♪ live from new york where business never sleeps, this is "squawk box. >> good morning. welcome to "squawk box" on cnbc. we're live at the nasdaq market site in times square i'm melissa lee along with joe kernen and mike santoli. sitting in with us for the hour, karen firestone. welcome to you >> let's check u.s. futures, seeing how we're setting up for the session. yesterday we had losses across the board. on the s&p 500 we snapped a four-day winning streak. on the dow, we snapped an eight-day winning streak the dow looking to lose 28 at the hope s&p down by 1.5. nasdaq is higher overnight in asia, north korea developments have affected trade there.

the nikkei down 0.4% hang seng down by 0.10%. in shanghai, down by 0.70% a mixed bag in europe with germany higher by a quarter percent. the star in terms of the attention, treasury yields seeing the highest ten-year yield since 2011 we've abated from the high of 3.07%. >> hard to figure. remember when korea, things started getting better nuclear armageddon is off, markets flat nuclear armageddon back on, markets down -- maybe eunice can explain. north korea canceling its meeting with south korea that's an actual cancellation which is somewhat disconcerting, it was supposed to be today.

now threatening to skip the summit with the u.s. eunice yoon has more is it really the exercises between the u.s. and south korea? a lot of planes flying around over there, or now are they saying we don't want to do the unilateral nuclear disarmament can you make sense of it >> no. no, i can't. that's the whole point north korea is now having a dramatic reversal in its position and sharp word force washington even as you had said, warning that it's recaring taonsidering part in the summit with president trump. a senior diplomat said if the u.s. is trying to drive us into a corner to force our unilateral nuclear abandonment, we will no longer be interested in such dialogue

the trump administration, as you guys know, has been making it a priority to get north korea to dismantle its nuclear program. that diplomat called out john bolton for suggesting that the u.s. organize a deal for north korea that would be similar to the one that the u.s. used to get libya to abandon its nuclear program. kim said the world knows too well that our country is neither libya nor iraq which have met a miserable fate that official said that north korea would never give up its nuclear weapons in exchange for economic trade with the united states this was seen as a reference to secretary of state mike pompeo's remarks over the weekend when he said that north korea could see sanctions lifted if it did agree to complete disarmament. i spoke to a couple north korea

watches who say this could be a nexting tactic they have seen this type of action before. they said this is familiar for north korea to try to get more concessions before the summit. still as of right now, summit is on because the south koreans have said that the foreign minister spoke with mike pompeo who said the preparations for the summit are still under way, and that the south korean president will be heading to washington next week to continue to discuss this matter with president trump. >> familiar, but in the past north korea didn't have, you know, a counterpart that -- we could have a button quote this morning, and then the whole thing -- button size quote then the whole thing gets ramped up again in terms of rhetoric. the rhetoric the two of them used to have six months ago -- >> remember dotard

>> right which i thought was -- it is a word >> an old, senile person >> i don't know. it makes you wonder. trump all along, we'll see what happens. it's always we'll see what happens. we don't have any rose-colored glasse glasses. >> yeah. are we still optimistic? you're smiling >> no. >> can you -- >> i'm smiling because you make me laugh but the -- it's entertaining to hear you talking, but, no. but seriously, a lot of the analysts that i speak to including nick epperstat who is based in washington say this is a standard north korea shakedown

tactic so they're seeing this for the most part as a negotiation for the north koreans who have been experts at brinksmanship, from their perspective they're looking for ways and testing the trump administration, seeing what they can get out of them f there are some concessions as you know, the trump administration and south korea's president moon jae-in have been adamant about how they don't want to give anything up give concessions ahead of this meeting. that they want to make sure there's denuclearization first so this could be part of that brinksmanship. at least that's what analysts here believe and around the region >> i'm accepting the use of brinks i think that's more than one brink. because you don't know whether it's brinkmanship or brinksmanship. it could be both i'm accepting that usage these maneuvers, they were long

planned or not it's not in response to anything so both sides knew this was coming it has a horrible name the operation itself it's so -- it sounds very aggressive >> are you talking about the military drills? you mean max thunder >> can we change that to medium thunder? >> no. the military drills usually have very strong sounding tough guy names. they were planned. they are usually planned north korea knew about it and had said before recently that it understood the need for the exercises. the position has been that the military exercises threaten north korea. the chinese have come in and said to the americans and the south koreans, you guys, when you do these military drills, the north koreans don't like it

and they feel like it's a threat that's why there was a surprise more eventually when the north koreans said, actually, we're okay with these military drills. now it turns out they're not >> when you say they were talking about a previous deal, i was hoping they didn't play the iran card, why should we believe you guys any way after you back out of deals that you make >> i think it's interesting that the diplomat referenced iraq rather than iran >> don't do the iran -- then they're getting -- playing to the people who are mad over here, our european allies who are mad. then it looks like they're throwing down. if you were kim jong-un and you watched what happened to gadhafi, you might want to have a different deal than they got thanks, eunice

that was fun nuclear armageddon, we're smiling. the international energy agency cutting its outlook for global oil demand as crude nears $80 a barrel this sounds like a reason to cut production they want 80 >> they want higher. >> the agency says iran and venezuela are a major challenge to the market and further disruptions in the countries would make the opec meeting on june 22th more interesting, as producers will likely grapple with the temptation to remove cuts to fill the supply gap. i think i happen to be in vie a vienna -- no, it isn't >> to vienna, you said >> yeah. >> you are going to be at opec >> yeah.

>> maybe while i'm there, do a couple of live shots that's crazy >> kind of cool. >> i saw the opec building in vienna >> great place, isn't it >> you know why we're going back to see the stupid horses >> the lipizzaner. >> yeah. we have go back for my daughter. they love those horses they are the most amazing horses supposedly >> i have not seen them myself >> they're spanish, aren't they? >> i believe they are. >> thanks, jack. i'm glad you're here >> moving on >> sorry, we're not talking about bitcoin. >> i'm ignoring that some of the biggest names on wall street have made some bold moves. leslie picker has more

>> investors this quarter took advantage of some volatility in the first three months of the year to buy stocks in ways that they saw opportunistic berkshire hathaway doubled its stake in teva to buy about 7$700 million worth. shares went higher in after-hours trading yesterday. omega advisers continued to add to united continental which became the firm's largest holding at the end of the quarter. he also boosted his stake in citigroup. david tepper took a new stake in wells fargo, but he did cut his position in bank of america. two well known activists, stan lowe and big ackman took stakes in united technologies

ackman's pershing square had 1.9 million shares, and all of these positions are as of march 31st and may have changed in the six weeks since then guys >> in terms of overall trends, have you noticed one particular stock that keeps cropping up >> a lot of movement with facebook as you recall, the cambridge analytica scandal broke in the first quarter of the year. those shares saw some pressure, and so i think a lot of hedge fund managers took the opportunity to buy them in a way they saw value to be had we saw a lot of prominent names getting into facebook. a lot to of prominent names coming out of apple. >> big names getting out of energy >> big names getting out of energy before the rally that we

saw taking place beginning in april. it's unclear whether they got back into energy and helped propel the stocks higher, but, yes, certainly saw a lot of selling in energy at the end of the quarter. >> leslie, thank you >> all right let's get to the broader markets. joining us now is jack caffrey, equity portfolio manager from jpmorgan morgan bank, and kerry firestone is also with us. i called you karen >> that's my real name >> but kerry, with the success of "homeland" is that it >> i'll call you joseph. >> you can call me joseph. both of you have similar view points of what's happening i think the reason it's similar is because it seems apparent that maybe there's some truth to this that earnings are great the economy is great, but interest rates are headed up is it that simple? >> you have the classic struggle what i love you hate

>> good news is bad news. >> if i love the fact that earnings grew 25% in the quarter, we have low unemployment, relatively low interest rates, low inflation, a tax cut, you may say wait a minute, if it's 25% earnings growth, it has to decelerate from there we have a labor shortage in places pressure on costs. pressure on margins. interest rates have gone up. they'll keep going up. that must mean it's the end of the bull market. we struggle every day, that's why the market is flat for the year the score between the ohio-based cavaliers and the boston-based celtics is not even. >> i'm from cincinnati, not cleveland based.

are you more bullish or less bullish? it's tough to make headway it's almost if there was terminal pricing in the equity markets based on tax reform and deregulation it went up there -- >> we had a great year in the first 25 days of january then a miserable year the next three weeks. now we're back to crawling our way higher we had great comparisons, and what will you do for me next year next year is a 6%, 8% growth rate i think that takes markets higher it becomes harder to make a valuation story. you think 7 is less than 25, so i don't want to pay more for earnings this expansion can continue for another 18, 24, 36 months at least economically and supporting earnings. >> this expansion, since they don't die of old age --

>> normally they have an intervention from a federal reserve. >> can it be too high at what would normally be a much lower level? >> everything has been at lower level. in that regard i don't know that the terminal rate has to go back to 4%, 5%, 6%. it will probably be in the low threes if you think about a flat yield curve, possibly after another two or three rate hikes, that would suggest that you're within 9, 12, 18 months >> so you think we could have a fed-induced recession at a much lower fed funds rate we could cut off the expansion at 4%, 5% fed funds rate >> that's giving the fed a lot of credit. it's the same as the people who say it's been a fed induced rally of the market.

>> kind of has >> maybe, but i'll take the rally. it still made people a lot of money. >> yesterday you saw the ten-year yield in focus. it gets us up to 3.09 for a while. every time you push in a new level, the stoke looks around, is anything broken, make our peace with it, then it's okay. we had 3% in 2011 when the economy was weak, and then again in 2013. what should we be concerned about? >> what are the signals? >> dollar. i think it's possible the fed might say after three hikes we'll pull that here and see what happens see if there's enough demand for borrowing. there may not be >> all right thank you. the votes are in you're staying jack, you're leaving >> voted off the island?

