♪ >> live from new york where business never sleeps, this is "squawk box. good friday morning. welcome to "squawk box" on cnbc. we're live at the nasdaq market site in times square i'm andrew ross sorkin with joe kernen michelle caruso-cabrera is hanging out with us today. look at u.s. equity futures at this hour. things are looking to shape up with a little bit of green dow up about 74 points nasdaq opening up higher s&p 500 up about 5 points. let's show you treasury yields ten-year note right now at 3.1%. we have a big development in the ongoing saga for control of cbs. the company postponing its annual meeting after the board moved to dilute the voting power

of the biggest shareholder it approved a special dividend that diluted shari redstone's voting power to 17% from 79% redstone's company, national amusements put out a statement saying cbs management can't wish away the reality that cbs has a controlling shareholder. look at shares of cbs. they fell yesterday. they're now up marginally this morning. at about 52.02 this is going to court it's been to court it will continue to be there for weeks if not months, if not years to come. >> doesn't national amusements dispute whether or not yesterday's board vote is even valid? they tried to change the rules to say 90% of board members -- >> at some points alo along the

you could kick out the board, put in a new board, and undo what they say wasn't really done or undo what was done. it's difficult to completely wish away a controlling sha sharehold shareholder. it's one thing to block a merger because of the fiduciary duty issue that the controlling shareholder has to the other shareholders the idea you can say, no, thanks for playing. we don't agree with you, that's a different story. >> wouldn't you argue cbs shares traded at discount because of that >> no question >> any company that has that kind of ownership structure, you know as a minority shareholder you will never get your best interests put front and center >> i have not seen the last two seasons of "game of thrones. >> i have. >> you know all the things

we have ken aletta on. you may need to take over. have you seen the letter lipton wrote, there's all these code names, from 2016 i think cbs was comet. >> yep >> venus was involved. that was viacom. >> all these code names. >> i read les moonves wanted to be king of the world, even back then he wants to control a to z at viacom and cbs anything short of that is not enough marty lipton -- >> at the same time, let's be fair, the idea of a cbs viacom transaction has never been the most attractive option if you're cbs. if you're viacom, that deal makes sense. >> he wanted total control >> so he's saying, i think for a long time he's been saying i'll take one for the team. first, i'll placate this idea to

begin with, unto itself strategically doesn't make the most sense it's 100% clear that there can be more value created if cbs were sold independently to somebody else than if they merge with viacom. because there's a controlling shareholder with a different idea, you have to look at requirements >> i was coming in, i saw a billboard, like they got 11 ncis'. scott bakula is in one somebody else is in another. then they have "survivor." what is he -- >> the man has a magic gut >> you know what it made me realize? maybe network there might be a problem with network prime time schedules. it might not be the way the world operates >> this is a whole different commentary you have. >> am i right on that or not i have not seen -- maybe if it's live, like "the voice" or

something. it's hard to do a drama on a flet wo network now, is it not >> procedurals work best >> what's that >> procedurals like ncis work best >> how are they making "survivor" still why do you still watch "survivor" >> i don't, but a huge audience does >> yesterday when this news broke about the delaware court, other companies fell, discovery fell, disney fell. was there any logic to that? >> i didn't see any connection >> you saw it. >> yes >> the intraday move was parallel i couldn't figure out if there was a fundamental reason you saw it, right? >> i saw it. i thought it was weird i didn't directly correlate -- there was nothing -- there was nothing in what the judge said a day ago or in this decision that would suggest that there be -- >> or the implications of what

happens as a result of this decision >> do we need to worry >> about >> we're more interested in this than the average person? the cbs siviacom thing i know how excited you are it's a media thing >> it's not even media this is a human drama. >> it's "game of thrones." >> this is the human drama of business >> don't you get tired of general news business is boring, you see this business is not boring >> i saw a couple of real interesting reports. >> go for it >> no. i think some people at home are like les who we'll see. we're going to cover it. how does it finally play out what's the final determination is it in the courts?

can these guys kiss and make up? shari and les? >> i used to always think in a situation like this, the family always wins. that's the traditional ending. >> they got the voting power >> if you have the voting, you're the family, you win the question is what's winning today? the other piece of it is if she wins, to a large degree her winning might mean she has to kick out less -- by the way, part of that team probably leaves with him, then what are you left with? >> the stock itself maybe doesn't perform well so even though she wins this battle, she loses the war. >> rupert wins with disney or with fox the family >> that's a little bit different. >> look. you are -- i'm surprised you didn't come back early for this, from wherever you were i have never seen you so bright-eyed. >> i like the story.

>> it's good >> this is business. >> yeah. >> to me, this is business i'm catching it from you >> good. >> we have other stories we'll get to washington. president trump talking trade. his comments on a potential deal with china moved the markets yesterday. eamon javers has the details >> reporter: we got some market moving comments from beijing overnight. the chinese government denying reporting that the chinese side was offering 2$200 billion in concessions to the u.s. side they say the rumor is not true this i can confirm for you that's the chinese side knocking down the idea that they offered concessions to the u.s. side you mentioned that comment from the president of the united states yesterday here's what he said about the prospects for success in these trade negotiations that are going on right now

>> will that be successful i tend to doubt it the reason i doubt it is because china's become very spoiled. the european union has become spoiled. other countries have become spoiled because they always got 100% of what they wanted from the united states. but we can't allow that to happen anymore >> so that was seen as a negative another potential negative that we are told peter navarro did not even attend the dinner held last night among u.s. and chinese negotiating officials. there's been some tensions between navarro and steve mnuchin, the treasury secretary. we'll see how that plays out this morning so those are sort of the negatives. one positive came out of yesterday's session, that is that the president did meet with the chinese vice premiere, that meeting was not on the official white house schedule unditil lae in the day they note finotified us about fr

minutes after the meeting started. the fact they put it on the schedule and the president did meet, that is an encouraging sign on nafta, some setbacks. those negotiations ongoing, there was a may 17th internal deadline lighthizer saying the nafta countries are nowhere close to a deal there are gaping difference on intellectual property, agricultural market access, de minimis levels, energy, labor, rules of origin, geographical indications and much more. they have to get that done before congress ends, and they are running out of time. we'll see if there are any

positives on those fronts today. and the move in congress trying to make cfius tougher on chinese deals. on all fronts, this is a huge issue china is facing with the united states. >> there are extremely high level negotiations going on here the president said yesterday his comments on zte, and he tweeted back last weekend that too many chinese jobs were lost as a result of u.s. action against zte, the president said yesterday that remark came after he spoke to xi jinping himself, the chinese leader the president saying xi jinping asked him to look into it and he did look into it the two leaders are talking on a fairly regular basis perhaps more regular than the outside world knows. >> thanks, eamon >> did you hear the producer, he's moving us along on the 2 0 2 $00 billion -- but we didn't

get moved along on that. we do want to check on the markets. in asia, a quick look. it was green across the board. in europe, which is happening right now, as we speak, it's mixed. not much happening there >> italy getting very interesting. there are headlines in europe now about whether italy will leave the euro we're back to this greece part ii >> i don't -- >> care? >> i do. >> remember when you were always ready to hop on the plane. >> i can't believe they stayed this long. you know how i am about the whole euro experimentment. >> i know. they got a new government that wants to raise spending, cut taxes, and oh, they hate the euro >> i'm not convinced france is in five years from now >> if they don't grow that economy, they won't be able to stay >> and germany what happened to the great german experiment?

