business never sleeps, this is "squawk box. good morning welcome to "squawk box" here on cnbc we're live at the nasdaq market site in times square i'm andrew ross sorkin along with joe kernen. melissa lee is hanging out with us today look at u.s. equity futures this tuesday morning. dow looks like it will open down about 21 points off. nasdaq off about 6 points. s&p 500 looking to open off as well down about 3 points. we have had now eight straight days, the winning streak for the dow. yesterday started strong got weaker as the day progressed nonetheless aiming for nine days at the moment we won't get that, but we'll see if things turn around overnight in asia. let's show you what has been going on you got the nikkei and the hang seng down. hang seng down 1%. shanghai composite up a bit. also european equities right now

as we flip the board around. you're looking there at a bit of a mixed picture. the ftse, cac and italian ftse up marginally. the dax off a bit. treasury yields right now, the ten-year note, 3.013 i still think the 30-year mortgage is a good deal. >> the dow might get worse home depot indicated results, bottom line is good. 208 above 205's estimate revenue at 24.9. 24.9 versus 25.15 was the estimate that analysts were looking for. that's a slight miss there you can see the stock is responding in kind now the dow is down more than 30 not that that's a big deal but we'll see what happens if this will directly affect that average

same-store sales in the first quarter in the u.s., up 3.9% total same-store sales, 4.2. the company's reaffirming fiscal year 2018 guidance that's the headline. i don't see the exact numbers at this point affirming guidance i guess a knee jerk reaction it's less than 2%. knee jerk reaction looks like it's based on the revenue. we'll talk to analyst brian neagle in just a couple of minutes. hopefully he's scrambling to get his story straight on what's happening. >> weather was an impact in the first quarter. we had a lot of snow that delayed purchases. >> sell more snow shovels, salt.

>> if you get bad weather late, it delays plantings. >> seasonal. >> how is bitcoin? i look at you, i think bitcoin >> that's all you think about? >> i know how "fast money" loves their bitcoin. >> it's a fascinating new asset class. >> don't get defensive >> it bounced off the monday low, thanks to this consensus conference going on. >> trying to bring viewers timely information about bitcoin. >> you're doing a public service. >> we have some other news we have to bring people >> go ahead with uber. >> this is in the category of breaking news. mentioned on "worldwide exchange" that we would have breaking news. uber out with an announcement about the way it will handle sexual harassment claims the company will roll back the use of forced arbitration agreements for riders, drivers and keeping things out of court

and a public view. it's a common practice in silicon valley that has come under scrutiny microsoft ended the practice late last year uber also rolling back confidentiality provisions that would keep settlements secret and committing to a report that he says will do the right thing. this is an effort to do that he talked about the competitive advantage of being the safest car player out there that unto itself could be a -- they're doing background checks, all sorts of things, but this takes them into the forefront in a way that microsoft has led on this but for a company as large as uber, this is a big deal it will probably cost them arbitration from a legal perspective is a much cheaper way to deal with all these things, both in terms of the actual legal issues and also

what can turn into a domino effect when they become public >> have you caught the ads lately that uber has been running? i saw one yesterday. it was forced over by daraa saying they're driving to make uber a better company. they hit on these things on being more transparent, the safest ridesharing company >> where was the ad? >> i sauce w it on hulu, and i o saw an ad by facebook saying they're doing more to protect your data. >> she is a true -- she's talking bitcoin, watching hulu, talking about uber >> trying to stay current. >> what were you watching? >> "law & order. see? she's blending the old and the new. >> right on hulu. >> did you just make that up >> no, i was seriously watching "law & order: svu.

was jerry still around >> no, it's svu not classic. they have current shows. >> whoa. it's still on, huh >> not suv >> not suv it's svu not about -- >> it's not about driving. >> okay. thank you. here are the big stories we're watching the u.s. ambassador to china says the two countries are far apart on trade negotiations. ambassador terry branstad said china has not reduced auto tariffs. he said the u.s. is seeking a timetable for the moves. the comments come as china's vice premiere heads to d.c. today for trade talks. australian regulators are reviewing google over privacy

allegations. they may pay for the gigabytes consumed during the data harvesting google says it has users permission to collect data msci announcing the 234 china a shares will be added to its equity indices industrial and commercial bank of china, china construction bank and petrochina will be included that inclusion is it likely to increase participation of foreign institutional investors. >> you know where i saw that i knew it was svu. you know where i saw some "law and order: svu in davos what else would you do in davos. >> that's the only thing in english. >> you go all the way to davos, switzerland, you're watching tv? you don't look at the beautiful alps >> i don't like caviar

i'm not with andrew, hobnobbing with the elitists. >> davos man >> i'm in that 8x10 cell with the crappy tv. >> you can stream anything you want on your phone >> i heard that. i should have done that. >> i have to say, i've been going for a dozen years, i don't think i ever watched television there. >> no. >> i would think onewould not have time. >> and you have caviar every year >> and some champagne. >> i know. you are dare davos man. >> you just helped his case. >> i know. i thought it would be funny at my own expense the driver of a tesla model s that rear-ended a fire truck over the weekend said the car was in autopilot mode at the time of the collision. utah police say the driver was looking at her phone at the time of the crash she suffered a broken ankle.

elon musk saying it's super messed u that a tesla crash that resulted in a broken ankle is front page news and the 40,000 people who died in the u.s. accidents in the past year get no coverage. investigators say they're working with tesla to gather data stored in the crashed vehicle. i do think people pay attention to these because there's an anxiety about autopilot and autonomous vehicles. and clearly it sounds like this person was using their phone maybe these technologies are not ready for prime time, or maybe they are and we aren't, are human beings ready and responsible enough to use them because we're looking at our phones >> are you okay with the ceo of this big company saying super messed up? did he get that from grimes? >> sounds very elon musk >> i understand why he feels the way he does.

he also made the point -- >> super messed up sounds like a valley girl. not that there's anything wrong with that. >> the thing that is true, he said this as well, he said why they're e. there are not headlines this this car rammed into another car at 60 miles per hour and the person walks away with a broken ankle. that's amazing safety. that part is true, too so you balance these two issues. >> trump said be cool yesterday. >> we're all -- >> we should say morgan stanley cut the price target on tesla to 2.91 >> where is the -- what's the -- >> 2.87. independently -- >> coming from 3.71? >> related to all of this elon musk disputing a "wall street journal" report that the company rejected certain autopilot sensors because they were too expensive. the report says tesla ignored engineers who urged the company to add eye tracking sensors to its vehicles as a safeguard for

the autopilot system so it would be looking at your eyes to see whether you were focused on the road or whether you're focused on the phone. musk said the worth is false, and that eye tracking was rejected for being ineffective, not because of cost. toyota and a couple others are trying to think of using the technology it's the same technology in your phone that you use to open it up, if you have facial recognition, or microsoft's kinect which looks at you as you're playing the game. >> to see if you're engaged. >> did they say anything about bitcoin? >> joe i don't talk about bitcoin all the time >> okay. >> when it's news worthy >> i see you getting flashes there. >> it's called keeping up with the news in the morning. >> all right it's early >> it is let's talk about the broader markets. joining us is david joy from

ameriprize financial, and j.j.kittihan good morning to you both >> good morning. j.j. what do you make of the market action? trying for nine straight segs of ga sessions of gains, but stuck firmly in a range. >> we are. it's a tug of war a bit. the 3% rate. we all wanted it now that we have, it's like somebody who goes to get married, gets to the altar and runs out because they finally realize they're there. that's what the 3% rate reminds me of and then we have this earnings season that the market is not giving credit to stocks for. home depot a little disappointing today, butmazing . there's a bit of fear about the retailers. expectations are very low. i think we'll continue to see the tug of war for a bit i have never seen a situation

much like this before where there doesn't seem to be a great catalyst either way. that makes people nervous. when you don't see a catalyst to the upside, you get nervous that there's one to the down side >> a lot of strategists were saying earnings season would be the great catalyst now people are look back saying 26% growth in profits for the first quarter will make it harder in terms of-ye s of year comps next year. david what do you think the hangups are in the markets >> i think they need to be strong enough to deliver the earnings growth for the rest of the year full-year forecasts are 20% growth i think the market has been struggling because the first quarter was already discounted in the price in order to break out to the upside, we need to see the economy strong enough to do that the consumer will be the key

the details of home depot this morning will be important. retail sales numbers later this morn will be very important. >> when you say the consumer will be key, looking at oil prices hitting 3.5 year highs. looking at gas prices, it's seasonally strong but much higher than a year ago are we concerned that combined with consumer exposure to rise in short borrowing costs that could impact the consumer? >> yes looking at the price of gasoline, it's up 50 cents a gallon year over year. if you look at where oil is trading now compared to the second quarter of last year, it's up 35%. clearly that's a tax on the corn super. that will dent them a bit. it won't fully offset the impact of the tax cut on a net basis, the consumer is still ahead. we need to keep an eye on this with iran in play. where does the price of oil go if it getsup around 80, $90 a barrel, that's a different

story. >> we've seen energy stocks be the beneficiary of higher oil prices in terms of sectors, what is interesting to me is sort of the perk up that we've seen in healthcare stocks, biotech, especially after the president announced his proposal to reduce drug prices. do you think this is short-lived? does it look like traders are in this for the longer haul? >> it's interesting, this is the first time we've seen money go there in quite a rally one thing about this rally, you talked about the dow up eight days in a row. the one very good thing about the market that reminds me of last year is that technology is doing well financials so-so we're seeing a different other sector come in almost every second or third day to lead the way. if one of those isn't there, energy is there one day. healthcare is there one day. staples is there one day that's the one positive of the last few weeks that's a good

thing. when i talk about catalysts, one catalyst i could see six months out is thatthe tax cuts take effect it's interesting, everybody was looking for them in this quarter's earnings, it's too early. >> terms of the corporate impacts. >> yeah. they have not had a chance to do anything many of them did not talk about what they'll do with that money. the other positive, i would say for the earnings is the fact that nobody really mentioned tariffs affecting their business much didn't hear that so those are two things to build on but it will take a couple quarters in my opinion >> gentlemen, thank you. glad brian is here, brian neagle we will talk home depot. just released first quarter earnings it's gotten worse. a quick look, talking about the initial reaction in the stock. 185 bid, a 187 ask after closing 191. now down 2.3%.

