and the first look at economic growth in the first quarter. and it's friday. really, bring it on. april 27, 2018, "squawk box" begins right now ♪ live from new york where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and mike santoli. let's look at the u.s. equity futures. a mixed picture. dow futures down by 43 points. s&p up by 3.5. look at this, the nasdaq up by 90 points after the nasdaq was

up by 1.6% yesterday the dow and s&p were up by more than 1% yesterday. we'll see what happens we have a lot of earnings to talk about look at what happened overnight in asia. this meeting in korea between the two koreas is something historic they have done something that's been watched across many asian markets you will see green arrows. the nikkei up by 0.6%. hang seng up by 0.9. shanghai closed up by 0.23%. in europe you can see that the dax is higher. it's up by 0.6%. ftse up by about that much the cac up by 0.2% stocks are weaker in italy, up in spain check out treasury yields.

this morning the yield is at 2.968% >> the leaders of north korea and south korea signed a declaration within the agreeing to work for the complete denuclearization of the korean peninsula and to jointly reduce the risk of war apparently the two gentlemen were standing on each side of the dmz, they reached over, shook hands, and then kim jong-un became the first leader to cross into the south since the end of the korean war in the ' 50s. before summit talks began, kim said we're at a starting line today where a new history of peace, prosperity and inter-korean -- intra-korean

relations will be written a live report from south korea at 6:30. maybe traders are waking up now to this. maybe there wasn't much of a war discount or a real -- >> could be that >> we've seen similar steps take place in the past or that we thought -- >> i want more he was threatening california a few months ago isn't that worth more? >> a 70-year or 65-year peaceful stall mate on the korean peninsula continues. that's the way the markets look at it. >> all those guys in "a few good men" they're looking at each other. >> it was cuba >> was it? >> yeah.

guantanamo >> it's like a dmz there was it cuba? >> yes >> i'm worried about the guys in south korea. how many do we have there? looking across waiting. that phone that used to ring and ring and ring. no one would pick it up. >> motto there is to be prepared at all points, at fle time something could happen that's what we heard from the former defense secretary who joined us about a month ago. >> richard haas is on today? >> he is. >> i want to see how he turns this into a negative thing i was reading it a bit he said at least we have pompeo so the diplomacy by tweets will end. the realization to him that maybe some of that stuff will -- has resulted in this with the sanctions has not really sunk in

yet. this does not rank up there with the german speech obama gave that got him the prize he was on that day for that speech he deserved that nobel prize >> you're talking about korean unification via tweet? >> no, but god, think if things had gone south think if the big button and small button had resulted in something horrible they would love this this, now they're like, god, how do we -- how do you respond -- >> i think there were a lot of other things along the way i don't know that the tweet led to this. >> not the tweet, but the sanctions. the pressure put on china. >> not to discount that -- >> far be it for you to do that. these are good things happening, right? >> these are great things. >> not to take anything away

from that speech you love in germany. >> we have breaking news that is just crossing. the royal baby has a name. we knew the -- the new baby has a name, louis arthur charles >> charles >> charles after his his grandfather. >> what is his name going to be? louis? >> yes >> he will be known as his royal highness, louis arthur charles >> three big tech companies reporting after the bell here's a quick run through amazon shares hitting record highs after the company posted a big beat among the highlights, crowd revenue grew nearly 50% in the first quarter. the company is increasing prime membership prices to $119 a year from $99 a year. and amazon continues to bet on

content. locking in a two-year deal with the nfl to stream thursday night football games that stock is up 7%. microsoft announcing a t ten cent beat pointing to strength in the cloud business microsoft also giving strong guidance and then intel is soaring after reporting a blowout quarter. the company beating on the top and bottom lines that stock is up by 5.7%, which is why you see the big futures pop in the nasdaq today. >> joining us now is ann griffith, senior writer at wired. and ed lee from recode i checked out the market cap of amazon and apple are you ready? >> it's a faceoff? >> no. no i'm ready to say i think amazon gets to a trillion first >> wow why? >> because i think that the --

you know, their second derivative or whatever it is, it's been passed things have crossed. i thought that for a while >> 100 billion is different. >> ann said google or amazon i can't remember some of the stuff that cramer has been talking about with apple. in terms of beginnings of maybe the notion that sales of the iphone are not going to be as great as -- >> in china it will be harder to sell iphones maybe >> what's the rev venue growth amazon >> aws, their cloud thing, that's a huge part of their business it fuels everything else if you can take the profits from aws and then lose money in other things, they can grow like crazy. >> and they have shown that maybe they are trying to become profitable in other parts. they just raised the price of prime by $20

>> they just signed up 100 million members, and that will go up by 20 bucks. i don't see many people dropping that >> i'm not sure the reason behind that decision, but it has to do with the profitability >> the demise of the f.a.n.g. stocks earlier this week, maybe that was premature >> fedex, u.p.s., they have been raising their rates. they've been signaling that delivery costs have been going up, we need to raise this. >> and not to mention what else has been built in. >> they spend a lot on video nurse night footba thursday night football. joe, you're always turning on amazon thursday nights >> no. >> people are saying he wouldn't do this if they did not think it would produce more churn it will be accepted by the

market >> there's not an alternative. the same thing with uber, everybody knew it was too cheap, eventually they'll raise the price. >> >> netflix thought that at one point, too i don't see this as the same scenario >> exactly >> one thing -- as an aside, nba, have you seen this? santoli? did you see lebron james the other night? >> i saw that. >> did you see that. >> saw it on twitter i'm watching now boston/milwaukee and the sixers are good? >> they've been good all year. >> not that long >> this season they've been great. >> i caught it on twitter first. i caught the buzzer beater on twitter. i wasn't going to tune in. i was like i should probably watch the highlights on this does this mean twitter's video strategy is working? >> that is amazing

>> i was thinking about some of this stuff i know a lot from twitter. i can't shake it now that's what they do. that's like heroin almost. it starts out, you realize how bad it is, but there's no way out because it does things for you. it does. i'm not tweeting, but i have to keep the news feed >> i've seen you, you need to fill it up more. >> i could be like kanye an get 15 bazillion -- people can gang up on me >> his follower won't probably increased. >> he lost 9 million >> because he was tweeting about finance, he said i'm not a venture capitalist, people were like i'm unfollowing you >> it's the mirror into the soul >> wow, that's great >> people let it all hang out. not pretty

not a positive view of humanity. it's ugly. nasty. >> you are addicted to it. >> i can't get off it now. exactly. what would the -- what's that stuff you use? instead of heroin, not as bad -- >> methadone >> you want to -- >> would that be snapchat? >> there's no easing off either you're on or off. >> i'm on. i'm on i just don't tweet, the slightest thing -- >> i want to see more where the media strategy is going, whether it's twitter, amazon, google thursday night football rights the growth for am month or twitter will be who will own these things in the future the big rights are coming up in 2021 cbs, nbc, other major networks, i wouldn't be surprised if google, amazon, facebook jumps into that. does that put additional pressure on the traditional broadcasters

so much money was splashing around, they already thought they were overpaying in some cases but needed to. >> that's the right point. that's why you see consolidation in the media industry. >> how much is sky worth to the right person >> sky interestingly enough, they -- a big part of uk media is english premiere rights they own a bunch of that, but that's it. there's no huge competition. >> it's huge for comcast it's a huge entry into that whole -- >> this is the holy grail. that's the one thing they're protecting no let's not ever pit this onlio--pu this online. this is our cash cow >> are both of you leaving now you have touched on a lot of things >> you know, you don't have to be that sad about it we could stick around for a bit. >> we'll miss you guys

a you related to bill griffith >> no relation >> you've done the 23 and me thing? >> i have. >> bill would know >> yeah. i think he has an eth, i'm ith >> andy griffith >> no relation sha i'm awathat e of. angela merkel is arriving in washington for a meeting with the president in the white house. the french president could be a tough act to follow. >> the french president got a 2 1-gun salute at the white house earlier this week. angela merkel will get a working lunch. there's a big difference in the way the white house is treating these two world leaders. the topic we think will be about the same but the president and german leader have had an awkward

relationship you remember what happened last year, there was a moment where angela merkel went in for a handshake with the president, he didn't notice, didn't return the handshake. there was an awkward body language between the two the white house has not told us what is on the official agenda for this meeting other than we presume it will be about trade, tariffs. the president has been critical of german automakers we know the president had this bromance of sorts with emanuel macron and shinzo abe. we had the double kiss of the french, we had golf, we had a state dinner, we had hats, we had all kinds of thing for the french leader. we had that moment where the president wiped a little bit of dandruff, he said, off of the french leader's lapel. then zishinzo abe invited down o palm beach, florida for golf

neither leader really got what they wanted. both wanted exemptions from tariffs. the president did not give them despite the warm words and warm welcome, the president did not give the exemptions abe and macron were looking for. so merkel may want some carve outs on trade as well as she may not be able to get them despite the frosty or warm greeting. >> immigration is a stance that angela merkel has taken where president trump has some opposed ideas. do you expect that to be brought up >> he did break that up with emanuel macron earlier in the week he said we both have a crisis of uncontrolled migration that was the president's phrase for it macron didn't really respond in

public we'll see if the president brings it up with merkel today we won't see as much of merkel and the president today. they'll be welcomed, have this lunch and that's it. a quick and dirty visit today. nothing like the pomp and circumstance we saw earlier in the week with the french >> anyone down there talking about comey at all do you have fox blocked? you don't have fox blocked on your tv, do you? >> i love watching fox >> did you watch yesterday >> i did not see the interview i saw some clips >> people have got to be talking about it some of it was surreal i felt like somebody slipped me some acid. >> i did see a clip in which comey felt the president was wrong on the idea that he's a liar and a leaker.

one dus pit coispute was wathe f comey's dinotes -- the questions whether every communication between the president and the fbi director is classified or whether or not only conversations relating previously classified matters are considered classified. everything the president says to you as fbi director is classified, then the president is right >> he acted like he had no -- he had less knowledge of how that kent down than i have. and he's head of the fbi how much do you make per book? $4 or something? >> he says he still doesn't know whether the democrats paid for that steele dossier. >> up is down, down it up. >> how much do you get per hard

cover book $4, $5 >> my book, i got less than that >> how much is it, do you know, santoli? >> i don't know. if it sells 2 million -- >> real money. >> he will make millions no question. >> yeah. 5, 10. >> he will make a lot of money >> the more you talk about it, the more you're helping. >> thank you you should have seen this. i thought i was asleep i thought -- it was as weird as a dream. when we come back, shares of starbucks. the company posted a revenue beat but investors were not impressed with same-store sales numbers. stock down by about 1% now. and much more about the declaration from north korea and south korea this morning pledging to end war on the peninsula. we'll talk more about that "squawk box" will be right back.