>> remember when we used to talk about germany as the holy grail for how an economy should operate? >> i know. >> you never did >> never >> but you remember article after article -- >> in europe they look like they're great. >> even in the united states, when we were growing slowly, everybody was talking about inequality you remember that whole period sort of like 2010 to 2016 >> still a managed economy relative to ours >> not to china. >> everything is relative. >> studying this show and what i wanted to focus on, i think one of these gentlemen has some comments on what we're talking about. joining us is tim holland from brinker capital. and phil guarco, jpmorgan private bank ph phil, in reference to what the

current situation with debt is doing to the em with the dollar strengthening this much. have i got you right is that one of your concerns now? >> it is what's happening is now that we're in a sustained rate rise in the u.s., we also have commodity prices going up as well in terms of oil, it is functioning as taking away liquidity from the rest of the world. i like to think of liquidity as makeup in the sense that it covers up a lot of sins. >> so you're tailoring this to me, in terms of the metaphors and analogies. wow. you're speaking to me. if the makeup is not right, it's a problem. is there stress in em right now that is similar so some stressful situations in the past that can ripple through the entire global economy? >> i'm not sure it will ripple

through but it's causing severe bumps. you have the liquidity taking away that exposes even more difficult issues in countries like argentina, turkey, indonesia, mexico they have their own problems going on what we've seen in terms of the currency in argentina, the mexican peso, probably making a run at 20 again. even brazil being hit as a secondary effect the rates issue is taking on a life of its own in a minor sense. i don't think it's limited to em in the sense that we're seeing this makeup come away in terms of europe as well. if you look at germany, we're still at 60 basis points the costs are going higher when

you add some political instability as well where we have a merger of -- i like to think of it as the trump wing of the republican party with the burning wing of the democratic party. that's causing a lot of nervousness in the market. and if you think of rates, the big question in europe is how high can italy sustain rates, and when does that start hurting this economy >> in the old days we didn't go to italy unless the ten-year hit 10%. 2% still looks manageable. they have to refinance 17 % worth of gdp this coming year? it's crazy the amount they have to do. >> did you see monte dei paschi? mark grant just sent me this shares in that bank slumping 9%

on this. italy, you had the early call on this already a good reason for you to be here today, long before phil said anything. tim, you guys have 22 billion, then you find people to manage it for you your job is to look at the overallglobal environment to decide which guys to pick? >> that's it we don't pick individual securities we pick best in class strategies, blend those into dynamic diversified multi asset class portfolios so we look at the big picture and lend a hand on asset allocation >> so you have to have sort of

a -- you're flying at 30,000 feet >> sure. >> you heard the conversation that we just had you have things to add or things that you think we're missing >> sure. i think politics drives everything everything we do at brinker is with, through and for the adviser. the most recent survey shows 50% of respondents say the political climate is driving and impacting behavior if you think watergate, the late '90s, the white water years, so markets don't care about politics you have different return streams in the '70s and late '90s europe has some significant challenges for sure. if you look back at home, when we think about economic fundamentals, fiscal policy in particular, at brinker we're still constructive on the u.s. economy and u.s. equities in particular we see more good news than bad >> even though our politics are

more strident here, our policies here are better for economic growth compared to europe. >> yeah. watergate was a legitimate constitutional crisis. late '90s saw a legitimate constitutional crisis. you got opposite return streams. markets don't care about policies or personalities. if you look under the hood, you have an economy doing about 3% gdp growth, under 4% unemployment and you are look at a q1 period where you saw record buybacks and record capex the vitriol is core lated. correlated. so we see more good news than bad. >> no chilli tacos over here, right? you have nothing to do with the italian grill or --

>> no. i love going there >> me, too >> so this is not brinker international, this is brinker capital. >> no. we were talking about sizzler the other day, remember that >> yeah. >> this may be a bridge too far, when i think about co optimism, i think about sizzler. when times were good as a kid, we went to sizzler when cos are optimistic, they spend money. >> there's not a bridge too far ever on this show. just let me tell you that. we go -- wherever -- i don't think -- phil, you agree with that we have never seen -- we have a bridge down at the keys where you don't even see where you're -- any way, thank you thank you both >> thank you >> i remember when hbo's mckesson -- >> andrew has no -- >> we'll talk about cbs when we come back. >> paypal making its biggest

acquisition ever this is something. >> we'll talk about the european expansion. first, the reason you tune in to "squawk box" every morning. your daily royal wedding update. who better than wilfred frost, he's in london what is coming up, wilf? >> i'm not in london, i'm at windsor, but in 24 hours times 596 of the 600 guests will have taken their seats waiting for four more to arrive which will include her majesty, the queen, and her husband, prince phillip, who has been confirmed will attend and the bride will be walked down by the groom's father, the prince of wales. a full preview of the royal wedding coming up on "squawk box. ♪ ♪ (baby crying) ♪ ♪

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♪ the wait is almost over. prince harry will marry meghan markle tomorrow at windsor castle in england. yeah i'm with you, wilf i feel your pain when -- when michelle caruso-cabrera referred to windsor as london it just -- you just got to excuse us a little

cu cut us some slack. there's a reason that it's called an ugly american. just bear with us, would you, please everybody is telling me your accent has returned completely we'll need subtitles now since you're over there. >> i thought, joe, my accent always was very strong in english, at least you pointed it out every day. i didn't know whether today of all days would let me off of the accent or point it out more pronouncely. as you said, joe, 24 hours to go until the wedding. the doors of saint george's chapel behind me over my right shoulder will open at 5:00 a.m. eastern time 600 guests expected. we can expect friends of both harry and meghan so royals on the one side, celebrities on the other far fewer politicians than in the last royal wedding in 2011 between william and kate that was a state occasion. harry and meghan's and not in 2011 there were some 300

government officials from the uk and around the rest of the world. far fewer politics this time, and we don't expect president obama to come, despite being a close friend of harry's. that saves some potential embarrassment for theresa may, had we seen former president obama here and not president trump. we also don't expect theresa may to attend. the services will at 7:00 a.m the bride will be walked down the aisle by none other than the father of the groom, prince charles. that confirmed this morning. the religious aspect of the service will be strong the queen is head of the church of england royals are expected to take their faith seriously. meghan markle was confirmed into the church of england just a few months ago after the service, a procession through windsor, then lunch for 600 guests at st. george's hall

over my left shoulder here hosted by the queen, and late into the night a party for 200 at frogmore house. that will be hosted by prince charles, away from the castle so as to not keep the queen up at night. >> okay, wilf. you are -- and true is excited about cbs/viacom this is your thing it's a treat to not have to talk at least for a day about ten-year italian bond yields or jpmorgan earnings. >> you love it you know you love it >> i'm not denying it. absolutely i do. you forget how much this can bring a nation together. having all the over-the-top pomp and sermceremony of a monarchy, versus a republic like america having a head of state puts all the issues of brexit to one side

and the country comes together the atmosphere is fantastic here it's so positive and upbeat. i certainly do love it. >> we learned that from watching "the crown." >> there we go >> but that's right. the minute you underestimate how much attention and excitement there is going to be, when you see it happen, the royal family, you know, they have not made -- they have not been the seat of actual decisionmaking in the government for a long time but it has not diminished at all the interest probably we're not quite as interested as someone in the uk. >> i don't know. i have to say, i think everyone is, of course, glued to it here in the uk. as much as 2011, i would say which is a testament to how much prince harry is loved and adored because he is not line to be

king he's sixth in line now he's not a future head of state, william was. yet the interest is as high. i would say the interest in the u.s., perhaps dare i say it myself, is higher than in 2011 which is totally understandable because an american is marrying into the royal family. that's a great reason to celebrate. >> we get excited about bat"the bachelor" over here. >> don't get me started on that. sara eisen's favorite show >> we'll see more from you over the next 48 hours. >> does he want to be a contestant on "the bachelor? >> no. >> he would be a good one. when we return, it's been six years since facebook's public market debut. we'll talk about the stock's performance and, yes, the challenges ahead for the social network. as we head to break, look at yesterday's s&p 500 winners and losers

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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. ♪ good morning welcome back to "squawk box. a look at u.s. equity futures on this friday morning. some green arrows across the board to show you. dow jones up about 84 points nasdaq looking to open higher, 15 points higher the s&p 500 looking to open about 5 points higher. we have earnings out from deere and company.