brian neagle is managing director at oppenheimer. i mentioned the same-store sales number i didn't know the estimate is that below? >> it's below. >> so for comps in the u.s. or overall? >> both. total company comp of 4.2. u.s. comp of 3.9 >> what was it supposed to be? >> 5 5.5. >> and the revenue number is a bit light, too that's reflected in the comps. >> that's right. as a retail analyst we focus on comps. that's the easiest way to think of top line growth >> weather had something to do with it. you sold fewer snow shovels, lawnmowers or something? >> i think that's -- as i dig through the results, there's the initial reaction where we discuss theit's as bad as this s

we had a slow start to spring coming off of two years where there wasn't much of a winter. i suspect, and home depot eluded to this in the press release, once the weather turned, sales picked up. >> they said strong momentum in all lines of business in the first few weeks of play. >> light bulbs >> i have to ask someone for help to do that. i know they have leaf blowers, they have to sell those things >> sure. this timeof year, it's about gardening. >> it is i'm on to something. you want people out there fixing their plants and gardens, to the extent that was delayed this year, that's a negative. >> not a reason to -- quarterly, making decisions quarterly is bad enough when it's based on weather t shouldn't have anything to do with the prospects for the llgt f long-term of the stock >> absolutely not. it's a shift

>> so you have a buy still >> i do. one of my top picks. >> how many top picks do you have. >> a handful >> out of a handful of stocks. >> no home depot is one of the best run companies out there it's very well positioned in a growing sector as we discussed, there's a lot of defenses to online competition. >> frank blake brought it back to life. >> that's right. >> who is in charge now? >> craig menear. >> we knew that. just testing you what's your price target >> up in the 200 or so >> it's that nebulous? >> 290, 210? >> 210 >> okay. all right. have to come back a little to get there. the outlook, they said they're affirming 2018

are they reaffirming where they are or where you are >> they're saying they are reaffirming their own. that's consistent with the consensus expectations >> so they're not being conservative >> probably they are, but at this point we set our numbers, a lot of my competitors set their numbers. >> is lowe's in your handful of top picks? >> i like lowe's a lot here. home depot is a better run company. i'm excited about lowe's because for the first time in a while they're recognizing their issues better they seem to be more aggressively addressing them >> more upside on lows >> probably. the key with lows now, you have a cheaper multiple, more depressed operating margins. if they can close that operating margin gap, that's probably a better stock dofrnlg th >> do they take bitcoin at home depot? >> joe, you're exhausting today.

what time is it? i don't know if i'm going to make it. >> i only do it to people that i love >> that means joe loves you. >> it's love. when we come back, a painting that we told you about yesterday, setting an auction house record we have the details next also a look at rise of this mystery company, up 200% in the last year, we will reveal the name of the company and talk to the ceo straight ahead if you know it, send us a tweet. back in a moment (birds tweeting) this is not a cloud. this is a tomato tracked from farm to table on a blockchain, helping keep shoppers safe. this is a financial transaction

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that's not the most expensive ever we had the 4$450 million paintin that we thought -- any way last night at sotheby's, the highest price in the auction house's history. the buyer was the only bidder. >> what? >> an anonymous investor that sotheby's lined up in advance. the most expensive painting ever was da vinci's that sold for 45$450 million, a speculation that whether mohammed bin salman was behind that >> art is fascinating. the guy had no idea, obviously >> that he was bidding against himself? >> no, that he was painting something that would be worth 150 million. what about the anonymous bidder that bid against himself unless this was a floor. oftentimes these things get prenegotiated that someone will come in almost as the underbid,

guarantee it >> this one went from 20 million a few years ago to 150 million 15 years from now, is it a billion dollars? it seems like there will be a regression to the mean >> what is the mean? >> i don't know. how can it triple from here? >> yeah. >> it tripled easily to 15 or whatever it is just seems very out of touch for normal people to -- >> for normal people >> all right i don't think -- we're not going to buy a sport s team? >> no? >> carolina panthers -- >> pool our credit cards, we could do it. >> the carolina panthers may soon have a new owner. a report says that billionaire hedge fund manager david tepper

is finalizing a deal to buy the team i don't understand this? he's a steerls flers fan >> i think he has to sell his stake in the steelers. if you're a steelers fan, then you own the panthers -- it's weird. tepper would have to sell his minority share in the beloved pittsburgh steelers. i think it would have been nice to buy it before yesterday all of these teams got marked up yesterday, didn't they >> in theory >> i don't want to -- >> gamble? >> no. legal or not i know guys that have been doing it for a long time >> the guy with the envelope >> yeah. you get the thrill, but you can run up a horrible -- >> you probably don't like gambling in general. >> no. >> i don't either. i don't get it

>> do you? >> no but i do like a lottery ticket >> that's the worst odds >> that's -- you're tempting fate >> if you win, think of all what happens. the curse of the lottery >> the curse of the lottery, but if it's 1 out of 10 million, overopening yourse you're opening yourself up for these weird diseases >> i would take that chance. >> you just said it's the worst of all >> worst of odds >> there's an article, it's in the "new york times" magazine maybe a week ago about this guy who worked at -- he was the security guy for 33 states, he rigged the lottery for himself this is a fabulous investigation. >> one guy did win twice in a week >> that's the music. coming up. did you guess the mystery chart

we showed you earlier? it was weight watchers stock it's up more than 1,000% since oprah winfrey announced she was investing in the stock in 2015 it's up 200% in the last year. mindy grossman will join us next on how the company is competing with fitness tracker apps and healthy meal startups. as we head to break, a look at yesterday's s&p 500 winners and losers ♪ the governor has declared a winter weather emergency... extreme risk of burst pipes and water damage... soon, insurance companies won't pay for damages. that is, not if they can help prevent damages from happening in the first place. at cognizant,

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welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning we had eight straight up sessions, but the u.s. equity futures at this point are indicating a down open nothing that couldn't change before 9:30. 31 points on the dow the s&p is indicated down under 3. nasdaq down just over 4. our next guest shed her company's old image to pack in some new embers. the strategy paid off for weight watchers shareholders. the stock is up more than 200 % in the last year let's bring in mindy grossman

who is participating in the women's wear beauty summit in palm beach, florida. good morning >> good morning. >> joe -- do you have your egg >> at 7:30 >> joe, by the way, caviar is also zero points >> that's for andrew >> thank you what about the champagne >> look how thin he is >> you save your points for the champagne. >> you know, before the break we teased this segment and we said how is weight watchers coming peting or thinking about all these health gadgets people are using, whether it's fitbits or different apps how much is that impacting the business of the strategy of how you approach this? >> actually, we have about 1.3 million unique users a month who sync our app with their fitness device so we work in tandem to have a

wholistic concept of wellness for people our biggest competition is people thinking that they can get healthy themselves only 5% of people use a commercial weight loss program so we're focused on being the partner for the 95% to help them be empowered to get healthy. that's what people want. they don't want to be dictated to they want to define what healthy means to them. we don't dictate a bmi or a weight it's giving people their own tools and being a partner to inspire them and educate them. let them define what healthy means to them. it's no different for beauty let people define what beauty means for them >> would you ever get into the hardware tech business and say i will make a watch or some kind of fit by the competitor or a scale or some kind of integrated thing? do you think that you can do it just on the app or software side or none of it?

the weight part, as you say, is not what this is about >> the way we think about it, we want to be your everything app if you have netflix for entertainment, you have amazon for shopping, you have spotify for music, we want you to have us for health and wellness we have partners from fitbit to apple. we'll sync and give you whatever tools you want we have done certain things in hardware for example, we have a bluetooth scale that can sync up with your app or with your device. for the most part, it's using tools within the app connect, our digital community which is very powerful, and which is why in addition to having our highest subscriber base at the end of q1 of 4.6 million, we had the highest retention in the history of the company. a lot of it is because we built

these digital communities, physical communities over 200 subscribers a month are actively engaged in connect. over 2.6 million are using our proprietary bar code scanner, over 260 million foods a tracked per month. the way we think about that, that's 260 million opportunities for engagement that's what we're seeing >> what are you seeing -- i'm curious about millennials. do they approach this differently, generationally than others >> i think they are an example of wanting to define what healthy and beauty means to them we believe in body positivity and confidence, they also want community and to connect with other people they want to be able to have the tools to be able to do that. that's what we're finding.

we're seeing our membership base change we were always very female focused in our marketing between our influencers and our program and what's happening today, we're seeing more diversification in our base than we have in the history of the company. it really works for everyone there's nothing you have to eat. there's nothing you can't eat. so it's giving people such a livable way of being healthy and that is making a big difference because it fits into their life, not the way -- not the other way around >> before you became ceo, mindy, oprah bought a 10% stake in the company. how active is she? what understandings do you have in terms of how long she plans on being a shareholder in weight watchers >> i spent time with oprah before i joined the company. i always say who wouldn't want oprah as a board member?