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♪ sprint and t mobile apparently making progress in their merger talks reuters reports the wireless carrierss are aiming to reach a deal by next week. sprint and t-mobile came close to a deal in november, but softbank pulled out of talks at the last minute. starbucks out with their littest numbers. joining us now is will were you disappointed by any of the numbers or metrics the company gave >> i think it's mostly in line with what was expected they were decelerating slightly on a two-year basis.

china slowed down a bit. china was softer than we've seen in previous years and quarters the bigger issue, i'm not sure they have the initiatives in place to drive the acceleration they need to hit guidance. starbucks is talking 3%, 5% for the year hinting towards the low end of that including slowing down limited time offers that have been aggressive in the past few years to drive those comps we're not sure about the initiatives in place to due that >> we had jim chanos on our show yesterday. he talked a lot about the quick service restaurant space he's not short starbucks, but he is short dunkin' donuts. he doesn't like franchisees that don't own their own real estate or stores. he talked about how competitive that space is now. what is happening there? >> what's happening in starbucks

and dunkin' donuts, in the morning is where the peak hours are and where most of the traffic is the afternoon is getting tougher. a lot of that is because of the increasingly aggressive value messaging by mcdonald's and bigger guys. it's tough to hurt them in the morning, but in the afternoon value players will seek that value out with dollar drinks so starbucks and dunkin' donuts are having trouble in the afternoon. that's why the loyalty programs are so important to them you have to get the people in the door more frequently and that will be tough to do in the current environment. >> is the stock still captive to this struggle in america to get these comps up to their target at some point does it become we're basically converting all of china into coffee drinkers, and that will be the next phase

of growth? it's a long way to that, but i wonder if that's what investors will have to be waiting for. >> i think that's the problem. good point on china in that over the next three to five years china becomes a much bigger piece of the story, especially as they bought in the rest of the country. the problem with the u.s. being such a big driver of earnings growth now, if comps slow down, this cost structure is not built for 1%, 2% comps it's built forever 3%, 4% comps. while we see next year absent tax reform epa in the 10% range, if you can't grow comps at 3%, 4% in the u.s., it's tough to hold your margins. the comparisons get tougher in the back half of this year and next year. >> do you tell people to buy the stock or no? you sound cautious >> we're still waiting i would love to see traffic -- we have not seen positive traffic in starbucks for a few

quarters things had been slowing. it feels like there's some stabilization. we need to see some acceleration to get us more excited >> will, thank you for your time today. >> thank you starbucks ceo kevin johnson will join "squawk on the street" for an exclusive interview today at 9:30 a.m. eastern. coming up, the leaders of north korea and south korea working towards piece and denucledenupeace and denuclearization look at those shots. plus dambisa moyo is here to talk about her new book "edge of chaos. as we head to break, here's a look at yesterday's s&p 500's winners and losers

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in times square. good morning u.s. equity futures this morning, look at the nasdaq. you will see it's indicated sharply higher, up almost triple digits for the nasdaq. not something you see often in the morning. up about 98 points thanks to strong reports from a lot of technology names, amazon,

microsoft, intel dow futures indicated down by 32 z in the last hour the leaders of north and south korea pledging to work towards peace on the korean peninsula. we knew this news was coming but maybe didn't expect the huge strides we've seen in the comments that have come out already. >> absolutely. this is potentially a major turning point in a conflict that's been going on since the end of world war ii. just moments ago kim jong-un and moon jae-in issued a joint declaration of peace here's some of the highlights. they declared the end of the korean war they said they want to move to a peace regime they said they will set up liaison offices and have phased disarmament and then probably of most interest to washington, the

total denuclearization of the korean peninsula this is the formal side of what's been a fascinating day. i think it was fascinating to see kim jong-un actually speak at a press conference. beyond that, the whole day has been full of pleasantries, ceremonies the two leaders in the morning were joking with each other before they had their official 100-minute meeting kim jong-un even signed the guest book at the peace house at the dmz where he wrote a new history begins now the two right now are at dinner with their wives where they're dining on a multi-course meal that includes pyongyang style noodles and a dessert that has the map of the korean peninsula on it. this sets the stage for some hard discussions, but potentially an interesting

summit between the north korean leader, kim jong-un and president trump. there are a couple points i wanted to make here. we have seen joint declarations before in the past there are been two other summits that ended in similar language for joint declarations we still don't know what the intentions are of kim jong-un and what his intentions are. and there were also some vocabulary issues within the joint declaration. some say the use of peace treaty was not included, it is called peace regime, potentially giving north korea an out but definitely like you said, definitely reasons to be encouraged here. >> eunice, thank you very much we are watching closely. so glad to have you there. we'll check back in in a bit thank you. >> look at that. confetti >> it is for dambisa moyo's

book >> there was only one confetti flake. >> they drop confetti for the opening and closing bell a lot one was drifting down. in a new book our next guest argues the new political system is ill-equipped to deal with some challenges, dambisa moyo is here, she wrote "edge of chaos." it's good to have you here we want to get into the thrust to understand exactly what's happening. i think earlier this week i wasn't here, we had ian bremer on >> yes >> he was talking about us versus them. he would say they're feeling that they've been left behind, not just in this country in the backdrop of jeff bezos, billionaires, and the standard of living is going up globally,

and there are people left behind we're seeing it in elections around the world >> also the increase in wealth is not growing as rapidly as we would hope we need to grow at around 7% per year to double per capita incomes in one generation. we're not doing that certainly not in the emerging markets where 90% of the population lives this book highlights the schism between demographics, technology, the risk of income inequality, the debt burden that are all long-term, intergenerational structural problems in the economy. but given that liberal democrats are focusing on the short-term, we have elections so regularly in the united states, every two years, every four years for the presidency, we have this mismatch so we are not solving these long-term economic problems >> like corporate managers that report every quarter, they have to do things to make the numbers.

every two years, these guys get elected, they have to start working on the next election can you distill it down to the things we need the challenges are daunting. technology brings automation which wipes out workers, we have to match the skill set of the jobs available with the way we're training people. that's part of this. philosophically, do we want more market oriented policies or more government insertion into the private sector >> i'll show my hand i'm a big supporter of liberal democracy and a big supporter of market capitalism, but it's too simple to make those statements without acknowledging there's limitations. we're clearly far away from the one man one vote mantra that defines democracy.

we talked about income inequality, this is corrosive to the economy, and ultimately it issues -- we focus on issues like inflation, is the ten-year going to break 3%, those are things we focus on, but longer term we have an issue about human progress i believe we need to get public policymakers to focus in on those problems >> it because we can't see long-term because of all these changes coming through how do you do that lou do you focus on problems that won't be there when these elected leaders -- >> there's a number of ways. we could extend terms. some countries have longer terms. >> we have people here arguing for term limits. >> i also argue for term limits. in mexico, it's one time for the presidency, but it's six years

you don't want a case like dingell and byrd who stayed for 59 years woe should also increase the pay of politicians i think if we do that, but force them to justify their compensation through linking it to gdp outcomes or life expect san expectancy outcomes -- they are doing this in singapore. if they don't perform, there is the threat of a clawback i think we would have be a more engaged political class. >> we will get gdp numbers today. most economists will tell you this first read on first quarter gdp, add 0.9% to it. for years we've been facing a problem where the numbers are not reflective they're seasonal transitions not reflective >> yes i could see setting up a metric where we measure politicians by, but we have to fix the metrics

first. >> every economist will sit here and say we should increase 0.8 to that number for seasonality other economists will say there are societal costs that we are not reflected. a lot of environmentalists and people focused on ecological costs will say those are not fully reflected. we should deduct from the gdp estimates. the gdp numbers are from the 1940s and '50s, so we do need to upgrade the metrics we're looking at >> you don't want to get simplistic, dambisa, i understand that, but i still would like to know i think we had an eight-year period, talking about the last administration, where i think the policies were not pro growth, as a result the economy stayed below 2%, as a result the fed was stuck at zero. that caused asset values to get

marked up, so the best laid plan of redistribution, moving move from the haves to the have-nots, actually left the have-nots worst off. now here we are, we may have the third straight quarter of 3% growth because we have some of these growth policies, can a strong economy and capitalism in the private sector, if you make -- if you get rid of regulations, make it easier to work, can't that help a little >> the bad news is we tried both of these suggestions you're making >> so we need something in between? >> we do we tried supply side >> that's all we got >> we know that hasn't worked to stem income inequality what we're looking for here is long-term interventions. you know what the congressional budget forecasts are for debts and deficits in this country -- >> we can be so concerned and do

so much that we don't have the debt on the entitlements that causes the whole economy to grow slower >> i would leave you with one thought. ultimately i think this is about intergenerational value being added. so i think capital allocation decisions should be towards education. the education metrics in this country are horrendous because we are focused on the short-term, we are not looking at these long-term opportunities for growth >> you can't do apples to ams between the u.s. and europe, but the entitlement state economic model of u.s. has produced growth and take it to the conclusion of venezuela or true socialism, it's horrific. >> but we're seeing, you know, hungary, poland, italy, a number of countries -- the brexit vote itself, it's not just about immigration but concerns about long-term growth >> it's a great discussion,

dambisa. when we come back. more on the big earnings movers of the morning look at the technology names that reported after the bell amazon up 7% intel up 6%. microsoft shares up 3.25%. we have two reports from dow m components to come chevron and exxon are expected in the 8:00 hour we'll sh right bacbe right back. experience a blend of refined craftsmanship... ...and raw power, engineered to take the crown.