reporting a quarterly profit of $3.14 per share, short of estimates of $3.31 revenue was short of forecasts but they did maintain their full-year outlook. the stock falling in premarket trading. that stock down about 3% in the premarket. six years ago today facebook went public at $38 per share here to break down the company's performance through the years and fallout from its privacy scandal is michael graham. good to have you here. >> thank you >> stock has been through a lot. even the initial public offering was a mess people wondered if we could recover, yet here we are >> facebook outperformed the s&p by 500 percent you know, the amazing thing is facebook started the social advertising category facebook is 10% of the global ad market it's tacked on to google

now those two together are under 30%. so these two companies have taken the ad market by storm if you look at the chart over the last six years, you only had two noticeable downturns the first was after the ipo. at that point in time some advertisers came out and spoke out against facebook all those advertisers returned to the platform in a big way the most haven't doven recent de they will thad the privacy issu. and the stock recovered from that >> not fully, though, right? >> it's slightly below highs the stock was struggled to get above 200. still hasn't done that but it rebounded most of the way since when it peaked before q1 i think a big part of the reason for that is the management team did a very nice job of addressing the concerns head on. mark zuckerberg went and

testified in front of congress and by most accounts did a nice job. then the company came out on the q1 call and said they would spend a bunch of money to hire data scientists and privacy folks to make sure that the service was doing the right thing going forward. for those reasons and the fact that the underlying business performance is good, the stock has come back. what is facebook six years from now? >> in terms of stock price >> no what is it does it stay an advertising company? or as we talk about cbs and viacom and the role of content in the world, there's constant talk that these guys or somebody like them buys a network they either buy it or build it as they produce their content. >> video viewing changes between now and then even more rapidly than it has to date. i think a lot of video viewing will happen on digital platforms like facebook and twitter and

some of the others i think facebook sees itself as a media company broadly defined, which is time spent. if you look at where folks are spending time these days, it is on social networks >> do you see facebook becoming a netflix in the future? do you think they'll ever have that kind of business? reed hastings is on the board of facebook to me the great -- >> is that a conflict at some point? >> the great high sign when facebook goes deep on video programming is the day you see the announcement where he says he's no longer on the board. >> that could be facebook has been a free service, ad-supported service. you can see the nature of advertising change over time facebook has so much data. they've done a great job of changing the way advertisers think about advertising. i'm not sure in the next five years facebook will have a big

subscription platform. i think they're interested in getting some viewing time spent going on the platform, probably monetizing that. but it's an interesting point. over the long-term, facebook will have more users, more time spent, look a good bit different than today >> good to have you on thank you. >> michael graham on the six-year anniversary of the facebook ipo. paypal making its biggest acquisition buying a finnish startup. later, it's infrastructure week in america. we will talk to richard trumka president of the afl-cio and elaine chao will also be with us. you're watching "squawk box" on cnbc learn more or find an advisor at massmutual.com

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welcome back to "squawk box. paypal acquiring isettle, one of europe's best startups the price tag 2$2.2 billion it will expand paypal's instore global payments business

congratulations on the deal. help me understand this. this is a bricks and mortar play also a play that puts you in competition with square. they also have a bricks and mortar play. the thing i'm unclear about, explain this, you have had such success with venmo and trying to take away the brick-and-mortar piece of it. tell us why you wanted to own this particular channel. >> this is really about small businesses, and small businesses using mobile devices to blur the lines between online commerce and physical world commerce. so what we think the izettle team has managed to do that not just for instore, a single country, but for global markets around the world we think izettle has done a fantastic job creating small

business through a mobile point of sale that's in multiple markets around the world it's multinational already and that we think fits with our global scale and reach and how we want to serve small businesses around the world. >> and how much of this was driven offensively versus defensively? meaning you couldn't let this business get in somebody else's hands. >> well, this is very much a space that we had our eye on for a long time. we had some in-store capabilities in the u.s., but this is about serving small businesses well. we want to democratize access to the digital economy. we are in 200 markets around the world. we see a global phenomenon of small business coming into the digital economy. we led that in e-commerce. he would see mobile point of

sales as a way do that and we want to democratize access to that with izettle's capabilities and our merchants, we can blur that distinction further and bring more and more of those small businesses into the digital economy, which is an important thing, it's true in the markets that izettle is in -- >> one thing we were curious about, how much of this is driven by or the transaction also be driven by sort of traditional credit card transactions and how many of these will be driven by what might be described as a paypal account long-term? >> well, the product izettle offers today allows for credit card acceptance via mobile point of sale but they worked on products that gives e-commerce offerings to small businesses as well we think this is great we helped many small businesses go online and sell around the

world. it's also the case, there's a lot of small businesses selling online and in store. we want to take friction out of that process for them as well. there's going to be a lot of those small businesses that will be accepting paypal for online payments, using these capabilities to create in-store payments and lots of opportunity for those to come together >> the key value proposition for you here is that actually people start using the whole paypal ecosystem more beyond a basic credit card system or instead of the credit card system >> well, we partner closely with card networks, with issuers. we're a partner to the card systems out there, but we're taking friction out of that process. in the online world we take that friction out through great buying experiences like paypal one touch, but we also do that for small businesses and giving

them great access to accept digital payments and card payments whether that's online or in store. so we think that makes us a great partner to card networks and issuers and just expands the pie for everyone, it can make more commerce available. as i was mentioning earlier, small businesses are an engine for ongrowth job growth that's a great thing for us. it's a great thing for small businesses, it's a great thing for job creation >> bill, have to ask, don't know if you saw the comments from jack dorsey talking about bitcoin. square has jumped full bore into the bitcoin world. square cash is really growing at a remarkable rate recently any ambition to get into the bitcoin business >> you know, we certainly keep a close watch on what's happening with cryptocurrencies, those

movements in the markets we're focused on how we create commerce capabilities and democratize access to those. we think that, you know, the minu many currencies we support, cryptocurrencies add to that we think blockchain is interesting technology, but we're focused on things that enable commerce. with bitcoin, it's a public ledger you can look at that public ledger and see not a lot of commerce happening there because of volatility. so we're focused on things that create new commerce versus things that may be speculation on currency and those types of things we're focused on enabling new commerce and this is a great example of that, our partnership with izettle >> congratulations on the deal speaking of bitcoin, coming up, the hottest cryptocurrency up for sale right now is called the howie coin, except it's fake who created it

the s.e.c. as a warning. we'll talk to a cryptocurrency expert next. as we head to break, a quick check on what's happening in european markets now germany's lower, france higher, london is lower as well. they're all kind of flat except for italy. at&t provides edge-to-edge intelligence, covering virtually every part of your retail business. so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got near real time inventory updates. & he'll find the same shoes in your store that he found online he'll be one happy, very forgetful wide footed customer. at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & if your customer also forgets

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welcome back to "squawk box" this morning the s.e.c. launching a fake initial coin offering to educate investors on the promise of high returns and celebrity endorsements joining us now is the chief investment officer at jm 3 capital. and author on blockchain and adviser to the ethereum foundation good morning to you. >> good morning. >> the s.e.c. taking a stand on all of this. where do you see the regulation to the degree of the regulation of this industry >> so what they've done recently is a way to prove the point that you need to be educated and not just get into any investment that may be risky.

