>> yeah, yeah, may finally be the day. >> that's what i meant, sorry. >> we're getting an update on the ten year and the progress so far on what's happening with north korea. also the reaction from washington it's monday, april 23rd, 2018. "squawk box" begins right now. ♪ ♪ live from new york where business never sleeps, this is "squawk box". good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin is back welcome back. >> how much did you miss me? >> a lot you look tan. >> no thank you because you don't want to look technician. >> you want a little bit of a healthy glow you don't want to be burned or brown. >> he was looking a little burned this morning.

>> i like sun. >> i eat sugar, mcdonald's i do all of that >> red meat, steak for dinner. >> she missed you so much enough for both of us she missed you. >> thank you, joseph >> all right monday morning, everybody. let's take a look at the u.s. equity futures markets were lower on friday you're going to see this morning that the futures are in the red once again dow futures indicated down by about 50 points. s&p futures up by 2.5 and nasdaq up by 8.5. it was an up week for the markets. i think the dow was up by close to 100 points just for the week. up by half a percentage point. let's take a look at what happened overnight in asia you'll see that the nikkei was down 1/3 of a percentage point hang seng was off by half of a percent and the shanghai was slightly lower in europe, we're already seeing trading activity there yeah, it looks like things are modestly lower across most of the major forces the dax is down by less than .3

of a percent stocks are higher in spain, red everywhere else. what joe was mentioning, the treasury yields we're watching so closely, the 10-year ended at 2.949% it is sitting this morning at 2.988% watching that very closely. >> did you see the high? they put the high in the prompter for you. >> no, i didn't see that. >> go down >> 2.9972% we have not actually hit 3%. let me ask you what i asked you last week? would you guess 3% or 2.6% >> i'm worried about the german bond. >> the bund? >> the bund. would you guess 3/4 of a percent or back to 1/2 a percent it's 5/8 of a percent in germany. >> that's a move. >> italy, the bastian of financial stability. >> the bastian of pasta. >> 1.7%. that's what we talk about. we're still tethered, i would

think, to global yields. >> absolutely. >> but we're grinding higher is this for good reasons or inflation reasons? >> is it one and the same? >> yeah. the economy's coming along. >> sri kamar is on we're going to see what he says. you look good with a little color. do you ever suffer from sad, seasonal affective -- >> i don't >> if you have no sun -- we got to 60 degrees yesterday. >> sri is here. >> not to go off on a tangent, but when i first started the show because we were waking up so early in the morning i bought one of those moon lights. >> that thing to wake you up. >> a phillips light. i thought maybe it would help. it's early. >> i remember you copped a 9 hour time difference by telling them you go 9 hour time difference anyway they know

you are going somewhere where 1 percenters go. >> we had a great anniversary. >> but you didn't go on like a service trip down to, you know, like peru or something >> no. >> maybe you went somewhere 9 hours the other way where you could go on a peace corps thing. >> it wasn't a peace corps thing. >> you didn't? >> no. >> the biggest action is going to affect you if you are traveling today and you were planning to do so on southwest airlines because it canceled 91 flights today going to flight aware. 2% of the schedule yes, it's one of the top nearly 50 flights the carrier canceled yesterday. there were 50 yesterday. southwest is inspecting all of those engines following last week's midair explosion that killed a passenger the airline said the cancellations are voluntary and part of an accelerated program announced after that accident. it says they were not a result

of the emergency airworthiness directive that's been handed down by the faa on friday. in a statement, southwest says it minimizes disruptions duri during -- >> did that make its way -- >> it made it big time around the world. it takes about ten hours to do a full inspection of one of these engines. >> a metal fatigue. >> true metal fatigue. they're doing the equivalent of an mri. >> you studied up on the whole -- >> engine. >> you know more about this -- >> anyway, it takes a long time. >> engine, yeah. >> i think you do a whole plane in about ten hours but it's expensive. it takes time. the faa wants them to do it faster but this is faster than that. >> it's weird when something happens and then you hear, you know, we need to do this across the board.

we 45e7b9 dohaven't done it yet. how come we didn't know -- >> because suddenly it looks like this is a problem that's happened multiple times. is it a problem with the -- >> the question is whether it's southwest related but southwest does fly more older planes than a lot of the other u.s. air lines. >> they do a lot of short trips where you go up and down and every time you go up and down it puts a lot of stress on the engine. >> frightening she had her seat belt on, too, that's really frightening if you go halfway out with your seat belt on, that shows you the force of the vacuum. the window is not -- you can't fit through it anyway >> sticking with some airline news this morning. a couple of things to tell you air france says 1gs 4 of its flights will be canceled today due to air an lines strike they walked off the job demanding better pay the strike has cost nearly $270 million since it began you're looking at that stock

down 2.23% today gasoline prices, they are on the rise the average price for a gallon of regular, $2.83. that's up 9 cents over the past two weeks. 37 krengts higher than a year ago. the price of crude if you want to buy a barrel if you want to do it that way, 68.01. that's gone up a lot >> while you were gone. >> 70 bucks is what this is off. >> and gas prices are definitely on the rise. $3.50. eamon is here. big piece in the journal about what trump is going to demand from north korea just days before friday's summit with south korea, north korea is saying they will freeze their test program eamon javers joins us with reaction in washington

he's got enough material for 30 bombs theoretically? that's what i saw as an estimate >> yeah. >> i haven't seen any signals that they're willing to actually get rid of those, which it looks like what trump is going to want some of the rhetoric it's not going to be a walk in the cake, as they say. >> administration officials over the weekend were saying what they want from north korea is what they call full denuclearization, not just some steps towards denuclearization so we'll see where that goes but the president returning to washington last night after a week in palm beach, florida. the president's focused very much on north korea after the positive statements that you mentioned from the north korean side on suspension of those tests. that's some progress the president hoping to capitalize on that moving forward. a couple of tweets to bring you up to speed on the first one

the president simply saluting the north koreans for what they have said here a message from kim jong-un north korea will stop nuclear tests. also will shut down a nuclear test site in the country's northern side to prove them from suspending nuclear tests the president taking a swipe at what he saw is some media criticism saying sleepy eyes chuck todd says we have given up so much in our negotiations and they have given up nothing wow, we haven't given up anything and they have agreed to denuclearization so great for the world, site closure and no more testing. the north koreans have not though actually agreed to denuclearization what they've agreed to is to stop some of the testing we'll see whether they can get to that agreement. the base of the negotiations over the president and kim jong-un appear to be

accelerating we have another big visitor to washington, emmanuel macron from france there's a full state visit that begins in washington this evening. >> what else, eamon. >> barbara bush. >> barbara bush, that was -- >> did you see the picture. >> i did. >> i don't know if we have it. fascinating picture of all the living former presidents and all the living former first ladies including melania trump and it was just a really grace note, i thought, of unity among all those different presidents and all the different polite ral parties and all the different experiences they had in office all coming together for that one occasion they all seemed to be really enjoying themselves even though it was a sad occasion just to be together you did get the sense from the bush family that they were very stoic about this they said, don't feel sorry for us barbara had a full life, we

believe she's in heaven. we don't need your pity. i thought it was a great moment there. >> crazy stuff on twitter, too, not just the president, but i don't know where society -- >> really? >> kanye kanye made some comments about something and it's like -- >> yeah. >> -- and then shaneah twain apologized saying she may have voted for trump. she got so much backlash that she had to apologize for even intimating that -- >> did she say she might have voted for hillary? >> i don't know. "huffington post", you know -- >> we're in a very polarized world. >> yeah. twitter sphere exploded that she might have gone along with one of the other 63 million people that did that. she's not allowed to have that, you know, and kanye can't say anything either about this stuff. really strange but you can say crazy stuff if you're -- if you're at fresno state you can say anything you want. >> only if you're tenured.

>> god, are we tenured here? >> you are not you are at the mercy of the news gods. >> let's go -- let's leave this whole -- thanks. let's talk -- >> i can talk kanye with you all day. i don't have much to add to that. >> i know. i know. >> reporter: we have our kanye bureau rating. >> it's kimyea. >> kim and kanye together. >> see, i did not know that. >> yes, yes, you did. >> good-bye, eamonyea. it is a busy week ahead. today you can look for march existing home sales. tomorrow will be getting the s&p case-shiller home price index. new home sales and consumer confidence thursday we have the weekly jobless claims and durable goods. friday the first estimate on first quarter gdp and consumer sentiment. meantime, more than 1/3 of the s&p 500 and a dozen dow components will report earnings this week. most of them over the next three

days, tuesday, wednesday, thursday three of the five fang speeds -- >> god speed do a good job. >> alphabet today, facebook on wednesday and amazon on thursday joe is snikering tuesday, wednesday, thursday. >> joining us for or monday morning strategy -- we have two guests this morning. sri, we were talking about what you think is happening with the ten year approaching 3% you say there's a trifecta of reasons for this but none of them are the improving economy so what do you think is really happening? >> the trifecta is the earnings we're likely to have this week secondly is the feeling that geopolitical can be row produced third, secretary mnuchin is

talking about a peace offering and the fundamentals regarding inflation picking up sharply or economic growth has just not happened the first quarter gdp number which is going to come out friday, as you said, is likely to be much weaker than the fourth quarter the fourth quarter was weaker than the third quarter, and consumer spending, which is 70% of gdp, is very weak in the first quarter. >> why >> it is weak because the consumer sentiment and the extent of stock market improvement that they have seen is not percolating down to the average consumer this is the same story, becky, that we have had since 2008 with the stock market shooting up in the last nine or ten years then income disparity has increased and the people who are wage earners, the big spenders, have not benefitted from the stock market. >> what has happened with the

tax change that was supposed to put more money back in people's pockets. >> that's a good question, it did. but if you look at the way in which the money is going, it has gone more to the higher income people who are equity investors and it has not been uniformly distributed to the lower and middle income groups so the people who are the big consumers who have the disposable income, those who have the disposable income are the higher income group and they are benefitted and people lower down have not which is the reason why over the last many years the economy didn't do well the stock market did and i think the same situation is going to continue on the fiscal outlook as well. >> what's the fix? >> the fix here is to have employment oriented change i have always talked about having employment tax credit, vocational training. germany did after 2003 all of them take a long time they don't give you quick

