serve a judge ruled last september that shkreli was a public danger after he offered facebook followers $5,000 for each strand of hair that they pulled from hillary clinton's head that public danger ruling likely prevented shkreli from qualifying for the camp. shkreli is serving a seven-year sense for defrauding hedge fund investors and manipulating the stock of his former drug firm. nasa's partnership with spacex was a roaring success yesterday with the launch of the tess research satellite. the satellite is searching for planets around stars that are

nearby it waslaunched with the help o a spacex falcon 9 rocket from cape canaveral the rockets came back to earth furthering the company's goal of a fully reusable rocket on face crafts. coming up, is biology responsible for the success of your portfolio i have problems. i don't trade, thank god my testosterone levels are -- >> off the charts? >> no immeasurable because of propecia i trade testosterone for hair. who needs the testosterone if you're on tv, you need hair we have the results of a study of pest pest levtestosterone le performance. first a quick check of what's happening in the european markets. it's mixed

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do higher testosterone levels in male hedge fund managers mean higher returns leslie picker has the results of a new study just in time for the upcoming sohn conference

doesn't higher testosterone levels mean you're folicly challenged sometimes >> sometimes >> look at goldman sachs, they're all bald they're all bald and they're challenged >> sometimes >> look at goldman sachs they're all bald and they're challenged >> sometimes >> it may be more of a dotted line than the hedge fund performance, but it's true, baldness is associated with ceo roles, they're seen as more powerful >> c'mon is that why we ended up like on tv, not really invested? >> i was a broker. >> i wasn't going to say it but you can always shave your head >> that's true >> you can take action >> i don't know. i've seen pictures of me like that, i think i will stick with it >> you will stick with the hair. well, new research finds a significant correlation between testosterone levels and returns.

we went to orlando to talk with a professor who led this research. >> reporter: hedge funds, an industry synonymous with alpha that's what most of them strive for, alpha, or outperforms it's an industry with a stereo time, straight out of central casting, alpha males a new study asks do those with alpha males or higher testosterone levels deliver higher returns singapore management university and university of florida found hedge funds managers with higher testosterone overperform those with lower testosterone 5.8% on average. researchers used facial dimentions as a proxy for their testosterone levels. she's studied images of over 3,000 hedge fund managers, all male she used this tool to measure the facial racial, they site

other studies showing the facial width to height ratio as masculine behaviors. we found high t levels in a firm's figurehead made it more likely to close. >> we found a high level of testosterone can bring aggression, fearlessness, risk taking and all equo central and this can lead to unethical behaviors. >> reporter: other studies found it has been beneficial for ceos and high frequency traders for better returns, they avoid alpha male managers. she says managers with higher amounts trade more and succumb to the disposition effect or the tendency to hold on to losing position and sell their winners. >> i like that >> she also found that investors

in hedge funds, their lps are more likely to select managers that match their own testosterone level guys >> there have been books out that say why women are better at investors. i guess it's a play on the same thing. testosterone versus lack of testosterone. >> in some ways, with this specific study, theyonly looke at machine, that racial i ratio, that only works for men and their testosterone levels. it only works as a proxy for men. are you right, there are numerous studies that show men are more analytical and don't succumb to other tendencies guys with higher testosterone levels do >> it seems if you boil it down, it's one of those things that trash investors. on studies for women, it's not so much over confidence, maybe a little more caution or humility when it comes to i know better than the market. >> risk averse >> risk conscience

>> i think it repositioning the hair have you ever noticed, the guys, their back, they're combing, they're bald >> you are alloting so much hair either here. your -- or you have it up here on your head. >> so you are saying avoid hedge fund managers that are bald? >> or are hairy. >> hairy everywhere else music you can use on "squawk box. >> i was going to tell you the whole notion what they say, when you take a profit you are up 20%. it triples when it goes down, i cand sell it now you sell it. it goes toer is. >> reporter: that's marrying your losers and my wife talked about this and getting rid of your winners early is the worst thing and most common thing. >> calling yourself a beta male in trying to sell your hedge funds is no good bet that is just the mark, right? it's buying an etf

you can't charge for that? >> that's an etf >> what's the beta >> it's the opposite of an alpha. >> quieter, more an lit cam. i think they should start that it would be a good thing. >> i think fixed it. yes, i fixed it. i got a fix. i got a fix. >> no more maybes. >> call me maybe i fixed it i can't believe it i'm going to have to start writing code or something. let's start some kind of - >> internet genius >> i had to figure out whether i had an iphone 8 or owe that's the first thing i had toing fi out. >> step one. >> do we have a hedge fund happening? cnbc is conferenceing with the sohn conference, we will be live april 23rd it's coming up, isn't it >> it is >> is it this monday, from new

york we will bring wall street's brightest investors to present their best money-making ideas. that's just monday until i right? how come you don't know that >> today is the 19th, 21, 20, 22, 23 >> i got that right. >> you got that right. >> thank you to leslie picker. you gave me a lot to think about. when we come back, amazon's ceo jeff besos is revealing there are 100 million prime members world wide we're going to talk to an analyst about the retail giant >> that is straight ahead. >> you know the greatest hedge fund - it took guts to start my business.

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president trump vowing to step up trade talks with japan is a bilateral agreement in the cars stocks around the world reacting to last night's news conference the latest straight ahead. it's prime time for amazon, membership hitting the 1 million mark we'll get you ready for the next earnings report. proctor and gamble announcing a deal in the health care business straight ahead the second hour of "squawk box" begins right now. [ music playing [ music playing >> announcer: live from the beating heart of business, new york, this is "squawk box." good morning, everybody, welcome back to "squawk box" here on cnbc, we are live on time's

square andrew is on evacuation this week i'm here with michael san totoli nasdaq is down by about 13 the s&p futures down by 4. this comes after a mixed day for the markets yesterday with the dow down and the nasdaq both up. it's all happening during earnings season. so you see a lot of volatility among some stocks. let's tell you about some of them amazon's prime service now has more than 100 million members. ceo jeff besos announces that to shareholders this is the first time amazon publicly disclosed members for the prime program, which gives customers free $2.99 shipping all year, all kind of content. >> that stock up by $25. gain of 1.6% we have two economic reports on today's calendar the labor

report is out. >> that is at 8:30 eastern time. at the same time, we will be getting the april philadelphia fed manufacturing index, too and more power problems in puerto rico. a power line failure caused an island wide blackout yesterday officials say it will take a total of 24-to-36 hours to fix it this is the latest problem for puerto rico which is still suffering from the after effects of hurricane maria last year tens of thousands of people have been without power since that storm took out. the dow components of procter & gamble are out they find the consumer health business of merck for about 2.8 billion. a ♪, germany, merck is a separate company from a u.s. pharmaceutical company and the companies have sparred over the name for years and they add supplements as one of the largest in recent years and for

a while i think the german companies and u.s. companies were the same until world war ii >> i think we're world war i like bayer aspirin >> okay. bayer aspirin. you heard it, too. >> bayer/bare aspirin. >> you kind of did jesus. jeepers, mike, i should say. i guess they're expecting me to do that. they put it in there, 95 cents, right? the dollar, though >> adjusted basis of the dollar versus the 98 the street was expecting. it looks like the sales were versus the 16.212. >> this currency always involved, p & g is multinational. how is the stock looking