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prurp ju president trump ju tweeting that after a furious year of missile launches and nuclear testing, a historic meeting between north and south korea is now taking place. we'll have more on that later. christian deyour won a trademark ruling in china. china is looking to bolster its

credentials for international property laws. coming up, a new art exhibit opens tomorrow of the rockefellers, and the auction could set records. this collection, it's as if somebody that the rocker fellers would own, you know what i mean? we have the details next as we head to break, a quick check of what's happening in the european markets now at&t provides edge-to-edge intelligence, covering virtuwith edge-to-edgee you've got near real time inventory updates. & he'll find the same shoes in your store that he found online he'll be one happy, very forgetful wide footed customer.

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i'm very happy with the profitability. >> i think that will expand. >> i think our business is holding up just fine

a little bit of softness is to be expected. >> i think there's opportunities to use what we have to get people reengaged >> in the middle of all thisser turmoil, with our product portfolio is as long sass it's ever been. >> the only real worry i have right now in an economy that's overall pretty strong is a lack of labor ♪ >> welcome back, everybody starting tomorrow, one of a kind art exhibition opens right here in new york. showcasing works from the collection of peggy and david rockefeller. until his death last year, david was the last surviving grandson of standard oil magnate john d. rockefeller. the new york art exhibition leads up on to a charity auction that could be record breaking. joining us right now is mark porter, chairman of christy's

americas and thomas is the chairman of private jet charter company vista jet. which is sponsored the auction welcome to both of you why don't we talk about why this is a special collection. is it because david rockefeller was so knowledgeable at art and so passionate about it >> yeah. that rockefeller family historically has been the great collecting family in the united states and this the particular collection is the greatest group of french impressionist work and american paintings to come the market in a generation >> what are we talking about paintings by which artist, how many what is this going to -- >> the collection is over a thousand objects and major paintings are are bypys casio, monet, john singer sergeant, homer,.hopper, the greatest and most loved american and french painters but over a thousand of the objects are decorative arts and those cost $500 or $1,000.

>> so you're talking about price points forrel all people come through. >> very much so. >> thomas, vista jet is sponsoring this and that's because your clientele, this is right up their alley >> that's exactly right. when we saw the opportunity to work together with christy's, there were a couple of things driving this over 80% of our clients are collectors of art. and the fact that it was a global tour and we started in hong kong. there was london there was los angeles. and now finally here in new york so, you know, our theme of anywhere, anytime, you know, fly vista jet. very much fit so well with the effort of what christie's is doing. >> maybe this is coming at a good time because there's been pretty strong demand for quality art pieces, too. >> yeah. it is a large supply what's not usual is there are so many absence of great quality. that occurs once the in a sale

over ten or 15 years what we see is the traditional collectors who only come to america once in a while and the new buyers who are intrigued by finding the very best by the artist come to market. so the ausence for this is actually considerably larger than the usual auction >> how will the auction be held? is it going to be people all crammed in the room or are there going to be people calling in and watching from overseas >> it's held in several formats and several different ways there is an auction room which holds approximately 500 people many people call in. many people participate online and then over half of the sale is online only so it's because of the variety of property a lot of it lends itself to aer purely online platform that's the most accessible price wide >> i haven't decided what with to bid on yet. is it safe to say the stuff i'm

interested in would be online? am i going to miss anything if i'm not in that room you don't know anything about me my name is not rockefeller would i -- the stuff that i could probably -- the $500 or up to -- and i'm not saying i'm buying that, either. but the $500 to $1,000 stuff is online am i right about that? >> largely online. >> no one is going to be in that room going do i hear $750? >> on the days after the evening sale, a significant number of objects which are defks and chairs and lamps and porcelain that the rockefeller family lived with will be sold in the online sales >> do you have a suit team >> in this sale, we have one the following week >> is it less than $2,000? i want that. and i also want a jet, too

>> thomas, how are your customers feeling these days >> i mean, they're very excited about this i think we saw a lot of -- >> just in terms of how much they are willing to spend. what kind of consumer confidence do you have? >> we have an extremely high consumer confidence. the economy is strong. the economy is not really strong here in the united states. we see it all over the world we see it in understand yeah, we see it in asia, we see it in europe and especially the last -- i mean, if we had a lever stronger first quarter, which is finished in the company's history. usually it was a bit of seasonality. but people are flying at record paces. we talked about this earlier it's really the move away from food and fractional ownership. >> yeah. you have to be a rockefeller >> thomas, marc, thank you both for being here we look forward to seeing the auction. >> give me your website. coming up, foreign policy and focus, mike pompeo cfiedonrm as secretary of state. angela merkel is in washington and kim jong un becoming the firs

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. historic meeting in korea. the north and south holding talks to cease all hostile acts. what it could mean for the economic divide and the united states is straight ahead big tech, big earnings amazon and microsoft looking strong this morning after reporting results. we will get you ready for the trading day ahead with two market pros. that round table, just minutes away and trading in the acts. for a paint brush. paul stanley is here to talk

art, music and much more as the second hour of "squawk box" begins right now >> live from the beating heart of the 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. i'm becky quick along with joe kernen and john santo are li check out the nasdaq it's up by about 92 points above fair value that's because of some incredibly strong earnings that we saw from technology companies last night, specifically amazon, microsoft, with intel. we'll talk more about that in just a moment. s&p is up by 4 points and the dow is down by 45 points a key economic report just about 90 minutes away. the government will be out with its first look at the first quarter gdp. the u.s. economy grew at a 1.8% annual rate during the first quarter compared to a 2.9% rate during 2017's fourth quarter

but this is something that's been going on for years. these lower numbers in the first quarter, that then kind of turn around and balance out over additional quarters. we're going to talk more about that, too. shares of amazon surging in the premarket trading reporting $3.27 of shares after the first quarter. amazon announcing a 20% increase in its price in the popular prime service to $119 per member that comes up from the current price of $99 a member. and we just heard that they have 100 million members in prime that was something bezos revealed in the last couple of weeks in his annual letter to shareholders >> he did. >> yes that's a quick the turn, amazon web services providing a lot of profit for the first quarter >> and the bottom line being obviously very eye catching, but it's more of the same in terms of operating cash flow company is probably going to do a quarter of a trillion dollars in revenue this year which is, you know, at the upper

end of the estimates it's about half of walmart, for scale purposes >> that would put it on track to be the first trillion dollar company in market cap. >> yep and it's tough to predict these things, but no one said amazon three or four years ago -- >> it's up by a third from here. >> mike, apple was supposed to do it three years ago. >> this is a small point bow a mechanical basis, apple is working against itself >> i know. >> it's soaking up the shares. amazon is not doing that >> right but it was at about 800 billion three years ago. >> yes, apple was. >> and analysts had typical 25% appreciation in the stock built in over the next three years and just normal math and we asked them many, many times, okay, fine, 25%, it's undervalued, ten times earnings. but you're saying it's goinging to away trillion they had their assumptions of

25% growth a year, 45% growth or whatever >> the analysts are saying they anticipate a trillion. saying flat out because of -- >> because of amazon >> because of amazon, yeah >> but doing those numbers and recognizing the math as joe was saying, apple analysts -- >> large numbers, but it doesn't surprise me. he thought it might be google, but amazon would make sense. how much have they penetrated their overall -- we don't even know what their market is. >> so we had them in house last night saying they're in multiple multi trillion dollar market potential market >> geographical and -- >> kind of silly, but -- >> geographical, how much have they penetrated andover all what's their -- >> i can see 43% of online sales they now seem to control >> seems like they can do a lot more around the world, too, i imagine. the leaders of north korea and south korea agreeing to work together towards denuclearzation

of the peninsula president trump just tweeting, korean war to end the united states and all of its great people you should be very proud of what's taking place now in korea. yun is in seoul now with historic details from this meeting. if you look in the last two months some of the stuff that just has happened and it's so quick. eunice, it's mind boggling >> it's totally mind boggling, joe, and a complete turn around from what you had said just a couple of months ago we had the leaders of the united states and north korea hurling insults at each other. now this meeting today is setting the stage nicely for a meeting between president trump and the north korean leader, kim jong un. today, here in south korea, the talk has all been about how fascinate ago moment it was to

see the leader, kim jong un, of one of the most secretive nations if not the secretive nation walk out in front of the process on live television and actually address the people. so this is just being seen here as a potential turning point in a war that'sen been fought, technically, since 1953. now, when the two gentlemen had spoken at that press conference, they issued a joint declaration of peace and here are some of the highlights they declared the end of the korean war they say they want to move to a peace regime they will set up a liaison office they will have a phase disarmament. and this one is the most important and probably will get the most attention in washington, that they agreed to pursue a total denuker larzation of the korean peninsula. this is the formal side of what went on today. it was a fascinating day full of

ceremony as well as pleasantries kim jong un went and signed the guest book at the dmz where he said a new history begins today. the two men along with their wives are having dinner at the moment they have a dessert that has a map of the korean peninsula. all of this could set a very good environment for north korea's leader, kim jong un, to meet with president trump. from what we understand from south korean officials, president moon will be hold ago phone conversation next with president trump in order to debrief him on the summit. >> eunice, it's always been insecretb insecretb inscrutable how you could sort

of preside over that i just wonder if kim jong un actually gets a taste of this and he sees how south korea has performed in terms of its economy and its democracy in a short period of time and what that has done for the people there. i'm worried there's like some trick here or something that we're missing. but maybe there's not. it would be amazing to come into the 21st century for north korea and for its people and he could be heralded as -- is all forgiven them? do we forgive all of that if he, you know, goes on the right path from here? >> yeah, absolutely. absolutely i think what's unclear to us and to most north korea watchers is exactly what kim jong un's intentions are what is actually motivating him? what does he actually want and like you said, he could look at south korea, which has done