right now they're still grappling with it. for them the box they play in is they see all of these cryptocurrencies as a security not everything is a security so they want everything to play in that box. but in a way -- >> and because some of them are securities some of them are currencies or commodities or -- what's your -- either way, whatever you want to call some of these things, do you think that long-term there will be real regulation around them >> i think there will be some to the regulation they have to change the regulation right now the novelty is that these currencies could be a utility. that is the novelty right now. utility means that it is something that has usage -- a real usage it doesn't come necessarily with anything to profit from the currency and the utility comes before being a security that's what the s.e.c. is trying to wrap their heads around. >> don't you think the commission wants to label them as securities so that way they

can regulate them. if they don't call them securities, then they can't regulate them. >> that's right. that's the box they play in. they see everything as a security in a way they're trying to fit a square peg into a round hole but not everything is a security right now. >> jack dorsey just said i believe in the past 48 hours that he hopes bitcoin not only succeeds but he considers that sort of the native currency to the internet do you think that ten years from now, we're going to talk about bitcoin as the native currency of the internet? >> i think bitcoin is going to be one of them it is definitely a native currency it's been called the internet of money. and it was the first one, obviously. ethereum is the second most important one. there will be others >> so developers -- if you go to the valley right now, they're all developing on top of ethereum the question is in a sort of bitcoin world, which clearly is the leader, does ethereum sort of overtake it because of all

the development around it? >> definitely. ethereum today has the largest ecosystem of developers and start-ups and venture capital. and all kinds of support going around it. so what's important is not just the technology itself. >> for those playing in this game and trying to bet on the currencies, just to be clear, ethereum or what's known as ethereum classic will win that game >> ethereum classic is a version of ethereum. but it doesn't come close in size and importance to ethereum. at this point. >> we think so much about bitcoin and all these things like a currency. you know, in the u.s. we have one currency a dollar but maybe the security and exchange commission is right to think of them as securities because the reason there are going to be different ones is there are different use case the same way there are different stocks maybe i want a value stock maybe i'm looking for dividend payments, et cetera, et cetera maybe i'm looking for growth every single one of these tokens

or whatever you want to call them have different use cases and one reason why one person would own wan versus another, no >> that's right. there aren't enough use cases as a utility. and right now, for example, ethereum, 53% of the transactions are on smart contracts. so this is a utility we need to see more of those >> thank you we're going to -- i didn't know about that come on back we'll talk about that. thank you. coming up, a media battle for the boardroom. the latest on the fight between shari redstone ken auletta will join us we the late latest "squawk box" will be right back.

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trade talk between the world's largest two economies as markets on the move this morning. a full rundown of what you need to watch at the opening bell that's straight ahead. cbs' board voting to slash the power of its latest shareholder. the latest on this developing story minutes away and what happens when you're late for your flight >> you can't go in there >> it's okay i'm a limo driver. >> that story and more as the second hour of "squawk box" begins right now ♪

live from the beating heart of business, new york, this is "squawk box. >> who knows good morning welcome to "squawk box" right here on cnbc we're live at the nasdaq market site in times square i'm andrew ross sorkin along with joe kernen. michelle caruso-cabrera is hanging out as well. got some headlines to tell you about as well. the fda has approved the first-ever drug to prevent migraine headaches boy, could i use it right now. the once per month treatment was developed by amgen it's also going to be marketed by novartis. list price of $575 per month a number lower than what many wall street analysts were anticipating also carl aooicahn, he has

new -- fighting efforts by the shareholders to take the company private. he says they are, quote, blatantly taking advantage of other shareholders that stock up about almost 7% this morning in pre-market trading. china now denying its offer to cut the trade surplus with the u.s. by $200 billion the u.s. officials had said yesterday that china was proposing such a deal. china's foreign ministry saying overnight they didn't say that saying they constructed discussions taking place a big debate about what took place yesterday in washington as these trade deals get negotiated cbs postponing its annual meeting after the board moved to dilute the voting power of its biggest shareholder. it approved a special dividend, not money but a lot of shares that would have diluted sch ed

redstone's amount. if consummated, the dividend would enable the company to operate as an independent, non-controlled company redstone's company also put out a statement saying cbs management can't wish away the reality that cbs has a controlling shareholder. shares of cbs fell yesterday on word of a court decision >> that's pretty interesting though i will say that. we are less than 24 hours away from what's going to be the most watched news event of 2018 for the 600 guests beginning to arrive we can expect friends and family of both harry and meghan meaning

plenty of royals and celebrities. but far fewer politicians than at the duke and duchess of cambridge's wedding in 2011. when there were 300 government officials from the uk and outside. mainly the commonwealth. after the service, there will be a prosgs through windsor and then lunch for all 600 guests in st. georges hall in the castle hosted by the queen then a smaller group of 200 will celebrate late into the night at frogmore house that's a short walk from the castle means they won't need to keep the queen awake. so your idea, michelle, is it windsor's pretty close to london, right? >> when i threw to wilf in the first hour, i said let's go to london he said i'm not in london. i'm in windsor the vatican is in rome but the

vatican itself is its own state, government, et cetera. we have an ambassador to the vatican as we do to italy. >> where's san merino. is that the same the one i know is in pasadena, california >> i don't know what just happened just now. what are you talking about >> san merino is a little something -- >> that's a restaurant >> that's what i was -- >> it's also a place in pasadena but it's also a small -- i don't know you don't know this, sorkin? >> i don't know. i don't know these things. >> are tomatoes from -- no >> i just know are you going to be watching tomorrow that's all >> you mean -- >> the wedding >> will i look up at the tv where it's going to be on? yes. >> is your tv on all day long. >> no. >> but the wife's going to be watching >> i think scott's probably going to be watching too unless i can induce him to play fortnite or something. >> okay. >> i'm going to try.

>> are you going to wake up early? tailgate this thing? that's what ooum trying to understand >> we have friends throwing a party at 7:00 in their mind. >> i see how your mind works tailgating >> with mimosas. >> get an electric grill to put on the deck to try to cook a tofu burger or something >> we're going to open up the back of the minivan. >> he's not going to eat meat. how'd you like to be the cow anyway right now let's turn to the markets. it's been awhile since you were on are you having trouble following? >> i've missed all your inside jokes. >> they're so outside. this is not a bridge too far some of the biggest risks facing investors so far, dom chu breaks it down. maybe dom, for the open or the u.s. open there might be a tailgate party >> there might be. >> you going to do it for tomorrow >> there might be quinoa burgers. >> garden burgers.

>> but you know what there are few things out there that the queen of england may be kind of staying up at night for and everything else. but she's going to get some sleep. investors, however, are not going to get sleep there are so many risks out there with what's happening for the markets. we spoke to investors. this a small sample of them. there's tons of views out there on what the biggest ruisks are eric viloria says pick up on inflation. rising price pressures that would contribute to further repricing fed tightening expectations over and above what's already priced in it's our sense there may only be limited room of further repricing. volatility there let's move to the next one here that flows into this idea of rising interest rates. matt maley says every time we see a meaningful rise in rates, it exposes some sort of mal

investment in the system it could create the kind of scary downdraft we saw in february let's move to the next one which also dove tails on the same theme. it's the top of the list, the dollar strength and emerging market weakness. it's probably the most immediate and current stress in a few countries could easily spill over into other emerging markets and eventually start to impact the developed markets. that's the emerging markets theme which then flows into dollar strength and how it does to corporate profits lori says when the -- the weaker dollar has been very consensus among equity investors we'll finish it off with one look that encapsulates that together peak earnings? is it there? it's all about revenue and earnings growth. anything that would derail that train would be the biggest risk to the market. that's what aye vin feinseth says just a sampling of some of the

thoughts out there they're all interconnected and many are the thoughts that keep investors up at night. >> good for that wall of worry thank you for that run down. closer look at where we've been, where the smart money is going let's bring in chief economist at stifel. you saw that wall of worry that dom put up there do any of those worry you a lot? what are the risks to the market here or are you bullish about what's happening with the economy in the united states >> i think one of the biggest concerns is this continued disconnect between the consumer confidence and where the background is going. the evidentiary support is not there. so the biggest concern is that the fed is going to continue along this pathway to a higher interest rate environment. the long end of the curve is going to be restrained by still

very moderate growth, still very moderate growth profile resulting in a continued flattening of the curve. my concern is that we do see an inversion potentially by the end of the year. >> are you saying we would have a recession then >> well, i certainly think a recession is lurking around the corner typically an inverted curve has preceded but it typically comes with a lag of 12 to 18 months we're talking about the latter part of 2019 but that weakness does appear to be coming down the pipeline sooner rather than later >> long before it happens? >> oh, absolutely. we would expect rates to be restrained and start to feel that downward pressure if not by the end of this year than by 2019 >> what are the concerns out there for money managers >> our biggest concerns is the impending trade war that could happen we're fighting a battle on two fronts right now these are huge trade partners.

