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 andrew ross sorkin joe is out today we're joined by kevin o'leary sitting in with us once again today. >> nice to be here. >> andrew is here, too in body. >> i'm here, my voice is not we'll see how we do. checking the markets, you'll see u.s. equity futures in the red, this comes after the markets are looking to recover from yesterday's selloff good luck with that. the dow futures are down by 70 points s&p futures off by 6 1/2 nasdaq down by 15. all of these are things we've been watching closely.

seeing what happens after yesterday's session reversed sharply on comments from caterpillar. there is news from comcast comcast formalized its cash offer for sky. the total value of the bid is about $31 billion. comcast also including a number of commitments in the deal including maintaining the annual budget for sky news for ten years at a minimum of 2017 levels, and establishing an editorial board to assure the independence of sky news 21st century fox has been trying to buy the 61% of sky that it doesn't already own. but the attempt has been rebuffed by regulators concerned about fox having too much control over british media this deal comes in -- >> it formalizes what we knew was likely to happen there was still a question mark out there. but now this starts the clock. this begins the race to how does

fox come back? >> this is a 16% premium to fox's original bid because disney is in the process of buying fox, does disney make a bid? now we're in this whole new dance. new element of where this all goes >> andrew, you followed these rules closely. the rules in britain are different and unique about how you have to go through with some of these deals >> yes the reason we knew that comcast wanted to buy this was because they had to come out first and say they wanted to buy it. this is the next step in a formalized process though this is an important step because you could have made the first step a month ago now without making this step and there are investors on all sides of this. some people think this would be a great deal for comcast other analysts say we prefer they buy something else.

>> the stock has been under pressure since this news comcast has made the point that, look, if they had this combined together, sky headquartered in the uk, 23 million retail customers, strong in germany and italy. their combined customer base would be 52 million with this acquisitio acquisition. >> the real opportunity is across europe, to leverage the content we already have through nbc universal. when people think of sky, they think of it as a satellite company. the real growth engine is in everything else. >> it will be tough for comcast to get bigger in the united states >> meanwhile, i'll throw another

thing in there, if, in fact, the at&t deal with time warner is approved, it is possible that you could say, okay, i don't want to do this anymore. this was a good idea then. now i can do anything. >> just looking quickly at that. looks like shares are up.6% on this news. sky shares were up higher. 1.65% higher for comcast sky shares trading up about 2% on this. let's get back to the markets. we were showing you u.s. equity futures which have been down despite declines yesterday all of this coming after strong earnings reports from plenty of companies including caterpillar. the company came out, talked about strong demand. not only beat expectations on the bottom and top line but talked about stronger profit outlook for the year on that conference call you did see a dramatic turnaround after the cfo made some commentary

talking about how this could be the high water mark of the year. that sparked the selloff shares closed down by 6% they were trading down there were more than 30 stocks that traded down through all of this talking with mike santoli about what happened, it was not only this, but technology stocks that took part in the reversal. amazon and netflix shares dropping more than 5% on this news and the f.a.n.g. stocks overall lost over $85 billion just in yesterday's trading session. something we'll be watching very quickly, but again this was a huge reversal we saw the fang stocks also down sharply from their 52-week highs and watching the yield on the ten-year, which finally topped 3% for the ten-year. you will see the yield this morning sitting at 3.018%. that was seen as another huge issue facing the markets above 3% not sure why that would come as

a surprise to anyone >> this is what kevin was talking about. that's more exciting to you than equities >> last time this happened it was very short-lived and we pulled back into the -- down another 40 basis points. i don't think that will happen this time. markets realizing 3 is here to stay if you go back in history, i'm a student of history, look at psychological rate hike barriers being broken, there's a pullback in the market. the s&p is at 15.5 pe now. you can have a comment by the cat ceo which is disappointing >> i was wondering if that was taken more broadly i think he was talking about a high watermark and beating expectations >> when cat catches a cold, the world is getting the flu >> i wonder if we were interpreting too much into those

comments >> i think we were if you go back and look at interest rate shocks, and if it's for the right reasons, in this case it is, the market comes back within six months and starts its onward rise, earnings are good i don't find 3% competing for equities yet >> ben white from politico pointed out, hey, we're hitting a dangerous point for yields at that point it was 4% they were talking about >> 3%, would you have to deploy capital, you don't want to deploy a large position of your portfolio in a 3% world. you're now 200 basis points behind your benchmark. i see this mattering at 4%, 4.5% would i deploy capital at 4.5% probably not here i will lose 20% of the underlying value of that

ten-year bond if rates went to 4. there's a lot of risk in that. >> yesterday's 750-point swing has all kinds of questions being raised mike santoli explains all of this good luck. >> it's exactly what you've been talking about. how much is priced in. nobody is saying we're going from a good environment to a bad one. but it's about whether that period from labor day through january represented the confluence of great stuff that the market priced in that means global economic momentum that was going to offset potentially higher interest rates and inflation if you look at this chart, this is stocks versus earnings. as earnings -- that bottom kev is earnings for the next year. look how far above that blue line got, that's the s&p 500 shooting up above the earnings trend. now the s&p 500 has come back as earnings have gone up. so we're saying valuations may

be overshot to the upside, shiftily, and now coming back. you can look at stocks versus bonds. this next chart is the advantage that stocks earnings yield has over the inflation adjusted bond yield. as this chart goes down, stocks are less -- earnings divided by price. so this is the smallest advantage stocks have had in this cycle but if you go back to prior cycles, stocks look like a good bet. so a few things happening. there's a late cycle mindset going on we came into the year saying we know it's ban nine-yeaeen a nin expansion. we think we can get better a little while longer. but nobody had confidence it would be a five-year burst of growth people are quick to say maybe that was all we'll have for this cycle. >> what shocks me is the quick about-face, from the morning when we were saying everything

is great looks like they'll see demand in all markets. they see everything going higher from mining to construction, all the way across the board, to an hour later sub sayiomebody sayig the high watermark >> i think there's information content in the market responding in the way it did across the board, selling all industrials it means that -- when we were up 7% in january, was it because every cfo, we took it on face value what they said no we thought we had all this momentum that would gather steam and it wasn't going to be offset so much by rates and inflation >> tells you about market sentiment. >> sentiment and positioning people feel they own too much equity in january when things fell apart a bit and they're not really -- they don't have a high appetite to rebuild positions now. profit margins, you know, i heard brian sullivan say they're

at a record high basically, up as much as they have been in a single quarter for a long time what direction can they go from there? further up or down not saying it's all over, but this is the push/pull in the markets. we're flat for the month >> we lost all the april gains yesterday. >> it's been kind of fragile i don't think the world is one where people say it's either 3% on the ten-year or i'll take my chances in the s&p 500 it's, you know, investment grade bond yields that are now 4 1/4, and they were 3 1/2 six months ago. somebody is paying that out. >> you say we're flat on the month except the dividend is still there for those who choose to invest in stocks that return portions of their profit you're now making money. this is probably the best advertisement ever in a few years for why you should be paid

a portion of profits when markets go flat. you will still make 2%, sitting, waiting in equities in the s&p while the market goes up and down as we resolve these issues you detailed >> which is why you love dividends. >> i love cash flow, these companies that don't have any, the teslas of the world, now you see the king has no clothes when the pe gets slaughtered. you have a heavy speculation, market drafts are down and you get major correction sometimes 30%. i love to teach this to students when it's going up, it's wonderful until it's not going up anymore what is the value of a company that makes no money? what is it t >> the market knows that alphabet's cash flow enabled that company down the road to kick cash back the market doesn't have to see the checks coming in the door. >> maybe one day they'll return it to shoulders.

it doesn't guarantee that management knows what to do with the cash better than you do. >> joining us right now for more is rich steinberg president and chief investment officer of steinberg global asset management here on set with us, michelle mckinnen from payne capital management rich, let's start with you what do you do after yesterday's selloff? is that an opportunity to buy or do you say i'm still nervous about things >> we had a trading perfect storm yesterday between the technology selloff, the 3% noise around the ten-year, and then of course the caterpillar news. some of this was algo driven ita traded at 25% higher volume.

xli, the spdr did the same the algos start to kick in on this negative momentum to kevin's point and mike's point, you can be a buyer of this market even with 11% earnings growth next year. the back drop is decent. i view this, especially in the dividend space, with 4% yields of kind of a green banana buyer's market you may not get paid now with the green bananas, but over the long run you'll get a great return >> mimichelle, to mike's point that this could be as good as it gets, if you could see selloffs like this in the middle of earnings season when you have beats from companies, such great outlooks from companies, what will power stocks higher once we get through earnings >> 18% increase on earnings this year is phenomenal news. whether you have a couple days

of volatility, in the fundamentals things look good the u.s. economy is as healthy as it has been in years. >> you don't think any of that has been baked in? >> i think it has been, but that's an opportunity to look overseas the earnings growth overseas has not been baked in. >> mike, again, if you can't make traction when you are seeing such great numbers that come out, my thought was heading into earnings season that would be a scary time to short things. if you see moves like this, while getting great news, what good news comes later? >> when i say as good as it gets, as easy as it gets >> i'm not saying there will be a decline. >> you can kind of fight your way higher this is a correction process that's been going on for three months it's a routine one, even though it's frustrating for all sides i think also from the supply/demand standpoint, you would hope to get rallies in there chasing it

it's not happening we had a sub it% qua2% quarter first quarter. the story has changed from is the economy going to run too hot to can we catch up to 3% growth. >> the other part of the equation we sometimes see people blamingfor these pullbacks on wall street is the lack of p predictability from washington and big global issues that might have impact. yesterday it sounded like president trump and macron had reached a potential deal on iran and staying in that agreement. also treasury secretary mnuchin is being sent to china to hopefully talk through some issues with trade with them. those are things you think would add to positive sentiment. again, if you see all of these pullbacks on a day like that, what does that tell you about sentiment? >> i think the markets are used to this style of negotiation the regulatory environment is

getting better the daily chaos coming out of chicago maybe in the short run is keeping pe levels subdued but the s&p is now trading at under 17 times with 3% gdp growth i think the investors have to look at their risk and allow the volatility and the geopolitical conversation as well -- >> what does that mean are you a buyer or not here? >> we're buying slowly looking for names coming our way additionally with new money we're scaling in over the next two to three quarters on a structured basis to allow some of these big moves to come our way in terms of pricing. if we look out, we see 2850 to 2875, neighbor 2900 before year end but some lumpiness due to