>> you both were great >> market survivor >> no. this was all planned you were on for a segment. did you think you were staying >> no. >> could you stay? >> no. >> all right you cleared your schedule? china's vigs pce premiere is in washington a report from the capital next coming up, an interview with alex gorsky at 7:40 a.m. eastern time

stocks to watch this morning, starting off with tesla. reuters reporting the company plans to halt production for six days at the end of the month to fix issues on the assembly line. tesla struggled to ramp up production of the model 3. this would be the third stoppage this year. on the conference call, elon musk did talk about planned stoppages to fine tune the production process we saw pressure on tesla's stock

yesterday. we had adam jonas coming out and cutting the price target on the stock. reports of investigations, autopilot being on in the utah accident a fiery accident in switzerland. >> when do these high-level -- you might know when do these high-level departures -- i might go to waymo. >> there's two more gone from solarcity. >> does it mean there's something going on where they want to leave? is there just an attractive option >> or that musk is realigning things, he wants -- >> it doesn't mean they're looking around going i got to get out of here. >> no. you named those little things, it just shows they lost the benefit of the doubt in the market before it was like we'll figure it out >> they lost the benefit of the

doubt when he said they wouldn't >> the quality of the cars, how fast they are, how neat they are, that has brought them a lot of good will whether they can do it prof profitably >> you never had to question the demand side. they got the orders. everyone knows they can sell these if they can make them. >> first try for a body? look how many times we tried to design cool looking cars good try except the ugly one with the gull wings >> once he's really in the car manufacturing business, it's just a different ball game when you have people leaving and in particular reason why, not a good enough reason other than they weren't so happy with tesla, i think that affects sentiment. >> this is a stock you would never own, right >> no. >> just on a valuation basis outside of your purview. >> too expensive

also a car company. starbucks is looking to more than triple its annual revenue from china over the next five years. the coffee giant aims to have 6,000 stores in the country by the end of 2022. up from about 3,300 stores now starbucks says its tie up with nestle earlier this month helped it extend the reach throughout china. it raised a bunch of money from nestle which could help with this expansion >> in washington today, trade is in focus we're just a day away from the key deadline for nafta also china's vice premiere is in d.c. for five days of trade talks. kayla tausche joins us now with more i thought we had nafta in the bag. i guess not. >> it depends on what type of agreement the three countries are willing to reach, a partial agreement or the full text it seems clear this thursday deadline is unlikely to be

reached. the white house's talks with the vice premiere is set to begin today. senate democrats have made it clear they don't want a deal to include concessions to the c chinese phone giant zte. aids say the president only touched briefly on china yesterday at a lunch he talked up his relationship with president xi, korea, that was before north korea got cold feet about those talks. the office of the u.s. trade would not comment further than a statement released last friday justin trudeau, though, was upbeat yesterday >> there is very much an eminently achievable outcome that will be good for the united states, good for canada, good

for mexico, and we're very close. we will continue in the coming days to work hard to try to get there. we know a deal is not done until it's done. we will remain optimistic and hard working on trying to get this settled for canadians and citizens in all three countries. >> mexico's economy minister said last night while they're still talking we do not believe that we will have a deal before thursday the three countries held a call on monday with no public update. former trade officials say it's not a good sign that the top officials are not negotiating together, and that there are not even rumblings of what a deal could look like. >> okay. that sums it up nicely for us, kayla. thank you. i assume you're in washington, d.c. >> that is where i am. this is not a green screen >> okay. >> was that in question before >> nope.

i picked out that building that structure, just filling people in, that that's kayla coming to us from washington and i was correct, too >> excellent coming up, cryptocurrency startup circle completing a round of funding circle is launching a new stable coin the ceo will make his way to the squawk set and join us after a quick break. right now yesterday's s&p 500 winners and losers ♪ i just want you close, ♪ where you can stay forever.

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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning u.s. equity futures at this hour continuing some weakness we saw yesterday. except the nasdaq. that is green. the dow jones indicated down 36. s&p down a bit less than 2 the ten-year is -- >> since 2011. >> about seven years >> okay. 3.06 or something we saw earlier. hawaii officials have now raised the volcanic alert level

to red they're warning a major eruption is eminent are already under way. the ash cloud reaching 12,000 feet above sea level the next eruption could propel boulders of lava the size of cars miles into the air. major storms battering the northeast last night bringing high winds and downpours check out this scene from grand central terminal thousands of commuters were stranded as a storm moved throughout the rush hour the storm forcing major train delays hundreds of flights were also delayed up and down the east coast. dow jones is reporting that executives at walt disney have discussed allowing pixar co-founder john las sshslasseteo return this was following accusations of unwelcomed hugging and other touching the report says that lasseter

could return in a new role that would reduce his than jeeri manl power, he could also return to the same role or not return at all. he steered a number of disney's most valuable franchises including toy story and "finding nemo." sequels are not usually successful i think toy story 3 was nominated. >> this year, incredibles 3. >> i love the original nelson and holly hunter. i don't know how he feel about this for the creative talent he brings, he was integral to the whole thing. >> you can have the deepest bench but not be able to replace the creative guy

>> must have been through sensitivity training >> i will not go over the list, there's been quite a few, you can kind of rank possibilities for comebacks and no possibility. weinstein, no possibility. >> no. >> this piece points out, there is a gray area here. >> it's hugging and touching >> it's not as if there was charges. >> it wasn't sexual assault or anything like that >> as far as we know >> i'm not an expert on lasseter's case, but i'm an expert on his movies circle, a global crypto finance company is breaking a new 1$110 million funding round the investment is led by bit main, a key strategic partner. joining us now is jeremy allaire, the ceo of circle welcome to the show. >> thanks. >> so bit main is one of china's

largest mining technology firms. what does that bring you >> bit main is probably the largest, most profitable company in the crypto industry they provide the infrastructure that processes a huge percentage of the transactions that run these different blockchain networks that infrastructure is core to the security of these transactions so they're a fundamental infrastructure provider. but the founder and i share a vision that we can build more and more layers of the financial system on top of this infrastructure in particular we're collaborating on a model which allows us to take traditional fiat currencies, tokenize those, run those over these public blockchain networks to allow for much faster settlement, more secure settlement and the participation of fiat in smart contracts. >> so this is a so-called stable

coin there are many stable coins popping up because of the volatility of other cryptocurrencies who is the end user of this? where do you see the goal of this in the end? >> there's three important use cases for fiat use tokens over block chains one is people who are investing and trading, they need to hedge and they need to do that in a fast, frictionless way, that's integrated with the existing banking system that's a core use case the last two or the other two arepowerful. we can create contracts for things like debt, equity, other types of financial contracts we can denominate those in fiat which is key to making that infrastructure work. the last but not least is ubiquitous free global payments.

so you can allow people to transmit dollars, any currency in 15 seconds to any device anywhere in the world in a safe, secure way so it opens up more free payment infrastructure on the internet >> it's interesting, a lot of markets, developing -- emerging markets like frica, a lot of apps and companies have been created around this truck sfrics transfer of money, but they use bitcoin. how do you get the usdc's up to par? >> marrying the u.s. dollar and the desirability of that as a stable storer of value or medium of exchange with the efficiencies and security and global reach of blockchain technologies is powerful i think it will be a better way for mobile devices that want to handle these kinds of payments globally >> as you describe it, it seems to me we're talking about a new

kind of software protocol. a new piece of the infrastructure of the guts of the financial system how does that have any connection to crypto as an asset. there seems to be a divide out there. >> the first is so these fiat tokens, they are issued through the open source technology scheme we developed called center that runs on top of infrastructure like ethereum so ethereum is kind of like a global computer that you can run code on. but it's an unhackable, tamper-proof secure computer that no one controls it's kind of an open system. we can build apps on top of it, and the u.s. dollar system app on top of it that's the inner play between the tokens and underlying infrastructure >> you mentioned using usdcs as a hedge when trading the stability of the hedge

are you launching this thinking that institutional money will increasingly come into the space and there will be more futures contracts tied to other cryptos? >> absolutely. a couple months ago we acquired one of the larger crypto exchanges. that's an exchange that grew dramatically last year it allows people to trade in a broad range of these digital assets that's all institutional we want to enable easy on and off-ramps for institutions who want to trade in these asset classes, and usdc creates a way for global institutional participants to access the markets. >> if there are noncompatible systems now in place, so that your system versus others that are being developed will be eventually winners or losers, when do we get to that point how do we know if you're just observing the industry >> that's a great question

we don't want to control this. we created intellectual property, we spun it out to an organization that anyone can implement and join any bank, any fintech company, can take this technology, impleme implemental. it's the core of how the internet has grown we can all access websites and internet services in an open way. we are trying to do that for fiat money transfer. >> jeremy, have to leave it there. >> thank you. coming up, you can't have it all. author randy zuckerberg says on any given day you can win if you pick any of the following, work, sleep, family, fitness and friends. stay tuned, you're watching "squawk box" on cnbc ook good, but we should be seeing more range of motion.