she's been fantastic she's incredibly engaged and passionate about the impact we can make she's been highly accessible as we're goingon this transformation journey and then in particular in the u.s. she's been terrific with supporting our marketing companies. she's very passionate and committed to what we are trying to accomplish. we have a problem now. there's a paradox. everybody is talking about the wellness economy, 3.7 trillion in beauty, everybody wants to talk about wellness, nobody wants to talk about diet, we're all excited about the new $20 smoothie, 50 dolla$50 face maskt we're getting unhealthier as a global population. so we're trying to solve that paradox by giving people the tools, the education and

inspiration. it's critical. >> what's the thing you found now in terms of churn or avoiding churn in your program is there a single tactic or strategy you have found that you can almost guarantee that somebody sticks with it? it's not about getting people to sign up it's about people staying on it. >> of course our business is recruitment and retention. to your point, the reason why our retention is at an all-time high, i would say freestyle, the program that we launched in december that is the most livable, simple, over 200 zero-point foods that people can have and integrate into their lifestyle i would say the second, which is always the core foundation of our company is community so whether it's the digital community of connect, which is so powerful. imagine a community that is

99.7% positive in today's world. and that's what people -- even people who have reached their health success, they stay because not only do they want to be inspired, but they want to inspire other people we also have 30,000 meetings a week globally. 8,600 coaches. that's been very important now we're bringing people together in different ways for example, this weekend in new york we will be part of harlem eat-up with marcus samuelson and we'll have a big event there we just finished our third ww cruise. think of it as almost 1,000 people for a week of health and wellness on the sea. all of those things are contributing to people feeling they're part of something that is really not only inspiring them, but they're inspiring other people >> mindy, thank you. >> thank you >> have fun today. >> it will be terrific thanks coming up, the race is on.

states are competing to get infrastructure in place for sports gambling after a supreme court ruling paved the way yesterday. we'll tell you which states are in the lead. and later, fda commissioner scott gottlieb will join us to talk about the president's drug pricing plan stay trune etuned you're watchi "squawk box" on cnbc hotel, car and activity all in one place. ♪ at ally, we offer low-cost trades and high-yield savings. but if that's not enough, we offer innovative investing tools to prepare you for the future. looks like you hooked it. and if that's not enough, we'll help your kid prepare for the future. don't hook it kid. and if that's still not enough, we'll help your kid's kid prepare for the future. looks like he hooked it. we'll do anything...

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time for the executive edge. seattle has approved a new tax on big business including the city's largest employers, starbucks and amazon the final package is about half the size of the original proposal which was strongly opposed by 132 businesses. itcompanies $275 a year for each full time employee it only affects businesses which generate $20 million or more in the city after the vote amazon said it

would go ahead with a new downtown office building it had put on hold, but says the action forces the company to question its growth in the city >> wow >> all right coming up, ladies and gentlemen, place your bets. the supreme court paving the way for states to allow sports gambling the fallout from this game changing decision in the daily news has a cartoon of someone saying i'm betting $500 on whether pete rose gets into the hall of fame any way. as we head to break, here's a quick check of what's happening in the european markets. at&t provides edge-to-edge intelligence, covering virtually every part of your retail business. so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got

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it is crunch time for new jersey the state is rushing to roll out infrastructure after the supreme court deemed the activity unconstitutional great to have you with us. your site is a site devoted to content. you can't place bets on that actual site. are you expecting a pickup in traffic there? >> i think so, yeah. i mean, we've already seen a

tremendous amount of interest in the past 24 hours since the supreme court announced the repeal on sports betting it's been fantastic for us and it's going to be fantastic for all sports fans who are interested in engaging this content and finding ways to look at sports. >> in terms of the rollout, just because they lift the federal ban, doesn't mean the state can go ahead a lot have to have a referendum to voters. in general analysts are saying the states with laws in place will be the first to roll out. like new jersey, connecticut where you are, new york, pennsylvania, west virginia. what do you expect this rollout to look like and beyond the states that have laws in place, who are the next states to go >> well, first, i think the rollout's going to be aggressive where people have already passed the laws you mentioned a few of those states the challenge is how do you get the infrastructure ready what are the sort of more detailed regulations what is the licensing process?

the states that you mentioned plus new jersey, they're all going to be very aggressive in getting ready. new jersey i've seen some reports there where they want to be ready to take bets within a month. in new york state senators have indicated they want to take bets by the football season this is what all these states that have enacted sports laws in the past couple of years getting ready for this moment, they want to be ready for football and so you're looking at states like illinois, california, some of the larger states where they have some sports betting laws that are ready to be passed. so those are the states that i think are coming up next >> you know, a lot of the states were looking forward to the revenues of sports betting is it going to be the case of what we've seen with the legalization of marijuana? in california they thought taxes from pot revenue was going to hit "x" "y" and "z" in the first quarter and it fell short.

people simply bought their pot on the black market instead. it drove activity to the black market are you expecting the same thing when it comes to sports betting? >> i think it's a little bit different with sports betting. it's hard to say exactly what the tax revenue is going to be i think a lot of people are probably overestimating what that revenue is going to be on a state by state basis but you make a great point about the black market right now people that bet have a lot of ways to access sports betting. it's one of the reasons sports betting has become more popular and why there was a sea change because you can access it so easily through digital means, through your computer. it's something people have become more comfortable with it's going to be hard to get people to stop doing that because the states decide, okay, we're going to allow this. there's going to be revenues and taxes. there's going to be higher commissions. so the states have a real challenge of trying to figure out how we can compete with the

already existing marketplace where people have easy access to get to make bets >> there also could be a dispute against the sports leagues and the casinos. a fight over how much of a cut a sports league could get. we're in uncharted territory right now. >> yeah. this is where the rubber meets the road this is about the money, right so the leagues have often been saying they're concerned about the integrity of the game. at the end of the day, i believe they believe they're concerned about the integrity of the game. but at the end of the day this is about how much revenue can everybody drive from sports betting. it's why people have been lobbying to have it legalized to begin with it's why adam silver of the nba came out four years ago saying he thinks sports betting should be legalized the challenge for the league and businesses is, they would rather it be federally regulated. they'd rather it be a federal law, not state by state.

state by state as we're seeing in the marijuana laws, it makes it harder. it's harder to make money off of that from larger businesses that want to come into the market. >> all right, chad we're going to leave it there. thanks for your input. >> you bet thanks >> i still don't know how i feel about this >> i know. >> in what way >> i'm back and forth -- >> i'm the same way with marijuana. people get as much pot as they want already. >> if you want to gamble, you already can gamble >> i mean, do we need to open up new debtor prisons i'm taking it to the far out hyperbole, but is there any due diligence like you do with when you open a brokerage account whether you're able to take on that type of risk. how big can your debt get before people cut you off online or whatever are people going to have $50,000

worth all of a sudden? but these people with a problem, are they already manifesting a problem -- >> in other ways or in a not legal way. >> is it the same with pot i don't want an entire generation of teenagers stoned all the time i don't know it's hard. then again, there's the personal freedom side of things >> yeah. i would think you -- >> i know. but i'm not a -- i'm just not a knee jerk -- not everything is just a knee jerk i don't moralize what i think. coming up, your market strategy session, we're going to get you ready for today's economic agenda that could move markets. look at the dow. later, big interview, scott gottlieb will join us talking about the president's plan to

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markets are on alert for geopolitics and key retail data. both in focus today. what can you expect from wall street can you expect a summer price in gas prices? >> what are you doing? >> what you might pay at the pump straight ahead. and the supreme court paving the way for states to allow sports gambling. we're going to tell you which states could be the first to take wagers as the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york, this is

"squawk box. >> good morning. welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site in times square i'm andrew ross sorkin with joe kernen and melissa lee becky has the day off. dow off about 43 points. we had home depot earnings out a little bit earlier maybe weighing on things nasdaq off about eight points. s&p 500 off about 3.5 points couple of headlines to bring you as well. the u.s. consumer in focus this morning as the fed looks at data this morning it would be half the increase registered in march. home depot went lower in premarket trading this morning the retailer beating estimates by 3 cents but revenue and comparable store

sales were below forecast. did maintain its full year forecast and president trump's nominees for the federal reserve will testify before the senate banking committee today. columbia university economist richard claudia and the president's choice to be fed vice chair michelle bowman has been tapped. both expected to be confirmed. elon musk and his firm tesla making head lines again this morning. the driver of a model s rear ended a truck over the weekend said the car was in autopilot mode in the collision. the driver was looking at her phone during the time of the crash. musk saying it's super messed up that tesla crash resulting in a broken ankle is front page new and the 40,000 people who died in the u.s. auto accidents alone in past year get almost no

coverage it's worth noting that morgan stanley reduced the price this morning. a quick stock to watch, agilent's forecast, revenue roughly in line. however the life sciences and testing company's third quarter guidance fell short of estimates. as a result stock's down about 7% let's get you caught up on the broader markets now. joining us now is mr. timmer from fidelity. and here on set with us david bonnson. david, i'm just considering some of your thoughts on this we did go through a period where all stocks could do is go up it was about a year, i think, until february of this year. and it's been different, choppy, volatile haven't really made any headway. and you attribute that to nor l

normalization of interest rates that's going to happen we blame it on the new cycle, but it has more to do with just resetting in terms of an environment where rates are headed up not down >> it can't be the new cycle the fed is by far the best explanation here as far as the upside lying skittishness, it's all volatility first of all, we were not volatile enough all of last year that rally you're talking about where things kept going up, couldn't go down it actually started the last time i was on set with you the day after brexit in mid-2016 lasted a year and a half and what changed at the end of january was what the mueller investigation? no that was a year earlier. eight months earlier all of a sudden president trump talking protectionist. that had gone on through the whole campaign the only thing that's really changed is the fact that rates are moving higher and they've begun normalizing the balance sheet. it's creating the paradigm of --