political dividends, but that's about the only way that you're going to change the labor situation and income. >> josh, you'd agree with all of that >> no, i actually don't. i want to see marginal rates go down to 28%. i mean, all of the trump tax plan, number one, we're not even seeing the effects. >> because it's still so early >> yes next year is when the first trump tax plans will be done, number one number two, i mean, a lot of this was at the margins. we only cut the margin rates from 39 to 37. that doesn't affect wage earners mp they have the qualified business tax with a 20% pass through. i think long term i think we'll see better results but it won't be until next year that's when people will do their taxes, but i think we want to -- if we want to see raganomics or trumponomics, we want to see 20% rate not the weird inning at the

edges. >> you don't think this was enough >> no, i don't i want to see 20% marge gnat rates. >> lead editorial. taxpayers spend billions on a training program that doesn't deliver. 1.7 billion federal spending on jobs were a total flop how do you do vocational training then in throw more money at it for income inequality >> vocational training can be done very well you can -- >> what did they do wrong on the jobs score >> you have not had an actual employment tax credit in this country since 2008 so i don't know what the editorial is referring to, but that is not the situation we have gone through in this country. so what you need is for a firm to get a certain amount of tax credits per employee that is hired. you also need the immigration of skilled individuals from the rest of the world. tell me, joe, if anything along

these lines has passed in the last ten years. >> this is about the specific -- it has nothing to do with the tax credit this is the jobs -- this is trying to figure out how to match skills with jobs it's hard. it's hard to do and they try to do it and best intentions but a lot of times after $1.7 billion you've got absolutely nothing to show for it. >> that's part of the editorial i would agree with if it is done at all, it has not been done properly and it has not given any benefits but, again, if you want to see whether it will have benefits or not, think about germany in 2003, it was known as the sick man of europe. the programs helped out. if it is properly done, it can give you an enormous amount of dividends. i'm not saying haphazard employment policy is going to work. >> josh, very quickly, would you buy stocks here at these levels when we're in the midst of earnings season?

>> i think this is a sideways kind of market we may continue this for another month but i think long term things should look good for equities, especially towards the end of the year. i think with what's happening this week with facebook, amazon, google, most of these companies have monopolies. even though we're worried about big data stealing our privacy, it's already happening google isn't the card catalog. they're looking at things we're searching. they're manipulating our purchases. i bought my first thing on facebook i think they're going to surprise to the up side. you have to realize, these are ecosystems now getting in our heads and training us with the buy. >> josh, thank you for coming in sri, great to see you. >> thank you, becky. great to see you. coming up when we return, we're going to tell you about some lucky summer interns in for the ride of a lifetime we will explain as we head to the chairs we'll have the top water cooler stories in a moment.

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welcome back to "squawk box" this morning another royal baby could be delivered here soon. kate middleton checking into a hospital in london in the early stages of labor. the betting on whether the new baby will be a prince or princess is currently at 10 to 11 in favor of a boy top girl names -- odds makers mary, alice and victoria boys names include albert, arthur and fred. >> what? >> why >> throw other names in the mix. >> those are all family names? >> right. >> fred. >> old name. >> old sort of -- >> yeah. >> almost summer internship season and harley-davidson says here is blowing away the competition. motorcycle company is going to pay eight interns to spend the summer touring the country on a harley. >> what? >> yeah, and sharing their adventures on social media at the end of the summer the

interns get to keep the motorcycle. >> they get a paid aside from the motorcycle or is this the case of an unpaid internship >> interns get paid a lot of times. >> a lot of times. >> i'm not sure why. >> it's the law. >> there was also -- >> yeah. >> plus, it's unbecoming if you don't pay people because you're basically saying only if you're wealthy you can take an internship. >> it's a law? >> everywhere? >> no unpaid interns. >> i think it's very hard to have unpaid internship it's considered an apprenticeship where you're getting credit. a case of science fiction becoming reality lis zwroen this. the university of minnesota and the u.s. army have developed materials that mimic the flexibility of squids and could be one day used in military robots that could be 3-d printed on the battlefield current military robots have

trouble maneuvering in confined spaces that's something this new material could solve are we looking at a squit? that's not the material. >> that's a real quit. >> that's pretty realistic looking. well done. >> calimari. >> hungry? >> i like squid. i like calimari. that's not what i was seeing. >> grilled, fried? >> squidward. >> sponge-bob squarepants. >> when i see it advertised, they don't liook like they're i the ocean, square, squidward have you seen it are you going to >> we have not seen it we have a fish though called sponge bob in our house. >> you're still at that stage? >> yeah. >> sponge bob's been around for years. >> what kind of fish. >> sponge bob 11.

>> tropical. >> we have goldie. a goldfish we've had for 12 years. >> make it last. >> he's holding in >> what's 12 years old >> goldie. >> goldie's a 12-year-old fish. >> just in case the kids are watching, yes. >> same one, yeah. >> not -- >> no. >> okay. >> kids are watching kids are watching. >> okay. why would they be watching >> i don't know. nothing better to do >> maybe. >> all because of this deal news, henry schein, 6:30. spinning off its animal health business, vets first choice. we'll talk to the ceos first choice as we head for the afore mentioned break, here's a look at friday's s&p 500 winners.

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it's a smart way to eat lunch in peace. ♪ ♪ welcome back you're watching "squawk box," live from the nasdaq market site in times square. good morning welcome back u.s. equity futures this hour in the red to some extent down better -- now it's mixed. the dow is now down 15 but the

nasdaq has turned positive and the s&p slightly positive. >> that was down 50 before. >> yeah. we're watching the ten year, which got to 2.997 it is now 2.98 but in the last two weeks we have seen the move back to challenge that level of 3%, which has been so elusive for so long. i can't believe we're not going to get to it at some point maybe we don't. >> at some point being the key, today, this week >> today, this week. >> potentially. >> we're awfully close. >> be weird to turn down 2.997. >> i don't know if 3% is a technical level. >> kwa. >> it's a round number let's talk about some stocks to watch today, too. ubs reporting first quarter profit that rose 9% beating forecast on higher income from the investment bank. but the swiss bank is being cautious about the current quarter as it sees geopolitical tensions and rising

protectionism as threats to investor confidence. the stock is off by just over 3%. phillips first quarter core profit rose 15% topping expectations the dutch health care technology saw strong growth in china and the u.s. for the high end hospital equipment that stock is up by 4.7% then fresenius is terminating the $4 billion deal to buy u.s. drug maker akorn they say akorn failed to meet several closing requirements akorn says it will fight to enforce that merger agreement. akorn shares off 31.5% this morning. fresenius is under pressure down 4%. we have a deal in the tech care center. medical and dental solutions henry schein spinning off its animal health business to merge with privately held vet first choice they're creating an independent

company. here we have harry schein ceo. the new company will be called vets first congratulations. before we get into it, help us understand what you were thinking in terms of deciding for whatever reason that you thought that the dental world needed to live on one side of the world and the pets business on a different side though i always thought you needed to take care of all of the pets teeth. >> we are going to take care of the pets teeth that's not the question. this is one of the most exciting transactions i've ever seen in my period in health care we are -- it's all about growth and it's all about unlocking shareholder value. we're going to be in a position now to vie for both the medical and dental part of henry schein focused on wellness and prevention focusing on its own customers and the animal health

side focusing on its customers, the pet owners and the veterinarians. it's about unlocking shareholder value. >> were you looking to sell this business or spin it off or how did this come about? why you lo were you looking to buy the business >> ben is going to tell you the exciting part of this business at the end of the day it was a natural merger between a global distribution and software business and a provider of unique veterinary services. >> to put a fine point, was there an auction >> absolutely not. it was about sale, it was about bringing together two unique businesses >> okay. what's your side of this >> oh, i agree this was a very complementary businesses that had an opportunity to come together and we're supporting small business practitioners. >> explain -- for those not initiated, explain what you do so everyone understands what we're talking about. >> veterinarians are office practitioners, right they're seeing a whole range of species across all aspects of health services so henry schein

has been predominant provider of these services in office throughout the world and vets first choice has developed new capability to support them with online capabilities and a direct to patient engagement opportunity. so on a combined basis we offer a multi-channel service to veterinary practitioners so this is about helping veterinarians respond to changing client expectations >> when this transaction is over though shareholders of your company are going to own a significant stake of this company? >> correct >> the shareholders of henry schein will own just over 60% of vets first corp which is really going to be a company positioned for growth because it provides fantastic services, it will be in a position to provide fantastic services to the veterinarians and accordingly to the pet owners. >> when's this deal close? >> we expect the deal to close

sometime in the fourth quarter. >> is there any chance that somebody will emerge since this asset is up for sale, not that you're saying it's up for sale, the fact that you're willing to -- >> no. this is not one of those situations where we're selling a business what we're doing here is we're bringing two unique properties together one supply chain practice management software. the other one creating services so that pet owners can purchase products and ensure that those products need to be bought online. >> were you looking to sell? >> no, but what this gives pets first choice is not only an opportunity to partner with one of the major innovators in our space but a huge acceleration for vets first choice. this is a global health care market it's an opportunity to accelerate some of the things we're doing. >> what does this company look like 18 months from now? do you use this as a platform to roll off other businesses? >> well, we have a lot to do just in terms of bringing these two organizations together and we hope to close this by end of

year but we have a big job ahead of us in '19 and '20 to unlock a lot of new value. >> final question nothing to do with this. i'm going to the dentist later this week for a cleaning what do i need to know it's different this time >> well, where we're moving in dentistry is to the digitalization of dentistry. a scan of the mouth is equivalent -- >> not the x-ray where i have to clamp down on the little things that's so hard to keep them in your mouth >> the angle is much more comfortable now. not to worry it will be fine. >> angle is never comfortable. do you agree with that the little circle thing, it's going -- >> yeah, yeah, yeah. you can now get a scan instead of having an impression taken, it's a scan and extremely accurate it goes right into the practice management software. the digitalization is -- >> do you do that annually >> twice a year. >> the scan? >> no, no, no. >> i like that lead thing they put on