>> up a touch. >> 1.7%. >> it's been very depressed, obviously. >> $15 down. >> 94 was the high the stock has been depressed and shareholders what else do you see >> i see fourth quarter sales they're expecting up, 16.3 billion, 4% on that, at one point the street's expectation are for 130i7b 66 become that's about right in line with expectations for that. just talking about some of the other issues that are coming through, third quarter earnings, the company saying that they have large businesses in several difficult markets. the ecosystems in which we operate around the world are being disrupted and transformed. they say they will be changing at an even faster rate they hope winning through superiority costs and cash activity and a strengthened

organization and culture >> and no guidance, they're not providing quarterly guidance at this point it's tough to -- i would do that, it makes it a lot easier those are the things you don't mi miss we probably don't have the cfo they moved this up based on this acquisition. right. >> the company says it's raising its fiscal full year guidance for core earnings. >> for the year. they don't give the quarterly. >> they're now looking for core of 392 and trying to see, yeah, that's not going to match up with the gap earnings. also they talk about gains they are getting from the tax act >> all right becky, we're moving on here. >> we are continuing to follow the latest on the fatal engine explosion on the southwest airline flight the aa is ordering ultrasonic

inspections of 220 jet engines this move comes after an investigator found fan blade caused the explosion a few stocks moving on, another top nike executive is out the vice president of footwear jeff thompson, a sixth high level departure in a month it's unclear why thompson is leaving. his exit comes as nike ceo mike parker tried to clean up the company. american express first quarter profits topped forecast. as the improving u.s. economy contributed to higher spending by car holders amx spent a record 3.2 billion on customer awards as it tried to track more investments. let's talk equities and earnings the chief investment officer, bank of america's global wealth of business and eric knutsen at new berg and berman, eric you

say volatility is back it's not back today. are you sure it's back in. >> it is back. >> is that a late cycle phenomenon does it mean we are long >> we think it's typical at this point in the cycle we think the cycle is extending. we're expecting three day extending global gdp growth this year and next year at this point in the siege, we're expecting due to central bank behavior, higher inflation expectations >> that is normally by normal volatility 15% annualized volatility. that's where we think we will stay as we are in this more, you know, plateauing, growth environment. >> are the lows in for the year? in the s&p >> too hard to say when we will hit any lows we don't think we've seen the highs on the year. that's the important aspect. >> what would, versus the old high, how much higher than the old high is reasonable to

expect >> we think for the full year, we're kind of mid-to-high single digits on the s&p 500. we actually they they're better opportunities. >> how about january we barely get back >> 8, 9, that would be a reasonable year. what's important to remember is first quarter quarters are forecast year over year coming in higher than that, total year forecast is in the 17-to-19% range. >> that could easily drive a 7-to-9% return you do have to expect some, you know, price earnings multiple contraction with higher rates. we are cautious on u.s. equities we would rather. we see better opportunities overseas, where we're earlier in the cycle and there is more opportunity for appreciation right now. >> i hear that a lot it always sounds smarter that more opportunities, your

domestic - >> i manage global strategies. >> you might buy a mutual funds or etf >> understood. we see opportunities in the u.s. >> earlier in the cycle but they don't have a u.s. economy. >> i was here earlier in the year you gave me a hard time, we were short, small cap, financials, energies, that's been working so far this year. >> when were you on? >> it was early january. >> so you ecovered >> we're fine. chris, strong earnings, across the board? that's in the market or not in the market >> it's not in the market. i mean, when we went into january, people forecasted the full year another 16, 17%. we're coming n. i know it's only 10%. 12% of the s&p reporting 30% earnings, 10% revenue growth it was the news of the day until we got to earnings we wanted to fast track the

calendar to get earnings season here to get out of this negative feedback loop of these headlines around tariff trade, et cetera we're at the point in the cycles, where there is a lot of excuses coming in as to why profits can't be better than what we have forecasted for the full year. so as we get through the full year, you know, price targets of 3,000 and the s&p that everybody talked about late last year is achievable but earnings have to work overtime to get there, because of the multiple compression. >> that has happened >> you say that the benefits from tax reform, are you already seeing those anybody that did their taxes knows that we're still looking at the way it was, not the way it's going to be this year, our corporation is different. managers are just feeling better about things because of it and it's self fulfilling it shouldn't be in the actual numbers. >> good point. it is initially. initially you feel good about it then once you start to forecast

your 0 plus 12, are you a corporation. you start to see the benefits are accruing more than you had expected once that happens, then you feel more comfortable putting money no capex, which you didn't before you start to, the positive feedback for a company occurs and that's where we he >> your cautious fools a buffalo? have you ever heard that, buffalos are shy >> from buffalos in the bull family, it's heavier, it's hairier. it's skierd of things it doesn't see, it runs away once in a while. it stays on course >> it's a prey animal and they go in herds. >> it is i mean at the end of the day, no, no, it's early. the early part of the day nature

tactical shifts and portfolio shifts happen at major turning points it shouldn't happen by the quarter or the year. >> people talk about peak profits. maybe next year, but not in '18. >> you know that santoli you ever heard that buffalo before >> no, i leak it, though >> the kaka. all right. thank you, gentleman, eric thank you both the tunka. remember >> kevin costner >> n and graham green. i think he was the - >> oh, yeah, yeah. >> you didn't see it >> sure i saw it i couldn't avoid it. >> it's good i saw it oh, comcast is teaming up with one of the nation's largest blue cross health insurers called independence health group. it's going to launch a new

consumer oriented technology platform firms didn't specify a time line, it comes at a time when health insurers and hospitals are increasingly looking to technology to help boost patient satisfaction independence health and comcast say they plan to develop a platform and patients can access nationally the health insurer has more than 8.5 members. comcast, of course the nation's largest provider and parent company of nbc universal and cnbc. when we come back, amazon prime hitting the 1 million membership mark. we will talk about the numbers and what it could mean for the stock right after this break later, prime minister shinzo abe agreeing to set up trade talks we will find out how small business is talking to a former negotiator for tpp stick around, qu"sawk box" will

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jeff besos says there are more than 100 million prime members this news comes a week ahead of the company rolling out quarterly results. joining us with his take on owl all of it, amazon stock price is daniel ives. thanks for being here today. this is a pretty big number. it came as a surprise, how does this match up with a what the street was anticipating? >> it's a jaw dropping number the stream was about 80 million. we were at 92. but this really shows 1,300 hours per year that a prime member spends. it shows the ivonn fortress and this is a major bullish data point into next week >> you compare it to a giant fly wheel, which is probably a great way of looking at it what happens when you are an amazon prime member? >> once you are a amazon prime

member you spend two times more than a prime membership. it's the key it's as sticky as you can get the fact amazon has done, you seen it through whole food and all other distribution and others, the fact that it's north of 100 million it speaks to the fact that this company a trillion dollar evaluation is on the horizon, eastern when you factor in 20 more prime members, 1,300 hours per prime per year, plus tap in on aws this is really something for the bowl as a feather in the cap even the skeptics will have to capitulate a number like this. >> the next point for the skeptics will be, wow, they almost fully penetrated in prime in the likely markets. so how many more can they get? and then i guess the other question would be, is this the start of greater transparency on the financial side that's ban criticism, too.