>> sooner or later the fed had to do this anyway. is there a notion that they'll overshoot or screw it up >> first of all, they will overshoot. that's what they always do that's probably a ways down the line in the meantime, i would agree i think it will resolve itself positively the whole issue i don't understand we're not talking about more with this earnings season and it's actually the reason that home depot is down because they've pucked the trend. tax reform doesn't allow revenues to grow >> it could eventually theoretically. >> from capex and -- in fact, i think it will. that is a lot of the thesis we have to be bullish now over the next 6 to 18 months is that capex growth will grow in the meantime, earnings growth and the overall acceptance will

allow equities to recover. i don't think that will happen across the board i think the overpriced stuff will have to be repriced that's why we are anti-fang and pro-value. >> living here, i'm not feeling real flush right now had to ramp up my withholding. right? for being pretty well off in general, i'm supposed to be like the rich guy that got the big tax break. >> i moved to manhattan to get a tax cut. >> backfired for us, didn't it, sorkin little bit >> i agree >> that's okay not complaining. not complaining. anyway, are you an inflation hawk what's your story? what's bugging you today >> everything is fine, actually. the fact the market is going sideways while a valuation vertigo is being corrected i think is actually a very good outcome. and i agree with david the market's driven by two

things earnings and interest rates. those two things drive valuations for the last nine years, earnings more than doubled but the pe more than doubled and therefore price quadrupled it's been an epic run. in the last two years, the s&p until january at least, up 52% against record low volatility. the market kind of got ahead of itself interest rates are rising. you know, we have a double whammy of low rates and low risk premium across all asset classes. that's a tough hurdle to overcome this is why the market i think is not rewarding the 24% earnings growth that we saw in q1 and likely 20% to 22% in q3 don't reward earnings growth that high because it's not considered sustainable so we're just having a reset and my sense is it's a benign reset. the pe is already down three points since january and the s&p is down less than

10%. i'll chock that up as a win. and i kind of liken it to the late 2014, early 2016 period where the market just sat around and did nothing. you know, that's a pretty good outcome. because markets don't go up in a straight line. they probably never will the question is when you correct a very, you know, lopsided advance, you can do it through price or through time. and we seem to be doing this through time and certainly the earnings backdrop is providing a very large bailout, if you will, for pe levels that just got too high back in january. >> you date to it brexit which you did, what's a 40% move, basically. the reversion of the mean just means that -- >> that's right. and if you got to the bottom level of brexit, 40% with the lowest amount of draw down in market history so you had the combination of a really big run with extraordinarily low volatility

that's the risk premium people are looking for. right now i think it's just a little awakening of how this stuff is supposed to work. if we think a flat market is going to continue for a little while, it does behoove people to try to get paid through the dividend growth approach we take you're seeing the highest level of dividend increases we've seen in years that's creating cash to investors. >> if we're going to have at least for the near term let's say five years, just a lower interest rate environment overall -- right because the terminal fed target now is, like, half of what it was in the '80s and '90s >> and it's not going higher than that in your lifetime or mine >> that means, are we still stuck with a long-term annual gain of 7% in equities or could you get annually 10%? >> on a nominal basis, higher

than that. on a real basis, that would be about what you kp pt >> jurrien, is that what you think? it seems we're going to be permanently -- stocks would be more attractive than fixed income for longer than normal. like, i would think. i don't want a three -- i still don't want a 3% 10-year. i'd rather buy a yield stock or something. >> yeah. i mean, if the fed's going another four to five times over the next two years, then the 10-year probably belongs between 3% and 3.5%, let's say it all comes down to the term premium. it's the premium they demand when they lend for a long time and that is negative now with the fed slihrinking its balance -- the big question is what happens to the term premium? if it comes back to life, we could be looking at a 4% yield

and that's a different ball game to your point, over the past nine years, earnings went up pes went up and price went up way more than earnings i think we're that part of the cycle where pes are coming down. that means that price is not going to go up more than earnings like it has for the last nine years. so you are looking at mid to high single digit in terms of price. >> all right thank you, gentlemen do you guys know any tuesday songs? what about ruby tuesday? yesterday we were doing monday -- >> monday songs. >> you know what we electralmosd stormy monday. we don't need to -- right? you probably would like to play that, remind everyone, right but we did not >> we did not. but i'd like to. >> yeah, you would to play stormy monday.

i know you what do you got? ruby tuesday, greco? we got a couple tuesday. what about wednesday thursday >> i don't think of any wednesday or thursday songs. >> i'm just thinking commercial break would be good about now. coming up, with oil on the rise, gas prices could see a spike. prices already on the rise towards the busiest driving season of the year outlook next and later, a landmark decision by courts to give states the go ahead on legalized betting stay tuned you're watching "squawk box" on cnbc because, when you really, really want to be there, but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies.

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how much do you think of this as seasonal and how much of it is an actual increase how do you separate that because people will say, oh, you know, we see this every year we are at a higher point than we were a year ago. >> obviously the input -- the crude oil costs has gone up. that feeds into what makes the gasoline part of it is -- there's a juice factor, if you will, for gas prices this time of year 10 to 15 cents a gallon into memorial day once we get past memorial day, once the market gets a sense that suppliers are more than ample which they are, demand i'll tell you is a little different. we've had regard demand weeks consistently since the beginning of the year. very surprising, high numbers. high levels of u.s. gasoline exports have also driven this decline. it's something to watch. we could be on the kus of a hot high prized gasoline

summer >> what are you anticipating in terms of the price of oil, for instance, then the price of gasoline >> i'm going to channel my inner dan rather and say this is more nervous than a room full of rocking chairs there's just so much anxiety over the situation in the middle east right now it's really on the boil. sometimes it's just, you know, okay and it's its own thing right now the situation with the election in iraq changes the dynamic that's somewhat hostile to the u.s cleric got elected surprisingly there. and now the hostilities and the violence in gaza yesterday middle east is just on fire right now. there's a new dynamic with saudi arabia now and the gulf countries seemingly to align with israel against iran so you have a real greater chance for direct conflict as we've been seeing. >> can i ask you aramco -- >> yes >> the never-ending ipo that

isn't or will be or what have you. does this make it more likely? >> less likely >> buzz they don't need it as much. >> they don't. with venezuela imploding, could go down to less than that. they're going to allow this price to run up to $85 a barrel for wti. brent is already near $80 this morning. >> but how long can it stay there? right? that's the key for them. i think we had heard from jackie deangelis for them to operate on a long-term basis, they need the price to stay around $88. >> that's their budgetary break even they're in control right now although u.s. production is ramping up in a big way. permits in texas are up 34% year on year. there's scores of drill of uncompleted wells. we could see a burst that gets us over 11 million barrels a

day. that's the horse race we're in does the decline in venezuela and the purposeful withholding to the open market by saudi offset enough of the u.s. growth right now it is. right now the saudis are winning thanks to venezuela's implosion. we'll see if we can edge them out. for now it'sgoing the stay hig and it could be engineered higher by the saudis until they get pressured by president trump. >> you think that's a four or five month situation >> i don't think we see any addressing of the situation until q4 >> is there a natural lid on oil prices is there a natural ceiling one would expect producers come online and start drilling for oil at a breakneck pace at these prices and then therefore in the longer run reduce the price of oil? >> which they are. they're doing that right now. >> so we would be beyond three and a half year highs potentially if it were not for u.s. producers >> no question about it. it would be a very tight situation. the question is when do the

saudis finally respond on the market they have a spare capacity of 2 million barrels. they could easily knock the price down but they're choosing not to do it right now they're trying to be real cute about managing the sort of longer term structure of the market they're forgetting about price now and more concentrating on what they calculate as global investment in future production, future infrastructure to keep a balance. i don't think they want much more than a hundred. but i think they want to allow us to suffer there for awhile. certainly the $85 to $95 is well within the realm of possibilities. >> thank you, john coming up when we return, the supreme court opening up sports betting across the country. we have a report of the impact of the decision. but first amazon and other big businesses near seattle, they're

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welcome back to "squawk box. seattle has improved a new task on big businesses. the final package is about half the size of the original proposal which was strongly opposed by 132 businesses there. it will charge companies $275 per year for each full-time employee in seattle. this is raising an estimated $44.7 million per year it only affects businesses that generate $20 million or more of revenue in the city which totals about 585 employees or about 3% of seattle's businesses. the tax was levied to combat a housing crisis attributed in part to an economic boom that has driven up real estate costs. after the vote, though, amazon said it would go ahead with a new downtown office building it had put on hold over its objections to the new tax.

but it says the city council's action causes it to question the growth in the city we'll see what happens as a result of this new tax >> and -- i mean, it sounds good on face value. right? you got the yuppies and the bohemians moving in displacing people >> driving up the cost >> fine. i'm not going to argue ideologically. it gets to a point where it's counterproductive to the people you're trying to help. >> but it hasn't happened yet. zblit hasn't been put in place >> it was going to be $500 then amazon said we're not building the tower and we're not adding 7,000 jobs. it would be nice to -- hell, just do 100% of revenues goes to help people? you know, they don't need any profits. there does come a point where it flips and becomes counterproductive for the people you're trying to help, right you would admit that >> yes got to figure out the balance. >> it's a five-year tax.

we'll see how it turns out >> if it ends up where fewer jobs get added or things -- san francisco had a lot of great ideas. have you seen what they're dealing with in that city right now in terms of quality of life and everything else? not all ideas work they feel good on -- >> the quality of life issues in san francisco are not a function of taxes >> i'm not saying it's taxes in terms of trying on the front end to do all these virtuous things that end up backfiring. coming up, the supreme court opening up sports betting. i don't know about this either across the country contessa brewer, big gambler, in las vegas joins us with a preview. you're in las vegas whenever you can be have i got that right? >> you know what i know when to walk away that's what i have to say about that, joe. these casino companies, big winners from the supreme court decision if they have a national footprint. coming up, i'll tell you who stands to benefit the most from