they say, no, it's not a big deal. >> but they leave the room. >> they run out of the room. it's like where did they go? >> the dentists should science off but at the end of the day it's about digitalization of dentistry and much more pleasant and much more accurate procedure than ever before. >> andrew has one cavity one filling. >> one filling, yeah >> taking care of his teeth. >> no kidding. my dentist looked in there, a new one, i used to go out near cnbc and we don't go out there a new one, he was like, well, well-traveled teeth. >> congratulations. >> you know, crowns and all that stuff. >> issues? >> yeah. yeah root -- you never had a root canal? >> thus far, knock on the black citi plastic. >> coming in here -- >> he's too young for a root canal. >> really? >> usually when you're over 50. >> really? >> okay. all right. >> will you work on a turtle >> of course. >> you do? we took this turtle in, my

daughter, years ago, and they suggested some really expensive therapy. i'm like, no. >> i had a turtle with pneumonia years ago. we used to have to give it antibiotics every day. my mother and i would have to get the leg to stick out to give the shot into the leg. >> pharmaceuticals for reptiles as well. >> yeah. it's a whole industry. >> thanks. when we come back this morning, congratulations gentlemen, toy wars hasbro out with quarterly results just days after mattel named its fourth ceo in as many years. courtney ragan will join us next then at the top of the hour we'll be talking tech investing with reddit co-founder alexis ohanian. after that a little later this morning, another squawk newsmaker. the trump administration small business administrator linda mcmahon will join us on set. stay tuned, you are watching "squawk box" on cnbc you know what's awesome? gig-speed internet.

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and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. welcome back, everybody. right now it's time for today's executive edge we are talking toy wars.

the business in flux as toys "r" us winds down and mattel announcing its third ceo in just two years. just this morning hasbro was out with quarterly results cortney ragan joins us. >> just a moment ago hasbro's first quarter results earnings 10 cents per share that is well below consensus the estimate was 33 cents. revenue falling short of street forecast rival mattel reports on thursday the toy industry is going through a lot of changes and toys "r" us is liquidating that's the big hangover on hasbro's results both mattel and hasbro lose their second biggest customer when this happens behind walmart. toys "r" us is tied with target. the toy industry isn't in complete disarray. the sales did grow just 1% globally and in the u.s. last year the two largest toy makers are swapping places as mattel sales fall and hasbro sales grow part of the shift comes from a changeover of the disney princess business. mattel lost it after about 20

years to hasbro in 2016. the following year hasbro sales surpassed mattel for the first time you can see it really clearly on that chart largely because of it, it was about a 400 to $500 million business there now mattel's barbie franchise is also weakening that's key barbie sales began to fall around 2012. down 33% now five years later. the sales have rebounded from the lows in part of new body types, skin collars that were introduced barbie's strongest days may be behind her mattel's fischer price and american girl brands are down, too. 26% and 20% respectively in that time period. hasbro's franchise and gaming segments are growing hasbro's ceo brian goldner is in his tenth year and the incoming ceo for mattel is coming in ynon kreiz.

since 2012 mattel has shed 20% and hasbro shares are up nearly 80%. it's not all bad but there are problems. >> what does toys "r" us mean, the depar -- departure. >> while some of those toys will get dispersed into other channels, it will take years and likely not all of them if you think of all of the toy shelves that exist in toys "r" us, i mean, walmart or target, they're just not going to continue to add aisles and aisles of toys. >> does that mean we're going to be buying less toys? >> it's funny -- >> different toys? >> we talked a lot about kids moving into digital kind of properties, playing more on the ipad, potentially less on the toys when you look globally, there is still growth certain markets growing more than others. prices have fallen so that throws off what's growing and what's not is it prices or volume a little

bit? in some cases we're buying less. in some cases we're spending less on the toys that we are buying and, of course, some of those digital properties are taking the place of those physical toys >> courtney, thank you. >> yeah. >> good to see you. coming up, mark watts and mark grant will talk interest rates. later jim grant. kind of cool duelling grants. he says the fed is ruining the party. the fed rubing the party as we head to break, here's a quick check on what's happening. right now, stocks are trading. that's wt'haeng.has ppin at&t provides edge-to-edge intelligence, covering virtually every part of your retail business. so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got near real time inventory updates.

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the price target increased from 16 to $13. michael kors updated it. economd putting pressure on the fed to speed up its rate hike cycle

joining us now managing director at b. riley joining us now for more trying to get your take on this i guess you see things like tax reform you see what the administration wants to do to try to help the economy, you see the fed's action as diminishing the positive effects of those other things. like they're working against what we're trying to do instead of work with us. but they've been with these lels so long, isn't this the time they could finally get back to normal rates >> joe, that's a very interesting question i see the fed here is mucking up the party as i said in my commentary >> i know. that's because it's cable but you're still a gentleman, so you don't want to say what you're really -- so you say mucking >> that's right.

mucking. so here's what's happening the u.s. government under president trump is cutting regulations, cut taxes, they're trying to grow the economy and get the country up and going again. and having nothing to do with politics, i agree with that program. the fed says they're going to be raising interest rates -- because what a return to normalcy if you think about it you have the u.s. government trying to grow the economy to the best of their ability and the fed with raising interest rates is trying to slow the economy and frankly, sometimes i wonder just who the fed is working for >> when you're at full employment or close to it and, you know, the specter of a -- i mean, we want wage gain but we know there are some negative aspects of for profit margins for companies if you get into

some type of wage/price spiral and previous slowdowns in the economy are a lot of times when the fed has to orchestrate a slowdown because things are overheating. i guess they're trying to get ahead of that or at least that's what they tell you >> well, that's what they tell you. they justify what they're doing on a return to more normalized rates. however, let me make a comment about that we haven't had normal rates since all the central banks intervened after the lehman brothers bankruptcy. two, if you keep raising rates like this, it just means the expense of anything, you know, that floats, for instance, or the cost of new borrowing is much higher which would include student loans, mortgage loans, corporate borrowings, personal borrowings so the borrowing costs keep going up which slow down the economy. and also with the fed doing this, one of the other circumstances that's taking

place is the united states which is, you know, borrowing more money right now again to try to boost the economy, so the cost to the united states government in terms of treasuries just go higher and higher. for no reason other than the fed says we want to go back to normalcy i just don't buy the argument. >> we hear it explained that, you know, german bonds are at 0.6% and italy's below 2% and we hear that's because it's been orchestrated by central bankers over there but -- >> right >> you know, those guys are a lot of times ineffective and rates are where they are because that's where this deserve to be based on economic growth and inflation that plays into your argument. god, if europe is below 2%, why are we trying to, you know, orchestrate higher rates when maybe the market isn't really

indicating they should be higher >> joe, the european central banks portfolio is now 42.5% of the entire gdp of the european union. over in japan, their central bank has assets worth 93% of the entire gdp of japan. their interest rates in europe are absolutely, you know, manufactured numbers because the central bank keeps coming in and buying and buying and buying there's no economic reason on earth why italy or spain or some of these countries should have interest rates less than the united states. so now we have the fed going off in its own direction not in concert with the other central banks. and they're raising rates just because they say return to normalcy in case something ever happens. all they're doing is causing higher borrowing costs for the country and everybody in the country. >> and president trump, i think we know how he feels

he just -- when he tweeted and said, you know, we got weak currencies in russia and china and here we are raising interest rates over here, i guess that doesn't help -- if you're worried about trade imbalances -- the dollar is just going to strengthen on this. i guess he figures that working against it there's a whole group of people that think we should be higher and we're behind the curve now you're kind of an outlier on that whole issue. >> what else is new, joe when am i not an outlier >> that's true all right. i wonder what jim grant says we're going to have him on a little bit later >> tell him i said hello >> they called hugh grant. he's not coming on but we got mark grant and jim grant. thank you. >> thank you returning, our guest host for the next half hour is going to be alexis ohanian we will bealngo tki thim about

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rate shock the 10-year yield nears 3% what this means for global stocks is straight ahead southwest canceling dozens of flights for engine inspections. plus famed chef lidi lidia bastianich is here with her take on the american dream as the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york, this is "squawk box."

>> good story. >> good morning, everybody welcome back to "squawk box" here on cnbc we are live in times square. i'm becky quick along with joe kernen and andrew ross sorkin. and our co-host this morning is reddit cofounder alexis ohanian. it's great to have you here. we've got a lot of news. i owe brian sullivan coffee because of losing the bet. markets at this hour are mixed the dow's come back. it's down 50 points when we started the show at this point, down five points. s&p futures are higher they're up about 1.75 points we'll see how things head as we get closer to the opening bell let's get you caught up on headlines. hasbro missing on both the top and bottom lines the results impacted by the bankruptcy of toys r us. hasbro earned 10 cents a share for the first quarter compared

to the estimate of 33 cents. street had to know about toys r us, but they did not bring their estimates down nearly enough they're also talking about revenue coming in below forecast the stock is off almost 5%. a buyout deal in the energy sector center, point buys vectren that puts the value at about $6 billion. and we're keeping a close watch on the 10-year treasury yield this morning it is coming within a hair of breaching the 3% mark for the first time in about four years we'll see if it happens this morning. we mentioned this last hour. kind of interesting, though, that -- well, it's a hold. but turunder armour was upgradet deutsche bank. it had been at 13, he's now increasing his price target to 16 but the stock's over 16 anyway

so sort of, i guess, making up for being sort of too bearish on the stock previously goes from a sell basically to a neutral. now i see -- okay. it's only at 14. i wonder if it was up earlier. anyway, we may be looking at a different class of under armour shares verizon upgraded to overweight at barclays and merck upgraded at goldman. mostly because of keytruda stock up about 1.5%. okay southwest airlines canceling roughly 2% of its scheduled flights as it carries out inspections. those are prompted by that engine failure that led to a passenger's death last week. the airline saying the cancellations are voluntary and part of an accelerated inspection program it announced after the accident it says they were not the results of the emergency

airworthiness directive that has been handed down by the faa on friday that's going to force airlines to do some of these much faster. southwest says it has minimized flight disruptions in utilizing spare aircraft when available. as we discussed earlier, it takes about ten hours per plane to deal with this. it is not a costless project elaine lynn is urging wynn shareholders to vote against hagenbuch. saying new investigatiors don'to far enough and more long standing directors need to move. steve wynn resigned as ceo after allegations of sexual harassment he sold all of his stock in the company and elaine wynn is currently the largest shareholder. she owns 9.24% of the outstanding shares she says a vote against

hagenbuch would -- she says he's a long standing friend of wynn's -- steve wynn's and he should not have been in the position of overseeing the investigation into the allegations. >> hagenbuch was always so close to him, to wynn himself. and a view that he may still be acting almost as a proxy for steve wynn even though steve wynn is now out. >> right and that's her point with this there are three directors that are up she seems okay with the other two. but this is the one she would like to make a protest vote against, withhold that vote. if they don't get any -- if any director doesn't get 50% of the votes, we'll see what happens. >> soap opera. as we count down to today's open on wall street, we're watching the treasury as we mentioned before you can see right now yielding