one big blob of revenue outside aws? >> look, transparency is something they will inch towardss i personally feel given some of the swirls we seen on the defensive would allow the trump you know inner chatter and other issues i think this was also them come out and beat their chest on the 100 million plus. >> everybody loves amazon. >> they're not hiding from it. ultimately i think it's the start of maybe a new amazon the fact that they actually released this was a surprise but i think it just shows that that number, which is much bigger is the fortress >> is it fully penetrated? >> in our opinion, international is really an opportunity also we think this is something that can grow another 25, 30% the next three, four years that's a part of this total market opportunity expands, especially on the aws side on theer prize. >> dan, what are their margins on the shopping portion of this?

so often you hear people say aws, that's what's so different? it's hard to figure the company out? how do you break that down >> when you look at the margin, it's a much different margin profile. aws you have a much more significant higher margins can you get. when you look on the consumer side, it is single digit margins today. ultimately, the investment profile is significant that's why we think when you look down the pike $80 of earnings powers in 2001, 2002 the street is giving them a get out of street card it's all about down the road eventually, you will have to pay the pipener terms of that margin profile. for now, aws is really spuling the consumer piece and that fly wheel. >> it has. >> it's got an lot more real than it used to be it's nice to have a black box. instead of just, and it's a real

one and it works great it's nice to have that there >> the new greecery or something. >> one of the leans of criticism from the folks who feel like amazon is too powerful is that break theup story, look, it's one profit business enablinging them to subsidize the retail business putting a lot of people out of business, not endorsing it, it's one of the lines. >> i leak the term batter and ballet is the potential anti-trust battle in the backgrou background >> it has nothing w to do with the shipping cost sfwls that's the ultimate fear does the anti-trust from a breakup perspective now prime membership is going into earnings next week this is a one-two catalyst we see, where it's been a black cloud over the last month, investors break up, they don't know where the trump tweet will be with amazon it's a good news story over the coming weeks in amazon.

>> you leak it regardless of what will happen in washington >> look, in our opinion that's a risk it's a risk you have to quantify, ultimately we have been on a post office that could increase 1 to 2 billion a year we view this as a stock that ultimately 18, 15, 1,900, 2,000 is where you can see the stock go, based on the fundamental gasoline in the engine and last night if are you a bully, you slept a lot better at night knowing 100 million plus was a prime membership member. >> dan, thank you so much for your time. >> good for having many sfle coming up, we will talk tpp and trades and then later, randall stephenson is set to testify later in federal court to defend his deal with time warner and an update on testimony an what we can expect mr. stephenson to say today. today. >> that is straight ahead.

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coming up, kate rogers, speaks to business owners on both sides of the political aisle about the impact of tariffs. >> plus, we'll talk about the president's visit with tensions, with abe as we head to break i wonder how that golf game went as we take a break, here's a look at u.s. equity futures. they're not volatile today, kind they're not volatile today, kind of flat.on that could help replace or repair damaged equipment and provide lost business income. they represent multiple insurance companies and customize coverage to help businesses get back to work. announcer: to find an agent, visit trustedchoice.com.

welcome back to "squawk box" here on cnbc live from the -- i do like to see germs, i will need some. one of the stories front and

center qualcomm's saying it had issues hard to resovlgs china is okay the final one needed by qualcomm to buy the dutch semi conductor. maybe it's a little quid pro quo, clarice and master card and visa is trying to get shoppers to use dedicated buttons under the visa and mastercard pass names, that idea is also getting support from american express. and tesla is the subject of a probe by cast regulators over safety practices following a report they failed to report injuries tesla says it's in compliance with injury reported and says it's never been cited for doing

that inaccurately. president trump and japanese prime minister shinzo abe held a news conference at the president's mar-a-lago last night. eamon javers is in florida he joins us right now. it sounds as there may not have been as much progress as the japanese minister hoped. >> reporter: that's right. they agreed to continue talking. they have a warm relationship. the white house points out again and again, this is the foreign leader the president has spent the most time with but shinzo abe will be leaving here from south florida without the agreement on the tariffs he wanted an exemption like other u.s. allies have got on on the steel and alluminum tariffs. he wanted the united states to jump back into the tpp despite the rhetoric on the transpacific partnership last week, he's not going to get that either it looks like the president says he wants a bilateral deal between the two nations. no indication that will happen

any sime time soon either. the president defend his tariffs, saying it's important as a negotiating tool. where he said. >> i will add the 232 having to do with alluminum and steel tariffs. 30% in one case, 35% and 10%, that it's got us to the bargaining table with many nations and in other cases they're paying and it's billions of dollars coming into the coiffeurs of the occupation. >> reporter: so not a whole lot of agreement there on the trade aspect of this really front and center this whole week here in florida has been the idea of a north korean summit with kim jong-un, abe was here to offer his thoughts obviously, it matters to the japanese they're right in the neighborhood there the president shinzo abe signified they are in lock step on this, their approach to it. the president saying ultimately if he doesn't like the meeting,

hemowalk out of it the north korean leader, still no dpatd for that official meeting at this point >> thank you very much main street is having its say when it comes to tariffs and potential trade wars kate rogers gains i joige rogers >> tariffs to china may mean make or break for business off the green, this farm has been in the family for more than 100 years growing corn and soy beans, now a potential tariff of exports to chosen has her on edge she supported hillary clinton concerned about what president trump's policies may mean for main street at a team when she says the ag economy is really hurting. >> well, we're a small business. we stand for american ways and we sure hope he would help out the small guy instead of harming

us we are hurting down here, the nebraska economy is dependent upon farms and that's our business. >> reporter: others say the potential trade wars is making planning ahead more difficult. jason duff owner of bellefountain properties in bell town tain, oichl, invests markes difficult for me to risk future projects. >> reporter: he supports trump, but obviously these policies are having an impact on main street. guys, back over to you >> okay. kate that's a lot of us overall you look at things and then when it hits home, what happened thank you. joining us now, former deputy wendy cutler is a vice president

at the asia society policy institute. it's very strange, wendy, kind of surreal, because you don't know who is going to support tariffs, who isn't in terms of party lines, there is many more democrats i think that are somewhat opened to these tariffs and republicans at this point. so it's not a simple calculus anymore. >> well, that's absolutely correct. trade creates a lot of complications and a lot of effects on the u.s. economy for workers, for businesses, for farmers. and particularly given where we are headed with china perhaps in a tit-for-tat scenario, a lot of people in the u.s. might be hurt i think that's what we're seeing, who will be supporting the president on these policies, who will want to get him to the negotiating table to make sure these tariff increases never take place.