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good morning welcome to "squawk box" right here on cnbc we're live at the nasdaq market site in times square shares of se man teymantec sayse was no impact from an accounting probe. they also gave an update to their forecast we'll also hear how stoke holders adjusted today is the filing day due to show holdings of the end of the first quarter. those filings happen on the 45th day of the end of the quarter. >> wow is that today? >> that's a big day. tomorrow we'll be talking about it and toys r us putting its mascot jeffrey for giraffe up for sale the company is trying to raise

cash as it winds down its business it's just one piece of intellectual property they're trying to sell along with brand names like babies r us >> apparently toys r us bought up a bunch of domain names that were close to toys r us in order to prevent them from being used that would associate certain things with toys r us. sex toys r us are one of them. >> what does this have to do with jeffrey >> the domains are available now. so if you ever wanted -- there's a whole list of them. >> there was a tweet that i foll follow i don't follow you anymore >> it's too painful. >> i would wake up and get mad but you pointed out that jeffrey and sex toys r us are -- >> it wasn't specifically because of that domain name. it's because of all the other domain names it was the last thing you would

expect toys r us would own the last thing >> i didn't understand the tweet, but then you explained it to me. >> by the way, joseph. there is a more polite way to not -- to effectively unfollow somebody without unfollow them mute >> then you wouldn't know -- i want you to know that i'm not following you. >> well i know. >> that's what i mean. so i don't want to do it politely. >> did you block andrew? >> no. i just stopped following him >> it's a badge of honor for me. >> yes contessa is in las vegas which is buzzing this morning on two stories. number one, two board members are stepping down from wynn resorts and the supreme court's decision to strike down a federal law that prohibits sports gambling clearing the way for states to offer sports betting. you nailed it, too, contessa the bad experience i had was when i had a debit card. i was up a little. and then you go down i had the feeling of going back

up and i kept going to get more -- and it was not a lot of money, but it was a horrible feeling when i kept going back to the cash machine to bet more. horrible so i don't do it >> apparently you did not listen to kenny rogers. you got to know when to hold 'em and when to fold 'em >> you pointed that out. you know how to do that? have you placed a bet since you've been there? >> not this time but i'm a very good roulette player i'm good because i know when to walk away. and speaking of walking away, two wynn board members are walking away you've got long-time board member former nevada governor bob miller and john hoggenbuck who was the target of elaine wynn's campaign. hard to say. the company spokesperson that of the proxy cards that have come in, only 5% are elaine wynn's blue cards now, though, the board is now made up of eight members

it shrunk. four of those are women. last night i had a chance to speak to betsy atkins, a well known expert on corporate governance, about the futures and challenges ahead for wynn resorts. >> the biggest challenge, really, is going to be getting everybody focused on the performance of the company, the expansion in boston, the future opportunities in other geographies, and focusing on the business of the business which is delivering premium service. >> now, elaine wynn has been persistent in her criticism of board members she sees as too close to former ceo and founder steve wynn this is made up of people close to steve wynn. maddox served as a groomsman in steve wynn's wedding i asked her if it creates a problem moving forward >> i think that in any company

where you've had an iconic founder who has actually created the las vegas of today, you know, he's somebody that everybody admires and learns from and, you know, he was a large figure and touched everybody in the industry so i think that there's probably a pretty large circle of people that have been influenced by him. >> what do you think of matt maddox and his ability to step into the ceo shoes >> what i think is remarkable is how smooth the succession has been the company hasn't missed a beat his leadership team is very cohesive amazing clarity of vision and priorities on moving forward the business, achieving great financial performance, expanding in boston, and looking for other major opportunities. >> i also talked to pat milroy

now they've lost hoggenbuck who was part of the committee. it will continue with two people they will finish the work. it will be in sync with massachusetts investigation as well and as for the shareholder meeting on wednesday, it's tomorrow, it's lost a little bit of the fireworks because the target of the activist campaign has stepped down so let me transition now i want to talk about the story everyone in las vegas is talking about. and that is the supreme court decision that paves the way for legal sports gambling nationwide this could be a $5 billion win for the industry think scientific games and igt, those with regional casinos like penn and boyd gaming could see a big boost here the most expensive investment in getting sports gambling is the sports book itself take caesars who has a strong

sports book. it can expand that in its properties where sports gambling could be possible by the end of june mgm was chomping at the bit here ready to take its experience to the borgata. here at the wynn, enthusiasm is tampered they're waiting on the commission for it and its license is under review. >> we're going to talk a lot about this, contessa, right now. joining us now is joe asher. ceo at william hill u.s. which built the sports book at new jersey's monmouth park years ago. now it's a big step closer to opening. what's the time frame, joe i mean, this could be within weeks, months, right >> well, certainly it'll be within weeks exactly how many weeks is open

for discussion from an operational perspective, we could be ready to go really within a few weeks then we have to also sort through the legal and regulatory aspect of it the taxpayers of new jersey have spent six years pursuing this litigation to its successful conclusion and i think they would expect to see the fruits of those efforts in the near term. >> so you're ready it's a british company you figure the u.s., it won't be long until it is the largest sports betting company in the world. >> i don't think there's any questions about that william hill has grown to become the largest sports book operator

in nevada. we always had an eye outside the state and what the opportunities might be we made a bet back in 2013 on monmouth park in new jersey. obviously that turned out to be a pretty good bet. and there's no question the u.s is going to be a big commercial opportunity for a lot of folks there'll be plenty of competition and i expect we'd get our fair share >> people talk culture people talk, just, the philosophy of betting that we're talking about here and your point is it's widespread already so are any questions about whether this is a positive for society? they're just moot because you're talking about something that is so much like other things going on anyway? and it may as well be legal and taxed? >> look. sports betting is widespread

throughout the country i remember growing up in delaware and my dad had his local bookie so people had been betting they've just been forced to do it in the illegal black market without any sort of consumer protections, without transparency without all of the things you get in a regulated market. now the supreme court -- it didn't do anything to stop the black market in any respect. look three and a half years ago, adam silver commissioner of the nba wrote an op-ed in "the new york times" and said -- i'm paraphrasing, of course -- but it was time to move sporting betting out of the shadows and into the sunlight. he was right it took us three-plus years to get to that point, but we're getting closer to it now >> it does help. i think of the final four.

if i don't get my brackets in, i don't care about the games if i get my brackets in, i'm sweating out 32 games on -- so i understand how it works. but i don't want to end up like jimmy con in "the gambler. i don't want to have that feeling either. >> is it the feeling or your bank account >> that too. >> the larger issue is it will hurt people. >> societally. i know but his point is it's happening anyway i don't know >> is it really happening? or is this just going to make it happen exponentially >> look. i got to tell you. i can speak from personal experience on this my father gambled too much and for a small segment for the population, it becomes an issue. i think those of us in the gambling industry have to be cognizant of that fact and try to be responsible about it and the point is i think that's much more likely to happen in

the legal and regulated market than it ever would happen in the black markets. certainly nobody stepped in to help my dad when he needed help. i know that. and so i think there are a lot of positives to float from this. but it's important those in the industry remain responsible. and focus on all aspects of this not just how quickly we can start making money out of it >> it's not a pure game of chance either. that's what's kind of attractive about it if you do your homework, you know, fantasy leagues or whatever, you can actually -- i guess you could actually do well based on being good at it too. which is kind of -- that must be attractive to a lot of people. but there's always that element of chance too. joe, thank you it's happening it's happening i know all the owners of the sports teams are lighting cigars today, probably. it's going to make everything more interesting to watch. joe, thank you appreciate it. >> you got it.

coming up, we're going to introduce you to a company that allows allows customers to send and receive income and it's attracting some big -- yeah she's excited. some big investors the ceo of bit pesa joins us have you heard of it >> yes africa >> as we head to break, here's a look at the european markets and you're listening to "voices carry. but the paband is called "'til tudaesy.

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i'm plugged into equities - trade confirmed - and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you. welcome back to "squawk box. blockchain technology being deployed to derisk emerging markets with bitpesa to change the face of money payments and transfers. joining us right now is the founder and coo of bitpesa it was the first blockchain company in the world to make a

market between african currency and bitcoin. also the first female founded bitcoin exchange in the world. thank you for coming in. >> thanks for having me. >> fascinating story you live in nairobi. >> now i live in senegal i founded the company when i was living and working in nairobi for six years. >> explain what bitpesa is >> it's a platform for emerging market currencies. we use all the latest technology we have a great team distributed across six offices we use bitcoin as a means of settlement between our workers reduce friction in frontier markets. i believe the way it's most use f -- >> so one of the things we've often talked about is just the volatility of bitcoin has made it a very difficult currency to use in the context of settlements, i would have

thought. am i wrong >> well, the nigerian nairo was more volatile last year. you can understand there are tools and methods to route volatility you won't hold it joer night you'll trade in that instance. the beauty is you can buy it and sell it quickly. almost kind of like deliver on need opposed to holding long-term. >> how many other examples are there like what you're doing in other places around the world. >> we've been awesome companies in mexico, philippines, korea, india, south africa. they're all using bitcoinas either a means of exchange or form of payment. there are some cool new companies coming out of the 'em rats they don't get a lot of play because of the idea of speculation or investment of those of us as bitcoin believers call it. it is more relevant here in north america.