geopolitical issues as well. >> michelle, when you say you like opportunities overseas, europe >> europe, emerging markets. earnings growth overseas is phenomenal i don't think it's baked in. you could have longer legs in the overseas markets than at home >> michelle, mike, thank you very much for your time. comcast out with quarterly numbers. looks like they're coming in with a beat on the bottom and top lines. earnings at 62 cents a share that's 3 cents babove consensus estimates. revenue at nbc universal was up 21% with the olympics and the super bowl cable network revenue up by 21% comcast adding 379,000 new high sped customers you're looking at comcast shares up 1.6%. this is the move we saw on the stock on the announcement of the

formization of t formalization for that bid for sky. >> people are also looking at total new relationships, 273,000 new relationships in the quarter. and video lost, 96,000 customers. but that's actually better than most analysts had been expecting. >> what's never looked at, you know hidden inside comcast numbers, i know this is a conflict because they own this and that, i own this stock for a reason, they have a growing services business inside their model. let's say you're running a restaurant chain they come in and provide you all services, video, high speed internet, connectivity to other restaurants on a subscription basis. this is a highly lucrative, very

sticky business that they get zero credit for. i think now investors like me and analysts will start looking at this saying how fast can it grow it's the highest margin business these guys do. >> a couple other numbers, ebita is watched on this.bita up 3.3%. net cash, 5$5.5 billion in free cash flow. strong numbers >> you love that cash flow >> more cash flow. theme parks, a business when we bought this company -- when they bought nbc -- >> this is a name is you should not be scared of >> it's up almost 25% on revenue. film revenue, this is a big issue for everyone this quarter, down 16.9% in terms of

theatrical releases. >> how is it that netflix doesn't suffer the risks that comcast gets deploying cap cal into hollywood if you look at movies, it's a crappy business. >> you just need enough hits to keep the children and then get people to show up at the theaterments. >> i don't buy it. at some point, you invest in deals that are dead flops, even if you're in a sub basis, nobody watches them that can't be great for that model. >> there's no transparency in netflix. if you had any idea what they were spending, not just the total number, but which shows were working, which shows weren't, people would have different views. >> to boast how many billions you can lose in a quarter, i appreciate it but don't own it.

tim cook is making his way to washington, d.c he'll meet with president trump at the white house that meeting to take place at 1:45 p.m. eastern time the meeting will be closed to the press. no word yet if on the official agenda let's get over to eamon javers do you have any insight on what they'll talk about >> i don't i've been e-mailing folks over at the white house and at apple to find out. all of there comes as the president is approaching the trade issue with china and apple does a lot of business there yesterday was a full day of foreign policy for the president and an evening of foreign policy as well as he hosted emanuel mac john for the first official state visit of this presidency early in the afternoon the president had some tough words for iran on the possibility of what would happen if iran restarted its nuclear program if the united states pulled out of

the iran deal. here's what he said. >> they won't be restarting anything they restart it, they'll have big problems bigger than they ever had before you can mark it down they restart their nuclear program, they will have bigger problems than they have ever had before >> later at a joint news conference, macron and trump seemed to suggest that they had been making progress on a further iran deal. macron laid out a number of criteria he said would go into the deal including limiting iran's ballistic missile program and limiting iran's influence in the region the president saying whatever deal happens, the united states will not continue to pay for all of this. he wants other countries in the region to pay. a lot of news to watch for as we go through the day today >> thank you, sir. good to see you. when we come back, dining with sharks. kevin o'leary brings us an inside look at a private dinner conversation with damon john and

a-rod. also a programming note for you, don't miss "squawk box" tomorrow our guest host will be jim c chanos atomrow morning at 7:00 a.m. eastern time. you know what's awesome? gig-speed internet.

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

parent company comcast, this just crossed at the top of the hour, comcast has formalized its cash offer for sky the total value of the bid is 1 $31 billion. it's also included a number of commitments including maintaining the annual budget for sky news for ten years at a minimum of 2017 levels also establishing an editorial board to assure the independence of sky news. 21st century fox has been trying to buy the 61% of sky it doesn't already own, but the attempt has been rebuffed by regulators who are concerned about fox having too much control over british media. this offer from comcast is a 16% premium to what had been offered by 21st century fox. comcast shares are up by about half of a percentage point sky shares up 2.8% and we are now hearing from 21st century fox in reaction to this news fox says it is committed to the

recommended cash offer for sky that it announced in december of 2016, and it is currently considering options. i would guess among those options is raising its bid >> whether it raises its bid or disney comes in and decides they will do it themselves. that's the fundamental question. what is the question is what bob iger can do and what 21st century can do without support the big thing is if that at&t/time warner deal gets passed, this may become a side show or change who wants to buy things >> you think comcast would change its mind -- >> comcast might want to look internally there's all sorts of things that could happen the whole world will open up if the deal is allowed. >> there's been a freeze across

the industry because nobody wanting to do anything until they know how the court also rule we'll watch that closely. kevin, you were telling us about your dinner. you had a dinner with some cool people >> totally random. >> a-rod just hanging out. just hahned to have cameras there? >> we were shooting something else, an interview with barbara cochran and mark cuban in another room damon called me said i'm coming to town with a-rod tonight, let's have dinner. >> as he would >> i said it's 9:00. he said we'll be down there at about midnight, tell him to keep it open. i asked the restaurateur, would you keep this open, serve us dinner around midnight i asked a young cnbc producer, you can keep this going? let's shoot this thing the guys arrived

all the cameras around the table. a-rod looked at it and said let's eat. of course that great, fine, o'leary fine wine was at the table. we drank a lot of it the ko the outcome was a nfascinating evening. i love the idea of having conversations around a real meal and great wine and see what comes out of it. >> people loosen up in those environments >> he opened up, so did damon about his past i knew 20 minutes into itmazing tape >> let's show the tape >> you are looking at the business of finance way before you were an athlete, right explain how you were projecting and thinking i need to go into real estate, i need to educate myself in so many other areas. >> >> because you made the transition >> which is very hard. >> none many of you dudes do that >> i grew up with a mother

probably like you, probably like you. i didn't have a lot of resourcing growiresource iresource growing up when i was 14, i said how do i get to palo alto from here i wanted to go to sanford. i needed to be a good baseball player, a 1200 on my s.a.t every time my mother said we had to move, we were poor growing up every 18 months we had to move because the landlord would raise the rent i said to myself, if i can ever trade places with the landlord -- >> and own it. >> and own it. the first shot i got, 22 years old, i bought my first duplex. 13,000 apartments later -- >> that's power, baby. >> better than baseball. the best thing i've been involved in, real estate every 8 to 10 years you refinance your property tax-free

and you buy some more. you don't refinance it and buy a plane or go buy a boat, you refinance it and buy another property you put nice debt on it. >> i like cash flow on cash flow on cash flow on cash flow. >> that's dirty word >> kevin, that's amazing i heard that story from him before but not with the personal depth he showed and the motivation about why he wanted to go into apartments. >> so few athletes make that transition they usually squander their wealth and end up in a bad place a decade after they're finished the game he was so motivated by watching landlords kick him out of apartments, he said i'll come back and he has >> just hearing about how he had been thinking about that since he was a teen. i knew about his apartment business and a lot of these things, but you got him to open up in ways i had not heard >> the steak was fantastic when we come back, these

guys are my favorite becky knows. kevin, you may want to get in on this tommy john, i'm always wearing it every day did you know about this? >> i didn't. >> i like to think i discovered these guys they are branching out releasing a new line for women becky, this is for you we'll talk to the co-founder straight ahead. then phil lebeau is in china where trade turmoil has auto executives on edge are you ready for chinese-made suvs and cars in the u.s. some are there and more are on the way. what happens if the u.s. increases its auto tariff with china? i'm phil lebeau. we are live in china when "squawk box" returns whoooo.

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welcome back tommy john marking ten years in business with a new product, a line of women's underwear that promises fit and function without little adjustments i don't know all about this stuff. we have the co-founders of tommy john here. tom, you came on the show originally, 6 1/2, 7 years ago now? >> 6 years ago >> i started wearing the stuff literally, all day long. >> you're showing us your underwear? >> yes >> i believe you >> tommy john for life i don't know what happens. howard stern all these people who found it. it's too expensive, as we discussed before, but it's unbelievable i went to their offices, you guys were in your 20s, remember that >> yes >> you had that crappy office. i recently went seven months ago. >> yeah. >> this loft space downtown.

unbelievable how many employees you have? >> about 85. >> the whole thing is crazy. this is what is exciting about entrepreneurs. but you have always done men now you have something for becky. >> yes we have something for you. what took so long? >> tommy john is a comfort-focused men -- has been a men's brand. it was founded out of pros trump administration tom was a medical device salesman, wearing a suit and tie every day, he wanted a shirt that was tailored and could stuck in couldn't find it on the market so he created his own product. the company was founded on comfort and function as a female co-founder of the brand, it's been ten years women are constantly asking me when will you make women's products we always felt it was never our time because the market felt too yoefshly s l overly saturated and we didn't know what problems we could solve for women. >> your marketing is good.

catches a lot of attention, but what is different about this stuff? >> we launched two collections, air and second skin. air is like second skin, no panty line promise you won't get vpl. >> what's vpl? >> visible panty line. >> the technology. >> people ask us what makes you unique, we talk about the three fs, fabric, fit, function. fabrics that are cool, dry, anti-microbial properties. a fit that fits at the end of the day the same as the beginning. >> this is a crowded space >> it is. >> i'm thinking of spanx, they own a huge part of this segment. who is your competitor for this? >> women were seeking comfort and function

they want something that functions all day and every day. >> how expensive you know i complain about how expensive this stuff is. >> what was the break through. because we see so many companies on shark tank that want to be in this space, and distribution always stymies them. people have made what brand they want i wear $120 a pair. i care about what i wear there i won't switch a brand i don't care what they cost. how did you break through? how many years did it take before you made money? >> a year in we got picked up by neiman marcus, then nordstrom. >> they sold through >> sold through 60% of the inventory we had the first month. then in 2012 we focussed more online >> did you have to buy your way to maintain that shelf space did they make you pay for the marketing? that's what we've seen

they get the rollout but they have to pay 12% rollout. >> i went to 90 nordstrom stores, being a medical device salesman, that's in my background >> that sounds like what they did with spanx, she went into every store, and started off in neiman marcus. >> over 5% compound annual growth rate through 2022 one of the few spaces in apparel that is expected to grow within that is premium priced underwear. >> important question. would you ever sell on amazon? i know you guys don't. i know that right now it's all direct >> right now it's direct never say never, but what's important to us is that direct connection with the customer we have a loyalty program, best pair guarantee we want that feedback loop you can't get through amazon >> cool. >> thank you, guys >> put this on amazon exclusive,

it's worth giving up your name for that only costs you 5%. not that i'm a commercial for amazon exclusive program. >> is that new >> yeah. only 1,000 products. >> we'll have a new investor by the time this is over. when we come back, puerto rico's governor will be joining us on the set. he has an update on the recovery efforts from hurricane maria an a plan to tackle island's debt crisis. and then quarterly report cards from twitter and boeing in the next hour.