>> prior to this most recent episode, was the united states ever just overtly taking advantage of other countries the way that sometimes i think other countries take advantage of the united states? or is that just not; that not true does that never happen >> i don't say taken advantage of let's beclear, the united states has been very successful in trade negotiations and opening markets through the years. a lot of that is through being tough in trade negotiations. >> why do we still hear that the classic cases? you know, we have a two-and-a-half% surcharge, they've got a 25% surcharge. is there -- is it ever true that because we're so wealthy, successful, large? the economy is the envy? it's the greatest economy they've ever seen, people think, oh, you can afford it. help us out here >> that never comes into any of

these negotiation with countries that are on their way up >> well, i mean, i think the point you are making about countries on the way up, that's exactly correct. if we have to remember when a lot of these tariff rates was set, the united states was the number one economy, number one market, everyone wanted to sell everything to us and we were very strong after the war. that's when the world trading wars were set up now some of these rules need to be looked at we need other countries, particularly as they become developed countries to really pony up and open their markets as well in line with our mark opening? >> what do you think the rational is for bilateral versus multilateral is it leak anything else or something good about bilateral or multilateral? >> of course each approach has benefits and neither approach is better in fact, both approaches can be pursued simultaneously

i think the president has a sense that bilateral negotiations are better based on his business negotiating experience but when you are in international trade negotiations, it's quite different. and one of the benefits of a group negotiation is you can work with other countries to build coalitions to get the country whose practice you want to change to move. and a lot of times it's more compelling if it's not just the united states insisting on a change politically, it can be easier for countries to move if they can tell their domestic constituents, look, the rest of the world wants us to do this. we are the outlier >> it's not as simple as when you think syria or defense, you get the allies leaned up and you are all on the same side when you try to get you know japan to cooperate with you on something with china, japan is already mad that they're getting aluminum so you know, it's everybody's got their own interests in mind, so i don't know how you build,

maybe multilateral is tough. some of the same people you need for the multilateral deal are getting hurt by you on some other front? >> correct but we have to arm multi-lateral trade deal with a much greater impact than a bilateral deal and trafficly business is no longer conducted between one country and another country. products and services move from country to country to country. sow want to make sure you have a trade deal but actually will be used by business and, therefore, benefit its workers and to me that's a compelling case for pursuing multilateral trade negotiations >> so we have so many guests on that say, look, we've, there were things that needed to be addressed in the way trade is done, we just have a problem with the way it's being addressed or you just have to be very careful and, you know, you have to have a methodology to how you approach it. it's not necessarily they say we shouldn't have done anything they want it done right or a certain way, is that where you

-- because for years it seems like we didn't aggressddress the things >> we did address them no trade agreement is perfect. even the tpp, which was a multilateral trade negotiation we were in bilateral negotiations with japan, for example, on the side lines of tpp. so in reality, i think this whole debate of multilateral versus bilateral is a little overplayed and the key is, let's physical out what we want to achieve in these trade agreements and then let's work with our trading partners to find the best approach and my view is both approaches you know can work together time tainiously to get the best deal for the united states. but we shouldn't be saying we're only doing bilateral i think that's hurting us. i think it's evidentcoming out of the abe prime minister sum. abe put frankly a lot of capital into the tpp first with the united states then without the united states is very wary about

enter nook bilateral trade negotiations he didn't say he's not willing to work with the united states on trade in opening and working vis-a-vis third countries. it's the fear that the president's only interested in a bilateral approach >> yeah. it's i think about some of the things we see on the front end it's like oh my god, what is he doing? leak with north korea, suddenly we are talking about de-nuclearization. i'd like to think there is a method to what is going on in all these things, it's negotiating. maybe this whole tariff thing before a lot of things are actually saet in stone and happening, maybe there is a method to that, too. is that too much am i being too hopeful and oughtmistic or >> it's too early to judge clearly, his trade policy and the fact that he is willing to impose tariffs has the daily

attention of our trading partners a number of them are coming to the table and willing to find a way forward. >> finally china set his enemies are mortified that this could work out. even people that sort of support a lot of this, there are times where it's you can't believe it, that it's actually working half-the time. >> once again, you have to look between the short term and the longer term and the other key time we are seeing is a lot of our trading partners are working hard now to diversify their trading partners and reduce their diplomacy on the u.s. market so even. >> now, maybe down the road. >> one of these times, you know, taking the good cop/bad cop, whatever you call it, one of these times it will not work in this world nowadays something awful could ends up happening. >> frankly, look what's going on with china they have announced some reforms, that they plan to take.

but those reforms are in china's interest and china has matched every announcement by the president with a similar action that it's willing to take if the u.s. moves forward so i think we're headed for some rocky times with china maybe with other trading partners, too. >> it may be inevitable with china anyway because they have their people to think about we have ours thanks for your time today i appreciate it. >> okay. thank you. when we come back, at&t chief randall stephenson and time warner ted lucas testifying in federal court and defending their mega-merger which the government is trying to block. we have the latest in the trial next. in the meantime, check out the futures. mixed picture. not really we are talking on the flat lean. >> the do you futures up and nasdaq down by about 9 points. "squawk box" will be right back. once there was an organism so small

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welcome back, everybody, the department of justice trial, atmosphe avt ath atmosphe/* ath at&t and. time warner ceo jeff lucas took the stands yesterday saying the deal is necessary to fend off internet rivals like google and facebook at&t chief randall stephenson is ready to testify this morning. joining us is a senior analyst at wells fargo it's great to see you. >> thanks, becky >> five weeks in, what would you say you have gleaned from what's going through the courts at this time >> i would summarize saying it's no smoking gun went into to saying we thought we would surprise a lot of people now the doj has rested its case on at&t's side, i this i we're in good shape here some no real

surprises. >> you thought the law was on at&t's side to begin with. >> that's right. >> no real surprises means you think os have increased that at&t is likely to get approval for the deal >> yeah, i will note, i'm not an attorney, if you talk to enough anti-trust attorneys who guided me that weigh, we're not pecking probabilities, but the law is the law and you know the stats this is a vertical integration we haven't seen a vertical integration shot down sense the nixon administration it's straight forward. a lot of the worries the doj set that prices were going to go up, facttually, we haven't seen that, if you look at nbc and comcast, it's the sample that the fact don't add up there. >> the issue we heard yesterday from lucas is just that, look, this is something that old line media companies need to do at this point because they are facing much bigger competition from deep

pocked companies like aing gole, a facebook, apple, like a netflix. how much traction does that argument get >> well, i think that gets a lot of traction. you know, five years ago, at&t's biggest worry was competing against verizon and comcast. now that scope is so much bigger if you look at the amount and the pace the original content netflix is creating every single year, day, these guys had to adjust and that's what we're seeing i think time warner's argument in court was that their content isn't as valuable unless wrapped around targeted advertising. you know, you look at the fang companies as they're called, facebook, amazon, et set remarks netflix, they're all going that, even though netflix is a subscriber modem, at&t needed to adjust that's what this acquisition is all about. >> jennifer, obviously the way you defend against this anti-trust case you allude here

is for time warner and at&t to say, hey, look, we're not that powerful it's not that strong a model that's going to be anti-competitive do you think if the deal gets approved and gets completed, that, in fact, at&t is in a good position to compete? or obviously it's kind of an irony you have to talk down your own business prospects in court? >> no, are you right about that i think if you look at the majority of at&t's business today, it is interprize, the main focus for people right now is wireless with the fame. i think it's fair to say wireless right now is swimming in commodities as these guys somewhat kill one another. so i think that case does hold true that this is a way to differentiate the model, but also foster more innovation and covertician to some of these other companies that i mentioned. >> jennifer, let me ask you how you would kind of value some of these companies at this point. whether that be a time warner or you match that up against the

fang stocks, netflix and amazon and google, where the measuring stick is pretty different. all of those companies >> right >> have gotten very large valuations on the idea that they are building up on audience and the profits will come some day, i'm thick of a net flex or along -- netflix or along those lines, that's not something they can do, saying we will miss our profits and maybe miss expectations along the way it's a bit of a kwaundzaquandare companies to switch to the world without getting heavily penalized by the street. which ones do you leak which once do you not? >> i can really only speak to telecom, at&t is one i recommend. the pipe is important. the same thing with verizon. as all these companies talk about wireless is their future, you know, there is really four companies they can touch to get there, unless they buy some spectrum and build out a network. so it really is the four

companies of the big four. sprint, t-mobile, at&t and versus so those are the ones we like and feel like have been down beaten here as a commodity service when there is a few night service in that spectrum >> jennifer, thank you for your time we appreciate. >> thank you i have a couple of stocks you might want to watch ahead of the bell imf manager director christine lagarde, following the opening bell stick around for her thoughts on how big tensions are affecting the economy. "squawk box" will be right back. oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? ...no minimums. schwab has lowered the cost of investing again. introducing the lowest cost index funds in the industry with no minimums. i bet they're calling about the schwab news.