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time for the executive edge. the pressure to be perfect has many believing in the idea that doing it all is a measure of

success. our next guest has another solution i like it. randi zuckerberg is the founder and ceo of zuckerberg media and launched her new book "pick three. the book argues the key to success is being well lopsided and not striving to be well balanced by doing everything every day. am i not going to mention rock of ages? we talk about sue's tech kitchen all the time >> yeah, great memory. >> isn't that what we talk about? >> yeah, that's my t tech-themed -- >> you do something for sprout you're one to talk about three things >> three per day >> you live by this? >> i do. i've been living by this for several years. i did what everyone says not to do i started my own company, had a baby, bought a house, i did all of those things within a month of one another i think a lot of people --

>> you didn't have a baby in a month. >> fair point. >> you're so driven, i don't have time for -- okay. all right. >> kind of changed everything in life all at once, everyone tells you not to do that for me, i think like most people i felt overwhelmed like i was drowning. >> especially in this city >> exactly >> this day and age. >> i mean, honestly, we're all in a world where we're multi-tasking, even people in a job they were in a year ago have probably added eight new tasks to their job the american economy, 50% of people are freelancing, working for themselves for me the idea that i could get over trying to be balanced and just focus on picking three things and being great at them >> i need friends. i don't know about friends i got to work. i have my family as my friends

i have to do work. i have three hours i devote to that sleep, i definitely need seven minimum. i do am i weird that way? >> no. don't you think we have a culture of busyness where people worship being a martyr and -- >> i think it's bad do that. i think you gain weight. i think your endorphins don't work >> absolutely. the stress i completely agree for some reason in this country we have this -- i'll sleep when i'm dead mentality that's not healthy >> and family. that goes without saying that, i don't need to read a book to understand fitness i have to do, though i hate it. >> yeah. >> this is not necessarily the gym only >> fitness applies to all areas of your health, nutrition, stress management, meditation, just wellness in general you look like you're holding it together pretty well >> ah -- i got propecia for the hair you don't have that.

trump got mad when his doctor ratted hill out. i stay it on the air of course hair is important around here. we're picking three. did you total up how many there were to choose from? >> there's ten total combinations >> ten total >> i think it's important for women in business to think and be mindful and intentional about how they spend their time. like you said friends tends to drop off for a lot of people, especially with work and family. >> i don't like your comment that you made about friends. >> i was joking. >> we -- we're good, aren't we >> we're like this >> totally when friends drops off, other things accidentally drop off, too, like networking, mentoring. a lot of the things that help people get ahead in business that are important drop off with that it's important to be mindful >> you're on the -- you sit on

the tony board >> yes this is the broadway season right now. >> why should i believe that spongebob is great >> spongebob is great. >> i want to see it, but i feel guilty squidward looks weird. >> it's great. it's beautiful for the eyes. it's like cirque du soleil for children >> you know all that they have the tony nominations >> i pass it by the theater, it has all the signs up i'm shocked that translates to the stage? >> i was also skeptical. ♪ both my sons loved it. they wanted to go back and see it again >> what's the other one that got so many mom nationnominations? >> harry potter. >> the lead, how did he do two shows? >> i don't know. i saw denzel washington in "the iceman cometh. talk about someone who doesn't need to be in eight shows a

week, four hours long each show. incredible >> i didn't see "rock of ages. >> i was the hippy berkeley protester. >> is that a stretch >> now you're an entrepreneur and a big business woman was that a stretch for you or not? >> i think any time that you can step out of your comfort zone in life and walk a mile in someone else's shoes, being in that show and seeing how grueling it is to do eight shows a week and understanding what it is like to make it as a working actor is helpful. >> we'll talk about sue's kitchen next time. randi, thank you the book again "pick three." thanks comingup, johnson & johnso out with news about its line of baby products. details next. and don't miss an interview with alex gokyrs at 7:40 a.m. eastern time

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kpmg. johnson & johnson holding its data today meg tirrell now joins us from new jersey meg? >> hey, mel. we're here in j&j's company store where the focus is going to be the medical devices and

consumer products unit and while pharmaceuticals are by far j&j's biggest business, the consumer brands in the store is what they're best known for. tylenol, aveeno, and johnson's baby we got an exclusive look in the lab about what's going into this to keep up with changing demands of parents take a look. when new mom meg conrad shops for products for her daughter, she checks the label >> i try to avoid products that have sulfates, par bins, and artificial fragrances. >> what you won't find in her bathroom, johnson's baby there's a 20% decline in sales since 2011 >> perhaps because of our success, we became a bit complacent and did not want to mess with success. and so, frankly, we fail to see

evolving needs from millennial moms >> so j&j is revamping the brand. >> what we've learned is that they were looking for fewer, simpler ingredients. more naturally derived ingredients in their products. from that, we knew that we had to completely make a change to our brand. >> the new johnson's baby line hits shelves in august it contains half as many ingredients and removes dyes and parabins the reboot should improve profit margins because of simplification of the supply chain. >> we're confidenced we'll get johnson's baby back to growth. >> and we'll have a chance to talk about all of this and more with ceo alex gorsky coming up with us in the next half hour. >> thanks very much. we've seen this with a lot of the big sort of brands, right? they just are simply losing. they didn't see the trend of the

me line millennials going to simpler brands >> people are less brand conscious or brand interested in the big brands but in addition, the grocery stores, cvs, walgreens, they're more interested in their private labels if you really want johnson & johnson baby shampoo and you're in the walgreens or cvs, you might have to ask them to get it the corporation doesn't want you to buy it. they've got a real problem trying to focus. >> are you in j&j or not >> no. >> thank you for joining us this hour >> thanks for having me. >> you really think this is carry on coming up, we'll talk markets. u.s. market equity futures now, theye tt'vgoen better.

the nasdaq is actually up eight. we'll be right back. rld for inv. let's always put investors' needs above our own. as investment management professionals, let's measure up. cfa institute. pthey don't invest inn stalternativesds. or municipal strategies. what people really invest in is what they hope to get out of life. but helping them get there means you can't approach investing from just one point of view.

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. let's stop talking and actually be more diverse. as investment management professionals, let's measure up. cfa institute.

markets -- stock markets fighting for direction the outlook for oil and more, complete breakdown of what you need to watch on wall street is straight ahead and a "squawk box" exclusive just heard meg talking about it. johnson & johnson chairman and ceo alex gorsky will join us ahead of today's annual meeting. his comments on that business of j&j just minutes away. and starbucks sales are percolating in china a look at the company's plan to expand happy hump day it's wednesday as the second hour of "squawk box" begins right now. ♪

live from the beating heart of business, new york, this is "squawk box. >> we should play waiting for wednesday on tuesday though. i mean, it's wednesday already we're not waiting. it's here. >> it's hard to find wednesday songs. >> it is i get it no, it was genius to find this one. good morning welcome back to "squawk box" here on cnbc we're live at the nasdaq market site in times square i'm melissa lee along with joe kernen and mike santoli. take a look how we're shaping up here the dow looking to lose about 11 here in the early going. this would be the tenth straight day of -- this would be the second day of losses after eight straight up. looking to open on the s&p 500 johnson & johnson holding its

annual analyst day today putting more emphasis on natural ingredients. it's confident the revamp will reverse years of falling sales ceo alex gorsky will join us in the next half hour north korea is planning to cancel its summit next month north korean officials say the summit will not take place if they are demanding a libya style denuclearization it is scheduled for june 12th in singapore. berkshire hathaway has doubled its stake. that's among the latest filings at the end of each quarter among the other moves. both taking stakes in united technologies during the quarter. and apple's david tepper took a new stake in wells fargo in a developing story, continuation of the story, hawaii officials have raised the volcanic alert level to red.

they're warning a major eruption is imminent or already underway. the ash cloud now reaching as high as 12,000 feet above sea level. officials say the next eruption could propel boulders of lava the size of cars miles into the air something we haven't seen in decades, really. that's not something we're used to in the news recently anyway. especially on the homeland other parts of the world, maybe. but in this case, one of the 50 states incredible reuters is saying tesla is halting production of the model 3 to fix smethe assembly line. this would be the third stoppage shares today this morning slightly lower after losing about 2.5% yesterday's session. >> when was the last time mt.

st. helens, remember that? that's in washington >> decades ago. >> it was. so decades -- let's get you caught up on the market. joining us is the investment advisory services. chief investment officer ahead of fixed income. want to do a synopsis of some of the key points because we spoke to you. we can't expect the market to be like it was before rating were rising every rally, you can't keep that but overall, earnings have been so good that the valuation has come down. that used to be your chief worry. so that's -- >> yeah. >> -- mitigated a little >> quite a bit not just earnings. even when we look at revenue growth, we're looking at 7.5% revenue growth i know we always talk about,

yeah, it's just tax reform and this is why earnings are looking so good. no even on the top line, we're looking at some of the highest levels we've seen in over a decade >> you still like growth more than value though. a lot of people have switched recently >> that's actually one concern that growth is doing better than value. there's a huge spread between growth and value last year over 12%. that for us is concerning. because every day where we've had a big update particularly this past week we had, you know, it was shooting up every day it was driven really just by the growth stocks and the value stocks just stay stable. when there is a potential downtu downturn, that's where you're most likely to see it. >> we saw that even yesterday. >> when you look at the volatility, it's coming from your growth style and your values are hovering along. >> so you used to be kept up at

night, it says, by valuations. now that that's gotten a little better, i don't see anything else so you're sleeping well now? >> i am. >> you are so we'll be higher by the end of the year but it'll be choppy >> oddly enough with volatility, it's easier. because this feels more rational you know, we're trading at about three-year average for valuations 17 times this is not as concerns back when we were up at 21 times earnings that was definitely concerning and we've come down. for us this is a healthy correction >> you don't disagree with a lot of this. >> we agree with it, most of it. ever since the financial crisis, we have discounted the strength of the underlying economy. we to some extent continue to do that the fundamentals are extraordinarily good by the end of the year, they probably get stronger. so i'm not concerned about that. what i am concerned about is how

does the fed react to that when we have 3% growth rate by the end of the year and seems sustainable inflation is picking up that's really when the test for the market is going to come. you know, february was just a -- kind of a trial when we get to november, december and growth is high and the fed may tighten three more times in 2014 if we can get through that, everything would be really good. >> i'm offended that you are worried we're putting too much stimulus on a hot economy. i'll tell you why. it takes 40 years to reform taxes. we finally get a chance and according to some we shouldn't have done. >> the taxes really wasn't the issue. >> what are you -- >> the budget deal the deficit financed budget deal. >> now i'm not offended. >> yes that is -- basically we didn't need that. the tax deal can get you higher

capex. in the long run that may end up being helpful to the economy the budget deal is really the outlier in my view >> a year ago we were talking about deficit neutral tax reform which is not what happened but anyway -- >> only you and sorkin were -- >> no, no. and the republicans in congress. but what i would ask, krishna, everybody whether you love the market or don't that the underlying economy is good but is it main street doing well and wall street has to adjust to this new world where you have offsets of higher rates on inflation? >> i think capex was picking up. one of the things lagging throughout the whole recovery. i think productivity as a result should do better wages should go up without inflation. i think things are in much better shape the question is, is the fed going to overreact when they see 3% numbers and inflation getting up to 2.5% or something like that i don't think they will, but that remains to be seen.