2.981% joining us right now is robert michelle who is portfolio manager at jpmorgan asset management and david baleen from citi banks what do you think is actually happening here in this situation? we're watching the 10-year get to 3%. it has been four years since we've seen that actually happen. what do you think is happening >> the market is, you know, looking at this 3% number as ma magical. whenever we've seen it approach before, it wigged people out but when you look at the overall strength of the economy and where we end the year in terms of price earnings ratios and the u.s. and emerging markets, you'll see that bank clients are putting money to work. >> why haven't we breached 3% at this point you look at the economy, the unemployment rate, you would expect us to be there particularly when the fed is signaling it's going to continue raising rates. if you look at comparisons

around the globe, it's a little tough to explain why >> well, our rates are materially higher than rates around the globe and i think the issue is not -- actually, too much is made of the 3% level, frankly. the real issue is going to be what fed actions they take and whether or not the yield curve does invert at some point in the future that's more of a concern to us than that. >> do you think that's a serious situation, robert, that we could see an inverted yield curve? is this reflective of rates around the globe >> i think it's reflective of lower rates. you've got the fed who's turned a lot more hawkish you've got inflation data running at 2.4%. and the supply dynamics in the treasury market look at an unprecedented horrible level >> what would you do with stocks at this point? >> you've got to pick those that will do well in a growth environment. they see the growth. they see the stimulus coming

and they're trying to lean into that it doesn't mean they're going to kill the stock rally >> so what does well in a growth environment? you're talking technology? >> tech could do okay. i think there are a lot of industrial companies that should do pretty well there's a lot out there that could benefit from a growing u.s. >> i agree i think when you see what clients are actually doing is they're putting money into work in international markets and they're doing that in areas like technology and like industrials. >> why international versus u.s. markets? >> ultimately, they are earlier in the sort of economic recovery cycle. we're nine years in. if you're in brazil, you're a year and a half in in asia you could be three or four years in. >> we've seen significant changes here with the new tax law coming >> exactly the case. if you look at what clients are doing, they're reducing their risk by building global portfolios but they're also buying stocks at lower levels than here in

getting the same types of exposures. we're seeing good enthusiasm for families to put money to work. >> does that mean you're cautious on u.s. stocks? >> more cautious neutralweight on them. because of relative valuations by the end of the year, i think people are going to be surprised by how low -- how modest they are. they're going to be -- >> additional compression. >> that's right. you'll see earnings go up by 15% to 20%, valuation compression and pe rates at the end of the year that are not bad. what we hear people scared about is the future. they're still looking at 3.5% growth potentially 2.5% for '20 they're actually pretty good if you're looking at global growth. >> that's a good point though. if you're looking at earnings continuing to out. mpl -- they're benefitting from

this rise in rates that interest margins are improving. that's very healthy. emerging markets should do well also so there are lots of parts of stock markets both zmikly and internationally which can benefit. >> you don't think it's going to be a time like several years where you can blindly put money away though? >> i don't think so. i think you're getting more into a stock pickers market we already talked about what's going on in the retail sector. so it is becoming more industry specific >> all right thank you both for being here. all right. coming up, tech is a big focus for investors this week as we get ready for more earnings out this week. we'll talk tech investing and life in silicon valley with our guest host axiles ohanian of

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we're the finders. we work here at comcast spotlight, and we have the best tools for getting your advertising message out there. anywhere, any way your audience watches. consider them found. you know what's not awesome? gig-speed internet. when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. welcome back to "squawk box. our guest host this morning alexis ohanian he's reddit's cofounder.

also initialized cofounder he's with us until 8:00. want to talk to him about all sorts of tech going on we have earnings of all of the big guys i think the bigger question and i'm curious as a silicon valley guy yourself if whether you think their business models whether it's google or facebook or alphabet is going to change the function of the conversation we've all been having for at least the past couple of weeks if not months. >> it's going to be really interesting to see i think we're all pretty pleased by the fact there is more of a discussion now around privacy. i think a lot of folks in the tech community, you can find me even back during facebook's ipo, i was on tv talking about privacy concerns i think the big challenge is there's still a huge disconnect between the lawmakers. i think it's going to get driven by consumers. >> so you want to see something. when you watched zuckerberg, what did you think of his

performance? >> i think -- look let's be honest. the markets seemed to react to it i think mark did the job he needed to do, but i think there's still that huge disconnect. >> are you a zuckerberg fan? a facebook fan >> i don't spend a ton of time on facebook these days, but i have to respect they built a massive wildly successful business the reality is for all the people saying they're leaving facebook, they're taking that time and putting it onwhatsapp facebook we're going to see going to other platforms they own i'm making the bet in the long-term, though, that consumers are going to drive a lot of this more than anything else >> and are consumers much more privacy oriented than we are currently? >> i believe that. >> or do you think there's a generation of people that don't care that's the biggest question. what it really looks like

long-term. >> i think -- it is easy to say that the generation that wants to take a selfie every place and tell everyone where they are all the time doesn't care about privacy, but i think they do because when they're doing those thin things, they're opting into it and they know what the repercussions are. but they didn't fully understand what the advertised standpoint i think we're going to see new platforms emerge that give consumers more control over their data which they now realize is valuable. >> i saw a poll over the weekend that said 49% of people surveyed thought facebook needed to be heavily regulated. when you added that with the people who said they need to be lightly regulated, that was 88%. that was higher than any other platform although there were polls for snapchat or twitter too. what kind of regulation do we end up with? >> i don't know. in the past we've -- i mean,

part of the reason why i was outspoken against bills were that generally speaking government does not have a great track record of regulating technology even in this environment, it's so anti-regulation, i wonder where legislators and their constituents are going to meet on this. it doesn't surprise me there's this sort of public response to want to see some regulation. but if the people writing laws don't understand it -- >> do you look at the size and scope of a facebook or amazon or google and say they are -- as an investor now in start-ups. do you think they are hindering competition? sit better for them to be broken up or say, i'm going to invest in a start-up and they're going to end up buying it out for hundred times the price in a year from now and i'll take that >> you know, we do think there's an opportunity here. actually, i think i was here when amazon acquired whole foods. we were one of the first investors in instacart

the reality is it's been a boom for them every other retail realizes we need to step up our game i think for a lot of upstarts, we're seeing a value to making a bet on someone who is going up against one of the big incumbents because the rest of the market realizes they need to get technology and get it quickly. obviously we would hope they would not get acquired too quickly. and i really do believe in the power of consumer demand to drive the innovation so i think as we're talking about a decentralized internet, i know there's a lot of jargon around block chain but the idea we could know one entity could own data about us is valuable. if you're a five-star lyft passenger, that's valuable to you. that's in a public ledger that this entity that represents you, you should be able to go to the next ride sharing network and

say i'm a five-star passenger, i want discounted rates and value. historically the way these have gotten so big is they've centralized all of that reputation and data. i think when there's a value to consumers, that's where change happens. >> wait a second you're talking about two different things one is you take your identity and it's shopped around all over the place. but your concern with facebook is on an anti-privacy thing. should not be collecting that data or selling your data. what is your concern >> my concern is for so long only the people who really understood the took understood the implications one of our partners was writing about the implications about this i think seven or eight years ago for tech crunch. and saying there are now third party apps collecting data about us about everything from maybe our sexual history or preferences to maybe more in

inoccuous things >> are they a media company or a platform and then when you get into that conversation, you get into what you're restricting and what you're not. >> i think this is where the role of pure media companies is so important and so vital. i do believe these are platforms. but the role that they're playing is obviously one that's about informing the public where people start their days, obviously everyone talks about facebook being one of those. >> but should facebook be able to say this is allowed on our platform, this isn't allowed on our platform >> as a private company, yes, they should. >> but at the same time if i recall, you were a big proponent of net neutrality. >> still am. >> okay. and the idea you need these pipes to be open

and the question is facebook and google so big effectively you give them control. right? >> i don't believe so. as long as it's just as easy for me to get to that competitor according to what my isp allows me that's why we want it to be a level playing field. net neutrality is important because they can choose equally between facebook or google or some alternative >> we're really only talking about two at the moment. maybe amazon as the third. do you think there's an alternative? >> i think right now one of the biggest existential threats to a company like google is the fact more of our searches are coming in as questions and are coming in through devices and i think when it comes to social networks, i would obviously argue because i'm a little biased platforms like reddit and others provide a potential alternative to how people connect to the news and people they care about

>> all right alexis is going to hang out for the rest of the hour lidia's kitchen comes to the "squawk" lounge. she joins us to tell us how her food empire became a family affair "squawk box" will be right back. your company is constantly evolving. and the decisions you make have far reaching implications. the right relationship with a corporate bank who understands your industry and your world can help you make well informed choices and stay ahead of opportunities. pnc brings you the resources of one of the nation's largest banks, and a local approach with a focus on customized insights. so you and your company are ready for today.

welcome back to "squawk box. in political news this morning, a road block for mitt romney, the former presidential candidate failed to win the utah republican nomination outright the seat is being vacated by orrin hatch. romney needed at least 60% of the votes from delegates on saturday to advance to the november election unopposed, but he only won about 49%. probably portends good things for the primary, i guess, if you win 49%. just not quite 60% little bit of media news for you. paramount's "a quiet place" took the top spot in the third

weekend. it brings total domestic gross to $132 million. also "rampage" second place with $21 million. it features a friendship between dwayne the rock johnson and a silverback gorilla an experiment transforms it into a raging monster when we come back, trouble in toyland why shares of hasbro and mattel are getting hit this morning and take a look at the 10-year treasury it's been yielding close to 3% very, very close right now 2.981% stick around you are watching "squawk box" right here on cnbc ♪ you know what they say about the early bird... he gets the best deal on the perfect hotel by using tripadvisor! that's because tripadvisor lets you start your trip on the right foot... by comparing prices from over 200 booking sites to find the right hotel for you at the lowest price. saving you up to 30%!