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now you can get it, too. welcome to the party. welcome back, everybody, let's take a look at stocks to watch this morning dow component american express rising in the free market trading. the company beating estimates by 15 cents with a quarterly profit of $1.86 a share, as customers spent more time using their amex shares and that stock up 3.6%. mattress maker sleep number, reporting a quarterly profit of 52 cents per share, missing comp store sales fell by more than expected >> that stock is off by almost 16% this morning, so keep an eye on that. all right, coming up, linkedin releasing report. ceo jeff weiner joins us with the exclusive results. later, senator bob corker talks

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>> earnings alert, out with quarterly results. the numbers in the stock reaction coming up linked in's new job tackling the skills gap the ceo joins us live. plus a meeting the world will be watching >> i will be meeting with kim jong-un in the coming weeks. >> we will talk to the chair of the senate foreign relations committee bob corker about what's at steak the final hour of "squawk box" begins right now! [ music playing [ music playing >> live from the most beautiful city in the word, new york, this is "squawk box". >> good morning, welcome back to "squawk box" here on cnbc, the nasdaq market site in time's square i'm joe kernon along with becky quick. futures are flat flat nothing happening yet. this morning, the dow not,

actually now 7, dow down 4 s&p down about 2 knots one of these days, where we're not seeing a whole lot of the volatility. >> not yet, at least >> it's been draining a away the last five or six days. >> maybe 290, we'll get volatility effect because of the new highs on yield, it would be million-year highs, 295 or so. >> also a busy morning for weeas dow component procter & gamble, among its units that did well was the units. saying it's buying the consumer health business of germany's merck, germany's merck is a separate company from the pharmaceutical merck those two companies have been sparing over the use of the name over the last 125 years or

so that deal which adds vitamins and procter & gamble lineups of over t counter medicines is the largest in years procter & gamble is down by less than 1%. it is the metric used for the private equity giant that was 20 cents better than expected topping forecasts and bank of new york melon beating estimates after the bank results were helped by a fee revenue that came from asset servicing that stock is up by three and a third percent. regional bank bb & t better than the street was expecting beating by 5 cents revenue was essentially inline and profit doubled from a year before that was up by 2%. here's what el is happening, wynn adding three women to its board. the move comes after a search that wants to be a diversifying

gender skills as well as experience on the casino boards operating board which has four women and seven men. another top nike executive is out. greg thompson left the company >> linkedin is out with new focus tech on theic shifts impacting america's work force and washington policy decisions at the same time >> great to be with you, thanks for having me. >> let's talk about this research that you conduct. they are facing the fourth disastrous revolution. everything from artificial intelligence and people who are working as independent workers all of these things kind of

adding up. i know you guys see this closely on what you do with lempgedin. how did you conduct this research in this survey, what did you finds? >> so we're out today with new findings from our skills gap work we have been looking at data from across linkedin member profiles, job postings we scan over 100 major cities. over 120 skills within those cities so north of 10,000 if you will there continues to be an imbalance with regard to software engineers communications is the 234b one skills gap in the occupation so jobs like account executives. sales development. project management

musk was commenting on the need for work with tesla. he says it turns out potential work for humans. when you say soft skills and communications there aren't people that read, right, communicate and act as a sales? >> i think it's more oriented towards communication, collaboration, things along those lines. it's not stem, it's not learning to be an engineer. you can't find qualified people for. >> that's exactly right. cloud computing, mobile software, et cetera, there has been a supply and deand the it turns out major metros we see an imbalance along lines of digital

fluency, bake digital skills word processing. the ability to use a spread shee sheet. >> when you are displaced. are you in a much better position to reskill and learn new jobs when you have that strong foundation in place >> you are in ug what. what would you tell lawmakers based on what you learn from this >> we have data available that enables us to gain insight and optics into where these gaps are emerging we done have to react historically that infrastructure didn't exit for any given local y locality we can measure the size of that gap and start to invest in the course work and the

skills before the deal was finalized, the deal for microsoft acquiring linkedin i was wondering where you are along the process of integrating these two firms? >> it's early days it can be challenging. we're pleased with the results thus far, as a matter of fact linkedin linkedin, we have been accelerating our engagement at record levels. riff news aren't growing the difference is we are over ten times the size that we were at that time so it's been great to see you. but we're also able to leverage microsofts huge footprint, on a global basis, their talent,

infrastructure so far so good >> what does linkedin's acquisition meean for microsoft >> we've gotten a platform, we have roughly 540 north of 540 members and as a result of those members, they're networks. they're professional identity, microsoft is in a position where it can add even greater value by virtue of integrating our products, our data into microsoft's products, so microsoft would be a perfect example you understand who is sending you an e-mail, who they are connected to you can get connected if you are not connected. taking that social fabric and being able to leverage that across not only outlook but the office suite is really potentially powerful >> you mentioned how much bigger linkedin is now at the time of your ipo back in 2011. i can remember investors

skeptical of linkedin, saying they're doing well because of a very loose job mark. we still had high nemployment. you had emotional engagement by people looking for jobs. obviously, it wasn't about that. now we have a tighter job mark you talked about the skills gap. are you seeing different types of engagement by employers are they doing anything more in the way of training or being a little more creative about things and trying to get talent? >> yes, to all of the above. you know, at the time our core recruiting offering was our recruiter flagship product which enabled companies and recruit torres do passive recruiting so if they had a search against criteria people not necessarily actively looking for work were in our database and could be found that way since that time, companies and employers have started to really think about how to build their talent brands, how to leverage our active job seeking capably where they can target folks who

are proactively looking for work, so there has been a real change in evolution. we've seen the utilization of linkedin expand beyond knowledge workers and our core professional user base in the retail industry, for example, we're starting to see folks pursue middle school workers so that there has been a lot of new use cases. then going forward, we're going to be leveraging our talent analytics capability we're excited about that to help employers start to think proactively about their work force strategies those skills gaps, how we were talking about earlier, how they can train or retrain their work forces to take advantage of new technologies >> jeff, quickly, obviously peacebook and the other silicon valley companies have faced a lot of pressure because of the information they check from their users. they turn around and sell to advertisers. i realize you are in a slightly different position these are people looking to connect with other businesses and other potential employees.