>> is $20 trillion, $21 trillion, are we worried yet >> yes we should be worried >> i'm not even talking about entitlements either. >> i think the expectation has to be that at some point we come back and address these issues. the question is, is it today when things are better the flexibility there would be reflexive. >> we know how much -- we know what we're spending before we even -- if you want to do something with the military which was a priority for trump, i don't know how -- and then you got your dealing with the other side of the aisle. how could you have done it and not spent as much? >> well, again, i'm not a politician, so i don't know how you could have done it but i think from an economic standpoint, we didn't need it. the economy had enough momentum

on its own i think it was basically to get something done. >> i don't think we did it for stimulus i think we did it because we wanted, you know, to reverse some of the -- >> i think we did it for politics we didn't do it for stimulus it was all about politics. >> maybe in a couple years you'll be losing sleep >> probably. goes in cycles you know, when you're a portfolio manager, it goes in cycles >> but will it be -- i mean, we're going to be running trillion-dollar-a-year deficits, probably or close although we had great month last month in terms of how much we took in versus how much we spent. but trillion-dollar deficits, that might keep you up >> honestly, there's not as high of a correlation to what the markets are doing. since i managed equity funds, i'm more focused on what corporations are doing and how that versus the overall economy. if rates are going up, that's the concern. i'm much more focused on how corporations are managing. >> is firm oil prices good or

bad for the economy? >> in general, the consumer is pretty resilient to upticks in oil prices i would say for the economy, it's sort of a neutral definitely airlines have been hit. we've seen, you know, earning estimates drop about a third from growth. so that's one negative but energy, i mean, their estimates have doubled for the year one area that it's actually looking better so for net/net, it's a neutral it's an adjustment >> i think oil prices are stable to strengthening oil prices is really a good signal about continuing strength in emerging markets. and i think you need that. you move away from the u.s., that is an important signal. if the dollar strengthens and you have weaker oil prices, you're going to have heck of a trouble in the markets so yes oil prices is a good thing rather than a bad thing in the current environment. >> okay. erin, have you been on "squawk box" before? >> i think this is my first on

"squawk. >> okay. just because i -- you know, when i ask, doesn't mean you haven't been that's what scares me. that's why i'm so slow could be me. could be me. so you have not. well, thank you. i mean, we see you all the time, krishna. >> thanks for having me. >> it's not too much just the right amount. perfect. >> stop talking. coming up, starbucks is looking to triple its annual revenue from china over the next years. and later, the iea cutting its oil demand a 70-plus takes its toll ayun, u're watching "squawk box" on cnbc mom, dad, can we talk?

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market 20 years ago business in china would actually one day eclipse business in the u.s. today they have some 3300 locations across 141 cities in mainland china starbucks expects this will now reach 6,000 stores by the year 2022 and the companies also announced it will triple revenue and double operating income in china in the next five years this includes the 30,000 starbucks reserve roastery in december where the ticket there is three time this typical starbucks china ticket same store sales there are outpacing the united states. kevin johnson told us in march they are moving ahead as we can see plans there and they will continue to work with the chinese government one interesting hurdle they're working around is that of course chinese people tend to prefer tea versus coffee.

they're using more offerings and opening next month the beijing fund store it -- fun store it's going to be even larger than their roastery reserve bar. >> why is it fun >> they're going to have all types of offerings there mixology and teavana and coffee offerings. they're trying to get the consumer to drink more coffee but they're giving other offerings as well. >> this reminds me of yum in china. it spun out. anybody talking about that as a possibility? >> i've heard jim cramer ask johnson about it several times he said i'd love to invest in starbucks in china as for now, they plan to keep it part of the starbucks offering >> the brand, the company seems safe with a lot of the trade tensions are they so engrained in domestic chinese consumption that they're okay? >> i think if you look at this expansion, you can see they're moving without fear. and they're continuing to work with the government.

so they don't seem concerned about it i don't think anybody does it better than them >> there's room for expansion here only two of the corners have a starbucks. there's one here and one here. >> but if you think about it -- >> you could have three or four corners of -- >> they've got about 14,000 stores in the u.s. and they're going to hit 6,000 in china by 2022 coming up -- have you ever seen the -- >> i know what you're thinking >> best in show. my man santoli. parker posey and her husband used to -- >> they're explaining how they met at starbucks but not in the same starbucks >> looked at each other across the street then they try to meet each other. and switch the next day and be looking at each other. then they finally met at -- that guy is brilliant that's a movie i can't watch it too many times anyway coming up, we're going to talk

oil in the markets then johnson & johnson chairman and ceo alex gorsky joins us for an exclusive interview time now for today's aflac trivia question. what airline was featured in "2001: a space odyssey"? the answer when "squawk box" continues. break a leg! aflac?! not that kind of break. oooh! that had to hurt. aflac?! not that kind of hurt. yeah, aflac paid us cash in just one day to help with our car payments and mortgage. aflac! perfect timing! see how aflac helps cover everyday expenses at aflac.com. yourbut as you get older,thing. it naturally begins to change, causing a lack of sharpness, or even trouble with recall.

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what airline was featured in "2001: a space odyssey"? the answer, pan american world airways. kellogg company closed operations in venezuela and laid off 300 workers yesterday at a time of widespread hunger in the crisis-racked south american nation it ceased operations as a result of the current economic and social deterioration in venezuela. the move drew an angry rebuke from socialist president nicolas maduro who accused the company of trying to sabotage his chance of getting re-elected. company has been producing cereal in venezuela since 1961

and the market had at one point been its biggest in latin america after mexico >> he also said he was going to begin judicial proceedings against the business leaders who ran the kellogg factory there because it was unconstitutional to close that plant. so interesting development here. coming up, ihs market vice chair and energy expert dan yergin talks oil demand and prices take a look at u.s. equity futures and how we're shoring up the dow looking to lose about 5.5 at the open. stay tuned you're watching "squawk box.

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♪ good morning and welcome back to "squawk box" here on

cnbc we're live at the nasdaq market site in times square among the stories front and center, mortgage applications fell 2.7% last week. this according to new figures from the mortgage bankers association. both new purchase applications and refinancing activity fell with refinancing at its lowest level. we are expecting the latest quarterly earnings from macy's in 30 minutes' time. expected to post 30 cents a share. comp store sales up by 1.4%. and now buying for 83 bucks a share. abaxis is the maker of instruments. churchill downs is among the stocks we're watching this morning. announced a new agreement with

the operator of the iconic track will join the betting markets in conjunction with the casino operator that comes in the wake of the supreme court ruling earlier this week allowing states to legalize sports betting. it's wednesday, right? i'm not -- not because it's nbc, but justify is a special horse >> preakness >> it's a special horse. this could be -- you know, things come in -- you know, it takes 45 years but remember last time >> the triple crown. yeah they're coming across. >> yeah. maybe. baffert. you see how beautiful that -- i mean, that was a pretty impressive -- >> people are going to try to do the money ball thing with horse racing and not race 2-year-olds. right? now, this horse won first time in 100-something years to get two. that's the new way >> but it's on this saturday just in case you were wondering. same time, you think

preakness. >> belmont is third. >> i like the horn >> it's good is that one -- does it have the -- it does, right? some of them you just -- right some of them don't have the three. >> bugle instead of a trumpet, you mean >> wip one is this let's go major storms battering the northeast last night bringing high winds and down pours. check out the scene from grabd central terminal forces major train delays. hundreds of flights were also delayed up and down the east coast. what a mess that must having last night canceling a highly anticipated meeting with president trump. this was with south korea. it was supposed to be today. it's threatening to pull out of that summit next month with president trump. hans nichols joins us with the

latest saw you here on set not too long ago. conjecture about whether is this posturing? how high up does it go officials that we're quoting from north korea >> oh, yeah. >> is something really happening here and it has to do with john bolton >> well, when you look at that second statement which is perhaps more significant and troubling than the first one, that comes from the vice premier. and it mentions john bolton by name so when you look at how yesterday unfolded and we'll keep everything here on eastern time but you look at how yesterday unfolded, you have the statement basically complaining about these annual exercises that was a move. everyone here in the white house thought they had the green light to continue with the annual spring exercises it's called full eagle in general. what they were objecting to is something called max thunder basically a lot of planes up in the air.

what happened at the pentagon yesterday was first something between shock and vise everyone like to say they're shocked but not surprised. it seemed like genuine surprise here yesterday then muscle memory took over and they started reissuing old statements saying, look. the point of these exercises is inner operability and they're defensive in nation. the statement from north korea is more troubling. not only does it have some of that hot language, but it also is talking about denuclearization and that is the goal of this summit between trump and kim ju jong-un. one thing to look for and book your flights now, in early june there's a big summit in singapore. this is all the defense ministers. look to see which stay in june i get to play assignment editor here joe, you've got to go to singapore. it's going to be a heck of a summit >> some airlines -- i saw there's a 20-hour flight, hans

i don't know i have a blood clot. >> is that commercial? >> yeah. there's a 20-hour commercial flight >> you fly commercial? okay, good i want to establish the baseline there. >> yeah. andrew's not here today. you're confused. you're confused between anchors. so i thought that -- i will tell you, hans, every time north korea seemed to acknowledge it was considering total denucle denuclearization, now they're not. i don't know what changed. >> it could want the economic aid before they do complete denuclearization you know, what trump and bolton and a whole host of officials even previous officials that have left the administration, that's a nonstarter. even mcmaster said that you need

to have the denuclearization first. that is the goal then you'll talk about economic aid. you know, the only concession that i can think of that the pentagon or the administration at large has made is not bringing reporters in to witness these military exercises when i was in korea just a couple months ago, normally they bring a bunch of reporters, they put you on planes. once those exercises started and once there's a prospect of talks going on, pentagon basically shut it off. they said no public attention to be put on this this was the strategy and they thought they had the green light across all of government to continue with these exercises. if you don't have exercises, you don't have an alliance you don't have the ability to work closely together. it's a nonstarter here at the pentagon to give up these exercises. although it appears the north koreans want to put them on the negotiating table. >> i see okay that does fill in a lot of the blanks on why we do those things okay all right, hans. thanks appreciate you coming on today