incredibly well as a wealthy economy and maybe he wants some of those economic perks. we heard his speech. more recently when he was trying to switch the focus, he said, of policy in north korea to economic development and economic reform instead of having a nuclear policy, that that wasn't really the main point any more however, just like you said, word of caution, we've seen this script before. >> not like this, though >> south koreans have seen since 2000 -- well, not like this. i think what was interested is they had the word about denuclearzation. but when you look at the joint deck lar ragzs from 2000 or 2007, they didn't have that word so it's different. but at the same time, what has been the same in 2000 and 2007 is the north koreans didn't necessarily abide by the

statement. so you had a lot of excitement and excitement and nothing really happened. i think what's going to depends on it all is how that conversation goes between north korea's leader and president trump, what's going to happen in washington and how those conversations go >> eunice, thank you we'll take it one day at the same time. thank you. meantime, back here in the united states, german chancellor angela merkel is in washington today meeting with president trump to talk about trade. aman joins us now with more. >> good morning, becky it will be a big contrast today. angela merkel will be here in washington at the white house. we saw emanuel mmanuel macron e. all of the spectacle and pomp and circumstance around the state visit that we saw earlier in the week, we are not going to

see with angela merkel and that reflects the frostier relationship she'll arrive at the white house about 11:40 east coast time and she'll be part about 2:20. we will see the president greeting her and that's about it and the questionis for angela merkel, does her frosty relationship with the president reported to date back to the campaign when the president criticized her on the campaign trail, does that get in the way of what she wants in terms the of terrorists and the united states we saw shinzo abe have a productive and warm relationship with the president we saw abe invited down to the palm beach earlier this month to talk to the president. they played golf they had outings with their wives. but ultimately, abe left empty handed emmanuel macron, he left the

united states empty handed to some extent, angela merkel can do not much worsen than these two other leaders have done in terms of their relationship with the president. if they want exemptions to tariffs and they want trade concessions, the warm relationship doesn't seem to really help. we'll see what happened throughout the rest of the day today, guys. >> thanks. joining us no for what's at stake for the merkel trump meeting and more former u.s. ambassador to germany, robert kimmett. can we get to german -- i know aman just finished with that, mr. ambassador, but you saw earlier this news out of south korea. when you look at that, do you -- what are the chances that you just take it at face value what is your level of confidence that we should believe the intentions of kim jong un are exactly what he's saying right now? do you feel good about this? >> joe, my father won a silver

star in korea. 30 years later, i was at the dmz with ronald reagan i thought the images today were very powerful, but the issues remain very complex. now we're in that position of having to move from rhetoric to results. i think we have a bit of a head start because our u.s. secretary of state has already met with the north korean leader. but there are tough, tough months of negotiation ahead. >> do we let this guy into the -- you know, into the center structure of the world on a -- if it finally comes out with, do we forget everything that's happened do we wipe the slate clean for, you know, take your choice of what you want to that talk about, some of the human rights violations that we all know about. if he's willing to go forward like he's talking about, do we let him into the global community? >> we have to be very mindful of

what happened in the past, but we have to deal with the circumstances of today we have to get rid of the strategic threat that is the nuclear threat and we have to ask what is right for the north korean citizens of today i think the bargain that he's looking for is a move toward denuclearzation. i hope full denuclearzation in return for economic assistance from the global community. in the past, there has been humanitarian aid given to north korea and the north koreans have not allowed world bank and asian development banks to get into north korea to see what their needs are. he seems to be willing, at least, to take these issues on but, again, we'll see if red rick can move to results and i would judge results, again, for the north korean people >> you're here to talk about germany. i didn't know what was going to come first, denuke already

larzation or we were going to get a german ambassador with the democrats, that they were going to allow that. but that actually happened what is more earth shattering, they finally put grenell in. but we'll talk about that. was it as frosty as was described? >> any meeting, whether it was a state visit or a working visit basically has three hours of substance. i would say mrs. merkel is much more about about circumstance than pomp. she has had relationships with two very different american presidents in the past, george w. bush and barack obama those developed over time. i think they will also develop with president trump because of mrs. merkel's commitment to results ander their strong transatlanticism let's remember why this is important. as goes germany, so goes europe. as goes europe, so goes american

policy both on security and economic issues. >> and the president knows this. he may be on his best behavior, not best behavior, but he may be willing to be much more amenable to some of merkel's concerns, i guess, at this point don't you think? they point want the this to work now, i would say >> i think that we are in a position where it has to work. that is the german-american relationship has to work if our transatlantic relationship is to work there are many difficult issues to discuss you've mentioned some of them, trade, iran, russia, defense spending but the good news is, i think mrs. merkel is here to talk specifics, what progress can be made but there will be work remaining

after. >> mr. ambassador, where is the -- were you in berlin when you were stationed over there as an ambassador? >> berlin remained the capital of germany even during the cold war. so my principal office was in bonn >> how was it? i've been to the one in paris, but how was the resident in bonn and i have a question. when you throw a party as an ambassador, did it cost you a lot to be ambassador in germany? >> i went to to germany when i was 41 we have five children. i will not talk much about my bank account the bottom line is, i didn't make any money but i didn't lose

any money. there's enough money to hold events that advance u.s. interests. >> really? i heard there was enough, but you serve some pretty crappy wine >> no. here is the rule on wine if you serve american wines, it's covered by your official representation expense if you want to serve a different wine, yes, that is at your expense. the good news is, the american wine industry very much wanted us to showcase and it by the way, the germans loved it with a particular fondness for california chardonnay. >> really? i do, too. i do, too. thank you. these are just -- people want to know some of this stuff, are mr. ambassador i appreciate it. thanks for your time today >> thank you, joe. >> when you come back on, let's continue this because i don't want anything too big. malta, i'm thinking. >> we've got it, joe >> thank you >> thank you when we come back this morning, shares of microsoft on the move after the company

reported better-than-expected earnings we will dive into the numbers right after the break. and later, kiss front man paul stanley is here with his latest works of art. we will talk rock and roll and patipassion for inng stay tuned you are watching "squawk box" right here on cnbc the governor has declared a winter weather emergency... extreme risk of burst pipes and water damage... soon, insurance companies won't pay for damages.

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welcome back, everybody. microsoft off with its third quarter earnings, the tech giant recording profits of 85 cents a share. that was better than the markets were expecting joining us now is jay fleishhour from griffin securities. thanks for being here. >> thank you, becky. >> was the defining characteristics of this quarter? is it the cloud overtaking the software business at this point? >> the cloud certainly did well. it came in at 6 billion. we were at 5.5 billion so substantially better than expected with better margins year over year that we had expected but the story here is the broad improvement in the business, not just cloud, as important as that is but multiple other businesses did better than expected linkedin, windows, service software business, the gaming business so this was a broadly better than expected business and it

will continue. you look at the guidance for kwq4 every business is expected to be substantially better than we had modelled for the fourth quarter. >> why >> cloud continues to grow the server business is holding steady or improving. >> but are all these businesses doing better because the economy is better than expected or because management is better than expected? >> it's the economy helping. there is broad improvement in the economies. but i think it clearly -- and joe has asked me this about the changes of the company on over the last number of years it is management this is the house that satya has rebuilt. steve ulmer has left some good foundations, but clearly this is satya's new microsoft. and the strategy is working very, very well here and they have strong technology tailwinds here there are many things here that

i think substantially differentiate microsoft from its competitors. >> 725 billion unbelievable job it was stuck at 350, 400 for so long >> right >> they had that great annuity with -- who is -- windows? you still need it. it's amazing quarter after quarter, they're selling windows. but he moved them into another gear >> we've been recommending this stock for close to six years now. satya was still more than a year and a half into the future when we started the shares are tripled and the story has become only more compelling, we think >> that's amazing. microsoft. >> and not many of the old line tech can you say that about. i don't know of anyone else that you can. i guess apple was a -- back in the -- >> the story is that they started with a very strong base of technology that just needed to be managed better >> right >> and reinvested and that's what the story is here >> your price target is 109. that's for the 12 months >> that's correct. >> they missed out on search, they missed out on search, they

missed out on so many things but here they are. >> they didn't get mobile right, but they got a lot of other things right >> jay, thank you. >> thank you, becky. thank you, joe coming up, what's working in the markets. we're going to talk technicals and fundamentals and earnings season with two market pros. and later, musician and artist paul stanley has brought some of his works for sale this week and at the wentworth gallery in short hills, new jersey. that interview is straight ahead. time now for today's aflac trivia question. what was the first video game console to come with oinnle connectivity the answer when cnbc "squawk box" continues of break. oooh! that had to hurt. aflac?! not that kind of hurt. yeah, aflac paid us cash in just one day

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it is willing to discuss changes to its deal to buy a controlling stake in xerox major xerox shareholders have sued xer on ox saying jeff jacobson closed a deal in order to save his job. the two opposed the transaction. xerox up by 2.3% the cost of investing in mutual funds and etfs is at an all-time low. that's according to figures from morningstar. the average fees fell to just over .5% in 2017 that continues a trend that's been in place for more than a decade one that morningstar estimates has saved investors about $21 billion. exxonmobil set to report at the top of the hour. chevron will be out with its numbers about half hour later. energies producers have been benefitinging in recent months from the increase in crude oil prices we are continue to go watch the ten-year note closely. yesterday it closed below 3%

and this morning it is just below that at 2.972% the stock market futures this morning have been higher, especially for the nasdaq. it hooks like the the dow is down by about 50 points right now. but the nasdaq indicated to open up by almost 96 points s&p futures up by 6. katie stockton, the founder and managing partner of fair lead strategies is here also, sevida's super mania and who is the u.s. equity and quantitative strategy head at bank of america merrill lynch, welcome to both of you sevida, we had been talking about how the fang stocks were kind of done and what was going to lead the market what if it turns out it's the banking stocks again >> they're looking pretty good resultswise. i think the question here is growth one reason that fang has done as well as it has over the last few years is that growth has been very narrow. there's been, you know, the scarcity on of growth, scarcity of yield that's sort of forced investors to pay up for the highest growth

they can find. i think what's happening right now is growth is broadening out. if you look at cap x trends, u.s. gdp, it looks like we're finally getting some acceleration in the economy. companies are spending on something besides share buybacks again. so that could put fang --ite in the that fang is dead. but that makes these high growth companies a little bit less attractive relative to cheaper growth that's broadening out across the market >> what does it tell you that the market during this earnings season has kind of absorbed these great numbers and really not universally given much credit for in the way of stock prices clearly there's a sensitivity to the idea that we're somewhere near the maximum, you know, peak rate of growth >> i think you're right. they're fairley heavily owned by institutional investors. fang is not a new story.