>> i think what people don't sen understand is the friction is tremendous where weather many people work as -- transferring money can run you 10%. >> yeah. that's the remittance example. remittance costs can be up to 20% in sub-saharan africa. even large multinationals. united airlines exited the market in nigeria because of their foreign currency exposure. if united airlines are leaving, think of all in between that help to grow across. >> ipd those small up to the internationals we help companies either trade out of their exposure in african currencies or trade in

and our best quarters are those that trade across the continent. >> i don't know if you heard buffett, gait, and munger all had critical things to say about bitcoin. >> sure. >> you think they just don't understand >> listen. i'm a big fan -- >> by the way, they also think it's like gold they don't think it's -- that it's an -- >> when did warren buffett start outside of america >> bill gates thought there were a lot of great things about the block chain technology you see these. can you use blockchain technology without the aspect of cryptocurrency >> can you drive a car without gas? i mean, for me, can you run a marathon without food?

>> tesla >> okay. right now, no. but i mean for me it's really you can have a blockchain but it looks more like a data base. then it uses -- >> like an intranet. >> i started by career at credit suisse in the prime broke ranl. to get to that level you need the infrastructure but how do you start a market in a new area without having a distributed system that lowers the barriers of industry >> for those who trait bit coin, how would you even try to think about it >> i'm not allowed to give investment advice or speculate nap would seem to be influencing my customers so i'm going to draw the line there. but what i do see it as an essential piece of infrastructure for those that are excluded from america -- th

rates are for over 50 years double digits. something has got to change. >> somewhere between $30 and a million dollars. >> you think >> is bitcoin? >> we'll see >> maybe below $30. >> are you only using cryptos. >> what's your -- >> i go to what's liquid i'm about my business model. not about the technology i use it because it works. i'm not going to use it because i feel the need to it's not a religion. i'm a business owner for right now bitcoin is the most likt. >> thank you fat -- fascinating don't go anywhere. scott gottlieb coming up

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higher as overall industry sales decline. and bernstein upgrading cbs. saying based on recent events it now sees a near-zero chance that cbs will strike a deal to combine with viacom. and gap upgraded to outperform compelling share price level and any pressure on revenue from promotions is already reflected in the stock we still have a big hour ahead. after the break, scott gottlieb will discuss the president's drug pricing plans and later, tesla under fire after a model s driver says the car was in autopilot before it crashed into a fire truck over the weekend. elon musk defending the company yet again. detailed report from phil lebeau straight ahead "squawk box" will be right back.

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because it's only when you collaborate and cross-pollinate many points of view that something wonderful can happen. those people might just get what they want out of life. or they could get even more. earnings alert, home depot falls short. a key read on retail sales 30 minutes away. plus place your bets we'll talk to the ceo of a new jersey racetrack which has posed a profit from legal sports gambling 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 with andrew ross sorkin and melissa lee becky is off this morning. the futures have been in the red most of the morning. these are about the worst levels we've seen down about 20 when we started. home depot, i don't think, is helping the dow. >> down 2.5% >> yeah. it's a little bit lower. down 70 now on the dow and the s&p down 7, nasdaq down 23 10-year back above 3% this morning. 3.02%. okay here is what's making news this hour home depot shares, they're under

a lot of pressure this morning the retail earnings beat the street but revenue fell short. home depot blaming a slow start to the season as the reason there. down 2.5% this morning uber, this is big, uber is ending forced arbitration for workers, riders, and drivers who bring sexual misconduct claims that's come under a lot of scrutiny microsoft became the first to end that practice late last year uber also rolling back confidentiality agreements that would keep scandals secret also in washington news this morning, the u.s. ambassador to china saying the two countries are very far apart in trade negotiations apparently, joseph, president trump's tweet about helping zte and all those employees may have not helped the way we had hoped

or thought ambassador terry branstad said they have not met their financial and services areas or reduced auto tariffs his comments come as china's vice premier heading to d.c. today for trade talks. msci adding 234 china a-shares equities. it will be included in the industrial and commercial bank of china and petro china the included stocks is likely to increase the foreign institutional investors. and a few stocks on the move this morning, a widely followed morgan stanley analyst cutting price target on tesla. new one is $291. is that stock off about 3% today. adam jonas saying he is adjusting earnings estimates due to model 3 manufacturing problems also shares of data center firm

switch they are down sharply. since its ipo in october switches down now more than 30%. and agilent's earnings were in line. guidance falling a bit short of estimates. you're looking at that stock down now a little over 6% this morning. let's get to our story of the morning. this is the background president trump giving the fda commissioner and frequent guest last week. >> scott gottlieb has done a fantastic job. where is scott stand up, scott. stand up >> joining us now fda commissioner, scott gottlieb i'm sure you had a lot of input into the final sort of strategy

that we had last week. is that the case and do you think it goes far enough because the worse case scenario wasn't realized. but what are the main components you think will help? >> from my standpoint, what we're doing is trying to bring more product competition onto the market on both the generic drug side and new drug side. we're going to be announcing, for example, a major change to the drug approval process to make it more efficient later this month we're also going to be announcing new policies with the respect to biosimilars to bring more to the market a lot of this was focused not on bringing new products to the market but on price competition. trying to create more on the market and giving medicare the ability to negotiate better prices so a lot of the new policies embedded to try to make the medicare part d program more

efficient. >> the pbms and so-called middle men. not just the pbms, but anyone, you know, sort of takes on that role net positive or net negative overall for consumers? >> well, they consolidate and help give health plans leverage. some of these negotiate on behalf of 78 million americans that's bigger than the size of some european countries. they do consolidate buyers and give health plans more leverage to -- they're going to be getting paid on a cut on list price. there's an incentive to see the list price go up and up and up the people they're supposed to be negotiating against they prefer when the prices go up because they make more money on the higher prices than on negotiating a better deal. that's got to end. we're looking at things like the safe harbor that gives them

protection to receive these so-called rebates. when they sell drugs to customers, they get rebates -- they pay rebates back to the health plan. it's sort of a scheme that creates upward pressure on the list prices. >> what is the answer? and is it addressed in the president's plan for the free ride, if you will, that we figure a lot of foreign countries get. what's the right answer there? and how do you do it without making the situation worse with our allies in different parts of the world? >> i think this is a larger part of our properties more generally and seeing american companies have their property appropriated overseas it's not just with drugs but it's every high ip endeavor that the ip itself isn't paid appropriately overseas or in some cases is appropriate entirely we see that in some cases with drugs as well. this needs to be handled at a trade level. it's well above my pay grade

looking at how europeans spend money on drugs we find they do underpay relative to us for branded drugs. they put price controls and restrictions on those drugs. but they're overpaying relative to us on generic drugs it's the exact opposite of what you want you're overpaying for your least innovative drugs that's not a system for success in the long run. so i don't think they're set up for long-term success. >> commissioner, should the most innovative pharma and biotech companies be concerned it seems almost like a push/pull situation potentially. on your end you're trying to make it easier to make it easier for biosimilars to get ontho the market place, on the other side, there's a possibility of some of these druss which could include some of the most innovative

drugs out there which cost billions to develop. >> there's a a lot of established drugs in the market place. but you don't benefit with price competition between those drugs. in the medicare part b system, it's a price taker on those drugs. if you were to move those to a competitive system either medicare part d or in something called competitive acquisition program. to try to make competitors scheme for the purchasing of the drugs. if you were to do that, you could benefit from some price competition between the drugs in these categories -- >> which categories specifically >> if you look at some of the anti-inflammatory drugs. when we created medicare part b or medicare part d, when we created that and i was at medicare at the time, with these part b drug categories that were delivered in doctor's offices. in most cases there was no

competition in this. now these drugs have become the mainstay of medical care and these categories granded that's what the secretary was talking about yesterday when he talked about moving these drugs from part b into a scheme like part d where you can have co competitive building >> it still doesn't seem we got the perfect taste for pat and protection it's such a stuff thing to gauge perfectly. we got the extended release versions, then they spend more money on marketing than innovation i don't get -- they were supposed to give an exact amount of time. do we have the right idea for how many years to -- and the way generics come in, that's crazy

too. which is one of the reasons that we're in this -- we have this problem. >> on the biosimilar side of our house, there is stra-- you're r different drugs have different patent terms also keep in mind these are long-term investments. it takes a lot of capital to undertake a drug development program. we think the market based system gives appropriate incentives and rewards for people to innovate the become comes to your mind when there's a lack and gain the system one of the ways i see companies doing that and we're going to take a step to try to address that just this week. is when branded companies take steps to block generic firms after getting access to e the physical doses they need

we acquire simple studies. they have to run a small study sometimes they can't go into the market and buy the doses that they need to do those comparison studies. that's wrong we're trying to to take steps to address that >> i've got people that are interested in what happens with -- you know, you talk about tobacco a lot when you're on and your efforts there i have people appealing to me for the side of small business owners that make premium cigars. premium cigars they think people don't inhale are totally different in the harm they cause healthwise to people and i guess the fda are looking into how premium cigars are classified how is that going to happen? when's the decision going to be made on whether they get some

type of exemption? >> well, i'll tell you in a minute i challenge your presumption that they don't present the same health risks we don't know that if someone is using them on a regular basis, they're getting a lot of smoke and nicotine. but it is true we are revisit ing the rule that they're all subject to the same regulation as cigarettes. part of revisiting that rule and that red tour structure, is whether or not there are different use patterns and do those indicate to us they should be related to differently which people use on a more frequent basis so we are revisiting this. soliciting public comment and data to look at the use patterns and impacts of premium cigars. >> so you -- when did -- this is recent, right. >> this is recent. >> wasn't it the urging of

giuliani >> no, no. >> scott, before you go, we do -- i have one question unrelated but it's a topic we used to talk a lot about which is ebola it appears to have re-emerged. i don't know if you've been paying attention to this in the congo. i wanted to get your sense of how anxious or not people should be about this. >> we're monitoring very closely. we're concerned because of where the outbreak has happened. the number of cases that you've seen it's in the throes of some widely traveled routes within that region. so there's a potential other people came into contact so we're concerned about this. we're going into this crisis and this outbreak in a different pasture than we did last year. the world is more galvanized and stepped in quickly

so we're differently armed than we were the last time we had a global crisis related ed td toa we're monitoring it closely. >> you got triggered is rudy a big -- >> rudy's a cigar guy. >> but is he in this issue or something? >> no. you had a question on your phone. i thought someone had e-mailed you. >> someone tweeted a question at you, joe >> no. it was a cnbc article. >> thagt maybe rudy had gotten -- >> you don't have a direct line? i thought, you know -- >> so much insinuation going on right now. >> you have a lot of thought leaders. andrew's very connected but it's with the other side of the aisle, scott anyway, that's kwhie it works here we're like yin and yang. anyway, hope to see you again soon thanks

>> thanks. coming up when we return, could boring be the new exciting we're going to introduce you to a speak to mary ellen stanek stay with us ♪ i just want you close, ♪ where you can stay forever. ♪ you and me together ♪ through the days and nights.