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. welcome back auto executives have gathered in china for the beijing auto show. the cloud on the horizon could be that potential trade war between the united states and tr china. phil lebeau is there in china and joins us live. how much are you hearing at the show there >> executives are worried about this we have done a number of stories talking about the impact of a

potential trade war with all of the suvs built in the deep south and then exported to china but there are an increasing number of vehicles built here in china that are imported to the united states the number of sales pales in comparison to what are exported from the u.s. to china 58,000 vehicles were imported and sold in the u.s. ford will be building the focus in china and importing it starting next year volvo has been doing this for some time with its s-90 is he aga sedan. when we had a chance to catch up with the ceo and ask about the rising trade rhetoric between the u.s. and china, he was clear he's not happy about it. >> very concerned, of course it would be a major setback for the whole industry, also for us if we could not trade. that would mean we would need to

invest extra, every caroline would have to be made in every continent. in the end that means more expensive cars for consumers >> what we heard from him is what we heard from other executives at the beijing auto show, they would like this rhetoric to tone down. as you look at shares of ford, after the bell today, first quarter numbers from ford. we'll have them for you on "the closing bell." back to you. >> thank you very much we'll see more from phil throughout the day. when we come back on "squawk box," it's been seven months since hurricane maria devastated puerto rico and the island is still struggling with blackouts as it works to rebuild puerto rico's governor will join us next to talk about the recovery and the island's fiscal plan to address its debt crisis. "squawk box" will be right back. tomorrow on "squawk box" -- two hours with legendary short

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welcome back, everybody.

puerto rico is struggling to rebuild after hurricane maria ripped through the country seven months ago joining us is the governor of puerto rico. thank you for being here today >> thanks for the opportunity. >> it's hard to imagine that part of the united states has been suffering without power for seven months since this all happened give us an update. >> you know, puerto rico had an already antiquated energy system when the biggest devastating event in the modern history of the united states hit our island, then, you know, it was -- we couldn't anticipate it was going to be a major disaster right now we're putting the energy grid back up. we're at about 98% of clients with energy. but really what we're looking forward is transforms of the system we think we have a great opportunity to leapfrog into energy 2.0 to make sure it's client centric, work with the private sector to make sure that a generation gets lower rates.

>> you need private funding to come in and help do that private investment that's something that a lot of investors are wary of given what happened to bonds in puerto rico at this point. >> yes but we've been working on several things of course we're engaging with stake holders. number one, we're passing a law so we can facilitate that to the private sector in collaboration. we're looking at a concession and private generation and then the second component which i think is the -- probably the most critical one is the regulation framework so we're talking to a lot of stake holders. make sure that regulatory framework is the best practices in the world and that we can see that prices are at best for all of our stake holders >> can i ask you a question as an investor? if i'm sovereign like norway and i want to build. i can be guaranteed a 7% return

over inflation over a long period of time if you needed $10 billion -- i don't know what you need but it's got to be a go number like that and you could get the united states government to back you, there'd be billions of dollars willing to be invested in puerto rico because you're part of america. >> right >> and you need that power and if i could make 7% in perpetuity plus inflation adjusted, i would invest in it i don't hear that program coming out of you i hear, you know, trying to fix this, trying to fix that why not go for the big jugular and say, we're going to build a deal for the world to invest here in this one aspect of our infrastructure there'd be a lot of interest in it but you need the feds backing you up >> yeah. well, first of all, i agree. i think this is a once in a lifetime opportunity we have essentially a blank canvas to do an energy grid that's a model for the world and investment to come the first step is to make the laws applicable to that in puerto rico. secondly, you know, we have an

oversight board in puerto rico which limits our capability of going to ask for money so we're limited in -- >> got to get rid of them. >> well, that's a way to do it but also it's -- what i think is if those conditions are ripe and if we have that framework, we can pursue that. that's my commitment i want to let the world know in puerto rico we want to be a platform to leapfrog from the energy grid to -- >> what do you do about the oversight board? you tweeted recently you are opposed to the new austerity measures they're asking for like 10% cuts to the pensions >> here's the thing. we're making the biggest cuts in the modern history of the united states in government right sizing so when we see that they add more austerity cuts, we feel that it's going to impact negatively the economy so we're talking about a 22% reduction on right sizing government cutting over $800 million in

areas of health care, education, and so forth and just trying to use that opportunity to innovate and get better services. so when i say we're against some of the things is that the oversight has a role which is establish what's our cap, what's our top. but they can't establish the public policy. that's why i really want to go after innovative solutions i really want to open puerto rico to the world so they come and invest >> we appreciate your time we'd love to have you back again. there's news crossing the wires. comcast coming in with a 16% higher bid on this news. fairly significant because sky is 39% owned by 21st century fox. >> now every comcast investor including me wants to know one thing. is this going to be dilutive to me i need to know that pronto >> they said cash flow positive,

i believe, in the first year >> they do believe that, yes maybe if the market believed it would be this deal and we're done and that's it, then maybe >> i think there's a question mark how high the price is at this price you might be happy. we're going to talk more about this after the break "squawk box" will be right back. whoooo. when it comes to travel, i sweat the details. late checkout... ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a... ...hotel without breaking a

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markets looking to recover from yesterday's selloff which featured a dramatic reversal during the session dow component boeing set to report this hour we'll talk about others reporting as well. twitter on focus a look now at what's driving the stock and what the company the saying about privacy straight ahead. plus, space odyssey 50 years

later. >> dave, do you mind if i ask you a personal question? >> we're joined to celebrate the milestone and talk about the legacy the movie left on the industry the second hour of "squawk box" begins right now ♪ live from the beating heart of business, new york, this is "squawk box. good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. music's playing for a good reason we'll tell you about that in a bit but i am becky quick with andrew ross sorkin and kevin o'leary. we are watching the markets closely this morning the u.s. equity futures after a huge move down for the stock

market yesterday you'll not see a rebound in the early going this morning dow futures down by 120 points after the dow was down by over 400 points yesterday that was a big reversal. at this time yesterday we were looking at green arrows across the board. most trading sharply higher. led by caterpillar even though the news was very strong, it beat on the top and bottom line. raised profit outlook for the year in the call, the cfo of caterpillar -- you can see this morning dow futures again down by about 120 points. s&p off by 12 and the nasdaq down by 25 also the other piece of news that rattled markets lower was the 10-year. across the 3% mark for the first time in four years several pieces of news this morning involving our parent company comcast. sky has withdrawn its recommendation of the offer by

21st century fox to buy the portion of sky it doesn't already own. that's 61% this comes after comcast formally submitted its bid for sky. it's a premium of 16% to the offer 21st century fox had made. it also says sky says it welcomes this bid from comcast although it will continue to engage with both parties also made a number of commitments regarding this purchase including maintaining spending for sky news at '17 levels or higher for at least the next ten years 21st century fox has been running into resistance. however, fox issuing a statement this morning saying it remains firmly committed to its bid saying it is considering its options. again, this is where you hear -- >> well, it's funny. the british rules are funny because comcast had come out with its offer first then all of a sudden sky has to

say that they're withdrawing >> wouldn't you like it for transparency >> what i'm saying is in the u.s. there would have been a press release saying they're both deciding to do this deal together however, there's a potential top offer if 21st century decides to come back or if disney decides to jump in >> regulators have had a problem with 21st century fox. >> interesting, the other thing that just happened two weeks ago was the takeover panel in the uk said if disney were to buy fox, they have to actually buy out the rest of sky anyway >> say that again. they have to make the same offer to the rest of sky >> no. they're going to have to buy the rest of sky. so right now -- >> because when they buy fox, they're going to get 61% so they need to buy the remainder. >> 39% of it >> the other way around. >> you can't leave that --

>> this takeover panel in my understanding of it said you couldn't leave that effectively. >> that just adds debt to the deal >> if you are disney -- >> and financing for -- >> if you're going to finance it and also it gives a greater incentive to want to come back with a higher bid. the reason comcast stock is down this morning is people are now worried not that -- >> not at this price >> at this price i think people think it's a spectacular deal. >> this is not the news. we've known about this informally for awhile. >> the question is what's going to happen. and i'm still convinced if the at&t/time warner deal goes, everything isn't going to be on the table. >> don't you think comcast says that essentially creates what we have right now at&t/time warner obviously you want more. >> comcast could go troo i to b -- try to buy fox at that point. there are a lot of things that could happen and if that deal is approved, there's going to be a sense that

everybody's going to be in a race >> if they don't win in this vertical merger opportunity that regulators will no longer be as aggressive >> this is where track record might help comcast institutional investors, investors that care about cash flow trust that management team in cash we trust because we don't dilute you. they don't do deals that dilute you. if it's dilutive, it'll be off the mark for these guys. comcast has always coveted cash flow and i think that they may get a lower cost of capital because guys like me say they don't do dilutive deals now, they could break my heart and do that, but i don't think they're going to do that >> comcast shares are down by about 1% this morning. we have seen sky shares continue to build through the morning as people think of the potential for a bidding war. at a 16% premium to what had been out there before from 21st century. separately, comcast reporting profit this morning at 62 cents

a share. that beat estimates by 3 cents revenue also beating forecasts pretty strong numbers across the board in terms of the subscriber ads that came through in terms of free cash flow. a lot of those different numbers kind of all being things that the street have been looking for. again, this deal news is probably the big issue that investors are looking at this morning. >> let's get to the west coast because the other big news, twitter results just hitting the wires. julia boorstin joins us now with those numbers. good morning >> good morning, andrew. we see twitter shares trading nearly 6% higher on better than expected results earnings of 16 cents per share were 4 cents better than expected revenue $665 million soared past projections of $608 million. the company's monthly active user base grew by 6 million which is 2 million more than expected and better than the prior quarter when the company's user number was flat twitter saying that daily active

user growth was 10% over the year ago quarter we spoke to the cfo. he told me tweaks to the timeline and ad products are working. >> video is now more than half of our ad revenue. this is the second quarter in a row where that's been the case there's still a lot more room to improve that as we get more video and compelling ad formats in front of our customers on twitter. >> as for the room to improve, the company guiding to a stronger than expected second quarter. before interest, taxes, appreciation, and amortizization segal telling me they're cracking down on fake news and trolling segal does say those issues plus

regulation aren't impacting twitter's outlook. >> we're always looking at what's happening in the world and thinking of the implications it could have for the business but we feel really good about the pace of business right now and the advertiser sentiment there's no changes to our thinking about the opportunities we got to deliver a great opportunity for them to get in front of their customers on twitter. >> i asked segal repeatedly if twitter is benefitting from the facebook scandal he wouldn't comment on that. the company's earnings call comes up at 8:00 a.m. eastern. >> appreciate it we'll see you in a bit with more twitter news, i'm sure meantime, other stories to tell you about this morning. we have mortgage bankers applications rising -- or rather falling 0.2% last week according to new figures from the mortgage bankers association. new home purchase applications were unchanged with refinancing activity declining slightly. the average 30-year mortgage

rate at 4.73%. highest since december of 2013 also anthem topping estimates with its latest earnings reported a profit of $5.41 per share beating estimates at $4.88. revenue did fall slightly below estimates but anthem did have lower medical costs. also a look at shire it is welcoming -- willing to recommend a takeover bid from takeda a huge deal. about 11.5% above the initial approach which was made on march 29th earnings in the 10-year moving above 3% for the first time since 2014 have equity investors on edge at the moment. joining us now, chief strategist at td ameritrade also robert frost is here from frost & frost wealth management.