if you look at earnings in the united states, it's been great in the first quarter but if you look beyond the tax cuts and jobs act earnings, it's going to be independent on international growth 40% of s&p has come internationally. you have a trade war in mexico and canada and china, that could slow down growth that's going to hurt u.s. companies. >> there's also the concern about the strong dollar and whether or not that's going to hurt earnings as we saw dom chu outline. >> certainly that was a big topic, what two years ago? every company started talking about the strong dollar as reasons for earnings weakness. that can always flair up and come back. >> i listen to you and think i wouldn't want to own financials here even though everybody's been pushing financials because of the expectation of higher rates. at least on the short end. but if the long end's not going along with it, doesn't help them out much. >> no. it certainly doesn't and particularly when we talk about the expectation for a flatter curve, this doesn't spell a very positive

environment for financials certainly something to be concerned about. again, when we talk about the economy as a whole, we're not expecting the risks that we go from 2% to 3%. but that we go from 2% down to 1% in the near term. not just financials, but a reason to be concerned in overall investment strategy when we talk about risk assets. >> you've got etfs that have a lot of international exposure. what kind of action are you seeing there in term of fund flows and what that's telling you about how investors feel about the rising dollar? >> well, what we're seeing is more of a movement toward domestic stocks in the international space. one of the fastest growing areas is the china consumer. because it's a story of domestic growth rising payrolls in china. growing middle class it's playing on a lot of themes in china that's going to be less effective. >> is that an american who can actually buy an underlying stock

via this or are you mimicking? >> so we have an etf that invests in hong kong listed and chinese listed companies. >> so it's not mainland china. it's hong kong and the united states that mimic. >> over time we're seeing the china mainland really open up with those shares. >> all right thank you lady and gentleman coming up when we return, the ceo of check point on the next wave of cyber attacks what you need to know. and then later, the board of cbs voting to issue an amendment that would remove the redstone family from being the leading shareholder of the company what is likely to come up in court. we're going to talk about it "squawk box" returns in a moment ♪ 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. ♪

. welcome back to "squawk box. already this year we've seen high profile data breaches at under armour, saks fifth avenue, hudson bay most companies are barely able to deal with the so-called third generation of attacks when we're already now up to what he's calling the fifth generation and sixth generation on its way. joining us now is the founder and ceo of check point software technologies and i'm thrilled to have him here. i was telling him off the set when i was in college, i had invested -- i don't own the stock anymore because i'm not allowed to own individual

stocks but i was a check point guy all the way. >> this was a great story you were telling >> i used to day trade his stock. i didn't want to say there was a range bottom but if you followed the stock, you could figure out how to do it so it's great to see you >> did the fees on trading three or four shares not eat up the day trading profits? >> i think i had an e-trade account or something like that i had -- >> that was my point three or four shares is very expensive. >> i was telling you before, i got my dad into the stock. >> where'd you get the money with that? >> i had done well with nike with him but then i failed him -- >> where'd you get the money trust fund where'd you get the money? >> welcome to the show >> the job was at the summer camp where you were filling bug juice, right >> couple of bar mitzvah presents >> you're back to 2000 levels. look at that >> you can see what was going on back when i was -- this was '96 the company went public.

okay, gill for those uninitiated, we're talking about level three attacks, level four attacks wha are a fifth and sixth level attack >> these are coming from the cloud, from our mobile end, from the traditional network and end point. these attacks are called poly morphic. they change shape every time in previous generation you could say this is how i identify an attack this is how i know a malicious file looks like. i know how to identify it. now the hackers are changing the form of the file and the attack every time so it's very hard. >> is that considered a level five attack or level six attack? >> level five right now. and what's more important, the hackers are using tools that are basically using the most sophisticated tools. like government grade level tools. basically all the tools that state sponsored organizations

today are finding themselves at the end to the general criminal hacking community. >> are they trying to get money? are they trying to get ip from companies? are they trying to steal secrets from the government? >> all of the above. i mean, there are a lot trueing to steal secrets there is a big industry today of ransom and blackmailing that are happening. there are just hackers that want to show they can >> but what percentage do you think is economically driven versus as you said the sort of hackers that want to show they can break through the perimeter? >> i think the cryptocurrencies have made the economical crimes something that's really exist today. 20 years ago it was hard to do it because there's no way to charge money. >> we constantly hear about, you know, thousands or millions of

credit cards what you don't hear about is on the microlevel those accounts being used necessarily to extract money or something else. >> they are being used usually the credit cards block in a small amount and absorbs the damage but it does happen and basically a stolen credit card number is in the black market depending on that and the hackers know how to try and create trade out of it >> my biggest fear is a massive hack that actually cripples and destroys a bank. is that possible have these guys done enough? >> that's more possible and we are seeing things like that. cyber attacks that destroys big organizations. these things happen. it's not science fiction this week we actually are commemorating one attack that happened a year ago and demonstrated that most of, like, theoretical cases of what an

attack can cause are real. factories were closed, almost an entire country shut down factories all over the world, hospitals were -- emergency rooms were shut down so it proved a large scale attack like that can happen. >> and so what do you worry about at night >> i worry -- i mean, for us it's about developing the answers to that. and mainly educating the market that should step up to fifth generation only 3% of organizations today are getting ready for the fifth generation of attack most people are really struggling with what we used to do ten years ago which is not bad for us we sell also the second and first generation solutions but the message i'm trying to convey is you need to step up today. >> is that a process issue or just a software issue? is there a lot of components to this >> there are several components. they can make these decisions quickly. in large organization, it's more

complicated. we have huge organizations which are dealing each one with their own domain it is to step up and not to deal with what i used to do i used to manage. >> final question because we have to go but in a cloud world where you see the amazons and microsofts and googles starts to develop their own security stacks in the stack, where do you fit into all of that? >> i think we fit in on top of it that's always been our job whatever the vendors are doing in the operating system in the router, whatever, we want to give the layer of security that's above that. we've been doing that for 25 years. by the way, mobile phones i think are the back doors to all our assets these days. and less than 1% of organization are trying -- are using something to secure mobile phones >> really? what's that? >> gil, if this doesn't work out for you, everybody here wears black that works on the set.

have you noticed that? so if you don't want to continue to be -- see every single stage guy here. you can be stage manager everybody -- the guy with the camera have you noticed that? you don't have to change anything you come in here -- >> this is the way cyber security ceos should dress though >> exactly >> all we see is your head while you're talking like this nobody can identify you or -- i mean, this is -- am i right or am i right where's mack >> thank you very much >> preeappreciate it very much. >> good sport. >> you know, blake actually had to -- my daughter is here sometimes. they said she was wearing these nice colorful things no got to wear all black. >> okay. coming up, don't be late for your flight. a man storming the tarmac in australia finds himself in trouble. that is crazy. how does that happen details after the break. "squawk box" will be right back. time now for today's aflac

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aflac trivia question. what company developed the first pocket calculator? the answer texas instruments in 1965. okay we have a news alert to tell you about this morning campbells soup just announcing the immediate retirement of its ceo denise morrison. no official reason on the departure. we interviewed her in davos just a couple of months ago she's going to be replaced on an interim basis by board member keith mclaughlin we'll have more on campbells in a minute i don't want to make -- speculate. but it's worth showing the chart. i don't know if we could put it back up. it has been a rough ride over the last year if not longer. and i do know that the company has been trying to do some innovative things to try to turn that around. but perhaps the stock may explain what's going on. >> yet it's going down even more it might rise if people were

excited about the departure. unless -- what does that even mean immediate retirement that's like -- retirements are -- they happen at a certain point. you don't retire on one -- you're here one day, you retire that day there's something happening. right? and the stock is -- >> i'd like to learn some more to know exactly what happened. >> but you don't even have to conjecture >> okay. >> obviously there's something happening there. coming up when we return, pras michelle is picking up the phone. it's not an ordinary phone it's a blockchain phone. as we head to a break, take a look at u.s. equity futures right now. ♪ 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. ♪