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welcome back to "squawk box. many arguments have been sparked some right here on the show if you can believe that because we never have arguments. about rising interest rates. >> discussions >> the hottest issue of the year but our next guest says we shouldn't be reading too much into the flattening yield curve. joining us now is president of baird funds. good morning to you. >> good morning. >> here's a question for you there was an article in "the wall street journal" where you described investing in bonds as sleep insurance. and i'm just wondering whether people should really still be sleeping right about now when it comes to the bond world. >> sure. yeah that line came from an investor of ours many, many years ago who said i'm counting on you to be

our sleep insurance. and that's exactly what investors need and speak in their bond commitments they don't seek excitement they don't seek volatility they really look to anchor their overall portfolio. so our style of bond management is trying to deliver exactly that we can't completely shield the portfolio from the level of interest rates and volatility of the interest rate levels but there's a lot of little things we can do to offset that and add value over time for our investors. >> last time kevin o leer we was on the show, he said if interest rates continue to go up, he said there's going to be a time where bonds will become more interesting than equities. how far are we away from that moment do you think that moment is going to come to pass? >> i don't think we're all that far away you know, we call it the lemons and lemonade back over 3% this morning for

the 10-year. that's what everybody is hyped and focused on it's just a number so the rise in rates is the lemon part of it but what doesn't get emphasize zed is the lemonade part of it that the yield on the portfolios is going up as well. and for yield oriented investors, they've been yield starved for almost a decade. and so we believe it's going to draw money into the bonds. the short enof the yield curve in particular is getting quite interesting. on a risk adjusted basis offers very good relative value. >> where are you on some of the high yield names these days? >> so on high yield, we're pretty cautious there. and recognizing that high yield has done quite well. and often is more equity-like in its exposure in terms of the underlying fundamentals. we worry longer term that there's a lot of investors who in this yield starved environment were drawn in for higher nominal yields and really

don't understand and completely buy into the risk and volatility so it's baseball season and we just look at it as trying to do a lot of little things there's still good value we're still constructive on investment-grade credit. particularly well diversified in the triple beast names particularly and i believe that there's a better way to build a portfolio that way selective names in the crossover high yield space, the fallen angels, if you will. but we think you want to keep some powder dry because there will be a day where there will be a better compelling value >> a lot of yield starved investors and yield starved bond funds branch out to emerging market debt. we're at a point where that debt is being pressured by rising interest rates here in the --

not necessarily baird, per se, but that could present a real challenge and investors might not even know they are exposed to this. >> sure. and actually really into this environment, this multi-year environment as the fed took rates down to ab normally low nominal numbers that it caused investors to move out into the risk spectrum. and we believe some investors moved farther out than they really their true risk tolerance. and high yield will be one of the markets at being another one. as you suggested very recently, there has been a lot of volatility there it's more currency related and does not offer as attractive risk return profile. for most fixed income investors. >> okay. mary ellen, thank you. nice to see you. >> thank you coming up, breaking economic

news a key read on retail sales straight ahead stay tuned bcg quk x"n in"sawbo o cn once there was an organism so small no one thought much of it at all. people said it just made a mess until exxonmobil scientists put it to the test. they thought someday it could become fuel and power our cars wouldn't that be cool? and that's why exxonmobil scientists think it's not small at all. energy lives here.

coming up, breaking economic data a live report from the cme trading pit next plussing with why arizona is a hub for autonomous driving even after a deadly accident

earlier this year. phil lebeau is there phil, what's coming up >> i'm phil lebeau in chandler, arizona. this is ollie being developed here in the valley of the sun. why has arizona become the hot bed for autonomous vehicles? that story when "squawk box" returns.

♪ good morning welcome back to "squawk box" here on cnbc among the stories front and center at this hour, crude oil prices, they've hit a three and a half year high this morning. take a look. this comes amid tight supply and planned u.s. sanctions against iran opec said the over-supply over the market for the past three years is now almost entirely gone you can buy a barrel at $71.77 with wti also fedex asking shareholders to reject the offer with $239 per share. more than 4% below the price the

day before the tender offer was launched trc has used similar tactics at other companies. we'll get the latest reading on home builder sentiment this morning. out with its monthly index that comes out at 10:00 a.m. the index is thought to be in at 69 for may we aren't just seconds away, it's out april retail sales a long tedious read. rick, the numbers, please. >> all right let's start with the most contemporary of course that's the may read on empire manufacturing it's much better than expected 20.1 we were expecting 15 follows an unrevised 15.8. retail sales for the month of april up 0.3% as expected. strip out autos, up 0.3% a little bit light strip out autos and gas, up 0.3%, a smidge light. the control group which is inserted in other data piece

puzzles, up 0.4% as expected and last look had been released at up 0.4% it was revised up 0.5% these numbers could be bigger. they could have a one handle in front of them, but they're not bad. a little light when you strip out autos. there were positive revisions not only on the control group, but if you look at all the numbers, 0.6% now becomes 0.8% on headline. stripping out autos becomes 0.4% which is originally last looked at 0.2%. positive revisions pretty much across the board we've extended the dollar index. we're flirting with 93 handle again. a nice resurgence of the dollar strength we'd season outside of the last three or four sessions. if we look at interest rates, we have preached 3% again but maybe the biggest technical elephant in the room is the 3.03% high yield close from

april 25th in the cross hairs to some extent today. it was basically the high intraday yield remember, we've seen europ rates move up yesterday. they're sticky haven't moved a lot higher today. but they held yesterday's gains. why is that important? because we're all in this together the relative value trade, pay attention to the spread as well. >> all right thank you. 10-year yield again 3.037% that's at least a 12-week high here steve leisman has a look at the yields >> i'm going to call it a strong report especially when you incorporate the revisions. 0.6% in march was up to 0.8% the backdrop of this, you had a pop in gasoline station sales. so continue the question we had yesterday. can consumers spend more on gasoline and other stuff the answer is yes.

1.4% increase in clothing and accessories. non-store retailers, that's where you get your internet category up 0.6%. a few negatives in health, personal care, sporting goods. but the question is this retail sales number is the first good number that we get to start estimating and tracking gdp for the quarter. second quarter was running hot at 3.7%. so the question is would the consumer do his and her part in terms of holding up that strong number and i think the answer is yes. i think we might get -- i don't know for sure. there's all kinds of massaging that goes on i think this is going to be a better number for the first quarter. and also goes along with the idea that the second quarter rebound is here. >> what's the context of these retail sales my memory is horrible so i don't remember the weather was a major impact for the retailers. therefore we see a bit of pull forward. >> you understate the case

the weather has been the single most important factor not just for a month or two months but for months the hurricanes have for lack of a better turm polluted the data going back to i think october. >> then we saw weaker sales and then stronger sales on the back -- >> it was weaker, stronger, then fell off i think wall street was kwused -- confused by this i think wall street thought the consumer was down for the count. and that's not the case. it was just a set back i think and i hope right now we kind of got all of that -- by the way, the other thing to add is april was a lousy month in terms of weather as well i think we may hopefully be back or close to trend here and as rick also pointed out, that control group which is the one that feeds into the gdp calculation is pretty strong at 0.4%. so i'm going to call this a

strong report and say the consumer is doing fine dealing with the issue of higher gasoline prices. also there's timing stuff. but when they get their tax rebates and that stuff i think this is a good report. it speaks to the second quarter rebound here >> thank you, steve. >> thank you now to the auto news of the day. the phoenix area remains a red hot hub for autonomous vehicles. chandler looking to become the first to accommodate self-driving vehicles. that's where we find phil lebeau this morning >> good morning, andrew. i am pulling up to you in an ollie. this is an autonomous electric shuttle. they will start going out on the road probably later this year at different destinations not only here in the united states but around the world this is one example of the autonomous vehicle research and development that's taking place

here in the valley of the sun. as ol olli and some of the othe are around me, you'll see autonomous drive vehicles being tested on the road quite a bit good example waymo. we've done a number of stories about waymo. they have several hundred waymo minivans these are autonomous drive mi minivans they have a safety driver there. they're to do li ing they're to odling around on the streets. we looked at the work being done by intel it is building autonomous drive vehicles here in the phoenix area some of those vehicles will likely be tested here a little bit later on this year it brings up the question, given what happened in march with uber where one of the uber

self-driving vehicles in autonomous mode hit and killed a pedestrian here in the phoenix area a lot of people are saying wait a second it's happening too quickly we should mention that accident is under investigation the governor of arizona said to wait uber has started testing autonomous drive vehicles. i should tell you guys this. for all the interests that you see from the auto industry and testing vehicles out here, we haven't encountered too many people when we talked to them out on the streets of chandler and around town who say i'm leery about these vehicles on the road for the most part people are pretty indifferent to it in fact, a number of people told us i think these are the safer vehicles i'm more worried about you or i behind the wheel we're going to be here all day long looking at the different projects going on.