the international energy agency cutting its outlook for global demand as oil prices push higher global demand growth at 4.4 million barrels per day. oil has risen 51% in the last year driven by coordinated supply cuts and concern of iranian supply after sanctions were imposed for more on the rising oil prices, let's bring in dan yergin always great to see you. >> thank you >> everybody watching what's going on in the middle east and more specifically the israeli air strikes against the syrian targets. i'm just wondering, you think it's venezuela venezuela is ramping down production how is that impacting the market >> that's right. obviously the focus is on the middle east, the rising tensions there. the fact there are now going to be new sanctions at least the u.s. is going to apply new sanctions on iran. but i think what's in the market where eyes are focused is

venezuela which brings together geopolitical risk and fundamentals at the same time. a couple years ago, venezuela was almost 2.5 million barrels a day. today it's 1.4 million next year it could be 800,000 a day. the screws are tightening in venezuela. in terms of companies trying in arbitration to seize venezuelan assets and the likelihood that they're going to have the election for president on sunday that that will be followed by u.s. sanctions which will also further crimp venezuelan supply. >> so just based on venezuela alone, this is probably hard to do, how much more should we expect in the price of oil in terms of what it could go up >> i think what we look at if we take all the things together that we mentioned. iran, tensions in the middle east, things that we haven't mentioned. the war in yemen and so forth plus venezuela we could see oil prices in july

when demand is high, we could see it several dollars higher than it is we could see $85 for a period of time >> $85 by july some say they can pump oil and replace oil that's not in the market already and u.s. producers as well what's preventing them >> well, that's the counterbalance at these price levels, everything goes. we're seeing the weekly recount go up. we're seeing activity go up. we think now that the u.s. will be adding 1.2 million barrels a day to world supply. so the u.s. is very dynamic. at this level, producers can both achieve physical growth and supply and give returns to investors. so big for the u.s and saudi arabia has traditionally said if there's a disruption of the market, they will meet supply

the iranian sanctions won't go into effect. they don't go into effect overnight. and last time it was an 180-day period supplies have to come down there's going to have to be a lot of negotiation between the u.s., europe, india, and china to actually put sanctions in place. >> dan, it sounds like we're at some kind of a sweet spot here where it's great for the industry at these price levels and not yet crimping demand. how do prices have to go before we talk about demand being restrained here? >> i think if we see gasoline prices hovering around $3, if they go much higher. i was in a conference a couple days ago and the energy minister the way he put it, he said they are pinching the indian economy. so it's not like you just go from one level to another. but there's a gradual thing. and the iea, its impact on

demand, it lowered it by a small amount 40,000 barrels a day but if it persists and goes up, then you will see a bigger effect on demand >> what are you expecting from the opec meeting do you think members are content to leave cuts intact even with rising prices? >> well, i think it's a dynamic situation. and i think going into summer with prices higher, they will go higher it's not just opec it's saudi arabia and russia and the other countries. but i think the notion they go in there and leave things flat, that's the easiest thing but if prices are rising and you have further disruptions from venezuela, then you'll have to think again about what they're doing. >> dan, great to speak with you. thank you. dan yergin and a programming note, brian sullivan will have an exclusive interview with vicki hollub on

"squawk on the street. >> you have to love the way they spelled out. it's spelled out eye >> you think they're after me? >> no. i know how to pronounce -- >> like is. >> do people do that >> no. >> maybe 1 hs. >> maybe it could be confusing to some. >> i loved it though i didn't do it >> i think in the rundown you changed it coming up, an interview with the chairman and ceo of johnson & johnson. alex gorsky. he will join us after the break. here are the futures at this hour they've been all red again down 36 on the dow

♪ i just want you close, ♪ where you can stay forever. ♪ you can be sure ♪ that it will only get better ♪ you and me together ♪ through the days and nights. ♪ i don't worry 'cause ♪ everything's gonna be all right. ♪ ♪ no one, no one, no one ♪ can get in the way of what i'm feeling. ♪

♪ no one, no one, no one ♪ can get in the way of what i feel for you. ♪ ♪ you, you ♪ get in the way of what i feel for you. ♪ johnson & johnson is holding its analyst day today. meg tirrell is at j&j's headquarters in new jersey with a special guest. hi, meg. >> hey, joe. joining us now is the chairman and ceo of j&j alex gorsky

thanks for having us in your store. >> great to have you here. this is the home of johnson & johnson over the last 30 years right here in our company store. we're excited about the analyst today. we'll talk about our business. >> your pharma business is the biggest, but your consumer products are some of the best known brands that j&j has. you announced you're relaunching your historic iconic johnson's baby line to try to keep up with new trends for parents tell us what you expect that to establish. it's got the high-tech pharmaceuticals. it's doing things to hopefully help find a cure for things like ebola, hiv, multiple myeloma but it also starts with our baby brand. what we're trying to do is be more like a start-up with our baby brand that's what we're talking about. it's a relaunch. we're focusing on the changing

needs of the millennial mom. we reformulated the brand where we're using more natural ingredients. we've taken out many of the concerning ingredients that mothers didn't want. things like parabins and other ingredients. we also made sure we're creating a conversation with the millennial mom we're really excited about the relaunch of baby we think it makes it current and relevant at the same time, it doesn't lose that basic smell, basic touch you expect from the johnson's baby line. >> this comes after a couple years you had extreme headlines around the talc baby powder product. folks said they lost trust in the brand because of those headlines and they're concerned of the lunk to cancer to the talc baby products i talked to your company and said that wasn't the driver

behind the relaunch. but how do you keep consumers' trust, perhaps win back their trust in the midst of these headlines? >> when it comes to baby, safety and quality is first what we're talking about today is how do we take these legacy brands and really better position them for the future you know, for example, let's start with clinical data j&j. we have conducted more than 90% of the clinical trials the millennial mom, they have a high expectation about data. they want to know frankly do these products work, are they safe, are they effective and the fact we're able to produce that behind our brands is really important. we need to make sure the brands do well today and in the future. >> do you sense there is a loss of consumer trust? >> look. one thing we want to make clear is that we continue to believe in the fundamental safety of talc it's got more than a

hundred-year track record. by far the clinical trials support it being affected. at the same time, we realize that there's some concerns but one shouldn't confuse accusations made in a jury trial with actual changes by regulators or by actual clinical information. so look. we're continuing to educate. we're continuing to develop new formulations we want to make sure we're there and we're responding to those concerns >> so today is also about your medical devices unit in the first quarter, your vision care business was up 40%. what drove that growth >> we couldn't be more excited step back around vision care 50% of the world's population suffers from some form of vision issue. only about 10% of them are getting any treatment. we've been very proud of the heritage we've had with our contact lens business. we make more contacts than anybody in the world we've had more than seven product launches in the last few years. we are expected to launch two

new types of contact lenses. these are things for astigmatism, a wide range of needs for consumers and patients but we've also added onto that recently our intraocular lens business it's now part of johnson & johnson. we have a comprehensive contact lens and cataract business and we think that it's really going to help us transform that category and continue to move forward. >> a lot of your competitors are looking at splitting up. pfizer, for example, was looking at the consumer products business have you considered doing that is there pressure on you to consider doing that? and would you consider buying pfizer's unit? >> we think the best position is we want to be the broadest, best health care company in the world. regardless of whether it's a pharma approach or consumer approach, we ultimately want to help patients and consumers, you know, find a solution for their particular need. and so we think being a broad base helps understand what

patients and consumers need. frankly it's what's contributed to a strong business performance over 25, 15, 10, or 5 years. and we're always on the hunt for new opportunities. and, you know, we'll be talking more about that today at the investor day here talking about some of the acquisitions we made just over the last couple years. we've invested over $40 billion. we've made more than 50 acquisitions you know, some mid-size, some larger all trying to better position ourselves >> i know today's focus on medical devices and consumer but i have to ask about trump's drug pricing plan he rolled out last week. the market basically shrugged. a lot of analysts said this isn't going to do much >> we're still analyzing it. there's a lot of documents when we took a look at it on friday, i think there were about 150 questions in the request for information. it's still early days. but at the end of the day, if we make sure that, look, there is better transparency in the

current system if we can allow the government in many cases to get rid of some of the abhorrence around negotiation, we think those are good things. but through all that we have to make sure the patients can still get access and there is a place for proper innovation. it's still very early in the process. we'll have to see how it comes together but those are things we're focused on >> melissa, you've got a follow-up? >> i do. it's a follow-up specifically to what you're talking about in terms of drug pricing. i understand it's early days and you're still looking at how this plan could potential lly work o for johnson & johnson, but there's one that could be felt if there is some negotiation introduced to some part "b" drugs or a movement of part "b" drugs to part "d," that could directly impact how much people are paying for that drug have you take an look at that? even done calculations as to how

that could impact your business? >> we certainly have, melissa. you're right it's a very complex issue as you talk about part "b" to part "d." i think one of the things we've been looking at in our pharma business over the last few years is looking at our entire immunology portfolio and look, whether it's generics, the launch of biosimilars, we're constantly redeveloping our portfolio. over the past couple of years, if you take our newly launches products in that book, sales for those two products now actually exceed those of remicaid we know there are going to be changes. that's why we have to renovate we're pleased not only with those products but our most recently launched drug tremfya we will successfully navigate our way through the changes. >> i guess the question really is how important is it for you guys to keep those drugs in part

"b" in order to hit financial targets in the long run? >> well, look. i think it's going to depend on how these exact changes take place. and, you know, what we've seen through all these discussions, it's a very complex system we've got to make sure that we don't have unintended consequences for these changes for example, let's make sure the drugs that should be administered in a physician's office are, in fact, done there where the physician can be in control along with the patient let's also make sure they get the appropriate reimbursement for the time and the effort and frankly the care that they're providing. again, as i mentioned earlier, there's a lot of questions that have been asked on the part of cms. we'll be working with them and of course other organizations. those are some of the issues and concerns we want to address.