good morning welcome back to "squawk box" here on cnbc got a couple stories to tell you about this morning the big one we just talked about. campbell soup announcing the immediate retirement of ceo denise morrison. she's going to be replaced by board member keith mclaughlin. that stock has tumbled over the

past year. tumbling this morning on this news so we will have to try to get to the bottom of what's going on here separately ca ll lly campbell s margins are not up to its own expectations and it's lowering the forecast that may explain the move. a view of strategic plans and portfolio composition. so that may be the answer here about what's happened. >> another one of these companies that we've talked about a lot that missed the millennial move to niche -- i mean, do millennials buy campbell soup or something new age? >> that's what they've been trying to innovate. >> there's five, six, seven companies you can name -- brand name companies that you would think have, you know, shelf mile like no. >> and there's more fresh soup available to get

organic cans >> and you don't buy kraft mac and cheese you buy annie's. >> this has happened with all of the big brands >> that's what i just said but you said it like this. like the fedex guy >> next. >> we have some other news to tell you about this morning. heavy equipment maker deere missing estimates on both tom and bottom lines reported earnings of $3.14 per share. it's experiencing strong growth and does add it's facing rising costs. that stock down marginally this morning. according to "the wall street journal," bratz doll maker mga entertainment approached mattel recently but that mattel rejected the approach. there are a number of instances where hollywood and the toy makers have tried to get together one way or the other. cbs board members met together last night after the

battle with national anewsments. julia boorstin joins us now we the latest >> good morning to you at the board meeting last night, 11 of the 14 directors voted to dilute the voting control of national amusements from 80% to less than 20%. that's unlikely to take effect because just yesterday a delaware judge refused to give cbs a restraining order against redstone redstone had previously made a move to make this vote invalid cbs also postponed its annual shareholder meeting that was scheduled for today. here's a look at the history of these two companies that brought them to this point >> the battle for control of cbs is the latest act in a long-running drama involving family infighting, corporate restructuring, and one of the media world's most powerful ceos the redstones' national amusements began as a theater operator in the 1930s. they acquired viacom for more than $3 billion in 1987 and a

little over a decade later merged it with cbs at the time it was the media industry's biggest deal ever then in 2006, national amusements split cbs and viacom into two separate companies. after a tumultuous couple of years, shari redstone now sits in the ultimate power position of her family's media empire earlier this year she pushed the board's at viacom and cbs to explore reuniting. a move opposed by the cbs board and moonves. that led to the attempt to limit the redstone family's voting power. appeals are possible leaving the future of cbs, viacom, and the redstone empire in question. dualing statements were out after the announcement last night. not supporting a merger supported by both companies. but they also said they will maintain their voting control.

cbs saying it's taken this latest step to provide stockholder interest so this battle is undoubtedly headed back to court joe, back to you >> okay, julia thanks joining us now, ken auletta from the new yorker and author of the upcoming book "frenemies." and in this book, you're ready to talk about this story whether it had happened this week or not. i mean, this is not totally unexpected >> in 2016 his lawyer marty lipton sent a letter to shari redstone's attorney asking for nine demands that leslie moonves had. basically it was we want to control the board. we want to appoint the board independent directors. only moonves could be relieved of his job by the independent

directors which he appointed and shari redstone though she had 80% voting control could not have control exactly what's played out here >> the number to remove him was how many and he hand picked -- >> i think you needed 90% of the vote and he had 77% or something yesterday. >> exactly >> even though she had only three votes. >> right so she had voting control. but we know who's in charge. >> one of the things that is interesting, there are a number of companies "new york times "new york times," warren buffett, google, murdoch if moonves pursues this, other parties will side with shari redstone >> every lawyer i've spoken to about this thinks that the delaware court thinks in terms of diluting the redstones, that is not a feasible option that you can block a merger.

there's certain instances where maybe the controlling shareholder can be blocked from doing certain things but the idea of just saying, you know, you're really -- you know, we're just getting rid of you, basically, is a very difficult thing to do. >> but les moonves is a guy who really has felt like he hasn't had a boss he's arguably the most successful television executive in modern times. 14 out of 15 years number one in primetime. they make more money today than they did ten years ago cbs is doing well under him. he does not want to merge with viacom, "a." and "b," he doesn't want bob backish to be his number two >> what is a win though? we talked about this even if shari redstone wins to the degree that she continues to control the company if that's considered a win, because i think she thought she controlled the company up until a couple of days ago she then loses les moonves i assume she would -- i don't know how this relationship would continue and i imagine many members of that management team so then what are you left with

>> you have two scorpions in a bottle here. each of them have the ability to kill the other but they don't want to. if he leaves, the stock is going to go down >> right >> and if he's going to leave, he wants to be fired because he gets a couple hundred million dollars in severance which he wouldn't get if he just quits. >> why is she so desperate to put these two together >> she feels that -- les moonves really is a great executive and thought he would make -- that one plus one would equal three with him in charge that's one reason. two, there's an argument that everyone -- most people believe and a consolidation is happening. and consolidation gives you leverage and therefore ability to particularly advertise >> stocks don't act like that though the stocks don't seem to believe that story. >> no, they don't. because they believe in moonves. the fear the stock market has -- >> and moonves doesn't believe it either. >> the market doesn't believe it because the consolidation story

in broad terms makes sense, but it's not clear that the consolidation of cbs and viacom makes sense. meaning cbs could got to a telecom company. viacom could go separately >> which is why the stocks are reacting the way they are. >> that viacom is a crippled company and the only reason to emergency them is to save viacom but if you're not a major shareholder in viacom, it doesn't necessarily make sense >> that's how i thought you were going to answer my question why does she want to put them together she's trying to save viacom. >> she believes that moonves could help save viacom she thinks the combination size could help them and give them lemplg whether that's true or not, i don't know moonves doesn't believe that >> if you could look out over the next several weeks or months since this soap opera is going to continue to play out, give us a couple of the permutations about how it would end >> well, i think -- you're talking about a married couple that forced marriage and they sleep in separate bedrooms for a

period of time and moonves will try and fight this off she will try and bring it down neither one wants to attack the other by killing them. >> right >> he'd like to keep the job she'd like to keep him but increasingly it's a very acrimonious relationship i understand they met in moonves' office several weeks ago and it was a screaming match. he was enraged and i know his people say he feels belittled by her she's not someone who's used to dealing with talent. and les moonves is talent. and you've got to be sensitive to that. father was not great at it either >> he's talent >> right he used to be. >> well, he was a bit actor but he doesn't mean it in that context. he's like a superstar management type. >> he wears a suit but he's not a typical suit >> that's what i mean. you don't talk about most media ceos or corporate executives in this >> he's a guy who reads the

scripts, casts the people. he's engaged in the artistic side, if you call it art >> and it's worked, obviously. zp >> so far it's worked. >> so far? i think the jury's in. >> no, no. his legacy is set. >> it can't not work >> he said to me i can leave tomorrow i don't care if i go to more super bowls or tony awards but my legacy is set i've done what i've done at cbs. and he has >> thanks. coming up when we return, rapper and fugee founder pras michel he's our guest right after the break. and later, brothels under fire why closing them down could be bad for business we've got that story straight ahead on "squawk."