but what have you done or thought or changed about privacy given automatic furor that's erupted over the facebook situation. >> so for us historically, members first has been our most important value. we have six codified values at the company. members first is by far and away the most important of those. the whole derivation of members first is with an acknowledgment that the trust of our members makes the entire ecosystem possible for us, trust is consistency over time. and so with regard to how we leverage data, we've tried to keep that first and foremost top of line. >> do you sell it? do you sell that information or to advertisers come in i'm not sure how it with >> we have a, maing business, it continues to be our fastest business to scale with spore sp content feed marketers and advertisers are capable of leveraging data to our members and provide them

offerings. to how data is leveraged we keep in minds three things, first and foremost we tried to be consistent as possible and change those terms of service and those rules, when we do make changes, we try to be as clear with our membership in terms of what change is taking place? lastly we try to ensure our members can control how that data is being utilized going forward >> jeff, thank you for your time today. >> thank you for having many eme. >> a couple of members only jackets. >> santoli has got, you still wear that? your members only? >> you know what, i would have been in high school. i don't think it would have fit me anymore >> it's a dig? >> an observation. you were in high school. >> when you were acquiring your members only collection. >> how long could it have lasted when people see it you are so not the member of anythi

anything >> it's a club i joined. check out the shares of apple and in vidia a keying a taiwan semi gave weak revenue guidance, in part, blaming high software ends demand an analyst suggests a weak demands for the iphone 8 could dent apple third quarter forecasts. in fact, analysts, says that the iphone 10 weakness is widely understood and priced in but not the consensus for the iphone 8 plus, the consensus, can you see apple is down, god, i didn't mean to mention the problem with my iphone 8 i fixed it this is not me this is the analyst. >> i have to say, every two, three months you get one of these stories, there,

indications saying demand will not be that great. >> it tends to not be a long-lating feed with the stock, though >> they're not telling people they got eyes. they have something. yeah they're not a half a trillion dollar company that just says we're going to be good at this british drug maker shire has rejected a takeover proposal we talked about takeda pharmaceutical from japan. however the company says the discussions between the two sides are ongoing. the most recent offer reportedly worth up to $61 become we ha -- $61 become we ha -- $61 billion we have former nato supreme allie wesley clark will tell us what's at steak. plus we will talk to senator bob

corker he'll join us live at 8:40 eastern time later with new data on the opioid epidemic oyou are new efforts to limit the use of the drugs working, stay tuned you are watching "squawk box" on cnbc you know, i used to be good at this. then you turn 40 and everything goes. tell me about it. you know, it's made me think, i'm closer to my retirement days than i am my college days. hm. i'm thinking... will i have enough? should i change something? well, you're asking the right questions. i just want to know, am i gonna be okay? i know people who specialize in "am i going to be okay." i like that. you may need glasses though. yeah. schedule a complimentary goal planning session today with td ameritrade.

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now you can get it, too. welcome to the party. welcome back you are locking at a live shot of the white house oh okay i'm wondering what that was. president trump says his meeting with north korean leader kim jong-un could happen in early june here's what the president said about that meeting yesterday at that news conference he has been talking about. >> if the meeting when i'm there is not fruitful, i will respectfully leave the meeting and will continue what we're doing or whatever it is that we'll continue but something will happen. so i like always remaining flexible and will remain flexible here.

>> that was donald trump, president, first you are looking at the white house and that was donald trump >> thank you. >> you are welcome. >> for greater clarification >> he wasn't at the white house. >> no, he wasn't, but he's at the southern white house, mar-a-lago joining us wesley clark retired army general nato supreme commander allie, general, i just need to know your deepest thoughts, what is happening between u.s. and north korea what do you think is happening with kim jong-un and donald trump? >> well, i think it's a very unconventional way to go about a high level meeting but i think it could work. i think what the president needs is validation for the strategy adopted of the threats he'd like a win, diplomatically, to show he's done something that nobody else can do, which is reflect north korea from its nuclear ambition and try to resolve issues on the korean peninsula. i think kim recognizes his

country is in deep, deep, deep trouble. because the system which is grandfather and his father championed is simply not working. north korean economy is falling behind it's becoming less of a state government and more entrepreneurialests oentremendos prual -- entrepreneurial efforts out there. kim would like to modernize the economy. unlike his father and grandfather, probably he doesn't aim to take over the south directly because he knows right now, it would be like a minnow trying to swallow a whale. he wants to do is grow the minnow before he moves politically. so the challenge in this is not only the conventional challenge of a sum you went there and laid the united states of america on the line, what did you get for it? it's to take the lessons we learned from the iran agreement. where we focused on our nuclear

development and didn't do anything or enough to constrain other activities this is the same challenging career they're a rogue state. they're doing cyber. they're smuggling. they're kidnapping they're plo live rating a missile and technology if we go over there and work on a nuclear piece, we haven't done what we need to do we haven't learned our lesson from the iran agreement. so there are a lot of challenges here. >> general, they've got to look at the south korea economic miracl miracle. they take that wrong in south korea. you look at a free market forces, you look at the last 500 years, once capitalism, once you can own an idea in private property you look at what that does maybe we used to hear all he wanted for leverage was to be a nuclear power. and that was going to keep him in office and it was going to make him a player on the world stage. but there is nothing like, for example, a south korean, the

economic engine that that country built. i think he's looking at. that he's a young guy. he's looking at that and thinking, all right, maybe nuclear weapon isn't, you know, i'm trade that for this. is that possible >> i think that's very possible. but i think, you know the devsim in the details here. he wants samsurgeons, all these big korean first up there. -- samsung, all these big korean firms up there the question is, when he gets that development, does he put some of that into his military does he string out the de-nuclearization so he can jump ship from the agreement at some point in the future? how do we monitor it and control it going forward because there are sanction on now, restrictions on now but when you start releasing those, business gets involved, there is money on the line, contracts, corporate regulations, it's a lot tougher to put those restrictions on the

north. he knows that. he's a smart guy and got a strong team working against us they're very experienced so i think the challenges for the president is to go over there and have something more than a successful photo op it's to lay the basis for new security stability in northeast asia and that's a very challenging, that's a very challenging requirement. >> no one is going to think you can rehab this guy into a good person that just you know that does the right thing you look at some of his action, whether with his brother or what you hear about people that have gone up against them in north korea. this guy, i mean, i don't know whether you say unhinged it's kind of scary, is it possible that he has something that's so much in his self interest so much and for his country that he would go along with it. we wouldn't need him all of a sudden to turn into a good guy just someone you can work with, for his own interests.

maybe that's possible. >> i think it's possible i think he's a smart, smart ruthless clever experienced, got a great team behind himp, so he's not going to make the mistakes that gadhafi did, for example in giving up the nuclear weapons, not having the connectivity to the leadership and to the west that keeps him in power >> but do both sides really want this to happen do you think what do you put the odds that this just is a disaster? when you know trump walks out or who knows? gets thrown -- what are the chances that that could happen ten percent? 20 percent >> i'd say it's low, first of all the south korean government is a little bit afraid of president trump. they don't want a military engagement on the military peninsula, they're pushing he has south korea on sigh the

north wants economic development. president trump wants diplomatic success. i 4i the odd of walk out are low, the odds of long-term success -- >> gentleman, thank you for your inside analysis. we have got to run. when we come back, steve leishman, what do you have coming up? >> we will look at the new power tried a and ask whether or not how quickly we are market the life preserveer. it might be something that has to women swim a litt to swim a little more on its own now. as a control enthusiast, i'm all-business when i travel... even when i travel... for leisure.