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you know what's not awesome? gig-speed internet. when only certain people can get it.

let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. ♪ good morning we're here live on "squawk box" and cnbc at the nasdaq market site in times square we're going to get march housing numbers in about an hour economists looking for an

increase of 0.2% also u.s. oil field services company is in play this morning. mcdermott international has rejected a $2 billion offer from norwegian subsea 7 they said they would consider increasing the price if it could further assess mcdermott's business mcdermott already has a deal to be bought by another company the average price of gasoline now at $2.83 37 cents per gallon over where it was a year ago. joe? among today's biggest movers, toy stocks hasbro out with numbers toy maker says its results were impacted by the bankruptcy of to a consensus estimate of 33

cents. down about 7% as you can see there. revenue is also well below forecast shares of hasbro and rival mattel both lower on the session. >> many apps claim to help users budget better, save more, invest smarter. but one newcomer is offering all that plus the expertise of a personal financial planner joining us now is cofounder of and ceo of implanner >> pleasure to be here >> let's talk about this what does empower do and how does it differ from something like a mint? >> empower is like having a personal assistant on your phone watching your money 24/7, helping you make smart financial decisions. it looks for savings amongst all your various transactions. on average users are saving between $200 to a thousand >> is it saying don't spend on that latte, you can't afford it. or you should be paying with

this credit card rather than this one because you'll get a discount >> there's a lot of different ways it works. it does everything from look at, for example, bills and your insurance to find ways you might be getting ripped off by your various providers. on average we're able to help people renegotiate their bills or we renegotiate them for them and save about 300 bucks a year. on insurance about $460 a year another great example is one that i've been caught up with many times is helping build credit scores. so most people don't realize if you run your credit cards up a little bit through the month take it to 50% credit utilization, that can materially impact your credit score mine went down 70 or 80 points even though i never missed a bill in my life just because i was putting some of the company expenses on my credit card >> in terms of doing that, what are the brains behind it is it kind of like artificial intelligence that's figuring this out or is it an actual financial planner? >> it is artificial

intelligence it's taking -- we live in a world where we have self-driving cars so we take all of that intelligence that were used and developed for these other areas and capture the world's financial knowledge, use a massive data set that we have for our users to find all of the ways that people are saving. and help give that to everybody. >> can we talk about privacy though >> yeah. sure >> for this to work like mint and by the way like many other things, you're really handing over the keys in a different way than most things when i say the keys, the keys to your whole life because you have to hand over all your financial life what kind of protection is in play do the banks like you or not >> that he's not a fan of all these third party apps because they have very secure situations they feel comfortable with that. they're not a fan of giving that information away they'll do what the customers want, but he's warned people not to how do you make people feel be

rt >> people don't like competition. >> true. but at the same time -- >> part of his issue has been -- i don't know how you passwords work, but that was the issue he was fighting with mint about at the time in terms of how -- that's a technological issue about how to go back and forth. speak to the privacy issue >> that's a great example. one is, like, what information and how you store information. you mentioned tokenization they use to authenticate and we store a token that comes back from a bank or partner from the banks. the other critical areas is once we have the information we have, how do we store it so we use the latest 256 bit encryption for everything transported and everything encrypted. and then we do outside security order, all of the stuff that you would expect your bank to do and a little bit more beyond that. >> and you don't sell any of

even on an aggravated basis. >> we do not sell any data for this >> how do you make money it's a free service unless you want to upgrade to the premium. >> couple of ways we make money. one is we will find you all of these savings. a lot of us don't have time to go and capture them. we will go and negotiate the bill, help you find better insurance. if there's sie-- only if the savings we'll charge a percentage >> what percent? >> it varies for insurance it's free because brokers get paid by the insurance companies. if it's negotiating a bill, it's between 30% and 40%. and we also have a premium version of the app for people who love to geek out over their finances, yours truly being one, you know, you can go in and you can do all kinds of c categorizization >> can i ask something it goes back to the privacy thing. i don't know if you saw this

a potential fraud issue. zell is the paypal of the major banks, if you will but when we all decide to use some new platform that's going to go suck information from 20 different places, how do you on a very personal level decide i'm going to use this app, not use this app i trust this guy, i don't trust this guy what are you looking for >> yeah. for me very personally, you know, one is does it give me what i need at the end of the day? otherwise it's not worth giving up that information. you know, i do some testing. the other one is i often, you know, ask around between my various friends and see what they're doing. at the end of the day, i do want to concentrate into one sort of very specific app so i don't have my money. so i will try it, if it really is giving me value i'll continue using it if not, i'll delete it and remove all of the information. obviously if our users, if they try and we can't give them that value, we expunge the

information we have. >> you just launched in may of 2017 how many users have signed up? >> yeah. we've got a few hundred thousand people that have signed up with the app. it's been a great launch on android in december and, yeah, it was a great year "time" gave us one of the best new apps of 2017 product hunt nominated us. >> facebook, instagram google what's the -- what's your customer acquisition cost? >> 60% of customers arrive through the door because they're hearing from family and friends. that's one of the most gratifying pieces. as you said, how are people finding out? because other people use the app, trust it, and are recommending friends. >> thank you for coming in today. >> it's a pleasure coming up, tv host chef and author of "american dream: a live of love, family, and food"

lidia bastianich is our guest. and fortnight taking the game world by storm it has video game makers looking for a way to compete that story straight ahead. futures at this hour are right around the flat line in fact, dow's only down two now. the s&p and nasdaq both up >> look at this. wow. >> oh, my. 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.

welcome back to "squawk box," everybody. we've been watching the futures this morning we started out at 6:00 a.m. eastern time with the dow futures indicated down about 50 points right now all three have turned things around. s&p 500 now up by two points dow futures up by one point. nasdaq up by 11. also watching the yield on the 10-year note which is right now sitting at 2.989%. our next guest escaped

communism, moved to america with little but her family and love of cooking joining us is lidia bastianich chef and restaurateur. her new book is called "all american dream." thank you for joining us you have an empire i'm looking around >> this is the empire right here you can smell the empire >> well, the extensions, yes we were brought here by the catholic relief services and the red cross. so we had nobody we had no money. just the four of us, the family. and, you know, america is a great place to be. >> you were in eastia.

is that now croatia? >> if you look at it, the right-hand side where venice is, there's a little peninsula and that was italy after world war ii, italy lost the war and that was given to communist yugoslavia for nine years we were living under communiscommunism. really a tight grip. my father was a businessman. they took his trucks, everything away ultimately my parents decided we escape back into italy and there in order to kind of figure out, you know, where are we going to go, we were in limbo. they put us for two years in a refugee camp >> it's hard to leave -- beautiful place. i looked at it >> it's a beautiful place. really, all of that part of

italy starting from venice, the sea is beautiful it's kind of very naive still. >> pretty good food. pretty good place to learn to be a chef though. >> absolutely. absolutely >> was your father >> well, my grandmother. because food was scarce during communism. so my grandmother had a little farm and we had chickens, ducks, goats. i mean, you know, i would help her milk the goat in the morning. my grandfather made olive oil, little bit of wine everything for the family to eat. so i was the little helper and i really learned about food. how to grow it dig potatoes they're still warm in your hand. it's a great feeling >> if we need to write something about the american dream, you have you've done well here. >> i love it i'm the example. you know, i wasn't red i do write this in a sense.

i said i was going to write it eventually for my grandchildren. i have five grandchildren. my publisher said it's so r relevant now because it's a dream of yes, you can. and certainly you can in america. you know, you got to give it all. you've got to work hard. you've got kind of really take the opportunities and make them happen and there's nowhere, no place in this world that is like america. but for me, most of all, you know, kind of being an immigrant and being at the camp and all that was the security of finally having a mohome, being able to u roots and have my own family as we say in italian, a roof over our heads >> when you hear people say that the american dream is now challenged, if you will, what do you think of that? or the next generation of people here in the u.s. >> you know, i think the world -- the situation changes as a whole and the world has become much closer but there's still -- here in america there's still great opportunities. i think that you really have to

be prepared for it you see, whatever -- and as you see, these are all my businesses the extensions i grew in my businesses, you have to prepare yourself for it. make the right thing and i think the most important thing on me growing my business was the passion that i had and gaining the trust of my customers, buyers, whatever. >> the restaurant business is incredibly tough obviously you all have expanded into so many other things. we know your son joe who comes in and hangs out with us on the show too, what's it like to have your family involved >> for me the family is paramount. i think everybody is looking for that kind of anchor of a family today. i always thought so extending the family, the love for family and children into business was almost kind of natural. because, you know, joe an tonya my daughter used to hang around the restaurant all the time. when they got teenagers and i said, you know, restaurant, you

know, you need to get your education and you need to get a real american job. and so they did. they got -- you know, my son ended up as a business master in wall street. my daughter went into renaissance art history. she writes the books with me now. she takes care of the pasta and sauces joe's passion is wine. our winery and of course the restaurant and our latest as a family is italy. you know, italy the store emporium that one we do as a family and, you know, we just love it we love the sharing of food. so it's in a sense selling but it's really sharing. >> and you have a tv empire. you've got it all. lydia, thank you it's a great story >> thank you for giving me the opportunity. and i think out there, america is still the place of dreams >> absolutely. >> it's good

don't look at me i'm glad that she can -- >> anyway, thank you >> he's negative >> no, i'm not negative. >> basically he thinks the american dream's dead >> read this book. >> i will. >> what should he eat while he's reading it >> i'll eat some of this >> you enjoy you eat it >> it's so good. thank you. >> thank you okay coming up when we return, fortnite is blowing up the gaming community and has some of the biggest video game makers nervous. julia boorstin brings us that story right now. >> well, fortnite is free, social, and an obsession for gamers we'll break down the winners and losers coming up after the break. ♪