>> another thing that came up today was with novartis. it was said michael cohen just called up novartis to establish their relationship did he call you a year ago >> no, he did not. >> you didn't get a call from him or anybody representing the consultants? >> no. >> interesting how do you look at m&a and valuations in biotech? >> look, we're always looking for new product opportunities. and i think one of the reasons we've been so successful and we launched more than 15 compounds over the last five years seven of which are billion-dollar brands. these are things that are helping to find a cure for lymphoma, prostate cancer. is that we've been agnostic about the sourcing of our r&d. we want the best for patients. about 50% of the time we tend to go outside for early r&d, bring

that in. apply our regulatory expertise then be able to prioritize it and get it to patients >> we would expect that to continue going forward ideally, we like the small tuck in where we identify early new models and due to the fact we have a unique insight, we can then identify that and again put it through the clinical development program. get it approved. >> alex, we'll leave it there. thanks for having us here. >> it's great having you here today. thank you. >> all right thank you meg tirrell and alex gorsky coming up, stocks to watch ahead of the opening bell on wall street. stay tuned they don't invest in alternatives or municipal strategies. what people really invest in is what they hope to get out of life. but helping them get there means you can't approach investing from just one point of view. because it's only when you collaborate and cross-pollinate many points of view

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let's take a look at stocks to watch this morning. micron rated to outperform a you name way to gain exposure to the memory chip market at an attractive price dow component 3m was downgraded over at jeffreys which cut 220 a share to 200 coming up, retail and the consumer in focus. we'll get quarterly results from macy's after the break plus we'll talk the president's plan with ed rendell and ray lahood "squawk box" will be right back.

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ceo call

>> we realize over the past few years that we probably got a little bit behind the curve. >> j&j boss alex gorsky speaks out in a cnbc exclusive. rebuilding america public and private sector leaders joining forces to bring the nation's infrastructure into the future two of the driving forces behind the project join us live plus industry turbulence that's why the nation's airlines are facing a pilot shortage and what it could mean for investors and fliers as the final hour of "squawk box" takes off right now. ♪ live from the most powerful city in the world, new york, this is "squawk box. >> welcome back. this is "squawk box" on cnbc i'm joe kernen along with melissa lee and mike santoli the futures are off right now.

not missing anything in terms of extending that eight day streak. dow down 36 or so. the nasdaq up but the s&p is down the 10-year is actually -- it was at 3.06% earlier it still is. almost 3.07% macy's earnings crossing the tape the company reporting eps of 48 cents a share. that compares to estimates of 36 cents. revenue also coming in above $5.541 billion versus an estimate of $5.365 billion and the same store sales, 1.7% compared to an estimate of 1.4%. >> i'll say better >> massive pop in the premarket session. earlier this week morgan stanley downgraded this stock. ithad seen pressure going into this earnings. here we have the results >> raising earnings and

guidance i don't have the numbers so i don't know if it's now above where the street was, but at least for its own -- where its estimates were, it's now boosting those a lot of times the street might be higher or above but we should be able to see that yeah anyway, 48 cents is good that was a big move. still at levels of half of what it was at the -- during the hay day, right >> sure. although even down from its highs, the stock has kept this uptrend up a lot of retailers had that panic. it sort of held together enough. obviously looks really cheap a year ago we were talking about can they cover the dividend. seemed pretty dire now it looks like they've got plenty of breathing room on the toop line if they're raising guidance >> it will be interesting to see

what they say about the strength particularly as the weather has improved how that's impacted them also if there's any impact on the consumer from higher gas prices if that's on their radar at all for now solid beat across the board. a raise on their own guidance for the full year. >> that comp number must be good too. >> 1.7% versus 1.4%. >> for -- >> for the past quarter. >> and of course i -- you know, makes sense to remind people that this is the smallest quarter of the year for a retailer like macy's but the fact they are confident enough about the rest of the year to raise guidance is interesting. >> yeah. >> still don't -- as soon as we get the actual guidance, we'll flash it eventually. this would be interesting to see what they're saying about the next three quarters. breaking news on an activist story. >> not a traditional activist but an unhappy shareholder

nonetheless. cnbc has exclusively reviewed a letter from tiger management to gamestop asking to launch a strategic review that often entails a determination to whether a company should sell some or all of the business. now gamestop shares have declined about 45% over the last year amid some pretty tremendous management upheaval. on friday gamestop announced its ceo resigned abruptly after only three months on the job. the company fired two top ranking executives including the company's coo. tiger's letter was written by crawford hawkins who highlighted investors' lack of confidence in gamestop's leadership amid this turnover these letters are rare for the three decade old tiger management the firm led by julian robertson. the firm saying they intend to remain a passive shareholder for

now and had no intention of becoming an activist investor. they said if gamestop fails to implement their turnaround plan, they'll sell their shares and redeploy their capital elsewhere. guys >> thank you very much, leslie picker joining forces at over a hundred event to talk structure and will be top of the agenda. joining us now, former transportation secretary ray lahood and former pennsylvania governor ed rendell. they are the co-chairs of building america's future. gentlemen, great to have you both >> morning >> good morning. >> secretary lahood, i'll start with you it seems everyone can point to various projects in their own cities and states that absolutely need to get done. what do you think is the number one hurdle to stuff actually happening? >> congress needs to pass a

transportation bill and fund it. that's what the problem has been it's for the lack of funding, for the lack of resources. the highway trust fund is broke. and congress hasn't passed a transportation bill in several years. and the white house really needs to provide the leadership on this and step up and say, hey, we need to fix america's infrastructure a lot of us thought that president trump was going to do that early on. it's just a huge, huge disappointment that this administration has not stepped up and really stepped out with a bold plan and a way to fund it >> governor rendell, on the state level, the things states are doing, can do further in order to fund their own infrastructure projects whether it be tap the capital markets themselves or enlist the help of the private sector >> well, states can do both. but states have stepped up 26 states in the last four years have significantly raised their gas tax.

they put their money where their mouth was and we need an investment the private sector can be used here there's money waiting on the sidelines to invest. but there's 60,000 structural issues in bridges in america so 59,900 have to be done by the government that's local, state, and federal. the federal government has to step up. what president trump has proposed, $200 billion new spending in ten years. that's $20 billion a year. the society of civil engineers said to get a passing grade we need to invest ten times that much in a year we've got to raise the gas tax the chamber of commerce are behind a significant grincreasei the gas tax. and for the -- we need to raise it to $10.

everyone those facility charge is and raising it to $10 is nothing compared to what the airlines charge you for a bag or for priority seating but that would give congress a lot of money to put into airport improvement. >> secretary lahood, do you think those kind of revenue measures are politically feasible right now do you think it's a matter of congressional attention span or is there just resistance to the idea of having a lot more federal spending on these types of projects? >> well, look. if you listen to what speaker ryan says and others say, they don't want to raise the gas tax. they don't want to raise any revenue. it's not very encouraging. i do think that if president trump came out today full force behind an infrastructure bill, a six-year bill and said we need to raise the gas tax, create an infrastructure bank, do vehicle miles traveled create four or five pockets of money, that would push congress into doing it.

he's shown in the past when he steps up on an issue, boom congress takes action. i believe if president trump came out today full force behind that kind of a plan, congress would have no alternative except to debate it and pass it in the absence of that, america will continue to be one big pothole and with no light at the end of the tunnel in terms of how we're going to fix our infrastructure >> we might not even have a tunnel if this infrastructure is so terrible. secretary lahood, do you think that this is still a bipartisan issue? >> of course there are no republican or democratic bridges there are no republican or democratic roads transportation infrastructure has always been bipartisan if the republican majority in the congress were to put a bill on the floor -- >> when you're talking about revenue raising measures, when you get to revenue raising measures and you're saying putting a fee on this group of

people and increasing the tax on another group of people, does it then all of a sudden become not bipartisan or not as bipartisan? >> i believe that if the republican majority and republican white house put a bill on the floor democrats and funded it democrats would support it overwhelmingly. when i was on the transportation committee in congress, we passed two six-year bills with 75 votes on the committee everyone voted for them. both republicans and democrats it's been the tradition in our country that transportation and infrastructure is bipartisan and funding it has been bipartisan >> let's hope that continues governor rendell, you mentioned how much a bill could be in terms of how much the spend could be but the wide gap between that and the amount needed to actually upgrade a lot of the things that need upgrading, how would you prioritize how should that money be spent >> for transportation it should

be spent on bridges and roads. it should be spent on ports, airports, inner waterways that are important for our water transportation system. but look understand the gas tax hasn't been raised since 1993 in 1993 the price of a movie was $4 today the average price of a movie is $12 things have doubled or tripled in price we need the gas tax to go up to track that that's number one. and number two, our congressmen should have a little bit of a shot of courage and understand that in pennsylvania, for example, my republican successor tom corbett put a gas tax increase bill over five years. i stood with him and urged democrats to vote for it it barely passed but at the next election five months later, not one democrat or republican who voted for it lost because people understand you get what you pay for

>> we're going to leave it there. thank you so much for joining us >> thank you all right. coming up, a "squawk box" face-off nhl commissioner gary bettman joins us in studio we'll talk playoffs, sports betting with and even a new way to make ice. saves water. bizarre, but it's kind of cool you're watching "squawk box" on cnbc mom you called?