everybody is kind of there >> a 5-year-old story, as a matter of fact >> exactly so it's not -- these are not stocks that are contrarian picks and they're not necessarily reacting as much as -- >> the question is, as a technical analyst, we've got no bounce in the overall market since last time you were on -- >> you've been in retest phase >> nothing has changed since the last time you were on. >> it really hasn't. the tender has moved, the dollar has moved. >> it could be a good thing for you. the duration of the correction gets longer. has there been anythinging in terms of underlying technicals that has -- we're just watching the s&p is like -- from the last time you were on anything been going on under the service that we don't know that's positive or negative? >> the bottom up work is very important. so not just looking at the s&p 500, but rather constituents and breakdowns are very few and far between. they're very limited to consumer staples, maybe selected industrial stocks. so that tells me that we're still in a bull market as the s&p 500 is kind of in this

retest mode. it forms a triangle on a chart the triangles are more often a continuation pattern than reversal patterns. so as soon as we break out, you tend to get a very exclusive move so i'm watching about 27, 25 on the s&p 500, not that far off as a breakout point and then we can get more aggressive >> you mean the flag, right? >> sort of a wedge >> really a symmetrical triangle >> so it resolves itself >> typically it resolves itself in the direction of the prevailing long-term trend which, of course, is higher for the broader market so i think there's a lot of opportunity. still looking for our performance for technology >> that's right. technology, financials with the move in yields gaining some traction. so i think there's a lot of opportunity. >> and it comes together >> it comes together beautifully. financials looks great to me with the ten-year flirting at

3%, i don't think 3% is some crazy, scary number. what's so important about 3% why are we all freaking out about 3% >> it is a technical level not only does it hold the psychological number, but it is a resistance level a breakout above which you could get very high targets for the ten-year now the last breakout we saw yielded a target of about 335, thereabouts. and i think that's very attainable for this year at what point does that have a greater effect on equities it's hard to say >> did you know that it's only above 6% on the ten-year that average s&p returns go negative. 6% that's a ways away >> on the way down in yields, right? when we got down to 4%, we said, wow, i can't believe we're down at 4%. then we got down to 3% and you would have said the market should be soaring and it wasn't are we just in a different frame? >> sure. >> people are going back to the 40s and 50s to say this is kind of the normal. >> no, i agree

we did a bunch of work looking at yields and where it gets dangerous, where it's good there's no rule of thumb, there's no magic number. i think the question is are yields going up because growth is material theizing or are yields going up because of credits here >> and what's the answer >> i think it's growth if you look at cap x trends, use companies are spending their money they made from tax reform on cap x we've been tracking this and cap x guidance is above average. companies like fang stocks are announcing big spend on headquarters, data centers, it's going picks and shovels, which is a new trend that helps the economy. >> that's not all inflation? is that what the market is also sniffing, perhaps? >> the market is probably doing some sniffing, but i don't know if we're at that danger zone that's sort of where we see things coming in right now

>> it's only april we could see new highs it's only april. >> will it end up where we don't make headway >> the seasonals, yes. you tend to get a good upmove. it doesn't mean you don't correct again before year-end. so i don't have a year-end target, per se but the the targets are quite high and impressive, all about 3,000 certainly and i think that bodes well for continue growth >> thank you both for joining us today. great to see you >> exchange e-mails, you know what i mean? >> we have to stay in touch. >> it's like yin and yang. >> we'll exchange. still to come, the leaders in north and south korea

stating there would be no more war between the neighbors and agreeing on committee denuclearzation on the peninsula. >> they are not quite like this. >> no, they are not. look at this it's nice. we will hear from the council on foreign relations, president richard haas in just a bit "squawk box" will be right back. . coming up, paul stanley, trading in the act for a brush the kiss front man is pushing the limits in the world of art we'll ask him about his passion. ks rlssibility of aiswod tour when "squawk box" returns running a small business is demanding. and that's why small business owners need more. like internet that's up to the challenge. the gig-speed network from comcast business gives you more. with speeds up to 20 times faster than the average. that means powering more devices, more video conferencing, and more downloads in seconds, not minutes. get fast internet and add phone and tv for only $34.90 more per month.

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not small at all. energy lives here. this weekend, kiss front man paul stanley brings his art to the center but before that, he is joining us to talk about art he's at the nasdaq with us and

possible plans for what? a major kiss tour? >> a major kiss tour a major kiss tour, i would say, starts at the end of january and it hasn't been announced yet so don't tell anybody >> and your husband heard this already? >> i'm sure. >> he would be like liesman and follow you to every venue. >> as many do. >> kiss has barack obama a tribe. so many bands are based upon a certain demographic whereas kiss has young children, young children up to grandparents and everybody shares the experience. it's incredibly gratifying to look out and see families, neighbors, all kinds of people there. it's a good job. >> i love you without the makeup, though you look great >> well, thank you >> i love you with the makeup, though, and i identify with you with -- >> indeed. with the makeup. >> i have several albums from -- >> i have a few myself

>> that's a pretty big -- you're here to talk art, but that -- you know, you guys are there in terms of legendary sort of iconic groups. that's like led zeppelin -- not to compare you you, but that's -- if you guys get back in and go on tour, that's a big, big deal that will be a major event for -- >> it will be terrific it's amazing i think anybody who succeeded, whether it's in your field or mine realizes that success is easy sustaining success over the long haul is fairley challenging. at this point, we're 40 minutes in that leads to painting which i originally started doing as a way to depreciate yourize and in itself, it's turned into a multiple seven-figure diversion. >> and a five-day a week job >> it's a five-day a week job at this point as i used to drive a cab out here and i used to pick people

up so i'm not one who shies away from work. especially something as gratifying as art. >> i was asking you off camera, but this started as a passion, as a way to depreciate yourize is it still that when you're doing it five days a week? >> well, it's always unchartsed territory. so i never know quite where it's going to end up. and i tend to define myself by the challenges i take on so to see a piece come to fruition, you know, you look at something like this which is fairley unique in that it's acrylic, it's a two inch thick piece of lexi glass and i paint on both sides to create a 3d image. so to come up with these concepts is tremendously gratifying in the same way writing songs is >> did you have any training or is it just -- >> no, i guess i'm a punk impressionist, you know? because i have no background, really, in painting. and -- but i am a big believer

that a lot of people have abilities that they don't really tap into because people around them are telling them that it's not good or it's impossible. but the people who tell you what's impossible, invariably, are the ones who failed. so pick up a paint brush or invest find something and go incrementally and you'll see how successful you can be. >> so now that you deprosecute pressurize with the tour is that -- from the -- you're all amped up from the -- from painting now you have to depreciate yourize with the tour. >> yes i tend to compartmentalize but they the all revive around my family. i think without a solid home base, without children, without in my case a wife, it means nothing. so that is really the center of what i do. i drop my children off at school, literally, and then go to my studio and paint so whether i'm going on tour, i try to do my tours around my children's school schedule >> how often do you talk to

everyone else? >> well,ite hard to talk to gene because he's always talking. >> but everybody is back for -- and you'll with be in full regale ya for the -- >> oh, yeah. >> oh, my god. >> this will be the biggest tour we've done, biggest show we've done interestingly, our drummer, who is currently in the band has been in the band 25 years. so the lineup is great sometimes people say, well, you know, why don't you have all the original guys? well, that's like going to a baseball game and going, where is babe ruth you know so the band is phenomenal. the show is going to be amazing. and meanwhile, i get to, you know, indulge in my other passion, which is painting and it's beautiful because it's really not something that is singular for kiss fans it really has a -- i don't want to say it's an investment, but when people are pressured like you are with watching the stock market daily, it's nice to have something to depreciate yourize

with and a lot of people are collecting my art, which is terrific >> you said dabble and invest in things did you mean invest in stocks along the way? >> well, i think that people can certainly -- you know, you can't learn to swim until you get your toes wet so i think that if you want to invest, obviously, you should do it with a certain amount of, you know, your assets and do it in a way where you're not going to drown. so, you know, there's a learning curve for everything >> do you invest and make decisions yourself on -- >> you know, i tend to listen to the people around me and the decisions and perhaps tell them what i am more bullish on than other things but honestly, nobody helps me paint and nobody helps me write my songs i think you're only as good as the team around you, whether you're a politician or a president or any ceo you're defined by the people around you so i tend to surround myself

with people who can, you know, go the distance. so far, we're doing quite well >> as for your paintings, these are two pretty different styles. >> yes >> the two paintings that we have here and then this third piece. what do you find yourself more drawn to what do you do more of >> i would define myself as somebody who is fearless with color. people are often taken with, you know, my pallet which tends to be very bright colors. but that's how i define life to me, life is an affirmation of color and vice versa so the more color you see in a piece, i think it says something about how you see life >> so anybody that has talent can somehow, through social media, it seems like it's easier that way to break in to what's a very tough business. but then again, it seems like it's harder to get paid for great things that you do >> oh, it's very tough you know, when you're offering a service and the people who are

taking that service are the ones who are deciding how much you should get, that's the tail wagging the dog. so certainly in music we have a problem. >> is it better or worse now than when you were -- >> i don't know envy anybody who is trying to make it now in music. it's just that pot of gold at the end of the rainbow isn't there for me >> it's very difficult and plus, at this point, you're virtually owned by corporations. you have a 360 deal. i think it's unfortunate when we were coming up, record companies tended to commit to you for three albums and they would nurture you and build you. now the people who are running a record company may last year have been selling tires and if your first song doesn't do it, you're out so it's a different world out there. and i'm much happier to be at this point in my career than

starting >> well, it's -- i don't know. he's -- he looks like he -- yeah, exactly. he's over there bowing he's not worthy. i don't think -- has he been able to put a sentence together with you here at all i can't imagine. huh? >> thelockengest ever >> what about backstage passes, is that -- >> well, there was a time where you had to earn those, but -- >> now i'm uncomfortable now i'm uncomfortable. but that doesn't mean i'm not -- no, i'm kidding. whew anyway, paul, thank you. and we want to point out that he will be at the winworth gallery from 5:00 to 8:00 p.m. eastern time >> thank you so much for coming in >> thank you so much >> your works are beautiful. thank you. >> thank you again when we come back, some stocks to watch. also at the top of the hour, reaction from the council on foreign relations.

richard haas we'll talk about this morning's historic meeting between north and south korea. in the meantime, which check out the futures. dow futures down by about 42 points but the nasdaq has been up all morning. this comes after very strong earnings reports from a slew of technology companies we'll talk more about that in just a moment. s&p 500 futures up by 5 1/2. "squawk box" will be right back.