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and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. welcome back to "squawk box. we are approaching 8:00 a.m. on the east coast we're watching live video of twitch of gamers battling it out on fortnite. julia boorstin joins us now to talk about who profits from the success and the rival who is can suffer from the game's rise. julia? >> well, andrew, fortnite is such a phenomenon that this weekend a fortnite e-sports

event got thousands of viewers on twitch. here's a look at what's driving its success and impact fortnite is free to play and accessible across consoles, pcs, and ios mobile devices you can play with your friends as many as 100 players can participate in the battle royale mode costumes and dance moves for their avatars can be bought. it supports epic games of which chinese tencent owns 40% disney also owns a percentage of epic the most watched game in twitch history. all the time and money spent playing fortnite is to play into

the amounts reporting next money. ninja won one of the games this weekend. he says he's bringing in half a million dollars a month playing fortnite a month and other games competitively. >> anything else to tell us while i eat? >> we're eating. alexis, do you believe he's making half a million dollars a month? >> i do. i'm just jealous this wasn't around when i was a teenager playing that much, i was not getting compensated at a all for it it's very real it is very, very real. i think we're just now starting to see this sort of catch up a generation of playing video games and watching people play video games. i'm part of an investor group. we let people manage their

gaming teams it's all the software you need to run your gaming team. >> you think people will just watch this at home or are they going into arenas and stadiums >> they're going into arenas and stadiums it's starting in the states. we're not at football sized stadiums but tens of thousands of people are coming to watch these live events it's actually really -- i mean, it is adrenaline pumping i know it may be easy to cynically saying there's a bunch of people at keyboards but the action is that intense there are olympic sports i look at and think this doesn't seem riveti riveting, but it is for the people involved and the people who understand it. >> you aren't talking about curling, are you >> that's a great example, for instance >> but that's our thing. >> there's clearly a fan base there. and the numbers don't lie. the reason we've been bullish on this space, too, is the

engagement numbers, streaming numbers keep going up. and there's a disparia correlat between the viewers and brand dollars. >> it's happening. >> so fortnite, which gaming system is that on? >> so this is -- one of the reasons -- and this was touched upon in the segment. it's been so successful because it's cross platform. play it all on the different consoles and it's free to play. growing up we had to play 60 bucks for a video game >> so you're a new dad >> yes, i am >> given this -- so i'm always trying to keep my kids off of the ipad they all want to play minecraft and all this >> now got to train them >> this is the question though i'm curious as a new dad how you think -- and someone that has made their livelihood in silicon valley what's the plan on screen time >> well, i mean, so -- >> i know it's early >> she's seven months old.

she's precocious you see very quickly how quickly these kids gravitate towards it. >> it'll take about a month before she'll figure out your iphone >> i want her -- my wife and i both want her to be bored. we want her to know what it's like to have limits on tech. so, yeah, i do look forward to playing video games with her when she's older but it's important that she gets time to be with her thoughts and her blocks and toys. so we'll be regulating it pretty heavily. >> see regulation right here. >> there you go. >> free market >> you can have both you can support free market and want regulation. >> she'll be playing a lot of games, i have a feeling. >> you can come other and join us >> thank you >> great to see you. >> thanks. when we come back at the top of the hour, the view from main street we have the small business administration's chief linda mcmahon. she is here in studio and will join us on set after a quick break.

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we're on 3% watch. u.s. 10-year inching closer to that level

we'll talk to jim grant. and the view from main street it's small business week in america. our news maker this hour, small business administrator linda mcmahon. plus one company and a war of words >> this is not an honest guy, not a guy that keeps his word. he takes advantage of little people >> i'm telling you he's like the cry baby in the schoolyard >> we'll take you inside the battle between carl icahn and big ackman with the author of a new book, cnbc's scott wapner. the final hour of "squawk box" begins right now ♪ live from the most powerful city in the world, new york, this is "squawk box. >> good morning and welcome back to "squawk box" on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin let's get a check of the markets which has been more positive as

the day has gone on. the sp&p is now up along with th dow up 16, the s&p up 4, nasdaq up 14.5. and the 10-year waiting for 3% haven't done it yet. we got the -- we'll see this time whether we do it this week. whether we do it today >> i think it's disappointing if it doesn't happen today. enough already just do it >> get that print. we haven't had the print yet earnings season in full swing though let's get you caught up on this morning's reports. first hasbro this was disappointing missing on the top and bottom lines. the company earned 10 cents a share. somehow analysts were at 33 cents, missed by a mile. analysts also well below forecasts. results were impacted by the bankruptcy of toys r us. you can see the shares down 7% mattel down with it down 5%.

elsewhere, alaska air is reporting results. the airline posted adjusted quarterly profit 2 cents above expectations revenue in line. kimberly clark beat by two cents. the company said that results were impacted by commodity price inflation, but the company nonetheless pleased with its increase in organic growth after the bell, look for google parent alphabet among the big names set to report. once 4:00 rolls around, andrew here's what's happening elsewhere at this hour ford saying it will bid out some of the advertising currently managed by the advertising giant. this move following the departure of martin sorrell. ford had been looking at its ad strategy since last year

shares down again. and south korea ahead of the first summit in ten years between leaders of that country and north korea. the gesture coming after north korea said it would suspend nuclear and missile tests and scrap its nuclear test site to pursue economic growth and peace. south korea's president is going to be meeting with kim jong-un this weekend we are kicking off the first day of national small business week with sba administrator linda mcmahon. sba week will be focusing on reorganizing or recognizing the 30 million small businesses in america and trying to highlight the impact of entrepreneurship across the country administrator mcmahon is joining us today this is the beginning of a bus tour you're on >> that's next week.

actually it starts next sunday we'll take off in washington, we'll have two days of events in washington we'll then be on the road on a wrapped bus headed down south. then i'll go from florida to georgia, north carolina visiting small businesses and sba district offices >> we hear from so many analysts that come in that this is a year they expect small business to out-perform big business they're looking for the russell 2000 to out perform any of the major indiceindices. that there's a lot of optimism out there. is that what you hear too? >> absolutely. it's the first time governments now back on the side of business and businesses are optimistic. and that started even last year. the nfib's tracking of optimism. this is the most it's ever been on their tracking scale.

and i think tax cuts when i was first going out in 2017, i was hearing from businesses. we really want tax cuts. we're going to get them. and the optimism level was high. then when they came in, i don't even hear that now as the number one issue with businesses when i'm out there. >> what is the number one issue right now? >> right now they're looking at workforce. >> meaning they can't find people for jobs? >> we're starting a lot of good businesses but now we have to build up our workforce the college graduates coming up this year should feel good about the employment market. employment is down you know, we've had -- it's just amazing how this economy is growing with the deregulation and the tax cuts so small businesses absolutely are part of that >> when you think about what that means for small businesses just in terms of having trouble finding people to hire, does that mean they are going to have to start paying more and we will see wages pick up soon >> i think you're already seeing some wage increases. that's a benefit to workers coming on board.

you know, the president has an apprentice program apprentices out of those programs going right into business are making more money at the start often than college graduates. an apprentice job can start at $60,000 a year so we need those skill trades. >> i'm curious if you'd speak to what's going on with amazon right now. amazon is playing such a huge role in our retail world and in the economy at large. yet there's a big question about whether it's impacting small businesses in a good way or a bad way. the president has been critical of amazon over taxes and local taxes. >> well, i think that if amazon is looked at from small businesses, it's maybe a distribution chain that can enhance their revenues. but, you know, if small businesses are in a competition market, they have to refocus on how they're doing it

now, you can sell a lot of things you can get a watch. you can get it quickly but who's going to repair it you still have to take it some place or mail it back in some place. so small businesses that i found on main street, they are still having that traffic come in because it's their customer service. so you have to figure out what your niche business is going to be and how you're going to play in that field. the president just wants to make sure it's a fair playing field. >> what about on the tax front there's another view on the tax front that it can benefit -- that the reason that amazon and target and some of the big guys are actually now pushing for taxes, for the election of taxes is it actually burdens the small guy. >> i don't know. i think the jury's still out we'll have to see how all that plays out. for amazon, for a long time online sales didn't pay any taxes. that's not fair. now we're leveling that playing field. almost every state does have taxes for online sales so that was a big discrepancy

for the brick and mortar folks >> it's a boy. it's a boy >> the baby? the princess >> eight pounds, seven ounces. her royal highness >> congratulations >> they said it was 10-11. it could be albert, fred, i can't remember the last one. that's exciting. congrats sorry. >> no problem. >> we keep our priorities straight around here royal watching >> administrator, what's the second biggest issue aside from being able to find qualifying labor >> well, they just want to make sure that as they move along to grow their businesses, they can have access to capital i'll tell you. the tax cuts and the regulatory rollbacks have been the biggest boost for small businesses not only at the optimism level i

talked about, more businesses are starting there are many small businesses around the country that have already given bonuses to their employees as a result of the tax cuts small businesses, four to five people and they're able to give bonuses and raise wages. when i've talked to small businesses and they tell me what they want to do with those tax cuts, they want to hire more people they want to expand. and with the -- you know, the 20% reduction off their taxable income for pass throughs right off the bat, that's really money in their pockets to help expand and grow their businesses. >> what's on your agenda this year what would you like to get accomplished or what else needs to happen to help improve the situation for small businesses >> well, i just want to make sure as part of what sba does and sba not only helps provide access to capital through guaranteed loans, but we also have a whole network of mentoring. and i think small businesses especially start-ups often need that mentoring they don't necessarily know how to do a business plan.