santoli and mr. wonderful are also here. as is mrs. wonderful >> i just go by my normal name >> you saw what seemed like rate earnings yesterday morning you see we're now over 3% on the 10-year. does this explain what's happening here what's going on? >> i think investors are a little scared right now with the 10-year at 3%. saying how far is this going to go they're shooting first, asking questions later. you're getting an allocation out of equities into bonds at 3% i don't think you want to be chasing bonds here, but that's kind of what you're seeing you're also seeing what we think is a positive indicator. credit spreads are not really widening in that effect, equities should do better down the road because earnings are getting stronger. the fear sin flais inflation

if it's just inflation, you're looking at peak earnings but if you're looking at growth and can get pricing power. a lot are talking about reinvesting in their businesses. that to me portends future growth right now market doesn't care. it's actually selling first and asking questions later >> i like he's making trades at the desk here. are you doing? >> my trading platform is up in front of me. >> what's the move this morning? >> you know, i think he hit on something important. we all asked when it was coming. it finally got here and all of a sudden everybody doesn't want anything to do with it what i really want to watch and you just -- twitter's earnings just came out. we have popular names among retail being the fang stocks another interesting sector, i know you and i have talked about energy before. the reason i want to look at energy is not only have these stocks hung in there, but they're dividend payers. i think the dividend paying stocks are important right now because people are putting them

aside. and i don't know that it's necessarily the right thing to do quite yet because, again, many of those stocks have done well. you know, at&t and verizon have fallen out of favor. some of our clients still like the energies and as i said the fang stocks a favorite among retail. you may see people come here we'll see what facebook does on the calls. we're expecting about a 6% move in facebook from the options >> from your platform, can you see fund flows increasing into fixed income i know you can choose cds, buy corporate, buy treasuries. >> what's interesting, kevin, is we've seen people maybe take some risk off the table but not necessarily run into fixed income >> getting out of stocks >> just kind of saying where should i go? because there's a repricing of equities going on. the earnings are coming up the prices -- i think we're just repricing stocks right now. >> do you have a market of

everybody that's moved to cash on your platform can you see the cash holdings? >> yes. >> has it gone up in the last two weeks? >> last two weeks, it's been about the same >> no panic selling. >> it's not panic selling at all. also look at the vix vix is still 18.5% we're back towards normal levels it amazes me sometimes to see people say my god these moves on equities well '17 was the anomaly '18 we're trading more normally. >> i don't know what you think about this, but we're back to levels at the s&p 500 that we were at at thanksgiving. it was a love fest nothing could go wrong now we're talking about overreactio overreactions. was that an overreaction to all the goodies that were coming in terms of growth for this year? are we just giving back what we took from november through january? >> i think it's a bit of a reversion to the means i mean, we saw the 3% back in

2014 when the taper tantrum happened maybe we could call this the 10-year tantrum. >> for five seconds we were at 3% and at that point the whole story line was, anything bad happens, the fed has our back. i'm not sure people are convinced it's a heads i win, tails you lose situation >> traders saying that yesterday on our air i think it was jim iuorio. look, they're not going to be here to save us. it's going to take a 15% market correction before that >> well whab do we want? we want a strong economy that's why the fed is starting to raise short-term rates. and the market was up at an unsustainable rate, what we saw in january the fact it came down a bit, what an amazing buying opportunity for everybody that felt like they missed it in january. now to be able to buy at much lower prices >> two weeks ago when the financials reported, and they reported good numbers, the stock sold off financials are coming back

when you look at companies that were reporting good earnings, look at the goggles of the world. let's see what happens in the next couple of weeks right now investors don't really care they want to take some of the risk off but the opportunity to buy companies that are growing earnings that can raise prices, i think that is presenting itself right now >> and it's forward guidance, right? that's what everybody wants to look at. they want to see revisions and forward looking guidance that's positive >> all right we're going to leave the conversation there appreciate it very much. when we come back, nasdaq out with results ceo adena friedman is hanging out with the "squawk" lounge here at the market site. she's going to join us next here on "squawk box." stick around coming up, the star of space odyssey as one of the most

influential movies ever made >> open the pod bay doors. open the pod bay doors >> i'm sorry, dave i'm afraid i can't do that >> what are you talking about? >> this conversation can serve no purpose anymore good-bye >> keir dullea joins us for a special squawk in space production ♪ >> the epic drama of adventure and exploration is straight ahead.

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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. ♪ welcome back to "squawk box," everybody. morning after a big reversal for the markets. you're going to see this morning things are in the red once again. but off the worst levels of the morning. the dow this morning down triple digits decline of 105 points after losing almost 425 points

yesterday. that's a decline of 1.75%. the nasdaq was off by 1.7% nasdaq indicated down by another 22 points. s&p indicated down by another 11.5 points. this is in the middle of earnings season. we've been getting good reports from companies it's just that expectations were so high as we headed into this earnings season no exception to the rule this morning, nasdaq just out with first quarter results as well. the company coming in with better than expected numbers on both the bottom and the top lines. on the bottom line, $1.24 a share. joining us now to talk about it is nasdaq ceo adena friedman thank you for being here this morning. >> thank you very much for having me. >> what may be the most impressive is if you dig down through the revenue, 9% of the revenue growth came from organic sources. what happened? >> so i think we have really strong client demand across all

of our businesses. one of the great things about it is the revenue growth is coming from across the entire business. so we're very happy to see more clients continue to want our technology services, clients wanting our data, having more investors come into our etfs in addition to more companies going public then of course the trading volume >> when you gave guidance, you talked about higher margins for the businesses that you're really focusing on tell us a little bit about that. >> so we're focusing on making sure we're leveraging all the technology and data analytics capabilities that nasdaq has today. we provide our technology to almost a hundred other markets around the world and a lot of other broker deals and firms are leveraging our data to drive their businesses sop those businesses a as we continue to bring our services into the cloud and create more of a platform play in terms of

how they use the market infrastructure technology, that will give us some margin leftover time. >> over time, people think of this as the nasdaq like, this whole thing but it really isn't. over time, how big a piece will this represent relative to the platform piece >> our equities market tends to be a big part of who we are. it's our foundation. as a business today, we are a diversified business more of our revenue is coming from the analytics side. so the equities market is a wonderful franchise. >> but in total, if you were to make a pie chart a year or two from now, what would you like it to look like >> i would say we definitely would say that the majority of our revenue today actually comes from sources other than the equities markets so we would expect that majority to increase. >> where is your head on and that of your board on cryptocurrencies and providing

regulated and compliant? a lot of people are frustrated even if they go into that market, they have no liquidity nasdaq would be a natural place for that, would it not >> first of all, the initial implementations we're doing is with our tech nothing. gemini is using -- going to be using our surveillance technology to help them make sure they're providing a fair market for their own participants as you said,it's an unregulate space today. so "street signit's not somethie to go into providing exchange. but we are looking into other crypto exchanges saying people are ready for more regulated market, something that provides a fair experience for investors, certainly nasdaq would consider over time but right now our technology really is the basis that we're really focusing on >> would you advocate -- >> i think it's a pretty immature space right now

i think it's -- you know, it's kind of going through that classic product life cycle, right? so you've got early implementations and a big hype cycle. now we're looking at the matu maturing of the space. >> that means you're a believer because a classic cycle would suggest it's going to continue >> i do believe that -- >> that the cycle is -- >> the pink sheets >> i would definitely say that i believe that digital currencies are something that will continue to persist and it's just a matter of how long will it take for that space to mature. and then once you look at it and say do we want to provide a regulated market for this, certainly -- >> the dream would be a small company that only wanted to raise $250,000 in a regulated approved environment could do it at a significantly lower cost if it had an exchange where there was liquidity. and then look to an exchange like nasdaq to convert that into

other forms of currency. other krcryptos and perhaps cash if you're thinking that you want to be that destination, you're just saying we're not going to touch this while unregulated >> it's different to me than cryptocurrencies just using crypto to issue, you know, issue tokens i guess on -- to raise money whereas cryptocurrencies to me is a currency play in terms of creating an alternative to those out there. they really do need to be regulated. i do believe that the scc is right. they need to be regulated. >> we literally have 30 seconds, but i wanted to ask you about women ceos we were talking about a study yesterday that female ceos are getting paid the same as men even though we think there's a massive pay gap everywhere else. do you believe it? >> i was not surprised by your article. i think ceo pay is very

disclosed. and as you become a ceo as any person who becomes ceo can look at all the others in the sector. >> you think in female-led companies, there's less of a pay gap down the chain zblibl th >> i believe that certainly at nasdaq we do an evaluation of diversity pay every other year to make sure we have parity appropriately. >> thank you >> thank you "squawk box" will be right back time now for today's aflac trivia question. what was the blackberry arho named after the answer when cnbc "squawk box" continues anks, dad! break a leg! aflac?! not that kind of break. oooh! that had to hurt. aflac?! not that kind of hurt. yeah, aflac paid us cash in just one day to help with our car payments and mortgage. aflac!