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welcome back to "squawk box. i have breaking economic data. we j jobless claims, we were expecting 230,000. we got a little worse than expected no big deal, continuing claims we got 1 million 863 thousand, which is higher than expected as well, the business is 23, 2 from an expected 21 the stockmarket was coming heavy, down 7 in the s&ps, 2702. one of the reasons i think the stockmarket is trading heavy, trade yields have been going up.

it's the same spot right now this is somewhat uncharted water in the ten year. the one reason is the mark is now convinced that rates really are going up these numbers do nothing to dispel that. all week we've had pretty good data back to you, becky. >> steve leishman has more reaction to the numbers. what do you think? >> the jobs numbers every week comes in, it's 230 you start to worry won't when we're at 300 if it was 250, i think the job mark was strong and 275. so the job market is tight we don't at least according to base, we don't have a lot of wage pressure going on the big concern is it's almost an artificial one, this yield spread out there, which microsoft was talking about yesterday. we got down into the 40s >> low 40s spread between the two, some say that's an indication my read is it only indicates

recession when it goes to zero and stays there. >> it's kind of a switch one thing i struggle with is .4 of a% not aznar row when you are on two, four and 2, 8. >> you got a second derivative. >> good percentages. >> you are right, it is tighter. >> you still know. >> the big story i think is worth discussing is whether or not people think the fed is making a mistake. >> they pay more attention to the data >> moving a little too fast the market may think the fed is at the neutral rate, unprecedented change coming to your central bank the president has nominated or approved five members to the board of governors in washington the latest nominee to be vice chairman is praised both for his expertise and market knowledge as a managing director of pimco back if new york john williams has been named the most important bank president of all and part of a threesome with

the vice and vice chair usually at the center of running fed policy here's the question markets are wondering about. does the fed have your back in the face of a crisis most observers say yes but it will be different next time powell has raised the response to the financial crisis. his nomination hearing was clear. he would use the fed's tools in that crisis. >> that doesn't mean it will be easy here's what krisna guha says the politics of intervene iraqi horrendous and far worse than they were the last time aroundch balls it changes in the dowd frank and by these new fed heads the group is thought to be less likely to intervene overall and from companies vince reinhart is ahead of the monetary policy the powell fed is more likely to prefer interventions in the markets than than firms, that group worries about hazard if the new regime of more exam and stricter regulation fails,

it could mean markets price companies risk in a way that relies less on the idea the fed might bail them out. it may mean more in the meantime, what's interesting is that all these guys i talked to yesterday, i asked them, what does the book now say on how the fed should act the book is act early and act often. so the lesson is not the lesson the feds shouldn't intervene, it's how the feding intervene where the debate is. the idea is to stay away from individual companies, but intervene in markets >> this is almost two steps away, too, i mean, we started this conversation saying, are they going to be raising rates too quickly to then get into how are they going to act to save companies or to save markets >> it is. >> the first thing would be like stop raising rates, right? >> that would be the first thing they would do and go to stopping halting the balance sheets think this is something the market trades on all the time. when i start to see all the

commentary i get, i didn't use the phrase the powell put. that's what everybody wants to know is it at the same level as the yellen put >> maybe not >> i think it's a little lower that i guess it's still there. but it's different it's different because of the law. it's different because of the politics surrounding intervention and it's different because of the individual people being put on the fed. >> that makes sense. >> do you think the president's tweet about currency manipulation at a time we are raising rates is possibly directed at the feds >> i don't know. i mean, look, it was wrong -- it was wrong to begin with. right? because the chinese eun has been appreciating against the dollar. they have been doing so i think now a couple years >> that was the munitions response if you look over the last several years before >> i had trouble squaring the munitions responset the president's grammar and use of tactic it didn't quite work >> let's talk about, would you

take over managing my account, my stock >> because of testosterone levels >> because the higher they are, you made amends. >> i heard that report >> joe >> we're not allowed to manage our own accounts could leishman manage my account? >> becky >> i because less hair means more testosterone. >> leslie's report was that more testosterone was more performance. >> i thought it was the more too. >> you take risks. >> he's bald, goldman sachs is very good. >> you know the quote, joe, that i told you at the break. many a man hath more hair than wit. >> you pointed at me >> there are behavioral economics. let me say this seriously, behavioral economic studies show women can be better managers of money than men because of a lack of huberis.

>> what does that mean that's not hair? >> here's the thing, when i man -- >> isn't that like -- >> when a man watches a football game and he sees the running back running, he goes like this to try to influence if the running back on television women don't do that. they don't believe the things they do will have influence. >> it's more closely related to dogs >> to dogs the belief that what we do as a bigger - >> and the humility of women is thought to lead to or the greater humility of women. >> would you like this describe an anecdote of what women do on tv do you want to go there? >> i wasn't going there. >> i mean. they said where you wouldn't somehow be politically incorrect? >> no, that's true i'm saying there are behavioral economic studies, women can be better money managers than men because of a lack of fears. >> we wasted way too much. >> i didn't start it for the

record >> i asked if you could help me out. >> the good senator is waiting, joe. >> senator bob corker is who we are talking about. he is standing by. we are up next we will talk to him about north korea, about secretary of state nominee mike pompeo. he's got some still has decent hair >> that's great. >> after what he has been through, what wouldn't have grey hair in the trump economy? we'll be right back. polk county is one of the counties that you don't think about very much. it's really not very important. i was in the stone ages as much as technology wise. and i would say i had nothing. you become a school teacher for one reason, you love kids. and so you don't have the same tools, you don't always believe you have the same... outcomes achievable for yourself. when we got the tablets, it changed everything.

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welcome back, everybody, at&t's ceo randall stephen southern arriving at federal court moments ago. stephenson is expected to take the stand to defend the merger in that ongoing trial taking place the last five weeks. >> we have new data out on opioid prescriptions. >> reporter: it's rare we get good news about the opioid adimic we know painkillers leak objection cotton have played a major role in the crisis health officials have calling for a new way they're prescribed a drug industry researchers appears to be working. if you look back at the volume of prescribed opioids in the u.s. going back to 1992, that peaked in 2011 it's been ded steadily declining since, there was an act sell iraqis in new patients starting

the opioid treatment this 2017 in terms of the hit torical data -- historical data in 1992, i'd tripped last year and fem back to 52. we spoke with the executive director of the institute about the data >> this is a significant dropch we think it's important to see that and to recognize that some of the programs, many have been put into place in the past year or two seem to be having an impact >> unfortunately, description painkillers are not the source of the problem phentanol has overtaken the deaths all of those guys are accelerating through 2016, the most recent data there is a lot more work to be done >> we saw them before we went to

break, senator bob corker joins us now him we need like an hour, senator, so many things we want to talk about from north korea to iran. i want to show start, though, it's good to see you, how are you in >> i appreciate that commercial break in between, i felt i was listening to a dr. phil episode a minute ago you gave me time to clear my head and start with other things. >> your relationship with the president and we've talked on air, off air, everywhere else. it has had more twists and turns than like a novel. i had to bring this "wall street journal" piece up with you today. it's on the opinion pages. we've all got too much trump on our minds. it's really not an zooiindictmeo president trump. it's nor cable news and the way every waking moment is spent obsessing about anything he does, which is you know for a guy that likes publicity is