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welcome back let's take a look at stocks to watch. colgate pam olive, two cents better than expected revenue was amid forecasts when you compare it to a year ago expedia losing 43 cents a share for the first quarter. that was one cent smaller than the consensus estimate while the travel website revenue was above forecast the results were helped by greater than expected booking volume and all that adds up to an 11% gain for the stock this morning. in the meantime, u.s. steel beat estimates on the top and bottom line for the first quarter citing operational challenges at one of its production facilities this has been such a seesaw stock with the tariffs on, the tariff exclusions, what's happening. down 5 points. >> caught up in the whole

psychology of the tab stuff. but a reminder, not a great business just tough to operate. >> you know, the market goes down on possible trade wars, but it doesn't go up on this i don't know coming up, no more war i'm talking north and south korea are saying this morning, no more of that after the two sides signed a declaration we'll ask richard has about what it means f torhe relations on the peninsula. s at this hour, still down play "do it like this".

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when everything's connected, it's simple. easy. awesome. new this morning, the handshake seen around the world. the leaders of north and south korea signing a historic declaration. we have a live report from seoul, coming up breaking news this hour, a fresh read on the trump economy. we'll bring you the number and the market reaction. and earnings on deck, oil giant chevron and exxon set to report the stock reaction, straight ahead. the final hour of "squawk box" begins right now ♪ live from the most powerful city in the world, new york.

this is "squawk box. >> good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square, i'm joe kernen along with becky quick and mike santoli. the dow is down, but the other closely watched indices we follow are sharply higher. s&p up a little, up six points treasu treasury yields, we were above three. we're now 2.96 check out the shares of russell. reuters is reporting the company is going to overhaul its board and management in holes that the u.s. will remove it from a sanctions list earlier this missouronth, the u. imposed sanctions. the company will be forced to quit the global aluminum market and focus on domestic consumers if the u.s. doesn't lift

sanctions once an empty board is in place rusal lost almost 50% on of its share value after those sanctions were introduced. let's talk about exxonmobil. the company earned $1.09 a share versus the $1.12 that the street was expecting. if you look the at the revenue line, it was better than expected 68.2 billion versus the 63 of 3 the company was estimating the company says it was the highest quarterly cash flow from operations and assets sales since 2014 that number came in at $9.96 billion. first quarter operating cash flow, we'll dig deep ir down by 2% the become line number, 109 per share versus the $1.12 that the street was anticipating. we have seen oil prices climb significantly. >> and you see that little run that exxon stock has had

still, you know, not outperforming the group. i mean, it's still kind of the big lumbering giant, not as exposed acutely to changes in the commodity prices take a look at wti, down about 31 cents, below $68.exxon shares down by 1% breaking news this morning, the leaders of north and south korea pledging to declare an end to the korean war we've heard from president trump this morning he just tweeted, please do not forget the great help that my good friend, president xi of china has given to the united states particularly at the border of north korea. without him, it would have been a much longer, tougher process cnbc's eunice yoon is live in seoul. eunice, we knew this historic meeting was taking place, but some of the headlines, some of the news and announcements and proclamations coming out of it would it a bit more than most of us anticipated >> absolutely. there's been a lot of encouraging happenings here on the korean peninsula that would

be encouraging for president trump, for washington and the rest of the world. and it certainly feels like that here on the ground in south korea. people were absolute thely shocked when the leader of north korea probably one of the most secretive leaders in the world walked up to a podium the to address the press live on television and he said that he believed that south and north koreans were the same people and that he wanted to see a new path forward. and that really moved people here in south korea. and it had a dramatic effect there are a lot of people now who are saying that perhaps this conflict that has been going on for decades might come to an end in their generation. now, this is just one of the dramatic and fascinating events that have been happening all day. we saw earlier in the morning the two leaders holding hands, joking with each other they're just wrapping up dinner now. and this all -- the sentiment of this day was really enshrined in

the joint declaration for peace. they declared the end of the korean war they want to move to a peace regime they said they're going to the have phase disarmament in washington, the total denuclearzation of the korean peninsula. as we were talking about this morning, we have heard this before a lot of it. not everything there is still some language in there that's different but at the same time, we don't know what kim jong un's intentions are we don't know what his level of commitment is. and we also don't know whether or not he is willing to pursue a full dismantling of the nuclear program. of course, though, this does set the stage for a very positive discussion between him and president trump if that meeting ever does happen >> eunice, thank you very much again, eunice yoon who has been

watching all of this unfold today. joining us now on set to talk more about it is richard haas. he is the president of the council on foreign relations richard were, some of these proclamations are quite a bit more than you you might have anticipated, the idea that this is the end to the war, that we are going to maintain peace on the peninsula and denuclearzation is really on the table. what do you think of all of it >> you're right to be skeptical. there's a long gap between where we are and fulfilling those proclamations and those goals. that said, where we are is also impressive six months ago, i didn't think we would be nearly this far. i was much more worried about the possibility we would be in a war. so i think today is good news by my measure people need to take a breath there's a difference between what's been announced today and any of that becoming a reality we don't even know why we got here, whether it was because of the sanctions, whether it was because of the pressure for the administration or just maybe china helping with the sanctions.

but also, it might be because north koreans have achieved a degree of maturity with their nuclear missile programs that they feel they're safe, they're confident. i don't know the answer to that question >> if they're talking about denuclearzation, i guess that's the $64 million question >> denuclearzation and then there's denuclearzation. >> if we give them what they would like, which is to find a stable economy and find a way of boosting the overall impact on their nation, what happens then if they have not truly given up nuclear power? >> i'm skeptical they saw what happened to ukraine after what happened to its nuclear weapons. they saw libya they saw other countries also, denuclearzation could be a long-term goal and it could be so long-term and what happens if they say we agree to give up nuclear weapons if you give up yours or if you give up your relationship with south korea. >> we've gone down this road with iran to a certain extent.

is that the right map that we should be trying to follow or is there a different -- >> well, iran was -- we essentially parked the program problem with the iran agreement is after a certain number of years, some of its critical provisions expire and iran can begin to put into place the prerequisites. >> so you are equally skeptical of the iranian agreement as -- >> i was never in love with it that said, it's the only agreement we have and i think the goal now at the to be to keep it but supplement it with a follow-on agreement. one nuclear crisis at a time ought to be enough for the united states. so i don't think we want to create a iran nuclear issue. >> is it okay to let kim jong un into the global community as a member in good standing? is that possible to do that given the history of what we know >> as a nuclear weapons state, no, because then i think it's a

question of time -- >> no, as a human rights, his people under the suffering -- >> you have noou nuclear weapons, a massive conventional arsenal -- >> but can a leopard change its spots? >> you have to say unlikely. it's fair to sit here and be skeptical. the answer is almost reagan like don't trust, but push. >> he hasn't seemed like he worried about the well being of his people up to this point. it's been about him and -- >> it's been a slow motion genocide >> that's what i mean. could he suddenly have awakened and said i want to be a father of this country in terms of help, bringing everyone in to the standard of living in the 21st century is that possible >> highly unlikely, unless -- and it's a big list of unlesses. china really turned the screws or he's worried if things don't begin to improve economically, his position is threatened or is that he plans on holding on to the nuclear weapons and he now feels comfortable that that gives him the security

so the answer is we don't know but, again, it's the reason i think it's healthy to be, on one hand, to say this is an impressive day we never thought it would come on the other hand, to have large doses of skepticism. >> should we take comfort in the fact that the leadership now of south korea is willing to make these gestures, at least they're the closest to it, the most at risk >> no, i would be careful about that what we want to avoid is a situation where south korea essentially says if we get stability on the peninsula, that's what we care about. then we find our agenda is not the same as theirs the south korean president, his father came from the north this for him has been the most important plank of his diplomacy, a kind of north-south normalization. obviously to be welcomed we have 28,500 american troops still there. we have security commitment troops there but that's not the only thing on the agenda i think south korea mass to be disciplined to not to pay up front for promises and not to pursue a narrow agenda based on

the hopes that what we heard today will become reality. >> it just -- it would be nice to think that some of the most regressive forces in the world that we scratch our -- it's insecretble, whether it's isis, radical fundmentalism, they seem to be living in a different century in terms of human rights and everything else. it would be nice to think -- >> but so much has to happen between now and then as you were pointing out, the nature of the regime and look what's going on in the world. most of the world is moving against openness, is moving against democracy, including its patron china so, again, i just think -- wait and see. good news, wait and see. and test them. >> richard, thanks for coming in and thank you for not using that response to our question >> no one will know what you're

talking about. a lot of our you viewers are with us more than we know. coming up, striker on the move after an upbeat earnings report striker, striker's chief executive kevin lobo is here "squk x"ilbeig bk.awbo wl rhtac where's gary? 'saved money on motorcycle insurance with geico. goin' up the country. later, gary' i have a motorcycle! wonderful. ♪ ♪ i'm goin' up the country, baby don't you wanna go? ♪ ♪ i'm goin' up the country, baby don't you wanna go? ♪ geico motorcycle, great rates for great rides.