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get ready, because we're helping leading companies see it- and see it through-with digital. now the answer to today's aflac trivia question. what was the blackberry smartphone named after the answer, strawberries the name was changed to sound faster boeing rolling out quarterly results and phil lebeau joins us now from beijing with those numbers. phil >> andrew, first quarter earnings for boeing and it's a beat on the top and bottom line. it is a doozy of a beat on the

bottom line. core eps $3.64 a share in the first quarter. the consensus estimate was $2.58. and for a point of reference, first quarter of last year, core eps was $2.17. revenue coming in better than expected at $23.4 billion. strong numbers across the board. operating margins, 12.3% free cash flow, $2.7 billion operating cash flow, $3.14 billion. this has boeing raising guidance on metrics core eps going up by 50 cents a share now to arrange a $14.30 to $14.50 per share operating cash flow now expected to be $15.5 billion. it was previously -- the guidance was approximately $15 billion. and operating margins for the commercial airplane division, 11.5% previously the guidance was 11%. guys, i know a lot of people

will be looking at this and saying how can the analyst be so far off? was it a tax benefit from the law changing what went right for boeing boeing says this is being driven by execution both on the commercial side of the business as well as the defense side of the business they have a richer mix of airplanes they sold in the first quarter. and they believe that when you look at the tax benefit, it's a very small percentage of that beat again, boeing 3 -- >> again, that's phil lebeau giving us the update on the boeing numbers let's look at how the stock has been trading dow futures at this point are coming back a bit. off the lows of the session down by 58. that's a 1.5% gain >> $5 in a dow stock is worth about 35 points. yesterday boeing was down more

soit may or may not at this rate kind of recover that i would point yesterday to lockheed martin's numbers. it was similar to caterpillar. very good numbers. good guidance. and the market kind of sold it off just because maybe quibbling with cash flow issues. we'll see if it changes. it's not always the case one type of reaction kind of carries through the entire earnings season >> or even through the entire trading day as we've seen with yesterday's activity again, the guidance that they're giving for the full year on an adjusted basis, $14.30 to $14.50 versus the $14.11 that the street was anticipating. so we'll see if these gains continue >> at about 23 times forward earnings which is a little bit of nexus of where facebook is right now >> these are blow away numbers for this name. look, i'm talking my book. >> this is your largest position >> yeah. what people don't understand -- i believe what's not baked into

this name is when you buy a product from them, different from 20 years ago, you're going into a softer subscription license forever. and you're downloading over time and paying for it. i love that model so much. it's not just hardware it's software services growing, growing, growing. in a good tape with these numbers, they would be up 2% >> onstar for planes >> it's not planes anymore >> but to think about it that way. >> if we had a good tape right now and boeing delivered these numbers -- >> or if the stock hadn't doubled last year. >> but it's still cheap. this thing is a cash flow monster. it's a beast it's a wonderful thing to look at to be in a zoo with a name over it cash flow >> right now the stock is up by almost 2%. that's a gain of $6.50 again, this is the premarket we'll see where we get towards the opening bell and closing bell today let's get you up-to-date on

what is front and center comcast's bid is worth $31 billion. that's a 16% premium to the other bid that had been out there from 21 accidest century x fox as you probably know already owns 39% of sky. sky says it will now engage with both parties the fox bid has been running into resistance from regulators but fox says it's committed to its offer and is considering its options. also google is unfailing its first redesign of gmail sin it's an effort by google to learn more businesses from the flagship outlook e-mail application. and herbalife has a new name as of today. now known as herbalife nutrition. herbalife is going to be keeping

its current ticker symbol hlf. it reflects an ongoing strategic transformation the stock looks like it's up by about 1% >> interesting nutrition sounds more positive coming up, much more on rising rates plus social media, twitter reporting a short time ago we're going to discuss the results and preview facebook which is out after the bell today. also want to talk about the sky deal with comcast this morning we're back in a moment play "do it like this".

[music plays] when everything's connected, it's simple. easy. awesome. 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. twitter we leasing first quarter results about 30 minutes ago want to break down the report with ed lee managing editor at recode normally they don't do this in the morning. >> they've been doing it the last few quarters now. our reporters in san francisco are getting up at 3:00 in the morning just to read these and get our stories up >> and we have twitter today which is very important. then we'll have facebook -- >> yeah, after the close this was a solid beat across the board for twitter. they've been turning into a profit-making company at least since the last quarter this is the second quarter straight profit.

our contention this is a value play now right? it's not a growth company. it's not -- they're still hovering -- >> why can't it grow it's even got the president -- >> it's growing steadily >> in new york media circles there's always been those local papers that other producers read to get a pulse that's what twitter is >> you're not talking about "the new york post. >> "new york observer" was it was what every other editor at "the times" or producers at nbc news would read. >> every social media platform, every other one grows faster than this. the other question about it and maybe you know the answer to this is i can't use this tool to advertise with any small cap company because i can't geolock a region it should be so easy to do that. why don't they fix that problem? >> i think that's a great point. i think that's a smart way to

think about how they could monetize better. their bet right now is they're turning into a video company that's where most of your -- you saw julia's report earlier that's their bet they're saying they're going to become a video company that's where the advertisers are coming in. that's the advantage twitter still has over facebook. it's the thing you turn to when news breaks. i'm going to search it out, usually people turn to twitter >> if you're a small business, you don't want to advertise to everybody. >> it was a perceived advantage of twitter knowing a lot less about you as an individual so all of a sudden these privacy concerns that google and facebook basically are spying on everything you're doing and who you are, it makes it tough for advertisers to have super relevant ad. does it insulate them in this world? >> that's a good point >> what do you think they've learned about you? >> they don't even know who you are. >> facebook asks you for all those things twitter's not asking

>> what if they started scraping your direct messages, your direct messages on things and you're anthony weiner. >> sew so these are all smart ideas. the thing about twitter is they haven't gotten their act together for years i think they're finally doing it now. but i think the bets they're placing, you know, it's more traditional media play, frankly. that's how they're going forward. that's where they see the impact happening, right and i think they can fix all these things and eke out better margins or revenue on these. >> how much of the stock price is a takeout premium >> it's too much now it's like 40-times-plus. >> relative to facebook. >> preview facebook. then i want to talk about sky and comcast. >> facebook, all the stuff with cambridge that happened broke after the quarter. you're not going to see anything in the numbers they're going to do everything they can to change the narrative. earnings report is a chance to talk about something else. of course they're going to be asked about it and they'll repeat what they said before

i think the gdpr, the data rules that are going to hit, i don't think it'll hit them that much >> all right let's talk about sky/comcast we've talked about this a little bit before in terms of this grand negotiating dance between fox and comcast and sky. you think this is not really about sky. >> so my initial take was when comcast made its sort of soft interest in sky, that it was sort of leveraged potentially to try to get disney to sell its portion of hulu to comcast basically, disney's deal for fox would give disney control of hulu >> now before the deal happens >> before the deal happens i think hulu is the growing valuable property. if you're in the tv business, going online ott is an important thing. if you're comcast, you've invested a ton of money in hulu. you are a big part of making that happen. why would you want to give up control of that? >> 30% is owned by disney.

i'm sorry. fox. >> fox, disney -- >> and comcast >> then there's 10% with time warner >> and disney would forego that platform pre-deal, why >> they wouldn't but they also want sky sky is part of the fox deal. well, that's -- >> you go away and we'll take -- >> we'll take this however, i was traveling in london a few weeks ago for vacation i was visiting friends asking them, how does this work here? >> this is speculation like just for advertisements >> here's what's interesting paid tv is not as penetrated in the uk as it is in the united states sky has room to grow sports rights are different in the uk than here if you're a big fan of the premier sports league, there isn't a single entity that owns those. so between sky and bt, they own a lot of the english premier rights but not all of them he said you know who has the

most epl rights? nbc sports it's a product that comcast already knows well in terms of how sky works, how the uk media works, and how the sports rights works. maybe now they just really want sky because it's a growth opportunity. they have a foothold with some really important media rights with epl so i think it could be good. >> is it non-dilutive for comcast? >> i don't know. i didn't look. >> it's non-dilutive at the current price. anyway, ed, thank you for your various theories this morning. coming up -- by the way, they're grounded in some reporting reality. squawk in space. star of "2001 space odyssey" joins us after the break check out the futures right now before we go there was an idea. to bring together a group of remarkable people.

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♪ we are talk about artificial intelligence a lot on "squawk

box. today we are joined by someone who had a very early interaction with ai. >> i'm sorry, dave i'm afraid i can't do that >> okay. it's a fictional example of ai the computer hal 9000 from "2001 space odyssey. the film is marking its 50th anniversary this month we're joined by keir dullea who played dr. bowman in the movie we know you're here because you're going to be joining the new jersey chilling expo this weekend. we have a lot to talk about. we want to start out not only with ai but the idea it has been 50 years since "2001." i can't believe it i go back and look at movies from 35 years ago, "aliens," any of those none of them aged as well as "2001. >> it's sort of what happened with "citizen kane." could the actors there realize

75 years later they'd be studied in film school in a way this is the same kind of history you know, with that genius stanley kubrick having created this work of art >> why do you think it holds up so well? >> well, for one thing he didn't over-explain this film it's such a visual experience. like, how do you explain a beethoven symphony it just hits you and you experience it on a gut level there's something about this film in that sense that made it and still makes it unique. >> i went to college for film. they used it as an example of how to light there are stories off the set that kubrick was so difficult to work with regarding the lighting he made actors wait for hours. you were there what happened? >> well, we did have especially for long shot wide shots, the

lighting was so particular and difficult he was doing things that had never been done in film before and so he would have a board and he would maybe have 50 polaroid shots testing a different lighting effect. and there'd be 50 shots. yeah, you waited around. but that was all right i mean, being on the set was like, it made disneyland look sad. i mean -- >> you're talking about the special set that was built because this was before special effects brought in >> there are no computer generated special effects in this film. everything you see in this film, one way or the other was filmed physically you're watching what actually happened >> the iconic lines, i'm sorry i can't do that dave by hal, was that shot with somebody just speaking those lines to you? your eyes are a big deal in that film >> kubrick at first couldn't figure out what voice he wanted. marty ballsom was the first

actor. he was the detective killed on the stairway in "psycho. and then he tried a british actor for a week too british. he turned to his assistant director, who is british the whole crew was british and hal for us was, i can't do that, no it was all like this it was a bit like working with michael cain so it wasn't until in post production he discovered mr. raines, douglas raines who was the laurence olivier of canada he is known up in stratford from doing all the roles from hamlet to king lear he was the voice of hal. >> we were talking before we came to air how critical acclaim now has put this in the pantheon of the best films ever made. but at the time, that wasn't the case what happened and what was your reaction to it >> well, the world premiere was

in washington. and then new york was the second premiere and 250 people walked out. and 50% of the reviews were pretty terrible. pauline cale being an example. but it wasn't enough immediately that made mgm comfortable. and they came very close to yanking the film until the newer young generation began attending it and they began to realize that sometimes these young folks had smoked funny cigarettes. then they came out with the poster, the ultimate trip. >> keir, i want to keep you here for the next three hours we are out of time but i can't tell you what a huge honor it is for us to have you on set today >> it was my pleasure. thank you for having me. >> it's our pleasure keir dullea, thank you >> you're welcome. coming up, it is a big day

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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. still to come this morning, comcast formalizing their bid for sky. we'll find out what fox is saying about its bid for the company. meantime, the futures this morning making a big recovery from where we were earlier this morning. we're almost at the flat line for the dow. dow was down by 150 points earlier this morning a strong report from boeing helping turn things around right now the dow wn bdoy three.