probably the wrong tact to take. >> this guy suggests, joe epstein, maybe we should institute in the u.s. a trumpless thursday where no discussion of any kind and any media about donald trump on that, we used to have a trump tuesday here on "squawk box" but this is a trumpless thursday i don't know what cnn would do, they'd have to go black. i was wondering, what if he finally is out of office if cnn succeeds in that do you think they would close up shop, senator? >> i don't know, but i know one person that would not like a trumpless thursday is president trump. we beth dal pontary bit. i talked to him thursday morning before the strike on syria he asked me a few things about what ought to be done. i'm glad you can get him on the phone any time, joe, you know that so he's very accessible and

very chaotic action that coombs out of the white house >> i read people, you are ready to talk and willing styles, you got back on the horse again said something like any senator, any republican senator that hasn't asked themselves, what the hell is going on with this guy is what did you say is either dreaming >> maybe comatose or something like that. >> you are back talking. i thought you were back on the good side of things with trump >> i'm sure he appreciated that. my point, i had an interview a long sort of profile interview with a washington post reporter, he kept asking me questions a about the next election or if it was held today i kept not answering i said, look, anybody, we have a president that will sign republican legislation when it passes, on the other hand, all throughout the day as you are

alludi alluding to, 10:00, 11:00, you have differing feelings based on things out of the white house. it's normal. it's fun >> i tried to get paul ryan here in walk. we missed you down there i tried to get him to admit to that story, he said it was fake i fake news, dealing with trump was a part of the reason he was leaving. he listed aecom plirkments, gorsuch, tax reform, deregulation suddenly some of the stuff about the big button, small button, my big button, suddenly we're meeting with kim jong-un maybe some of it is serendipitous or whatever. but there are some results that you can't deny >> no question there are results and there is obviously chaos, too let's be honest. a lot of missed step, we are going to get out of syria one day then we're not we're going to -- then we're

not, we're going to tariff canada, then we're not, tariff mexico, then we're not there is a lot of input, i think the president gets a lot of input from people, wakes up in the morning and and can be in a different place every day. so that creates the kind of discussion that you are talking about. why don't we talk about something substantive? >> good. we're on we l. i will talk to you as long as i k. iran, you think, you are worried, you also that was something in recent days where you are on the record saying he's going to get us out of that deem do you believe that? >> i don't think there is any question that he will leave the deal on may 12th, unless there is a framework agreement with the three european countries that we're dealing with, macron will be in soon, so will many earthquake hi

-- merkel. and the sun set provision, joe as you know after year ten, iran is off and running as far as sentri new jerse centrifuges, they're move income an upward trajectory we had some resistance from the eu three we have been dealing with maybe there will be a break through before the 12th. if from is not, i absolutely believe he will leave the agreement. >> you think it can be fixed >> well, you see >> iran hasn't changed any of it >> if we get a framework agreement, then we've done a lot to greatly improve the deem actually, joe, we were unof the ones that when to the the state department and to the national security council, our office on these three issues a year ago, knowing that this president would likely want to get out of if those types of thing were not corrected. so we have been working

hand-in-hand with them for a year i'm all for these three things occurring if they don't, all i'm saying is i absolutely believe the president will leave i hope when these european leaders come, they will come with a desire to try to fix those three problems with this eastern deem >> so i'm going to play devil's advocate a little. good news/bad news good news the president's critics, the good news is we're talking. the bad news is it's donald trump that is handling all that. that is horrific some people think he's a loose cannon, he can go over there and fire off a tweet, everything breaks down, we are worse off before we start, is that a concern you have or are you embracing this idea there mate be a break through here >> we have to start skeptical and cautious and we have to remember kim jong-un has this

deliverable weapon for the united states, does he believe that is his ticket to dying as an old man in his bed? that is his way to survive so to think that he just willie nilly is going to give up this program they developed for 25 years is not realistic. on the other hand, i am glad the president's meeting with him, and i am glad he's sending people like pompeo in advance, precursor meeting to set it up in a way where it has some chance of success, but i'm glad we're talking with them and i want to make sure, the white house, that there is a chance for the beginning. it is out of the nuclear weapons and i'm an advocate for discussions, and forever through our intelligence agency so pompeo was exactly the right

person to meet with him first. >> i can't tell you, you like the tax reform bill? it was a good vote it was a bad vote. we have higher revenues coming in and you're a deficit hawk and you're worried about that. >> yeah. >> is the growth going to come that helps us deal with the deficit, do you think? you're still optimistic? >> look, i make rhetorical comments and talk with you in a rhetorical way, but in the cbo hearing they were talking about the cost of this tax bill and it was a rhetorical comment i said, look, if it ends up costing what you've laid out here it could well be one of the worst votes i've ever made the point was that i don't believe it will cost what was laid out we since have gone through the numbers they've laid out they're maligned and there's a lot of false information that was put out that day yes, i'm concerned about deficits and very much so, but i hope that this is going to

generate the sustained growth that will generate revenues and so we'll see i'm not for extending the individual rate, and i hope we don't have a vote on that. it's just, come on give me a break. we did the individual side from my perspective and not everybody solely to get the corporate side done and to make our companies competitive. so i hope we won't go -- >> now they're playing music, and i have to ask you one more thing. pompeo, he gets in next week >> i hope so it's tough. >> really? the democrats aren't going to give trump a -- >> for them, joe, it's a proxy on whether they're supporting trump or not, unfortunately. pompeo is very qualified >> and there's stuff with north korea. >> we need a secretary of state, do we not? >> we need a secretary of state. >> all right >> what about rand paul? he'll finally give a thumbs up or not >> i don't know. >> he says no -- >> have him on your program and

ask him. >> all right we had you on. we've got you. anyway, we'll see you again soon >> that was all substantive, even the first part. >> no. exactly rate i thank you. >> when we come back we'll talk to jim cramer. once there was an organism so small

no one thought much of it at all. people said it just made a mess until exxonmobil scientists put it to the test. they thought someday it could become fuel and power our cars wouldn't that be cool? and that's why exxonmobil scientists think it's not small at all. energy lives here.

get to jim cramer. sleepless in seattle or wherever you were apple, 3:00 a.m. you flagged that was that mizuho? was it taiwan? in a nutshell, what was it >> i think mizuho, and i think in the end when what happened on the chinese, people are getting increasingly nervous about what china may do with american technology what can i say there is a sense that this is not going to be the great quarter and in the mizuho piece, they say look, all of the capital allocation will come and it's already in the stock. its had a big run and a big run from the bottom three weeks ago, and i think people have just kind of said, you know what? time to take a little topic. >> jim, that's big and we didn't get to talk amazon 100 million. >> 100 million

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pnc will be right there when you need us. because when it comes to your finances, if you focus on today, tomorrow has a way of working itself out. if you focus on today, just another day on the farm. 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. play [music plays]his". when everything's connected, it's simple. easy. awesome. all right. let's get a time check of the markets. you can see the futures have taken a turn for the worse this morning. the dow down by 73 points. s&p futures off by 8.5 and the

nasdaq down by 29 points we started off relatively flat. >> you get the wobble in apple and the relative 2.9 >> look, the markets -- >> nothing at 8:30 happened, right? >> the yield went up and now it look attractive relative to the yield on the s&p 500 make sure you join us tomorrow right now it's time for "squawk on the street. ♪ ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber rising yield, inflation expectations and commodity costs are once again in focus along with earnings from mx and proctor. the uk is up a percent and attention is on the ten-year and cracking the 2-9