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♪ and welcome back we are looking at, i'm told, live pictures of the leaders of north and south korea. they just finished dinner, in their somewhere and are now participating in a closing ceremony that's kind of what it looks like there, but take my word for it this is the farewell for korean

leader ceremonies. >>. >> the band from the north was supposed to be there and a pop singer from the south. >> interesting times we live in. let's get back to the more -- that is not pedestrian i love stryker the medical devicemaker out with earnings after the bell beating on the top and bottom line raising its full year forecast joining us now, kevin lobo we're going to the talk about the results, but first we have to look at this cool thing that you brought us we've had people bring in a saw that doesn't hurt, it gets to the bone, but doesn't hurt the flesh. we've had all kinds of stuff that is a what >> an automatic cpr device >> for those of us that can fit in there, you actually lay on the bottom part and then clamp

it over the top and then that thing that looks like a large suction company -- >> performs automatic cpr so you don't have to do it manually, which is very exhausting and it can do it while you're being moved downstairs or even in an ambulance. >> and this is part of innovation anden continue to go design medical devices for the future >> so every emergency medical department, fire stations, they should all have this device. >> they don't, though. you have zero penetration, don't you? >> no, it's been around for about 15 years, but that's the third version. >> and it can be used with a defibrillator. >> correct >> i'll see that in all the ambulances, but this is a new device which the emergency medical technicians love it does it precisely today, they have to stand and do this which is a hazard for

emergency medical technicians. >> not to mention, you get exhausted doing this and this can go for a couple of hours >> the longest has been about a couple of hours, but the precise, consistent can delivery of cpr >> so sales up 10% or so, 9.7, organic sales up 7%. was currency involved? >> yeah. we had a 2.5% benefit of currency >> in line >> it was above. we beat by 8 cents, 13.5% increase this was our 20th consecutive quarter of growing organic sales greater than 5%. so we've had a great run of consistent growth. >> for us, it's a moderate headwind we are able to bring back our cash from the u.s., which is a huge advantage >> how much do you have? >> we had about $3 billion of cash outside of the united states

>> stryker >> absolutely. we generate a tremendous amount of cash. >> what are you going to do with that >> our first priority is m&a we bought 40 companies over the past five years. our dividend we increase we're a growth company we need to acquire companies this was an acquisition we did two years ago, this cpr device >> how is the government treating you otherwise >> so we have a two-year suspension of the medical device excise tax but having this suspension of the tax is beneficial. we spend a significant amount of r&d. we spend about 6.5% in research and development and that's how we develop these types of devices. >> you p yrobably have a pretty big group to lobby >> as a group of medical

devicemakers, we try to lobby together versus doing individual lobbying >> what has plateaued in stryker's portfolio. >> all of our business is doing great. spine is the only market that's flat and growing consistently in spite of the fact that our prices are going down every year, about 1% to 1.5% >> and how many products do you have, do you think >> we are a broadly based medical device company many people think of stryker as a hip and knee company that's less than 25% -- >> are you the leader in that? >> yes >> what about hip -- >> hip and knee, we're absolutely one of the leaders in there are a couple of other big companies, as well >> and minimally invasive still? >> correct we are the only company with

robotics assistance surgery. we bring innovations with 3d printed implants as well as total hip procedures as well as total knee procedures. that's been an engine of our growth >> thanks for brickinging it inn being on is he the with us facebook up graded to buy from hold. now they say the company is too cheap to ignore despite challenges coming from increased scrutiny over its privacy practices. when we return, we are minutes away from the first read on first quarter gdp we'll bring you that number and the market reaction. right now, dow futures down 40 nasdaq up by 4 s&p up by 5.5. it was a blockbuster quarter for amazon we'll at all talk to an analyst at 8:40 eastern time big reason that you see the nasdaq so much higher this morning, too

i'm very happy with the profitability. i think that will expand as our margins expand >> i think our business is holding up just fine >> presented in new forms and new varieties to get people reengaged. >> in the middle of all of this turmoil, our product portfolio is as strongs as it's ever been. >> the only real worry i have right now in an economy that's overall pretty strong is a lack of labor ♪ ♪ >> we're squawk. we have a name, britain's royal palace as prince william and kate middleton's son has been

named lewis arthur charles the baby's full title is his royal highness prince louis of cambridge. when we come back, some breaking economic news we've got first quarter gdp on deck we will bring you that number and a live report from the cme right now, though, as we head to a break, take a look at the u.s. equity futures it's thes nasdaq that's the story this morning, up by 106 points in the premarket. s&p up by 5.5. "squawk box" will be right back.

welcome back, everybody. you are looking at live pictures of the leaders of north and south korea leaving the farewell ceremony of what has been had a historic occasion. this meeting between the two leaders that we've been following all through the morning here, the first steps -- the first time a north korean leader has taken steps into south korea in decades south korea's leader took steps into north korea the potential for peace on the peninsula. we're going to hear a lot morer about this today, but this has

been something to watch and something we will continue to analyze. in the meantime, among the stories that are front and center the today, wells fargo is under scrutiny again the labor had department is looking into the bank aes practices regarding 401(k) retirement accounts. officials are looking into whether participants of low cost corporate plans were pushed to roll holdings into more expensive i i.r.a.s and whether account holders were pressed into buying in-house funds ahead of that, we've been watching the stock market futures. this morning, the real story has been the technology earnings that we got last night that is helping power the nasdaq sharply higher amazon, intel, microsoft, all reporting better than expected numbers and that's helping the nasdaq up by over 105 point. you would expect that with at least those dow components, it would be helping the dow a

little more. s&p futures up by 5.5% katie stockton told us earlier that that 3% was not just a psychological level, but a important technical level. that gdp number, watch closely first quarter gdp has been weaker the last several years. let's get to rick santelli >> we're going to get our first advanced look at first quarter gdp. holy cow, better than expected up 2.3%. many of us were thinking and there were a lot of reasons to do so that it would be under the 3% 2.3 follows 2.. last quarter some of the numbers we had yesterday that get plugged directly into gdp aren't included in this number, but they were first quarter numbers. so there was a bias that some of this might come out, but there were other numbers that could get charged and changed, as

well consumption, 1.1 exactly as expected but a far cry from our 4% last look on the pricing side well, 2% now this one is also fascinating. pricing issues are very important. well, it's 2%. we're expecting .2 and our last look was 2.3%. finally, the personal consumption expenditure quarter over quarter, 2.5 exactly as expected a bit harder than 1.9. and it doesn't end there we get our advanced look on the employment cost index for the first quarter and that was up .8%, .1% hoder than expected and .2 hotter than our last final look becky, i like the way with you brought up the hottest issue on this floor, 3%, nothing magic about 3% it's a round number. you can call it magic if you want it's the 303 because waits high-yield close and the only one we had over 3% going back to

2011 guess what the interday high was on wednesday, on thursday. a lot of technicians are going to say until we close above the there, maybe i should be long bonds and if we go under 2.95%, the old high before we take out the really old high, maybe we see more of a drop and that's a strategy many floor traders are using. the dollar index is within .25% of unchanged on the year it's been a heck of a run. becky, back to you rick, thank you. and thank you for being so inclusive and hitting every single one of those charts have a great weekend >> thank you you, too in the meantime, let's get to washington. steve liesman is there and has more reaction to this number steve, what do you think >> well, i think it's a win in a lot of respects. not only was it better than the estimate, but we've had that weak q1. in fact, this is a decline from the fourth quarter but the key is it's still right around trend and there is an expectation. i don't know if that expectation is going to change of a pretty strong rebound in the second quarter. we went into this number with a

2% estimate for the first quarter and the rapid update forecast for the second quarter is 3.5 that's a pretty good bounceback. and i think it keeps us on track for another three that's important out there, which is 3% gdp. and i have a couple of charts. i don't know if they're available here, to show you about the weakness of the first quarter that we've chronicled over the past couple of years. there's one of them, there's real gdp and there's that 2.3% number i suspect that may come down a little bit for this quarter in part because you had something of an inventory build back up in the first quarter so that may cam down for the second quarter. take a look at the next chart. you can see that q1 effect going into effect since 2009 the q1 has been running well short on average and the next chart will show you what that average has been growth has averaged 2.2% and very few first quarters have hit

that some of the economists out there like ian shepherdson said he would add almost a full percentage point to this number to take account for the seasonal aefks during the first quarter it's a pretty good number, all things considered. a bit of a slowdown, you had hurricane spending that came off of the roles and then you start the second quarter there's that number right there. i want to show you that chart. the green line is average growth over 2017. right now, we did have a nice bounceback one of the best first quarters we've had, becky >> that was exactly what i was going to ask you about, the comments that he would add 0.9%. would you do that, too >> i have to dig a little bit more into the number and ian's thinking on this it's not just 0-9 that you add you add it back into different

sectors. the inventory, it looks like it was .43 from inventories the consumption number is weakened we've had a weakness in investment spending, which is curious given the tax cuts >> but then i think ian suspected that that might be the case because you got a little full forward in the fourth quarter because of people knowing about the tax changes. >> that's exactly what i was going to say another mind meld there, becky look, when you do a big thing like change the tax regime in the united states, there was a lot of turbulence that happens in the data. some stuff was pulled forward, some stuff was left for later. we'll see. i would give this as a cycle of at least a couple three quarters to figure out how the tax cut is going to affect. we had that initial bump up in some of the bonuses and salaries that were out there. that was one piece of it and we'll see what happens when you cut that tax rate and there will be extra money on the part of corporations and what they do with it. it may be dividends, it may be

share buybacks and there could be some capital spending we just haven't seen it. we've had three reasonably weak quarters of cap x in the monthly data we'll see what happens when they go back and revise this. >> ian shepherdson is going to be on monday >> and we're celebrating something on monday. >> give me a hint. >> well, something turns 106 on monday >> none of us on the set >> the federal reserve >> no, no. the economic expansion we'll turn 106 on monday, 106 months >> oh, 106 months. what are you, taking care of a toddler now? >> exactly i'm just about to pass that entire thing as my youngest son goes to college. but it turns 106 on monday it will tie itself for the second longest expansion i'm going to have party hats and those kazoo things that they have and we'll have some confetti >> steve, if you turn around really request quickly, you can

see yourself on tv take a shot of just steve. take a shot really quickly >> refresh my memory no, i missed it. no, you're still there look over your other shoulder. >> other shoulder. >> i see myself now, yes, i do >> good. just wanted to point that out. >> you're very cruel >> steve, thank you. come in on monday, join us for -- >> he's talking about 106 months viewers want to know as a guitarist, do you paint? where does your on other artistic -- you might have other outlets. >> you mean other than guitar playing? >> yeah. we had paul stanley on he's a great painter we had a bunch of his pieces here >> i do not paint. i can't even draw a circle i can't draw a straight line my other outlet, as you know, joe, is fly fishing. but i have absolutely no artistic ability >> i don't, either >> if i draw a circle, it never ends up in the same place. >> no. and handwriting is even -- it

almost is painful to try to -- >> i think my ability to use spreadsheets and crunch data is artistic, joe. >> we do, too, steve you are. >> i do, too >> 3% this year, steve are you still there? >> i think we can get there with this 2.3 number. it's a good thing. we'll wait and see what happens. we'll get a survey of economists, what they do with that second quarter number, if they bring that down a little bit. i think some of that 3 1/2 was expect ago weaker first quarter. like i said, joe, the best way to think about the economy is to average the prior four quarters because there's so much volatility in the quarter to quarter data we're running a 2.5 to 3% economy. you care more than i do if it's three. i'm happy if it ends up being 2.5 or 2.75. >> the new prince's nay me is louis, not lewis