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not the other way around. we're deep, deep into the nhl playoffs with only four teams left skating for the stanley cup which you'll bring in this year, commissioner i love seeing that >> if you invite me with the cup, we'll be here >> the tampa bay lightning taking game three in the eastern conference finals last night against the caps the washington capitals. we've also got news out this morning from one team that could put the old way of constructing hockey rinks on ice. joining us now, nhl commissioner gary bettman and dan beckerman, president and ceo of aeg that's the company that owns the los angeles kings.

aeg, a stands for anchess. and there's also coachella and before we bury the lead, is there a big game tonight on nbc sports channel >> absolutely. >> how did a franchise team get into the semifinals? >> for those viewers who don't know, the vegas golden knights are in their first year. this is the most successful expansion franchise both or and off the ice, on and off the playing surface of any franchise probably in the history of sports >> the rangers turned into a franchise team and the golden knights -- into an expansion team. >> no, no, no. >> what the hell happened to the -- never mind. but i don't know any of the players anymore. but that is amazing for a first year >> it is and it's exciting >> what's the series right now >> 1-1 the way the city of las vegas has embraced this team is

nothing short of phenomenal. it proves that there's more to las vegas than just the strip. >> and this is your arena in vegas too. >> that's right. >> aeg arena >> that's right. we partnered with mgm resorts. we've been kings of the game there is the last 20 years the arena has been very successful now the golden knights are taking it to another level. >> you got this ice -- >> blue eco. >> it's ice. i mean, it's ice but you make it -- you suck the humidity right out of the air and you don't use -- how many 13,000 gallons of water? and then you pour on water during the game too. >> yes 13,000 gallons to create the ice. another 3,000 gallons every time we flood it and maintain it. at staples center which is one of our flagship buildings, we have a busy building 240 events and we're always focused on new ways to lower our carbon

footprint. >> you suck the humidity right out of the -- and that's positive too because your dehumidifying the air as well. >> yeah. it's comfortable for the fans. it lowers the temperature and it dehumidifies the air and creates about 500,000 gallons of water each year. >> that's crazy. >> we're the first sports league that has actually done two leaguewide sustainability reports. we're very mindful ofour environmental footprint and things we can do at the club level. and even in communities at local rinks to make things more efficient. >> okay. stop with the virtue signaling let's get to vice. how about gambling? do people bet on hockey? >> they do in this country not as much as, say, football or basketball. but worldwide, there's a fair amount of betting. and the supreme court's ruling, i think, is going to take some time to sort out its implications whether or not there should be a one size fits all sports betting

solution that congress passes. might be one way to view it. or we may have to deal with 10, 15, 20 states all doing their own things which would make life a little more complicated. but in terms of creating more interest and opportunities for states, for the federal government, for casinos and people who take bets and for sports leagues, while the future is uncertain, i think there's a fair amount of opportunity if it's done right. >> so much has been written in the past few days. the sopranos out in new jersey are not happy with this. this really will take a bite out of what happens in -- with the sort of what used to be not legal. those people are going to be hurting, are they not? >> well, of all the things i have to be concerned with, that's not in my top ten. >> what are you going to negotiate from all the differ t

different -- >> our trademarks, our games, the video of our games and so there are things that if you're going to run a successful sports book, you're going to need from us as leagues not just the nhl but all the leagues. and from our standpoint, we want to make sure it's done right from an nhl standpoint, i don't worry about the integrity of the game i think our players are the consummate professional athletes and they focus very much on winning and doing their best every night. >> do more people watch hockey as a result of betting >> you know, that's the big question and it's not just betting, i suppose, on what the final score will be or the result of the game but there may be a new world of prop bets where in the course of the game, things will come up. >> i was wondering about that. is hockey conducive to that as much as basketball, football >> who's going to score the next goal, you know, will they score

on the power play. and also we're in the process of technology standpoint of working on what we call puck and player tracking so the amount of data we can create in the course of a game that currently now you can't pull out of the game as efficiently. that may create it >> what is it again? >> puck and player tracking. >> okay. just easy on that. you must be -- you're very excited about this, are you not? i know you don't want to, like, endorse a vice, but this is huge for any sports franchise >> the supreme court has spoken. and so we've got to deal with the realities of our world the thing most important to us is the framework is done in a sensible way having 20 different states with 20 different sets of regulations and laws won't be our idea of a good time. uniformity is vital if this is going to work at any level >> do you care -- i'm hoping for

a vegas/washington final >> so am i >> i am hoping for good officiating and no -- of course. don't you love all your kids >> it's just fitting the two places where there's the most vice and graft and you got washington and then vegas. i mean, it's perfect that they should be facing off >> that's quite a characterization i'm not sure you're making friends. >> a canadian franchise against u.s. franchise >> fact is half of our players are canadians. whether it's played in the u.s. or around the woerld, its roo-- world. that's what it's all about >> i bet on either anthem, people are standing and without except i would imagine. >> our buildings when you tune in a game, they're energized, exciting

>> some of the best at a ranger game that anthem, both of them, it's one of the best parts of being there. >> if you tune in early enough tonight to watch the pregame show -- >> on nbc? >> the show is incredible. >> they've done a great job launching that it's flawless. >> excellent thank you. both of you. are you okay >> i'm great if you are. >> but you are on message, though he's a good commissioner >> thank you for having me >> you're welcome. bring in the cup we'll feel like "squawk box" wins the cup and thank you and i'll see you in coachella >> you got it. >> whatever you need >> one more the? one for mike coming up, damage by ice cream? r mlie man is suing halo top fo$5ilon that story straight ahead.

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a man is suing halo top for misrepresenting itself as ice cream. according to the fda, ice cream must contain at least 10% milk fat which halo top does not. the class action lawsuit argues halo top's use of the words light ice cream should be more prominent on the label also claims the use of the terms

no artificial sweeteners is false and misleading he is seeking $5 million in damages. >> what's in a fast food milk shake? >> it doesn't say it's -- >> it's called a shake i don't know i'm not sure coming up, breaking economic news housing starts minutes away. "squawk box" will be right back. there's nothing small about your business. with dell small business technology advisors you get the one-on-one partnership you need to grow your business. the dell vostro 15 laptop. contact a dell advisor today.

housing starts data hitting the tape rick santelli's got them at the cme. rick >> yes april reads down 3.7% on starts. not the number we were looking for. we wanted to be a little over 1.3 million. we ended up over seasonally adjusted annualized units. this follows, though, and upward revision which put last month from slightly below 2% to 3.6% now, that's starts what's going on with permits it's not good either but not nearlied a bad down 1.8%. we were looking for 1.35 million. we ended up with -- oh, i'm sorry. as expected.

1.352 million. but it is nonetheless still down a bit. but the reason it's down 1.8% is because last month's permits were ramped up from 1.354% to 1.357 million when you look at it sequentially, it moves down a bit. but it's darn close to expectations we still have industrial capacity and utilization and of course the 10-year the big news yesterday, punching through some significant resistance to 3.03%. let's see if it retests that level. maybe the other big news is the italian form between league and five star has this little demand for the european group they want their debt forgiven. back to you. >> all right, rick thank you. rick santelli at the cme steve leisman is here. your reaction, steve >> well, you know, this idea of the split between permits being on target and at expectations and starts being below

i went to see my son play baseball in minnesota where he's a member of the carlton knights team i can shout that out, right? >> yeah. >> and there was snow on the ground in april as they played baseball they had taken the turf field and -- >> wow >> so this is an issue i think that has to do with housing here i'm looking at some of the declines minus 8% in the northeast after a minus 32% in the prior month i'm sorry. permits there. midwest, minus 16% i think that's a big issue also, you would think there'd be more of an issue with higher interest rates right? they've been ramping up. >> right >> but there hasn't been take a look at this chart here i want to show you there's been almost no correlation between mortgage rates going higher and housing starge ining starts they have gone -- there's the mortgage rates that first leg up there is the election of president trump. and then another leg up beginning 2018 we can talk about the reasons why that happened, but there's

housing targets. almost no effect, really you can see rates go higher but housing stargts kind of -- it's a lot of volatility in there some of that is weather. should we bring in constance on this >> absolutely. constance hunter of kpmg >> well done >> hi. >> i want to ask you a question on that chart there. is that something that makes sense that mortgage rates go higher and housing stargts have almost no impact at all? >> i don't want to throw cold water on your chart. it's nice. but it's a little short. it's a little short to run it -- like, you only have it going back to '16. you'd want to look at it over a longer period of time. >> what would i see? >> you'd want to look at it in previous cycles. so it's not linear so at the -- it's -- at the beginning when rates start rising, it doesn't have much of an effect. because people have already made a plan to purchase a house people -- a house is not a whim

purchase you don't just go to the mall and buy a house. it's not like going to the mall and just getting a pair of shoes. if rates go up a little, it's not going to deter your behavior the level of rates we have right now is so low and so unprecedented in terms of real rates, i mean, we're still flat to negative on real rates. and so you're looking at a situation there, it's not going to start to have an effect >> what's the highest rate you remember, joe? >> i guess about 15% >> 15% >> my parents had that >> what do you mean your parents? >> i wasn't -- >> he wasn't a home buyer yet at the time >> i was not a home buyer at that time. >> i was not in the market to buy a home >> that's what i mean. i didn't pay it. i just meant in terms of remembering it now you're saying this move from what was it 3.5% to 4.5%