including ollie. >> before you go, two things because i know you follow it so well tell us about your take on this tesla situation. the crash that took place 60 miles an hour, yet elon musk going on twitter saying why is everybody putting up these big headlines about one of these things but now we're finding out that autopilot was involved and the driver was focused on their e-mail >> look. elon musk will go after any news report involving a tesla vehicle that gets into an accident he thinks it's over-exposed, that we are way too hypersensitive to these accidents. having said that, you've got four tesla-related accidents that are under investigation either by the ntsb or the highway safety administration. it's not like we're making this up there is something here that they are looking at. now, does that mean that tesla is 100% wrong? no it's under investigation

so i'm not surprised that musk's reaction yesterday at the same time i don't think this is a case of the media being hypersensitive here. the media is covering these accidents saying, wait a second, is autopilot working as it should be working? >> and what was the -- the other thing that happened was they said to "the wall street journal" was wrong about some of the costs and the decisions on these devices and cameras and sensors, not to use them what's kwoyour take on that? >> i think that's going to be the interesting question in the future how much cost should go into autopilot? and also remember, andrew, this is a level two system. so if you are not going to have the itratracking software, that part of super cruise it keeps a camera on your eyes so if you're diverted for a long period of time, that's part of this messy development that you're seeing with autonomous drive vehicles

so the question does need to be raised should tesla have that technology in there? they've made the decision at this point it's not worth it >> musk said he doesn't think it works. >> well, yeah. and i've -- look we've done a number of stories with seeing machines and other companies. i've seen it work. so the question becomes do you think that it would prevent an accident and elon musk at this point, they don't think that technology should be in their vehicles. super cruise believes it should be there there are other companies looking to incorporate as well this gets down to how you and i act behind the wheel are we going to follow what the rules are when it comes to autopilot? >> you've got on ollie driving behind you how much does a vehicle like that cost to build >> not in terms of building, but they're going to retail it two ways one, let's say there is a university that wants one to go

around a closed campus it will sell for about $400,000. that's a ballpark. or you can get one in a lease subscription rate. in other words, let's say you have a campus and you have sorkin university and you want it to toodle around for six months, you can lease it from them that's the two methods >> i like the ring of that sorkin university. yeah >> university of sork. >> we're in for a couple of leases >> phil, have you walked in front of one of these ollies to test it? >> they're not to that point yet. >> okay. >> i'm not real comfortable doing that with the autonomous drive vehicles we'll let them to do that with test dummies >> looking at those things, i can't tell the front from the back except for maybe the headlights they saved a lot of money on styling for those things it looks like a wardrobe rack moving along >> they're shuttles. >> okay. all right. >> utility play.

phil, always great to see you. >> phil, look out! >> see you, guys coming up next, move over ponies sports betting about to take on the gambling world eric, what you got coming up >> monmouth race park, they plan to be taking sports bets in about a couple weeks it could be the first place in the uny tscotrouide of nevada. we're talking to the ceo when "squawk" returns need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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new jersey at the forefront of so many things, andrew. expected to be the first in line to capitalize on the supreme court's decision that it will now allow states to make up their own rules on sports gambling eric chemi saw the light and is a jersey person now. he joins us from monmouth park racetrack in ocean port, new jersey, with a special guest hi, eric >> that's right, joe so here we are monmouth park racetrack. they are leading the way in new jersey new jersey leading the way across the country the supreme court just yesterday opening the door every state now they can set their own rules and the rules that look to be set in new jersey would say that at a casino and horse track, that's the places where you could put on sports bets they've spent years working on this, spent millions of dollars getting this ready i've got the ceo of the track here thanks for joining me here

>> thank you for coming to monmouth park. >> supreme court has already legalized this why are we waiting why are we not making bets today? what takes weeks to get this online >> takes a couple of weeks to finish the technology. we weren't sure which way the supreme court would rule we were confident of victory, but there were two paths we wanted to make sure we got it right. now that they have determined past was unconstitutional, there will be new laws the governor will sign that to place here in new jersey meantime, we're going to try to get up and running on a privately regulated basis. >> those out there saying billions of dollars could be made off this. is that really true? how much money could you actually make? >> i think the illegal market that they're talking about in the united states is $400 billion. and you look to several sources. i think the aga estimates it at $150 billion the nba has come out with a $400 billion number which is where i

think it is. points to a 1999 congressional study that said the illegal market was $380 million back in 1999 1999 so we think the $400 billion market is going to converge into new jersey sharing at about $10 billion of gross handle. and the different tracks and casinos throughout the state will all share in that revenue so new jersey stands to make a significant amount of revenue to help our taxpayers. >> now they don't have to bet on the horses they can bet on nba games. are you cannibalizing some of your own business? >> i don't think so. i think people are already betting sports they're doing so illegally there's synergy. we're going to have bets that combine the two. for example, pick four, pick five, pick six, with part of the races being wagers on the events >> are you concerned about all of the other states though

delaware, pennsylvania, new york, connecticut. if they all legalize it, too, you lose that first mover advantage, right >> not concerned at all. we get an early start having our laws in place. we're going to be taking wagers from new jersey residents or people here in new jersey visiting for tourism every state to begin with unless something changes in the country is probably going to be limited to the people on site in their own states >> what about big data big brother tracking we saw the facebook stuff a couple weeks ago that may come into betting because everyone wants to track exactly what dennis is betting and erik is betting. are people going to be worried about that presence? >> i don't think so. we're doing that in horse racing now. they're doing it in online gaming it's important to preserve integrity. so our gaming enforcement here in new jersey is at the top of the country. and we will have a system in place that protects the public and protecting people's data no concerns at all >> is there more money to be

made on the actual bets or the food and drink that you're selling to people here watching their games? >> no. i think you make the most money on actual bets on horse racing and sports bets. but the food and beverage end of this and the non-gaming revenue has worked good for the casinos over the years and we think it translates to racing also. so we're going to make a good environment that's comfortable for people to come here. don't forget you're not just talking about betting on the result of a game. there's going to be in-play action too in vegas, about 40% of their money is based on the in-play facet. we think this is going to be a place where people come, socialize, and we will have people that are engaged fully throughout the day so there will be both the betting revenue as well as the non-gaming revenue >> dennis, thank you so much >> thank you so much >> that was dennis drazin. they operate the track here at monmouth joe, i plan to see you at the jersey shore this summer with your family placing bets >> i'm focusing on preakness,

eric right? justify and good magic going up against each other that's some horse, justify, don't you think chemi? >> i was thinking more to help you here nbc is televising the preakness this saturday. >> you say -- >> work with me. work with me work with me it's a greet set up coming this saturday on nbc. we might check back. we might not anyway. >> when we return, jim cramer live from the new york stock exchange let's check on the equity futures. the dow looking to lose about me8 t on. ho depot down about 40 points. every way we look out for

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long-term maybe this gives people a chance to buy >> i think so. i mean, they did give you that may was good i love what steve liesman said there's a lot of numbers that will be incorrect. a lot of restaurants sold down because people realize the weather wasn't so good you're getting a chance. the stock has been incredibly strong the sellers tended to make themselves right on day one. i have found this stock does not reverse itself day one when you see lo's tomorrow let's say lows isn't that great. people will realize weather is an issue as the week goes on, you'll see a lot of companies say that and circle back and say, you know, maybe home depot is better than expected that's the process that happened when we have weather-related one-time issues. >> jim, that's a 3% solution or that's about the ten year, isn't it >> yeah.

you know, yes. look, i think this is a tough week i think we're going to get hit a bunch of times yesterday, i don't know if you saw. every one in the cloud place was down badly a lot of retail was weak i think yesterday the semis masked a lot of trouble. so i want to be careful there. >> that's what choppy is you go up eight straight days and it doesn't mean you're going to new highs. >> nope. it's probably good, joe. got to shake out people that have been tagging along. >> good seeing you yesterday, jim. you're better looking in person. hard to imagine. >> thank you so much. >> you don't look bad on tv either but thanks, jim. >> no, this tease was the best tease we've ever had. >> thank you see you in a couple of minutes big interview on "squawk on the street." david faber is sitting down with lowell mcadam. an exclusive conversation. >> fascinating. >> we want to find out what

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moonves. it's time for your business of the week. it started with four friends who had a massive sweet tooth and a stand at a holiday market in new york city. today it's the largest macaroon company in the nation. find out how these founders figured out how to work together to build their food business that's on "your business" sunday morning at 7:30 eastern on

msnbc. welcome back alaska airlines plans to pull the planes and pilots out of new york and relocate them to the west coast it currently operates five flights a day from jfk to los angeles and san francisco. other offerings fly from newark. alaska acquired virgin america two years ago. less competition less competition that's what happens. >> sell-off tickets are more than airline tickets now. >> right. >> they're not prohibitively expensive. you're benefitting from the competition in the air i know you don't -- >> why do you think the train ticket is so expensive >> because it's amtrak. >> because there's no competition. >> i'm just saying don't be discussing the airlines. >> take your kids and drive somewhere. see how you like it. >> gas at $3.90. >> every truck you go by

anyway a scary moment. >> this is scary. >> it is you only think it happens, you know, scary things happen when they're flying y you have to be careful the wings clipped the tail of another plane. severing it in half. it sounded like a bomb went off, they said. >> okay. >> thanks, melissa. >> my pleasure. >> we'll see you tomorrow. "squawk on the street" begins now. ♪ good tuesday morning welcome to "squawk on the street." i'll carl quintanilla with jim cramer and david faber futures down about 154 points. home depot looks to trade lower. europe is mostly high. the