>> as somebody who's raised a business yourself, you know all about this. >> that's whied. asked me to take on this who had done it. when i talk to small businesses and can help guide them, i think it's beneficial for them. >> administrator mcmahon, it's a pleasure to have you here. >> thank you and look forward to the national small business week. >> thank you very much. >> i like your tweets. you got that from trump. you're tweeting a lot. >> see there >> i'm going to retweet it thank you. up next, he calls himself the keeper of the public's purse. we're going to talk to the always outspoken north carolina state treasurer dale folwell he manages assets from one of the largest pools of money in the world. he will join us on set next. check out the 10-year before we go to break.

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some analyst calls this morning. upgrades and downgrades. lululemon downgraded to hold.

you can see the stock down about 2.3% caterpillar upgraded to buy from neutral. pretty big call at citi. citi admits, yeah, we're not really early on this as you can see they're not that firm citing operating leverage as a primary catalyst for stock price divergence and improvement in china macrodata points our next guest was looking at these. do you get anything out of these? let me introduce dale. the debate over trump's tax reform law is alive and well a combination of healthy and not so healthy financial conditions at the state level pushing local officials to act right now joining us now dale folwell of north carolina 26th biggest pool of money -- public money around. why'd you kind of laugh at the citi group call? thanks for nothing, we're late >> hearing everything you have to say >> that's nice

very good answer what's the hardest thing right now trying to figure out the fixed income sod of things trying to balance out the portfolio? >> state treasurers like myself, generally we're in the trek delivering business. we spent almost $750 million every thursday just for health care and obviously a part of that is to make sure that the portfolio has a proper asset allocation. and that's where our focus is right now. and, you know, your viewers don't wake up thinking about unfunded liabilities. >> do you? >> absolutely. >> and you're not sleeping very soundly anyway, so it's easy to wake up. >> if you work hard enough, you sleep soundly. they don't wake up thinking of assuming rights returns and life expectancy they think about public roads, public safety, public education.

as bill gates said over seven years ago, money is going to be taken away from things that people care about in order to fund the unfunded liabilities health care and pension. >> as far as pension go, north carolina is pretty good. health care is another story, right? >> we have one of the five best funded pension plans in the united states. we have head winds with wall street the wall street fees were $50 million a year back then but now $750 million a year. and life expectancies we had 90-year-olds getting a check and last month we had 7,0 7,000 109-year-olds getting a check. so fees going up, life expectancy which is a blessed event going up of course interest rates going down in about 40% of our portfolios >> you can't battle old age. what do you do to battle the

wall street fees >> what we're doing is we're -- we've called every money manager in the first hundred days of my tenure asking how good are you and how much are we paying you it's amazing when you ask basic questions like that what your answers can be ironically by the time we called the first ten, the second ten knew i was calling so last year we cut fees by $70 million. that's a four-year run rate of $400 million but we're not through. we found because we have the hundred billion dollar pension plan on the second floor and a $12 billion plan on the first floor, we actually found a money manager that was not giving us the benefit of the totality of that relationship and cut fees by over a million dollars when we put all that stuff together >> was that just thrlower rates because you called and asked or funds who weren't going give you

a better rate? >> we -- it was asking, number one. and obviously we got rid of some funds. when i was sworn in, i realized there was $11 billion of blank checks this is committee capital that has not been drawn yet in addition to that, the previous treasurer had invested two years worth of investing before i got there it was just a matter of reducing complexity, building value, but now our focus going forward is how do we sustain this plan for the people who are using hair hands, feet, mind, heart to educate our kids, protect us, pave our roads, and all the other core functions of public service. >> you have been a nightmare, i think, probably for some hedge fund managers. do you not necessarily -- do you think the benefit of hedge fu s funds --

>> that they sign their contracts and not wall street contracts. and what i've found in many cases is that once we allocate this -- once this money was allocated to these types of investments, we don't own those investments anymore. they own us because of the way they're structured. >> have you seen examples to this day of pay for play, things like that. people try to suck up to you to get to -- i don't know have you had offers where you had to look at them and say are you out of your mind do you know who you're talking to it still works that way, to some extent, doesn't it pay for play it's human nature almost >> well, ethics is what you do when no one's watching even though i might talk with an accent, i don't think with one >> you've got some good lines i'm going to start using >> i know andrew wrote the book too big to fail. these liabilities are the next sequel to your book. >> what do you make of sort of

the social impact investing trend in america and specifically more recently we talked a lot about guns and i guess last week one of the big teachers union said we're going to divert. how do you think about divestment and what's not going to be opposed to necessarily just a straight investment thesis >> i don't and the reason i don't is i have a loyalty and duty of care to the participants i think we have two exclusions right now. sudan being one of them. that was legislative at the end of the day, we apply the laws placed on us whether it be the federal government or the state government we have one currently in north carolina i think it has to do with sudan disinvestment. i can't tell you how difficult that is to just try to disinvest

from sudan then of course we have proxy issues when we are -- have over $100 billion all those things come into play. at the end of the day it's fiduciary duty of care >> you should send them a list of your stuff. got to divest climate change, guns -- i mean, there's -- i'm just scratching the surface of stuff. you had enough trouble with sudan to do -- send him the whole list just send him the list. >> there's a large question about whether it's -- >> i know, i know. i heard you ask me question. i know you heard his answer >> have you had this conversation what do you make of the other pension plan managers and leaders who have taken the other side of this >> i've never had this conversation with any of them or any other treasurer. >> interesting >> dale, let me ask you really quickly, one of the big problems with pension funds has been the

expectation of how -- what kind of percent gains in the market you can expect annualized. what can you expect that you can see? >> the rate in north carolina since i was in high school has been 7.25% we have not achieved that on average for the last 20 years. we're not going to achieve it for the next 20 years. >> are you changing the expectations >> we are. we lowered it five basis points last year. we're getting ready to lower it to 7% in the next month. and the reason is that people do not lower these rates return because it makes the fundedness of it go down. >> but you're playing realistically. >> we're going to figure out what's right, fkeep it right. >> kudos to you. >> and you're cheering on the 10-year today. it's almost 3% go, go, go >> but i would love to be back on the show some time to talk about the progress we're making on health care we have unfunded lien eed liabiy

we think we're doing some common sense things to turn our 750,000 participants -- this state health plan is as big of berkshire hathaway, amazon, and jpmorgan we're going to take advantage of our buying power and drive down the cost of health care. our train left the station about a year ago >> you have an open invitation to come on back. >> thank you so much in the meantime, when we return, elon musk getting a big endorsement in the form of kanye west having a twitter storm. we'll explain what that's about. and rate shock jim grant is going to be here to talk rates and markets at 8:30 a.m. eastern time. the ierhes in his bow tie we're back in a moment

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a passenger on an american airlines plane was tasered and arrested last night. the plane was set to depart from miami, but prior to takeoff the man jacob garcia allegedly touched another passenger inappropriately. then crew members asked mr. gar ye is a to leave the plane the airline then started deplaning the entire aircraft. during that process, there was a physical altercation between the man and another passenger. garcia then became combative with law enforcement officers on the plane and an officer

eventually used a taser on him and took him into custody. american airlines will cooperate with the miami-dade police department on the matter okay when we come back this morning, the 3% watch the u.s. 10-year yield inching closer to that market. the market hasn't hit there in over four years. we'll talk to jim grant right after this

♪ welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site in times square among the stories front and center this hour, newell, starboard announced a deal that will end the current proxy contest. the current board will appoint two new independent directors as well as a candidate mutually agreed upon by starboard and mr. icahn who's a major shareholder.

apple offering replacement batteries. causing the built-in battery to expand however, apple adds the issue does not prevent a threat to user safety. we've been focusing on the wild swings of bitcoin but cryptocurrency is averaging $7.4 billion this month. that compares to $17 billion back in december i don't know where that says we are in the crypto saga where on the roller coaster ride we live. let's get another news alert right now. a reprieve from the treasury department for rusal they had been ordered to wind down dealings by may 7th now that date has been extended until october 23rd while an appeal from rusal is considered.

rusal produces about 7% of the world's aluminum the 10-year treasury ticking as high as 2.9972% steve leisman joins us now >> it just turned down i don't know if it was the announcement of the royal birth. >> we need a name. >> is a boy maybe lets inflationary or something? we are near the highest level in the benchmark 10-year yield in five years that's nearly 3% as we near this 3% threshold here, most rate watchers see it as a combination over higher growth, more government debt issuance and of course reducing its balance sheet. along with higher yield is this other puzzle out there being debated. the spread between the 2-year and the 10-year. that 10-year yields less than

the 2-year it can mean a recession in the months ahead. fed vice chair randy correll said last week he does not see a recession level. but kashkari sounded more worried on friday. >> it's a signal of caution. the term premium is lower until it's apples and oranges. maybe but every time somebody says this time is different, it makes me nervous about that. again, i look at the fact the yield curve has been flattening. i think we need to pay attention to that. i think there's information contained in that. >> could push yields higher. and today the economics reporting the highest net percentage of firms raising wages since the survey began in 1982 and the most dufltty reported in finding skilled workers in a

decade guys, that fourth rate hike being priced in high for the contract i think, though, if that spread remains really tight and it goes towards zero, the fed is unlikely to affect >> in other words, that might keep them at bay >> that might keep them at bay joining us now jim grant jim, we almost hit 3%. we got close is that higher than it should be lower than it should be? or just right? given where we are in the business cycle, given where we are in all the central banks and everything we've seen over the past ten years, where are we >> of course every rate is the right rate if the market says it's the rate. >> is it the market saying it or central bankers saying it? >> well, the interest rates have been under the thumb of central banks for years. so these are to a degree

adulterated rates. 3% is an historically low rate historically with respect, say, to premium over the measured rate of inflation. got 2% inflation rate. 3% 10-year yield on form that yield ought to be higher than 1% above the rate of inflation. that would be greater rate of pay for the creditor who is are taking a chance on u.s. government >> so, i mean, when you look at where germany is and you look at where we are, that's fully a function of central banks? or there's -- >> it's partly central banks the closer you get to the shorter end of interest rates, there's the treasury bills that like them more they have a direct effect. they have a somewhat less direct effect on longer dated securities but central banks have a heavy influence on every single

interest rate. you know, what you'd kind of want is free range and farm to table prices you want them discovered in the marketplace rather than imposed. but for ten years they have been more or less imposed and probably they are the wrong prices, many of them >> just far long time there's been a whole contingent of smart people that have thought that we're -- that it's a scary mixture of central bank intervention keeping rates so low there's going to be asset bunls and we don't have price discovery and there's going to be negative consequences but now there's a whole other group. have mark grant on cackashkari kashkari you can hear the president himself saying what are we doing raising rates while everyone else is much lower you're working against us by raising rates.