>> where do you see the impact >> it's going to depend on what's happening with wages. if we look at mortgage interest as a percent of wages, it's the lowest its been since the '50s if we see wage gos up as well, we're not going to see an impact >> housing is the ultimate test of this idea that it's okay if rate gos up for the right reasons. if the fed is raising rates and mortgage rates and the 10-year yield is rising because we have better income, better growth, then that's okay the other concern, though, which we haven't talked about is this idea of higher oil prices. we're hearing all these stories about transportation shortages and people paying up for freight. what's the inflation outlook >> yes it depends again on your inflation if it's good inflation or bad inflation right? we have inflation because we have shortages

then that is a bottle neck in the economy. and it impedes the amount that we can continue to grow. all right? and so -- and especially in the labor market and we have wages going up because of shortages, that's not going to translate. we need productivity gains in order to translate to higher incomes. >> we've got to leave it there thank you steve leisman. thank you constance hunter >> thank you well, it's not just today. geopolitics front and center this week. especially after the unrest in the middle east. nbc's matt bradley joins us live from gaza city what's it look like there today, matt >> well, joe things are kind of quiet today it's not that different from yesterday. yesterday was also the nakba day, the so-called catastrophe days that's when palestinians not only here but around the arab

and muslim world commemorate the anniversary of the founding of the state of israel. so right now what we're seeing after the funerals of yesterday is kind of a calm that's been laid over this enclave of 2 million people most of which are the descendents of the refugees from the founding of the state of israel they were walking to the border with israel demanding their so-called right of return to take back their land from israel back from 1948 now, it's hard to see where this goes from here after more than 60 people were shot dead by israeli forces on monday it seems as though hamas and other kbroups here have taken a step back. they're evaluating their position and they may be negotiating with israel indirectly through the egyptians or other channels to come to an agreement, some sort of accommodation to determine where they go from here. and ma ybe to lift a little bit

of the stress on this enclave of 2 million people ramadan is starting later this week it's going to be very unclear exactly where this goes from here the hamas officials i talked to said they want to continue this protest. they want to keep the momentum going. but considering the incredible loss of life and lethality on monday, we don't know whether there's the stomach for it here on the strip >> there may some back room negotiations was that outyesterday? or is this something that's fairly new i mean, from your lips, let's hope so. >> well, the hamas official i spoke with yesterday said they were speaking not officially and not directly to israel a mas doesn't do that. it's illegal for the israelis to do that. what they would do is go through the egyptians. they have contact with hamas, other militants here and they would be the ones to come to an accommodation

that's what we think might be happening. but it's unclear it's all very secretive. of course the situation in israel is that benjamin netanyahu has been so buoyed by the movement of the embassy, his popularity rate has soared he has a newfound confidence he has no desire to go back to the negotiating table. it's the palestinians. they really have no real direction and looks as though peace at the moment is further away than ever >> nbc's matt bradley live from gaza city. matt, thank you. coming up, turbulence in the airline sector >> i'm phil lebeau in phoenix, arizona. looking for a hot job with a hefty signing bonus? how about becoming a pilot we'll take to the iesks and explain why these jobs are so hot when "squawk box" returns. or is it? this farmer's morning starts in outer space. where satellites feed infrared images of his land

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shares of retailers on the rise this morning. this after macy's beat estimates on both the top and bottom lines and in comp store sales as well. courtney reagan joins us she just got off the phone with macy's ceo >> that's right. it was an interesting quarter. the comp was really strong the second positive comp in a row after three years of negative comps but jeff gannett macy's ceo did tell me there were a bit of shifts in there we need to be aware of that friends and family event, it's a big event normally falls in the second quarter. did shift into the first

quarter. so we got a benefit from that. also the easter was a little bit earlier so that also helped. we'll see what happens then and what that means for the second quarter. we know they did also raise guidance they feel confidence at least for the balance of the full year for sales. no weather impact in the aggregate which was interesting. because yesterday home depot sort of blamed the whole quarter on that. it does make sense they sell a lot of gardening you can't plant flowers if it's still snowing outside. but gannett said no weather impacts. certainly in parts of the country you'd see weakness here and there. international tourism up 10%, best since 2014. so china is the big country when you look at where those tourists are coming from. and then followed by canada, mexico, uk, and brazil so that is very interesting. he also said the average unit retail price is up 5%. less discounting, exactly.

less overhang from the fourth quarter. that's important and then talking about tariffs, tariffs are bad for the american consumer, bad for the economy. as i've told you before, we think that cooler heads will prevail. we have faith that this won't actually be as bad as potentially that we realize. but does acknowledge that yes, we import a lot. in america 98%, 97% of our clothing and footwear comes from overseas and china is the number one source of that >> what about gas prices >> he didn't mention gas prices specifically i can't say for sure i didn't ask him that. we only had about ten minutes. but he said by and large the consumer feels good about their current situation and he also believes that macy's north star strategy is giving the right product at the right time and they have the ability to spend in general overall >> all right court, thank you courtney reagan. all right. there is one industry that's in desperate need of workers. the airlines have you seen this guy

the way he seamlessly moves between airplanes, cars, stocks. it's the only thing that moves rails. have i got that right? if it moves, you -- yesterday you had those -- those were the ugliest looking vehicles >> the self-driving trolleys >> i like to tell people, joe. i tell people it's wings and wheels anything that moves, i'm there to cover it. about ten years ago i used to say i covered bankruptcy courts. now that i don't have to do that any more -- >> that's a step up. >> -- the fact nobody's in bankruptcy i cover wings and wheels we're talking about the pilot shortage i know some people have brought this up. i hear this occasionally, come on, is there really a shortage of pilots? yes. there's going to be a need for new pilots here's the reason why. look at the explosion in air travel worldwide especially over the last ten years

the most recent data, complete data, is for 2016. and it was well over 3 billion people worldwide who have taken a commercial airplane flight as a result, it's not hard to find people like amanda larson she is a student pilot recently graduated from the program, one of the programs out here in the phoenix area she's in demand. she's being recruited by three different regional airlines. she's not alone. we hear this from a number of pilots they're being offered hefty signing bonuses. other perks in order to fill the need for pilots especially at the regional level >> a lot of regional airlines right now offer incentives like bonuses and things like that luckily because of my military background, i didn't have a lot of flight debt for that reason i chose one that had a better base preference than a bonus program >> they know it's competitive that they need to offer the best in order to get the pilots because we'll go somewhere else with a little bit better pay

>> it's really money talks right now all the airlines are fighting for standard entry level pay is that big competition that's happening then on top of entry level pay, bonus pay for simply signing on. >> all right so you might be saying, wait a second what's going on with the pilots currently up there flying these airliners? the mandatory retirement age is 65 and guys, we are on the cusp of a wave of retirements as a number of these pilots hit that mandatory retirement age and unless it is changed and there has been talk about changing it, but if it stays at 65, then you're going to have to see some of these pilots move out of these jobs. and as a result, guys, for the airline industry, this is a problem. we've already seen emirates cut back on some flights because they don't have enough pilots. we've seen some regional airlines blame a shortage of pilots for suspending operations that could continue in the future unless we start to see more pilots trained and then ultimately up in the air

guys >> market forces eventually will work the figure. good jobs, good pay. can these guys -- number one, you know, just like social security it's hard but they should go to 67 probably in today's -- that wouldn't be hard to do fop go to 67, phil but can't they go work for net jets or something or wheels up or something like that >> sure. you can do that, but the bigger problem is for the airlines especially as they expand their schedules and they add more destinations not just the hub and spoke we traditionally see with the current airlines they're going to need more pilots after you have guys age out after 65, you will hear greater chatter of why can't we let these guys fly until they're 68 or 70 years old? people are living longer they are in better shape than ever when they're at 65. that's the argument in favor of changing the retirement age. >> yeah. that doesn't seem that -- like it'd be that tough i don't know

anyway, it's faa and safety and all that too so who knows all right, phil. >> talk to you later >> he's a bankruptcy court reporting for -- >> he was. >> because all the airlines were in bankruptcy. >> and the cars. all right. when we return, jim cramer live from the new york stock exchange take a look at the futures right now as we head into the opening bell the dow looking to lose 42 at the open s&p looking to be wny 5.do b3. we'll be right back.

time for your kensho stat of the

down to the new york stock exchange big pop on macy's. >> i think that the number of 4.2%, you have to reduce that two. it should be 1.7%. you have to take out the friends and family shift it's very good the inventories are healthy. improved gross margin. there was a considerable short position that had been build up, in part because of a note most unfortunate by kimberly greenberg may 10th going to underweight saying the negative comps are not a reality and

those who short it are going to have cover it. >> so everything else we're keen on, jim, since we're in between earnings it's the ten-year. what do you think will throw us for a loop >> i think the one that has to be reflected are mortgage rates. housing stocks are down badly yesterday. it made no sense if you listen to home depot's call, they told you it's not going to hurt housing. we should be thinking on the affordability index. the 30-year is people are freaking out as lloyd blankfine told us it's being manipulated around the globe. i think 4% is bad. i don't think 3.5. but what'll happen every time we hit a milestone, there will be sellers with stocks that don't understand. >> so we haven't talked about

tom wolfe. do you have a favor movie? you were a master of the universe you made sheri mccoy look small time, i think. >> i feel more like a parent of i'm charlotte simmons. >> great stuff but he was a social commentator, though. >> he was the best he was the best writer. >> yeah. >> a man in full these are incredible books they hold up really well the writing is super. >> i didn't like -- they just miscast everybody. that could have been a great movie. >> you're so right. >> right. >> they need to do a remake with the think cast right it was awful. >> right bruce willis was -- melanie griffin -- i don't think tom hanks was right for the role. >> it was the worst casting of

any major book i've seen that was a major book. >> "bright stuff" was good. >> perfectly cast. it was one of the greatest movies. >> it's nice we can solve a lot of things. fed things, you know, earnings things santoli was here for a best in show reference in a starbucks they met each other in starbucks or across the street from each other it's a cogged -- you would like it you love dogs. you got see it. >> i do love dogs. absolutely. >> all right. >> i love invidia. eat a box of chocolate or something. it wasn't real chocolate he got into the kitchen and the pantry it was bad a bad week with invidia. a bad weekend with invidia. >> never know what you're going to get don't miss brian sullivan's

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didi is disabling certain futures such as profile pictures, ratings, and public tags from the car pooling service. it comes as service tries to win back trust following the death of a passenger who was allegedly killed by her driver the changes address the break down of safety protocols on the app. chinese media reported there was a little known function that allowed drivers to leave comments about riders that were visible to other drivers and these comments included descriptions of riders like goddess, natural beauty, and hot as hell. drivers could view profiles. female riders have been changing their profile pictures to men. changing their list of gender to male safety a concern everywhere in the world. >> yes the futures have been in the red a little bit that might be the worst we've seen down 52 on the dow after the streak of gains was broken

yesterday. didn't close at the worst levels yesterday. it cut the losses to less than 200. nasdaq down 4. s&p down who is here tomorrow you? >> i'm here. >> three in a row for you. >> short straw [ laughter ] >> make sure you join us she loves it she loves being here "squawk on the street" is next ♪ good wednesday morning earthquake -- welcome to "squaw on the street. futures are red for the second day in a row after the worst day for the dow in about three weeks. nafta an