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but we should be seeing ymore range of motion., i'm fine. okay, well let's see you get up from the couch. i'm sorry, what? grandpa come. at cognizant, we're uniting doctors, insurers and patients on a collaborative care platform, making it easier to do what's best for everyone's health, every step of the way. you may need more physical therapy. ugh... am i covered for that? yep. look. grandpa catch! grandpa duck! woah! ha! there you go grandpa. keep doing that. get ready, because we're helping leading companies see it- and see it through-with digital. buckle up. stocks are set for another wild ride following a 400-point drop in the dow new this morning, comcast

formalizing its $31 billion bid for sky. the latest straight ahead. earnings alert shares of twitter jumping now on better than expected results a cnbc exclusive with the company's cfo coming up. plus mr. cook heads to washington apple ceo set to meet with president trump today. the final hour of "squawk box" begins right now ♪ looifr from the most powerful city in the world, new york, this is "squawk box. >> good morning. welcome back to "squawk box" here on cnbc we're live at the nasdaq market site in times square i'm andrew ross sorkin, losing my voice a little bit. becky quick here and kevin o'leary mr.wonderful hanging out with us as well. and joining us is ian bremmer. he's here to talk about all sorts of things including a new book he's got which we'll talk about in just a little bit take a look at the futures

they have turned on us positively well, you know, they had briefly. they turned back i apologize. now dow off ten points nasdaq off by ten points s&p 500 off about six points show you treasury yields that weighed on the market at least yesterday afternoon. 10-year at 3.028%. >> it's interesting to see 3% we finally get there and the market suddenly turns around like there's some shock we know we've been headed here for a long time. it's been four years since at these levels how o can anybody be surprised >> i don't think it's surprise i think it's a psychological twitter -- trigger along with a lot else going on right now. we were at $2.$22.94% not long . it's like the market has to test

itself for the rates it's been a busy morning with plenty of highlights. comcast has formalized its offer for sky. that is worth $31 billion. as a result sky has withdrawn its recommendation for a takeover bid by fox which already owns 39% of sky. comcast bid is a 16% premium to that original 21st century fox bid. sky says it will now engage with both partiesparties fox says it's committed to its offer and is considering options. dow component boeing beating the street in the latest quarter. also raising forecast for the full year. shares of boeing shave been higher on this news. it's reallywhat sparked a turnaround this morning with the futures. futures are just below fair value after being down the dow futures down by about

150 points earlier this morning. also in other earnings news, twitter topping expectations on revenue, profit, and on active users. among the drivers, strong earnings growth overseas the company cfo speaking with julia boorstin >> video is now more than half of our ad revenue. this is the second quarter in a row that's been the case there's still a lot more room to improve that as we get more video and more compelling add formats in front of our advertisers customers on twitter. >> twitter shares this morning up by 3% at least right now. $31.39 is the last tick. couple of stocks to watch this morning viacom beat estimates by 13 cents. results helped by a turnaround to viacom's paramount movie studio a lot of people watching that to figure out whether they have the strength to get a higher bid from cbs separately, texas instruments beating estimates by 10 cents

reporting profit of $1.21 per share. thanks in parts to the chip maker's auto and industrial markets. also costco raising the dividend the new dividend is payable on may 25th and general electric holding its annual shareholders meeting today. morgan brennan joins us now from just outside of pittsburgh good morning >> reporter: good morning, becky. from a cloudy pennsylvania in just about two hours in the building right behind me general electric will kick off its annual shareholders meeting. there are two big things to watch. the first, the remaking of the board which is shrinking from 18 directors down to 12 we've got eight directors retiring, three coming on today. two with experience returning major industrial companies and one with experience in both accounting and regulatory issues a board seat was given to

activist investor ed garden. second topic whether kpmg will continue as ge's accountant after more than a century together both iss and glass lewis are representing that shareholders vote against the continuation of that relationship in large part due to the s.e.c. probes into the long-term service agreements -- contracts, excuse me and also the big insurance charges the company revealed earlier this year. also on deck, a proposal to split the ceo and chairman roles both of which are currently held by john flannery but with the stock price cut by half over the past 12 months, the dividend slash, there also could be upset shareholders including some ge retirees who have amassed shares as employees for the company. the other thing to keep in mind, ge is already facing multiple class action lawsuits from shareholders we also just heard that there could be several dozen protesters gathering here

outside as this meeting kicks off. so there will be this morning a lot to watch both inside the building behind me and outside here as well. back over to you >> okay. thank you for that, morgan now to our news maker of the morning. matt maddox is joining us from wynn resorts posted better than expected earnings announced a dividend hike. this is after a turbulent start for wynn in january allegations were leveled against steve wynn wynn told "the wall street journal" the idea he ever assaulted any woman was preposterous but since then he's resigned and sold his stake in the company. just last week the company announced three new female board directors. so a lot going on. joining us now with what's going on with the quarter and how to move forward, matt's here. >> thanks for having me. >> you sort of jumped into the

deep end b hehere >> i did the first thing i decided to do as ceo was reduce the noise. we have a great resort business. but everyone seemed to be focused on all of these historical issues. so i immediately decided i need to get rid of the litigation that's mired this company for six years. billions and billions of dollars that was just unnecessary. was able to solve that in about 30 days. >> solved? >> meaning the charge you took on the quarter. >> just to put that in perspective. the underlying principals, we redeemed 25.5 million shares in 2012 the market value of those shares today is $4.6 billion. i was able to in two days meet in hawaii with them and settle that for $2.4 billion. so $78 a share financed at 6%. it was great for our company it was great for universal that was something that caused

significant management distraction. we were also able to settle the litigation with elaine wynn. we have no litigation now with former shareholders. >> elaine is not a former shareholder. she's the largest shareholder. >> you're correct. she owns 9% of the company and she is the largest shareholder. >> can i ask you a question about that i think it's the elephant in the room elaine wynn, steve wynn. this is a war of the roses kind of story and you're talking about cleansing the past why is she still there >> she owns 9% of the company. >> i know. but firing directors that had anything to do with the old regime -- i'm speaking as an individual investor. it means you're not finished with the past. i don't get what's going on there. and until -- they don't like each other i get it i get it >> right

>> as a shareholder and you're the ceo, you're telling me you don't have to worry about that anymore. i don't think your work's finished >> particularly given what elaine has just done and come out with where she is pushing for people to not re-elect one of your board members. >> i agree with you. our board has already said the refresh has just started think about this in 60 short days, four board members have either stepped down or said they're not going to run. we appointed three new board members. how many companies do you see refresh their board in 60 days by over 30%? and then come out with a public statement saying we're not done. this board is about the future we're now in the top 40 of the s&p 500 for female representation on our board of directors. i personally interviewed over ten people for the board i'm excited about it >> what's your current relationship with elaine wynn and with steve wynn? >> so my current relationship with steve wynn is i don't really talk to him very much anymore. he has distanced himself from the company.

second move i did after i removed universal is i went to capital research and t-row price. and placed 8 million of the 12 million shares he owned with them because they believed in the future vision of the company we're a company of 25,000 people we're a $20 billion market cap we have a legacy of excellence that i will preserve however, we're almost seniorly focused on development in las vegas over the last few years. my vision is more expansive than that. >> what about boston that's been an investment you put over a billion dollars into. >> that's right. >> and this is one of elaine wynn's issue with this she's looking at your potential sale of this and says what gives. regulators looking into all the sexual allegations, you've got nevada regulators doing that how do you hand thal >> we sbrt boston five years ago. we've just been focused on las vegas. my vision is broader than that

and reprioritize and we're going to take this brand global. >> but boston is up for sale >> boston's not up for sale. what boston represents for us is a good growth opportunity. i like that market i found the land i pursued that deal. i entered the agreement with the host community five years ago. i like that market then. i like that market today. >> what does this company look like three years from now under your leadership? where will you be based? we know you'll be based in vegas. but if we were to look at all the projects, the vision you have for this company, what is the company going to look like >> the company is going to be much larger. we're going to expand globally so i'm the person at wynn that's been working on the japan initiative i'm going to spend more time there along with building a team i think we have an opportunity to take the wynn brand and make it more than what's perceived as a las vegas brand.

70% of our ebitda was generated in macau macau is a fast growing market i'm a big believer in china. i was the very first employee for wynn in macau. i lived there three years and developed that first property going employee number one to the time we left when we had 7,000 employees. >> how much debt is coming on the balance sheet in the next 24 months >> hardly any. when we paid off the universal note, what was interesting was i decided ed td to equityize thet one of the beggest casino companies in china they came in and bought 4.9% of our company for $927 million less than a month ago. showing not only did the u.s. investors believe in what we're doing, but the china investors also believe in the direction.