we're the -- were you too hawkish? were others too hawkish about rates? should they have stayed relatively low >> i think rates ought to reflect the demand for credit. >> and they're not >> no. for example, look at the setup for the corporate bond market. you have neelds thyields that ae relatively tight and thanks to the volcker rule, you have wall street that is very, very ill-equipped to intervene as a market-making capacity come the next bear market in corporate debt you have the fed working against you to try to institute a 2% rate of inflation. that's their target. they define that as no inflation. so the fed wants to devalue the currency in which you are lending. want to in effect disenfranchise you by changing the terms and

conditions of the loan they do that in an exchange offer. the central banks are against you. and the spread you earn over treasuries is more or less risky, it seems. very low so the setup in the corporate debt market especially i think is a very concerning one >> i wonder how it manifests itself if you were on the other side, let's say you were a dove. you'd say, let me get this straight you want to raise interest rates so you have ammo next time there's a slowdown so in raising them to the points where you have dry powder, you cause the next slowdown that you're going to respond to that doesn't make sense. >> that very well may be the case it's been ten years and we have recessions still we probably will have one again. and the fed has delayed and some would say dithered so we have historically low interest rates at a time when money growth is receding. when bank credit growth is

receding and as neel kashkari mentioned, the difference between short and longer data yields is becoming very narrow. those customarily are signs not of economic vibrancy but the opposite people like the president and who are others saying we shouldn't raise rates, they do have something on their side but there's no rewriting of history. going into another testing time. >> you mentioned the volcker rule before and what you thought the impact of is that is going to be the fact there won't be a market making. are you a fan of revoking the volcker rule right now >> i am a fan of letting people who take risks also bear risk. the trouble with the semisocialization of the big danks is the people wo work for them take the risks. they don't bear the risks. i would -- when i become king, i would have -- i would walk back

the socialization of risk. i would have the stockholders -- there was something when the bank became impaired i'm not sure if we can get there directly but we can have rules that will not micromanage -- the micromanage banking. but will still place the consequences of risk where it ought to reside which is the people making the decisions. >> so jim, given where you think the real inflation rate is right now, where should the yield curve be given where you think real inflation is? >> well, i think that people who are prepared to lend to the governments of the united states or more especially the governments of european countries at yields very close to the measured rate of inflation are taking a very big risk >> okay. >> i mean, years and years -- in fact, hundreds of years ago a frenchman said he would rather have a mort ganl on a garden

than on a kingdom. meaning governments are inherently ill-bdisposed to make a fair deal to their creditors of disowning and impuduating so to lend to a sovereign government for next to no premiums over 10, 20, 30, 40 years? i don't see the upside >> yeah. just wonder how -- what the day of reckoning looks like. i don't know we just heard from the north carolina pension gentleman that andrew will be able to write his sequel he's been waiting for for so long. >> high time, too, andrew. >> i can only hope we -- >> would you do too big too fail t-o-o or t-w-o

do something >> when we think about that book, we have another book we want to talk about >> all right. >> because when we come back, remember this? >> carl, i have no interest -- do you think i want to invest with you >> i wouldn't do business with you if you were the last man on earth. >> the billionaire brawl live on cnbc back in 2013. cnbc's very own scott wapner out with a new book about the two business titans. scott, what do you got coming up >> andrew, power, ego, money, and revenge. they all took center stage in the battle between icahn and ackerman over herbalife. my new book goes behind what really happened and why. "squawk box" will be right back. it was my very first car accident.

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bill ackman, ladies and gentlemen. >> my buddy. >> that was four years ago at cnbc's delivering alpha conference i don't know if that was an uncomfortable hug. >> it was a little awkward. >> we'll talk about how uncomfortable that might have been two of the investing world's most legendary personalities carl icahn and bill ackerman a year before that the hug made headlines, they went head-to-head on this network the "half-time report. joining us now is the man who

moderated that conversation who acts it in his book scott wapner authors of "when the wolves bite." good morning and congratulations. >> thank you so much it's great to be with you guys >> how did this all happen >> it happened because of what happened on cnbc i had been thinking about, you know, all along i sort of lived this story as it developed, you know ended up covering it from kind of both sides. and i kept thinking i should write a book a few important people in my life prodded me to do it and i finally did it and that was, you know, in mid-'16. >> what was the moment -- is there a moment you thought you discovered and didn't realize. >> i knew a lot, but i discovered a lot through my reporting. and the fact that i spoke with bill and carl for the book and herbalife as well. herbalife participated in a way

that i wasn't sure that they would. and i learned a lot about how they fought back >> scott, back up a little bit for people who maybe weren't following along from the beginning on this thing, how did it happen? it happened on our air >> it did. bill ackman had a special event where he rented out the center on the west side of town here and he held this special event and he laid out his billion-dollar short you know, everybody was like, oh, my god the guy's got a billion dollars on the line. he's gone public in a way few people have ever gone public on such a big short it just so happened that icahn and his people were watching what was going on with herbalife at the time. the fact that ackman knocked the stock down so much they had a long simmering feud for a decade they saw an opportunity. and that caused the battle and the brawl that unfolded on our air on january 25th, 2013. >> have you heard from these guys yet

>> little bit. >> a little bit? >> they haven't seen the book yet. >> so we don't know -- and who do you think comes out we know who comes out the winner, right? by default carl is the winner. >> history is history. you can't rewrite the story with a different ending the story has somewhat ended the way it has you know, bill recently got out of the position completely carl walked away carl's still in the stock best i know and he's made $1.2 billion on this particular investment >> and what's their relationship like now >> it's probably better than it's ever been give or take a few hiccups along the way. but they spoke -- you're referring to remarks bill made at the active passive event last week bill called carl after that and tried to sort of smooth things over and tried to make it clear that he didn't mean anything derogatory

>> he swings for the fences. he's, like, shakespearean almost i think about some of his calls. the way he went into the valiant deal, that was unheard of. to go in and build a position and then there was -- >> it was happening at the same time >> i'm still short the hong kong dollar i'm long or short, i don't remember which it was. they were going to depeg it from the yuan >> he laid that out with you, didn't he? >> he had 106 slides it never happened. and then there's penney's and target >> the valiant thing was happening the same time as this. icahn was hot and heavy into apple as well. >> right before we get -- i mean, very -- this is, like, never done. this is never done this is for him. just take it, open it up >> open it up right now? >> test been given out very few times. >> i really appreciate that.

>> cnbc "squawk box" book award. >> with the homemade year. >> i put that on there for you >> i appreciate that. >> where did you find that >> did you show it to -- >> show it to the camera >> look at an official. >> is it white out or what how is history going to measure karl icon? how is history going to measure bill akman >> i think it's going to be complicated for bill i think bill -- there was a period of time where bill had a number of incredible successes he had built up this amazing reputation, and more recent history is going to define him by valeant -- >> can he get back to being in the same sentence with karl as an investors >> i don't know if he'll be back running the kind of money. he had $20 billion under management not that long ago and

here we are talking about a different person. >> you're a big fan and reform broker he put them on there. >> yeah. >> i'm wondering for the important person in your life that inspired you was your elevator operator? >> no. andrew asked me who comes out ahead that's herbalife the stock is at $100 today it lived through the entire battle ceo is no longer there he's moved on. but michael johnson sort of walked off into the sunset after this whole thing happened, you know the book is "when the wolves bite." it's a really great book i think it's terrific. i'm not being paid to say th. at >> all right when we return jim cramer will weigh in

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shares of hasbro under pressure after a big miss on earnings the ceo will be on "mad money" tonight. let's get to the new york stock exchange jim cramer joins us now. it's a highlight of how we do

things everybody knew about toys "r" us and the analysts at 33 cents and post 10. i'm not sure whether it's the analyst or the company we should be pointing fingers at after a big miss. >> i think the analyst the company has been out front saying it's going to be a tough quarter. and you can say listen very tough quarter means they're trying to low ball or you can listen to brian. he's been straightforward the whole time he's told you this is going to have an impact i'm kind of aghast when the stock was down seven i said hello did people just discover this? i think the company has been well out in front of this. i think the analysts should have had lower numbers. maybe they're waiting to see this if this is a shock to anyone, they're under a rock it's crazy. >> last week when yousaid you thought it was two to one for apple to hit a trillion. are you -- do you think it's less likely now. do you think there was something that came out last week that really

>> yeah. i said, you know, apple is at $880 billion the others were clustered to $750 what is going on here it's going to be a reset for apple. we know katie is the biggest realist on apple the morgan stanley analyst said there's going to be a considerable downside to the numbers. when you see something like that from the biggest bull, that would be like someone saying get out of hasbro ahead. she didn't say get out she did say expect a lot of pressure and buy i think those are two different things to me that was saying, look, the consensus is way too high. it's too high on a stock like apple. a lot of numbers will come down. that's a better opportunity when you see the number. >> jim, thank you. >> see you on "squawk on the street." we'll check out alcoa. down 9%.

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welcome back to "squawk box. final check on the markets dow looks like it's going to open up higher by 52 points. the s&p looking to open higher ten-year almost at the three level. we're at 2.966 we'll watch and wait and see what happens throughout the day. make sure you join us tomorrow "squawk on the street" begins now. ♪ welcome to "squawk on the street." earnings season comes to full boil this week 42% of the s&p market cap will report premarkets mildly positive and added to gains this morning. same story in europe where the pmi have been steady today the ten year is the big story, as andrew said we got t