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♪ welcome back to "squawk box. joining us now is pras michel, founder of the fugees and has

launched a digital and content platform celebrating black culture and content in the u.s thanks for being here this morning. >> thanks for having me. >> how did this happen >> i don't know. years in the making. and then my team and i decided we were going to do a blockchain phone. first blockchain smartphone in the u.s. >> how did you first get interested or involved in blockchain >> i've been following technology for a decade now. and blockchain i start following. >> did you invest in bitcoin or any of the currencies early? >> maybe, maybe not. >> maybe, maybe not? is that for your own security and protection >> yeah. a trefriend of mine introduced bitcoin to me when it was 11 cents. >> did you buy it? >> i didn't believe in it then a little bit later >> is that a blockchain phone.

i don't understand what a blockchain phone is. can you show us that there it looks like every other phone. but what defines a blockchain phone? >> blockchain is the technology. this phone allows the users to get paid so when you use the phone, you'll get paid. and you can convert it into cash >> so there's a app within the phone or >> it's the technology and the technology is going to be on this smartphone. >> but this is a physical phone. >> it's a physical phone yeah this is just a model i don't have the actual phone because it's going to be made. but i have the technology on this phone >> who's manufacturing it for you? >> this company called borkx >> where are you going to sell it >> here in the united states. >> i mean, who's going to retail it for you are you going to sell it online? >> we'll talk to carriers. the four top carriers. they're going to be selling it for us >> this is software-based system that runs on android

and how do you make money on it? what's the model >> the model is this every time you make a purchase, you get rewarded, right? and that reward, you cannot convert it into your debit card because it's going to come with a doesn't card >> you've got the card there >> so you'll be able -- you can either reuse the rewards and purchase online. and convert it into cash >> i'm confused. so -- >> okay. think like this. you know how you get airline miles? >> right >> only with aurn miles you can't change it. here when you get a reward, you can do whatever you want with it you can either repurchase it, reuse it online, or convert it to cash. >> what kind of rewards can you get on it? >> any rewards >> you get the rewards every time you pay your bill >> any time you make a purchase -- >> using the phone. >> using the phone, the

technology which is the blockchain technology, you get some form of percentage. >> are you using ethereum? >> no. >> what are you using? >> my own model. this is not cryptocurrency i want to make it clear. this is blockchain technology. >> but there are other platforms out there. ethereum is a platform they use for tokens >> so the company i'm working with is a company called zippy >> zippy >> yeah. that's how built the technology for me >> you've been quite the entrepreneur how did you -- what other things are you looking at >> to me this is the future. blockchain is the future like i said, i've been working on this for years. and now i'm going to release it. >> some people have been talking -- this is related to blockchain

some people have been talking about attaching blockchain to music. have you been following any of this >> i haven't heard about that. >> in terms of ownerships? >> there's been a big issue about -- >> so you can't steal music? >> for example, if he makes a song, it gets played on spotify, you can buy it on itunes, all of these places, gets played on the radio. all these agencies right now are trying to track how it's being played so he can get paid. but effectively embedded in every song, it lives in the chain. >> right >> he would have a -- >> because in the old days the radio stations would call the publishers saying we played it ten times. >> basically because you cut basically the middle man because the blockchain -- and by the way, obviously the blockchain is the most accurate because you can't alter it i guess they're saying maybe spotify may not give me all the money that i'm supposed to get >> exactly pras, great to see you come on back as you continue to develop it >> thank you >> thank you coming up, the brothel

business in nevada is under fire contessa brewer is there in a brothel with a preview of what's coming up contessa >> well, look. you know, you have some 500 sex workers who cycle through four of these brothels in rural nevada their livelihoods are on the line they say the livelihoods of those around them, where they spend money is on the line we'll get into it next what it could mean for rural county nevada. coming up on "squawk box." 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.

a referendum in lyon county, nevada, could put brothels out of business and cost the economy millions contessa brewer joins us now with more. how far from las vegas are we talking about, contessa? >> like, we're six hours from las vegas. this is the northern part of nevada think of reno and then we're just outside of carson city. yeah but we're in rule lyon county. there's only 52,000 people who live here. maybe you recognize this place this is the famous moonlight bunny ranch. >> joe, do you recognize it?

>> they've changed -- no, no, that's it. no, i don't. i do not recognize that place, contessa but thanks for asking. >> i mean from the show. >> oh. that's not what andrew meant you know, he's over there, like, swiping left on some website so i don't know what he's doing. >> well, what makes this really interesting is that this is a place that was where prostitution is legal. one of the few in the nation in nevada the rural counties can have prostitution. but activists are trying to change that. they're pushing a referendum on this law to get brothels banned in lyon county it's only 52,000 people who live here dennis hoff joins all four of the brothels which paid the county half a million dollars in fees that pays for the fleet. he estimates his real economic impact is $10 million locally with 500 sex workers cycling through and some 135 full-time staff spending money here.

>> just like any other business, we have to have insurance. so we do business with state farm in nevada we have to buy things. we go to grocery stores right down the road. the image of a girl, a candle, and a condom, those days are over with. this is a real business. >> don't wrap me early the activists point to the tech hub that reno has become with tesla and google coming in they say new nevada is incompatible with old nevada is sex worker here has a real problem with that. >> i don't see me as a victim. i see myself as strong i see myself as business savvy i see myself as empowered. i became a sex worker because i wanted freedom i wanted a life that i could do things on my own terms

>> she says she makes six figures a year it's paid for college pursuing her masters degree she's a savvy businesswoman. dennis hof is running fer state office and the lawyer activist we interviewed yesterday said he is being paid by a pac but it's a pac to prevent prostitution. >> that would be a watershed change for that area of nevada i tried to say thank you, contessa. >> sure. coming up, afl cio talks infrastructure spending. ♪ 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. ♪

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a cbs drama but not on tv. the network's board voting to dilute the power of its largest shareholder. shari redstone the details coming up. "squawk box" news maker. transportation secretary elaine chao joins us to talk the infrastructure plan. plus the wedding millions will be watching but just how much will the queen spend on the royal event we'll take you to london as the final hour of "squawk box" begins right now ♪

live from the most powerful city in the world, new york, this is "squawk box. >> good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with andrew ross sorkin and michelle caruso-cabrera becky is off today let's get a check on the preparations for the royal wedding -- oh, no. we're not. actually, we're still talking about the stock market here at least for another -- what time is the close today 4:00 then it's going to be all royal wedding all the time >> back-to-back. >> isn't it? i mean, it's going to -- i can tell i can tell that there's a tension in the air about how excited everyone around here is about that development tomorrow. it's going to be five hours earlier than here, right what time does it all -- what time is your alarm set for sorkin >> we're going to wake up about 3:00 a.m. tomorrow morning. >> as usual. >> that's early for me

we're going to make some mimosas. we're going to get ready and we've got -- they're going to deliver some caviar this evening. we're going to get ready for the whole thing. >> does the wife have a fascinator >> no bangers and mash shepherd's pie >> no. >> all right let's check out treasury yields. treasury yields have -- it's pretty amazing that ten basis points can really dictate what we've been talking about all week it really has. 15 basis points from 2 nt 95% to 3.1% you wonder if the world is tilted on the axis it's a big deal, isn't it? >> i think it's a big deal what i find interesting is this isn't -- the stock market reaction hasn't been as nearly as crazy as the last time we saw -- >> so since february the reason

we've gone nowhere is because of this >> because of this it's competition of stocks it's competition to other markets big time why are you going to go risk it in some other country with a lot worse fundamentals >> exactly >> new this morning, ceo of campbell soup denise morrison is retiring immediately there was not a reason given she will be placed on an interim basis by board member keith mclaughlin the announcement comes on the same day the company's earnings were released. on its face, campbell's profits look pretty good because it was 10 cents above estimates and revenues were in line. however, when you read their statement, they're clearly very unhappy with the performance they say the profit margins are not up to their own expectations they're lowering their full-year forecast also announced a review of its strategic plans and portfolio composition. they're taking a very big charge for snyder's lance which is this

snack cracker company that they bought i don't know if that charge is bigger than expected it's a buck 65 on the earnings front. >> you know, this is -- you look at the slow growth this is a campbell soup story, kraft story, mondelez story. and joe really pointed it out earlier. you did. which is whether it's millennials or just the changing tastes of maybe multiple generations, frankly, in terms of what people want to eat and what these brands represent to them you know, we're looking at campbell soup right now. you could put a chart up of basically all of these companies. it's not as severe as the campbell soup story, but long-term there are questions about these companies. >> for sure. another story we've been following this morning, all morning, a development in the ongoing saga for control of cbs. the company postponing its annual meeting after cbs' board moved to dilute the power of its largest shareholder. diluted shari redstone on the screen there, her voting power to 17% from 79%.