>> you said you start to reduce the noise level. sorry, ian while some of the noise is steve wynn departed was the company going to be potentially a target was there a concerted effort by doing those investments and raising the dividend all to say that's not on the table? >> i'll tell you what you don't do you don't sell in a crisis when stock prices are artificially deflated because of a lot of the noise that's out there, that's the exact wrong time to be looking to sell the company. what i'm going to do is build the company and grow it. >> what do you think of consolidation more broadly meaning take yourself out of it for a second to the extent you can, how important do you think consolidation in your space ultimately is going to be? >> it's already occurred if you look at it so there are now three very large gaming companies market cap is $20 billion. our enterprise value is $30 billion. there aren't a lot of companies

that can take out a $30 billion company where 75% of ebitda is derived in macau with the government so what you've seen is the reits have consolidated. you've seen the gaming supply manufacturers consolidate. i think we're through that cycle right now. the consolidation of peers >> you're a brand in china right now. macau, huge part of the business how much american is perceived as global and how much do you think you need to change that as the u.s./china relationship getting more problematic and the chn chinese get stronger in promoting their own companies? >> the chinese company is for market and service if you look at what we've captured this quarter, our ebitda doubled from last year. we're capturing additional market share because our customers associate wynn with luxury and service and luxury brands do very, very well in china.

i don't view wynn as -- wynn's viewed as a high end luxury business >> regulatory environment in macau with so much of your cash flow coming from there, are you comfortable it's benign and there won't be major changes there. >> so we have a very good relationship with the macau government like i said, we just brought in a 4.9% shareholder that's also in macau we are working right now on accelerating there where the government has vision to diversi diversify. i've been bringing in some of the best global designers and developers to be next. we have 13,000 employees in macau. we are one of the largest employers. we are considered one of the best employers there and so you feel very comfortable about our position >> matt, i asked you off camera if you had spoken to elaine wynn especially since she put out this statement just the other day of pushing for the removal of one of your directors, what

is your relationship with elaine wynn >> so elaine is a 9% shareholder. i've reached out to her a number of times to talk about the future of the company. i'm really excited about the future of the company. any time she wants to meet with me and talk about the future, i'm open she has my cell phone. she has my e-mail. i talk to all the other shareholders a lot and i'm hopeful that over time the wounds will heal i think they will heal as the results are better >> will elaine wynn ever play an active management role in the company again? >> you know, she said in her letter, i believe, that she has no interest going -- >> she's not interested putting herself on the board at this point. i'd heard rumblings she might be interested in being more involved has that been discussed? >> it's not been discussed i'm not looking in the rearview mirror right now when you associate a brand with a person, you run the rusk whisn you put all into that person >> how do you not associate with

the wynns when wynn is still your name and his signature is still the company's signal >> wynn is about the 25,000 people that work there if you look at our customers and our results, what do they think wynn stands for? we actually survey our customers when they're checking in 70% of our customers that checked in this quarter, i surveyed about 1700 people, hadn't heard of the wynns. >> though the brand is still strong >> the brand stands for something else the brand stands for luxury. it stands for fun. and that's what we're focused on getting everyone back to that's why i wanted to reduce the noise and get everyone in the media and our shareholders thinking about what is it that's next for wynn in the business. not in this war of the roses, as you called it. >> you've done a pretty good job, i have to say because we've put you on the grill today. >> thank you >> there's a lot of questions about this company regarding these issues >> sure. >> so good luck with that. >> thank you very much i appreciate it. >> thank you, matt when we come back, a world

of worry the biggest geopolitical risks in the markets right now ian bremmer spends his days analyzing just that and he is out with a new book. it's called "us versus them: the failure of globalism." incredibly timely. a lot of things happening in the news right now all around us so fortunately he's with us for the hour a lot to talk about with him stay tuned you are watching "squawk box" here on cnbc

welcome back, everybody. our guest this morning is ian bremmer. his new book is titled "us versus them: the failure of globalism. it's out today we've talked about how you've done a lot of books. this one is so timely and explains the undercurrents of what we see every day here when did you start this book >> about a year and a half ago i mean, it's really all about not only what's happened in europe with brexit and all of those elections but now here in the united states too. and i think there is a sense that if we get rid of trump, that things go back to normal. or if the brits could somehow redo that referendum, it's okay. what we've seen is that every piece of the ideology that we've

been talking about -- >> since post world war ii >> yeah. whether it's free trade or open borders or we're going to be the global policemen and make security right, all of that isn't working for a larger and larger percentage of the american and european populations and growing beyond that that's the us versus them we see today. that's why they're coming out against the establishment. that trend is growing. >> what happened what caused all these people to feel like they're left behind? what went wrong with the issues like that? >> the economic story people know which is globalization is clearly the system that leads to the most growth. but a lot of individuals aren't necessarily taken care of. they lose their jobs, go to cheaper places if we don't take care of them, they get angry but it's just about that in fact, it's increasingly about you send a lot of enlisted men and women to war

and they're failed wars. they come back the veterans administration doesn't work you know the enlisted men and women all voted for trump and sanders. they didn't vote for hillary and jeb. right? they don't support this stuff. now technology is making it much worse, much more dislocation much more fragmentation of people's political views because they only follow what they like. and the open border question i posted just last week 11 syria refugees so far in the united states this year opposed to 3,000 last year. half of the americans responding to my post said it's 11 too many that tells you all you need to know >> pre-brexit, pre-trump election, polls analysts that would guess the decisions of the forthcoming particularly in the brexit vote. on bonds i was buying data trying to figure out what was going to happen. it was all wrong are we ever getting back to normal in terms of being able to assess are isks from the traditional polling or something

else nothing is working anymore >> polling is a lot harder when you're talking about people that are prepared to vote for someone that is really unsuitable from the perspective of the establishment. they'll say they're going to vote for the people that you want them to say and then they go to the poll and do something different that was the case with marine le pen in france. >> so we're not getting back to where i can buy data that makes sense. >> we could get back to that if we ended up providing a lot more support, making these people feel they were part of the franchised system. but we're building walls >> so what's the solution? >> the solution now is walls when trump says you want to know if walls work, look at israel. used to be we said if they did not create a two-state solution, that was the end of them now today israel is one of the most effective industrial democracies in the world as long as you're not talking about the palestinians who can't get in

they can't tunnel under. hezbollah can't launch missiles at them. i'm not a wall fan i'm telling you we're going to build more i don't like that at all unless you're going to enfranchise more people, make them feel like things work for them, the solutions that they will want are dehumanizing the other. i mean, when trump says that mexicans are coming here to rape and criminalize, when trump says that nigerians will not go back to their hut ifs we let them in. when trump says how dare you black athletes, we allow you to make tens of millions of dollars and you don't stand for our national anthem. that really resonates for white undereducated people people who feel like the country has been taken from them that's us versus them. and nobody does that better than donald trump so if you want to live in that kind of country, keep doing what we've been doing >> and for the folks that still think globalism from an economic basis has its merits, there's a

sense out there that if we try these walls, if we try brexit, if we try tariffs, you'll see that the economic consequences are bad for your country we'll see the error of our ways. is there a chance? no >> the fact that we have this level of divisiveness, this level of us versus them at a time when the american and global economy is doing better than we've seen since well before 2008, 3.9% global growth expected in 2018 same thing for 2019. what do you think is going to happen when we hit a recession trump's budget and thus congress's budget feels like we're spending on everything we've got low interest rates everyone gets some money right now. so no. it's going to take some time before those bills have to be paid and then we'll see where we are. >> ian bremmer, you're going to be sticking around we're going to be talking about this thank you, sir when we come back, apple ceo

tim cook attending last night's state dinner at the white house. he's not leaving to the west coast just yet he's going to be meeting with the president. i wonder if he's going to say some of the things ian bremmer might be saying. and tomoow, rrjim chanos at 7:00 a.m. eastern time. whoooo. when it comes to travel, i sweat the details. late checkout... ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a... ...hotel without breaking a sweat. because we now instantly... ...search over 200 booking sites ...to find you the lowest price... ...on the hotel you want. don't sweat your booking. tripadvisor. the latest reviews.

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♪ good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. among the stories that are front and center this morning, mortgage applications edging lower last week as mortgage rates hit their highest in four and a half years applications were lower by 0.2%. that was entirely because of a drop in refinancing activity the average 30-year mortgage rate was up to 4.73% another earnings flood ahead this afternoon after today's closing bell among those prominent names that a due, facebook, ford, and visa. then british drug maker shire says it is now willing to recommend a takeover from japan's takeda this comes after shire rejected four previous offers from takeda the latest is worth $64 billion

and shire shares are up. in washington news today, apple ceo tim cook is going to be meeting with president trump at the white house at 1:45 eastern time it will be closed to the press boeing shares higher this morning on better than expected earnings and an upbeat outlook joining us now is equity analyst in aerospace and defense equity research at jeffreys the numbers better than anticipated. what do you think? >> it's been a rough earnings season so far. the segment operations were about 85 cents better than we expected across the commercial business, defense, and services piece. >> what happened >> just better profitability the productivity is coming through especially on the commercial side. on the operating profit from 11% to 11.5% we're seeing better productivity come through >> does this change your perspective on any of the -- how you value the company?

>> we continue to be positive on boeing the share price has been benefitted by the free cash flow we expect it to go from $24 a share. >> the cash flow, how much is it attributed to the services business >> we actually think the services could be a surprise to the upside the company's been pretty contained in its view on the growth of that segment growing 3% to 5% we think it could potentially grow faster than that given the market share opportunities boeing has as it has consolidated that and put in more of a focus. and the profitability there is 15% to 16% we think it could have significant runway given what some of the aftermarket suppliers put up >> but it's a high margin business >> exactly >> it's got the applesque story. hasn't happened yesterday. analysts like you don't talk about it too much. but to me it's the whole deal.

>> it's a recurring revenue stream when you look at folks like transdime, their profitability is higher than what boeing service business currently is. >> doesn't that partially explain why the stock is valued where it is right now. low 20s, forward pe multiple if you look at past cycles, it's higher >> exactly but i think the services advance hasn't been fully factored yet so the free cash flow advance is being driven by commercial deliveries at a 7% growth rate so the services element is another element of surprise to the upside >> it's great to see you thank you. >> thank you coming up when we return, aluminum prices soaring and then plunging kayla tausche is live in new orleans with the reasons >> hey, andrew we are in new orleans at the mighty mississippi river where around this bend there is hidden in plain sight half a million tons of aluminum

we'll tell you why it's there and what it's doing to the market straight ahead

♪

welcome back to "squawk box" this morning over the last two months the aluminum market has seen dramatic spikes as they face uncertainty. this has led to a stockpile of aluminum being held around the country. kayla tausche is in new orleans today where a couple companies are storing that aluminum. >> reporter: good morning, andrew the mississippi river here is an artery into the heart of manufacturing country which is why new orleans has become such a popular destination for importers. specifically of aluminum around this bend there is roughly half a million tons of aluminum just sitting in a stockyard. about two or three football fields large castleton commodities has been building that up slowly for the last two years but the stockpile has surged recently here's the strategy. you basically rush foreign aluminum on shore before import tariffs and russian sanctions go into effect. you hold the aluminum, wait for prices to go up as supply

constraints are introduced to the market and then you sell it. or pass it off to another firm castleton isn't the only company doing it but it is the biggest we tried to go on site yesterday, but we couldn't see much we could see a lot, though, from the air. in all in america, there is about 2 million tons of aluminum sitting in these warehouses or in these stockpiles. that is three times the amount of primary aluminum that the country currently produces and is reported to the exchanges each year. the local president of the area we're in in louisiana says these port jobs in this rush to import these materials, it may slow down but he is hopeful they will be replaced by high quality manufacturing jobs >> in my opinion, those would be better jobs to have than just, you know, the offloading of coils or aluminum.