>> is it, really >> yes >> the funny thing is, we had a british anchor, i don't know if she was born in britain. remember prudence solomon. she got to st. louis and she said st. louis >> we're the ones who -- >> we messed it up it's really louis. >> i'm down here, joe, for the white house correspondence jam tonight, you know. place to be. >> oh, have fun. >> that's the geek prom. >> with chuck lavelle from the rolling stones not so geeky, joe. >> tomorrow is the geeky thing >> tonight is the cool people. i'm wearing a tie dyed shirt tonight. >> go have fun joining us now is john silva. also lindsey piesa

let's weigh in lindsay, what do you think, 2.3% better than expected what does that end up leaving us for the rest of the year >> well, it was better than expected relative to weak expectations, but this doesn't change the story loor line for the u.s. economy we did see a logs of momentum into the end of last year and a further loss of momentum now in the first quarter, particularly amid a very weak consumer sector as the consumer based economy, the fastest way to derail the u.s. economy is for the consumetory puconsumer to pull back the u.s. economy has lost momentum and a little steam at the front of the year, but tax reform was expected to mitigate that pattern so with the consumer not feeling very confident, not seeing their financial footing much stronger at the start of the year, it's very difficult to expect a sizable bump going forward in the remaining nine months of the year so we're still looking for about a 2% annual pace in 2018

>> john, what is your take the sales does support continued economic growth. the inflation number is a little higher i think that does support the fed moving in june and overall, the inventories did contribute a little bit to overall growth, but that 2.3% number, a good, solid number we still expect something like 2.75% gdp for the overall year that will be good for the equity market >> john, i know you're not a market strategist, but i'm going to ask you to take a look with what is happening with the implied open this morning. we have better than expected numbers. we were down over 40 points before we saw that you you bring up that next derivative which is this number is so good, it means this gives the fed the ability to go ahead and raise rates again. is that a good thing or a bad thing for the markets? is it a good thing you because the economy is so strong or a bad thing because the fedmoves again? >> no, the economy continues to be solid enough. the inflation numbers continue to rise enough for the fed to

raise rates consistent with market expectations. so i think that's good for the market again, as you mentioned earlier in your commentary before the gdp numbers, market looks at this technology numbers. capital goods, orders, advanced technology is a leading sector for the u.s. economy in terms on of a comparative advantage i think it's good. >> rick mentioned the dollar has been the story in terms of market reaction right here it's up almost 3% in dten days does that change anything about the economic outlook.? >> well, from my -- >> i think it's -- >> i'm sorry, lindsay. i think it's more of a reflection of the u.s. economy relative to the weaknesswe're seeing abroad. the central banks are recommit to go continued accommodation and, of course, we saw weaker than expected activity out of the uk why early today in the first quarter, the weakest that we've seen since 2012. so yes, the u.s. economy is still on relatively moderate footing, but on a comparative

basis, we're still talking about the strongest economy in the developed sector of the globe. but for the fed, i think this is still a very uneven territory. i think the fed is going to have a very difficult conversation about whether or not 2-issue percent gdp and still sub-2% inflation is enough to force their hand to continue to move forward. generally, it's a done deal. >> capital inflow, people want to invest in the united states and that is a driving factor >> good to see you >> thank you earnings just in from chevron wi chevron, first quarter earnings well above estimates revenues did miss forecasts, but we should point out far fewer analysts give estimates for revenues than for earnings

the stock is up nicely when we come back, amazon's blockbuster chart is sending shares higher. that's right after the break once there was an organism so small no one thought much of it at all.

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amazon, posting a good number on the big beat joining us now, bob from

gugenheim. we got a request for a question. when does it become too expensive for prime? what is it, $118 now >> it's going from $99 to $118 i think the poster child for this type of a fee increase is costco, historically >> hopefully not netflix >> right and i just think gradually is the way to do it and, you know -- >> is 20% gradual? >> i mean, 20%, but i -- >> four years. >> in four years, right? >> it's not that big a deal. >> and i think the point that brian made on the call essentially was they've added from 20 million to 100 million in terms of available for prime. you think about all the video content, the music >> it's not going to scare me off, but they've just trumpeted the 100 million number >> and the best part about it from an analytical perspective is the results were that good before they told us they were

going to bri going to bring in another $2 billion over the next 12 months. i see very little attrition. it feels like the value that amazon brings to the consumer is very cheer >> so is this the point where, okay, consumers have had their day, you're still going to get a decent deal, but now it's investors turn to reap some of this stuff >> it sure feels that way. it was probably the first time you've heard them say how expensive it is to deliver prime to the members and they made that point and i feel from the perspective you sit there and you say, you do have the video, you have the music, you have the delivery -- >> plus delivery is no longer two days on some of these things >> right same day, two hours. it's a compelling value. and they're trying to get the student value piece of it and, you know, the monthly -- you know, they're really attacking it on all fronts and i think it's a very compelling statement

to make. >> in the past when you've had a lot more fall to the bottom line for amazon than was expected, like you had this quarter with the actual earnings per share had number was well head, the story has been amazon couldn't invest in fast enough. there was a bit of a lag i know operating cash flow has been on a more consistent growth trend as opposed to a big lump but is that the case here that they're at a loss at the moment in this investment cycle or no >> i think if jeff bezos can find things to invest in, when you think about the different growth trajectories, wasn't a lot of discussion about india. but when you think about the national story for this company, the cob tent availabili -- content availability they do it in a measured way and it does come in cycles, as well. >> where is the stock in ten years? what's the value of this company in ten years >> i mean, it -- it should

clearly -- it could double >> with the different price target >> right now we're at a 18.50. we took it from 17.50 to 18.50 based on on what you heard last night. >> gentlemen >> is there any that recommended shorts they're usually the same people that recommend short on apple and nasdaq is there anything that can happen >> i think the way i would answer that, i think if you look at the different segments, right. when you think about the retail segment when they did the whole food acquisition that was approved in three hours. right. there was discussion about is there anti-trust concern it was like almost approved immediately. and you think about the, you know, the aws piece of it. and, you know, that's very competitive. you're fighting against microsoft, google. when you think about the growth there globally and then, you

know, you have the ad business that is starting ad business they have the various pieces to it and who are they competing with on the retail side walmart. anti-trust walmart has got deep pockets, as well and great reach. i don't really foresee, you know, i think there's more headline risk with tweets than i do regulatory concern in this company. >> $16.59. >> yeah. >> so that's what i was looking at what's the market cap going to be >> right now $87.50. >> factor in the gains. >> that's right. >> 7%. >> it's going up. >> 10%. >> yeah. >> ten now yeah it's over 800 now. and it's closing in on apple and closing in on a trillion

dollars. >> there you go. buy a vowel. >> no. we're out of time. > ene meu.ank yo >>wh wco back, we have jim cramer from the new york their money into is what they hope to get out of life. but helping them get there requires a real refusal to settle for average. because when you approach investing with a tireless desire to beat the status quo, something wonderful can happen. those people might just get what they wanted out of life. or maybe even more.

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we head down to the new york stock exchange talking to jim cramer you know, your comments on apple and a trillion dollars $16.59 on amazon i think that puts them over 800. don't you think they've got the momentum now to be the first over apple >> yeah. i did my horse race i said that amazon is going to win not apple. i think one of the reasons you saw such great numbers last night is the major companies that were involved are not levered to the cell phone. the cell phone is something you don't want to be levered to. amazon is levered to the data center amazon web services was the star last night icing on the cake was the price increase for prime i think amazon is now even

though it's -- it's less than $100 billion short of where apple is i think it's going topass them rather sooner. >> you think there was an inning in the quarter to kind of show off a bit and strut stuff after taking hits from the president over the last three weeks? >> no, becky i think they can't handle all the business i think their biggest problem is stress stress over being able to build a data center. the amazon web services was a remarkable number. they have to keep building and spending it kicked off with alba bet. we hated them for it at the end of the week, we loved them for it. i think that alphabet can come back to where it was before they surprise us with how much they spend. it's web services and early innings. they had an excellent conference call. >> we're handing you the coverage at 9:00 with the dow in positive territory.

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genetic engineering index jumped 47% in the past years. all right everybody. a final check on the markets the dow is in positive territory. up by about three-points after

being in the red through about the entire session that we've been watching this morning s&p futures up by 9. the nasdaq up by 117 helped by not only strong earnings but better than expected gdp numbers mike, thank you. make sure you join us on monday. right now "squawk on the street." good friday morning. welcome to "squawk on the street." premarkets suggest the nasdaq will lead the open amazon propelling the index higher after last night's blow out earnings microsoft, starbucks europe is up and then back home gdp 2.3 as strong business spending makes up for a