or sheet metal it's, you know, the focus has to be the value added that has to be, you know, because that's the long-term good that's your best ping. that's what built the middle class of america i think that's a worthy and noble goal >> reporter: in the meantime, the stockpiling has been extremely profitable the delivery surcharge on aluminum has doubled since january. of course the market has been rocked recently by the trump administration's decision to relax temporarily potential sanctions on a russian supplier. that's what everyone's watching now to figure out where their supply is going to come from in the coming months. guys >> okay. thank you for that, kayla. appreciate it very much. have fun down there. coming up, the biggest geopolitical risks to the market and then later, set your alarm clocks for tomorrow morning. we have a special guest host who's going to be joining us

famed short seller jim chanos will be here starting at 7:00 a.m. eastern time. i imagine he might say something o owt tesla. whkns. "squawk box" returns in a moment once 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. that you don't think about is very much. counties it's really not very important. i was in the stone ages as much as technology wise. and i would say i had nothing. you become a school teacher for one reason, you love kids. and so you don't have the same tools, you don't always believe you have the same... outcomes achievable for yourself. when we got the tablets, it changed everything. by giving them that technology and then marrying it with a curriculum that's designed to have technology at the heart of it, we are really changing the way that students learn. and i can't wait for ten years from now when i get to talk to them again

and see, like, who they are. ♪ welcome back, everybody. jack dorsey making some news on the company's earnings call taking place this morning. julia boorstin is here with the headlines. what did he say, julia >> well, of course, becky, they're doing a lot of talk right now about twitter's better than expected results.

but some interesting comments from jack dorsey about the company's commitment to improving the product when it comes to the health and civility of twitter i take that to mean when it comes to the potential spread of fake news on twitter and what they're doing to crack down on that dorsey also talking specifically about twitter's commitment to privacy saying they believe privacy is a fundamental right and when it comes to twitter's data business and the idea of selling the data that is collected by twitter, saying it's something they feel really good about dorsey making the point that twitter is different from its peers in that twitter is fundamentally public the data business he explained organizing that public data in realtime and organizing that for brands and researchers, et cetera so he was defending twitter's data business because it's all about collecting public data rather than harvesting private data of course this all comes against the backdrop of facebook's data privacy scandal. facebook reports its earnings after the bell this afternoon. guys, back over to you

>> okay. thank you for that our guest host this hour, ian bremmer whose new book is called "us versus them: the failure of globalism. and we have a lot of issues we haven't really talked about. i'm going to give you the big one for investors. which is there are a hundred things that are seemingly wrong with what's going on around the world all the time these are things you focus on. and yet despite all of the headlines that are generated, the investment community at the moment at least seems to think maybe nothing's really that wrong at all >> because the economics are great. right? if you ask, there are things they're worried about. certainly you look at the elections because people are taking a big hit u.s./mexican registrations are going to get hurt and he's going to be problematic for everything they've done in a more pro-market way on energy and such >> and nafta's not going to get figured out before that?

zblit mig >> it might. i think it's going to be 50/50 but i think you'll have a president in mexico that's deeply anti-american but the questions of, like, are we going to blow up north korea or rip up the iran deal, will there be a war or the russians are attacking us in cyber >> but this is what you talk about every day. >> those are things that are much more tail risks they're elevated from where they were a year ago. but markets -- short-term markets don't invest that way. ceos want to understand that in terms of thinking about where they're going to be investing over the long-term plans for supply chain disruption but if you ask me do the hedge funds care an awful lot about north korea? it's mostly tell me when a big headline is going to blow up >> when your clients call you up and say china trade war, you tell them what you say no it's just a negotiation? >> trade war is usually overstated because the united states and the chinese both need each other far too much. the thing i worry about is the

technology war between the u.s. and china. the fact they are developing ai. they have their own companies they're supporting the americans, they have their own companies we're not regulating very heavily. and there's no interaction in order, it's zero sum. facebook, not in china google basically not in china. right? and even apple i mean, five, ten years' time, are you telling me the chinese are going to allow apple to have e the kind of cloud based influence they have here >> not to mention nationalism is on the rise everywhere including in china where we keep hearing from our correspondent there that, look, there's a lot of anti-u.s., anti-american sentiment playing out in the streets there. >> there is. but i bet on the chinese not to cut their own nose off economically when they hit us back on the national tariffs, it was targeting red states because they wanted trump to know don't go there. as a consequence, they're behind the negotiations >> can we go back to apple

tim cook's going to be with the president at 1:45. you don't think apple long-term is going to be able to have the toe hold -- the market share it currently enjoys or bigger market share in china. >> i'd be stunned. i think over ten years' time technology standards, filter, all of that is going to be fragmented between a chinese model that is driven by the government with their own promoted mow nop ed monopolies >> compare europe to north america to china on this tech growth the most valuable part of our economy is technology. continues to be. in europe they've regulated themselves out of the game they don't have any apples they don't have any microsofts they've made it impossible to grow a business there. this is more interesting for me as an investor if you get a head start with a monopoly supported by the

government, they put around uber taking over that segment and they got didi going. then you go out 20 years in other words, you're forced at some point to compete internationally with best practices, best technology, best development. i can't find an kpampexample ine world where government-based supported companies remain dominant because they were not market driven so my theory about china is, yes, while it may be in the next 15 years the number one economy, when it finally gets untethered into reality with real ip law and entering the wto and everything else. those companies won't be the long-term survivors because they were built with a fractured base the government >> yeah. i get what you're saying, but, you know, the americans -- we beat the soviets in the nuclear race and the space race. the manhattan project was driven bethe u.s. government. the question is, is the future of ai going to be more like that where the chinese are driving

everything they can at the scientists and the data and that's going to lead to big breakthroughs? or is it going to be more like a million flowers blooming and potentially problematic with the united states? >> 250,000 engineers a year. we do about 35,000 a year. >> we attract them to the u.s. >> that's a policy mistake we train them at m.i.t. then kick them out of the country we could fix that. i think we will at some point. but my point is we still dominate in ip with a much smaller group of people forcing that forward our engineers. they're still the best on earth. >> although, ian, i know you know this case has been made that in china when you have these, you know, sanctioned monopolies that have access to all the data being produced by a billion smartphones, that's the cheap resource >> exactly so much more data. they will tell you they're not sure whether a lot of data and mediocre scientists doesn't beat a lot of scientists and mediocre data look ten years ago no one out there

believed that china could become a technology superpower. they basically stole ip, patents were tiny tweaks and that's it today there are two ai -- two technology superpowers in the world. there's the u.s., there's china, then there's china and there's nothing. >> whose ip did they use to get a head start >> start sure are they in facial recognition? >> i mean, it's the big bet investors have to make decide whether you get a head start in government-based monopolies that's a better value than letting the market grow these companies, as they have grown domestic. >> whether or not the americans or the chinese are the better bet on this is a huge unknown question what can almost guarantee at this point over the next five to ten years, the fights between the americans and chinese. not on them exporting goods to us not on them holding our treasuries because if they were to sell and they're going to undermine their value. on this issue of technology where we're developing our own

it's zer aresome that's what the people should be asking about and your question. >> okay. thank you. >> we're going to come back with a little bit more. when we return, jim cramer will join us live from the new york stock exchange. we'll ask him what he thinks about that massive reversal yesterday. what he thinks about bowings earnings numbers today the futures are down but well off the lows of the morning. the dow down by about 40 points. the s&p off by about 8.5 nasdaq looks like it will open down about eight points. we'll be right back. when i first came to ocean bay, what i saw was despair. i knew something had to be done. hurricane sandy really woke people up, to showing that we need to invest in this community. i knew having the right partner we could turn this place around.

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consumer staples have fallen over 5% in the fast week after

welcome back, everybody. we're getting closer to the opening bell let's get down to the new york stock exchange jim cramer is here we need your guidance. we need your advice. what happened yesterday with the reversal was it as dire as everybody thought after they heard the caterpillar conference call? does 3% matter when it comes to interest rates >> i think 3% matters to the algorithms that people have -- younger particular, don't care there could be upside after 3. they want to reverse it. i think the consumer package and stocks with higher yields are

just not as interesting. but, jeez, the cat was jarring it made you feel like wait a second this was peak they didn't mean to say peak of the cycle. they did make you feel like the raw costs will be terrible going forward. >> and do you think that's an accurate perception? is that all we have to go with now? >> when i listen to kayla talk about aluminium, it feels like, you know, of course it's steel they're involved in. it feels like it's an active perception the president really presses on steel. and the problem here is these are -- if it weren't for the president but you can't say that you can't ask the president. but i can make the case that caterpillar wouldn't have said that caterpillar is up against some serious costs and they can't raise price that's enough. they got it up $2. i think it was a vast overreaction no one was thinking it was going to happen. when they reiterated on the

call, it took people's breath away. >> i'm dying to hear what you think about boeing i'll have to stay tuned. tomorrow our guest host will be jim chanos. tomorrow at "squawk box" 7:00 a.m. eastern time. we'll be right back. let's begin.

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our guest host this morning has a new book out "us versus them: the failure of globalism. here is my question before we go, do you think it will reverse? there's a moment that this feeling around the world will change >> is it a pendulum swing? >> i think the momentum is way too far in this direction. it looks like climate change in the early days people are talking about it but there's no urgency this is not a crisis everything we're talking about now and the reason why trump isn't draining the swamp is globalists are doing well. you remember after occupy wall street i think as long as the economy is doing well and, you know, the establishment party holds power in these countries and we have macron and merkel. the republicans won't move on anything things feel happy. i think there's a long way to go

before we start actually addressing the issues. >> wow. >> thank you it's great to have you here today. we appreciate it kevin, thank you we'll see you tomorrow. >> great to be here. >> mike, thank you for sticking with us. make sure you join us tomorrow, too. right now time for "squawk on the street." ♪ welcome to "squawk on the street." i'm carl quintanilla along with jim cramer and david faver 60 plus companies reported this morning. europe is red after tuesday's sell-off in the u.s. and the ten year above three the dollar near a three-month high road map begins with the boeing. stock futures erasing earlier losses as the dow delivers blow ou