the board said in a statement if consummated the dividend would enable the company to operate as an independent, non-controlled company and more fully evaluate strategic alternatives redstone's company is called national amusements. it also put out a statement saying cbs management can't wish away the reality that cbs has a controlling shareholder. check out shares of cbs this morning. they're higher by 0.75% trading at $52.01. they fell sharply mid-session yesterday after a court decision which basically seemed to give control back to shari redstone we're going to talk to david faber in the next half hour who has been doing a lot of reporting on this. it is infrastructure week. elon musk digging deeper into his idea of building a high speed tunnel phil lebeau is in chicago this morning. he has news on what's going on in l.a >> last night in los angeles, elon musk along with one of the creative visionaries, one of the

leaders for the boring company which is his side company building an experimental tunnel, i would say. a proof of concept tunnel underneath spacex. they held an informational meeting for an hour. they talked about what might be possible with the boring company with building one tunnel and hundreds of tunnels underneath cities across the country. from between cities up the california coastline not a whole lot of details came out of this talk by elon musk. me did say he would like to see the transportation system move cars move small shuttles filled with people at up to 150 miles per hour. for $1 a ride. they do want to build a 2.7 mile proof of concept tunnel. here's musk last night talking about how his tunnels might work >> it's really personalized mass transit. and you have a highway system

and kind of like a series of offramps so when you're going through the tunnel network, you would enter the main arteries and then would be transitioned from one artery to another then eventually go out through one of the little, sort of, microstations or ministations. you would be going very fast the whole time the only time you would actually stop would be when you exit. >> now, we've been out to los angeles. i've been out there and i've seen the tunnel that they're building this is some video that they released of the current prototype tunnel that goes underneath the spacex property in california last night musk did say the boring company is forming a partnership. although it's unclear what that partnership will be with l.a. metro which operates the public transit for the county of los

angeles. they're calling it a partnership. doesn't mean there's any kind of a formal link between the two companies. one last note, guys. at least a couple of neighborhoods have already filed suit to stop the boring company as it talks about building some of these experimental tunnels. so we are a long ways from seeing the boring company truly start digging hundreds of tunnels around los angeles or southern california. but any time elon musk talks, people are interested. last night in los angeles, they were interested in his tunnels >> a couple questions. first, do we know how much they've spent thus far on these experimental tunnels >> no. they did have a filing raising $150 million in terms of how much they've spent on this first proof of concept tunnel underneath the spacex property, we don't now how much they spent. we don't know how much it would cost to build out towards l.a.x.

which is what they're talking about. >> he also says he's going to be offering free rides. have you seen that >> yes i saw that. >> you saw the free ride line. however, apparently whatever permission he's been given for these experimental tunnels don't allow for anybody to go down there. >> these are the details, andrew, that everybody looks at. remember last year i think it was last year, year and a half ago where they say we've been given approval by the administration in washington to start building a hyperloop underneath the senior seaboard people started saying, really? who gave you that pproval? no one gave them that approval that was sort of a verbal agreement we'd like to see it. >> did you like elon's tweet about candy and warren buffett is he really selling candy or was that just a joke >> i think it was a joke, andrew we've not been able to get any official comment >> for now >> yes the reason i say that is remember when they first said, hey, i think we're going to sell flame throwers or give them toll

people who want to order them. and people said that's ridiculous they're going to start shipping them within a couple of weeks. so you have to take it with a grain of salt. >> that was the first time, andrew, that the fan boy aspect of elon -- that's when you start -- that made you think >> i was not pleased with that just because you know what it was? my kids -- no, it was because my kids knew about it and heard about it and they're only 7 and talking about flame throwers >> phil -- you got to decide guns or flame throwers neither one of them, right phil, is that trademarked? the boring company is that really -- >> i believe the boring company is trademarked. >> that makes me think, like, utilities, reits he should be able to come up -- the boring company >> it's a pun. >> joe, all kidding aside, at the end of the day, we can barely build a bridge in this country. let alone dig tunnels. >> it seems like going above would be easier than moving all

that dirt probably, phil but i don't know it's hard to count the guy out >> look. he's already done two miles of it it's two miles long? >> right >> i think it's about two miles, andrew but, you know, if you go out to the spacex facility there in hawthorn, it starts and then it kind of turns and it goes under one of the main streets there in hawthorn, i believe. but, look. hawthorn has embraced them doing this concept tunnel. it's a different thing when you start talking to different municipalities and then you start getting environmental studies involved and then you start getting neighborhood groups filing lawsuits that's what slows this down. >> i must have read an article ten years ago how there was a lot of boring going on as a way to actually increase the amount of housing in highly densely populated places, et cetera. it's a different time. >> the ideas have been there for some time. you're right about that. >> and there's problems with flying too, obviously. like gravity and things falling and if there's all these, you

know, propellers flying around, you're going to feel it. either way the traffic problem in l.a., that's the place to address it, phil that's for sure. it almost counteracts the weather down there. >> phil, thank you for that. meantime, we want to talk about nafta. the future of nafta and where we are and where this is or is not going. joining us now is richard trumpka. good morning to you, sir. >> hey. >> great to have you on the program. help us understand where you think we are and let me quote this is robert lighthizer yesterday saying the countries involved in nafta are nowhere near close he called it a gaping difference he said they're going to continue negotiations. but both his language very different from what you heard from trudeau and also really now i think exposing or at least opening up the possibility that nothing gets done until the midterms and then who knows what happens. >> well, i think ambassador

lighthizer is trying to do the right thing. he's trying to negotiate a deal that's good for american workers. the deals in the past have been good for ceos and multinational corporations because they wrote those deals and put things in it that's good for them he's not going to be stampeded by any artificial deadline given to him he's negotiating for a better deal we hope he get there is. if he does, we're hopeful we'll be able to support that better deal >> speak to the politics of it though speak to the politics of it. is it possible especially if you think that the house switches over, what -- how does this happen you know, there's been an expectation for a long time that the goal had to be to get this done before the midterms in fact, they wanted to get it done before the elections in mexico >> well, i think it's just the opposite i think if this deal's going to get done, it's going to get done with a republican president.

a handful of republicans and a barrel full of democrats because it's going to be a better deal. if, in fact, it goes to the next election cycle, if it's not done this time, i think it's actually easier for us to pass it than it will be -- if it's a good deal if it's a good trade deal, it'll be easier for us to get it done than it would be right now. >> where did you see the fault lines in terms of what you understand is going on in these negotiations >> you mean issues that would break us apart >> to the extent that -- i don't know if you heard trudeau suggest they were very close he was on the opposite side of lighthizer and said there was one issue without specifying what that one issue was, that was keeping this from happening. >> i think there are far more than one issue that's keeping us apart. you're looking at the five-year sunset provision or the re-look. you're looking at the labor chapter. you're looking at rules of origin there are still a number of

important issues that we haven't agreed on. then of course there's the mexican side, the model. their low-wage model that continues to have suppressed wages that make it more difficult for the u.s. and canada to have a real trade deal with them. so i think what you're seeing right now is the -- ambassador lighthizer negotiating hard for the best interest of us. and i think ultimately we'll get there. it just may take longer. it's not going to get done, i think, in this session >> okay. richard, it's always great to see you and to get your perspective on where we are and i imagine as this progresses one way or the other, we will be having this conversation again so thank you >> i sure hope so. and i wish ambassador lighthizer good luck because i think he's fighting hard to get a good deal right now. >> okay. good to see you. and we'll see you again soon we should also tell our viewers in the next half hour we're going to talk to transportation secretary elaine chao.

that's going to happen at 8:40 a.m. by the way, a lot of people -- kristal with orange juice, people are going nuts zblifs making that up, guys. >> i know. but no one would do that with that you use corbel >> it's like if you have a great vodka, you'd never -- i got it you're supposed to drink it straight >> take it back. >> i take it back. the whole thing was a joke >> oil and the dollar rallying -- and drinking in the morning? not good >> not a good idea >> no. oil and the dollar rallying in tandem we'll talk about what this means after the break.

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u.s. crude hitting a three and a half year high this week joining us now with w implications, joining now nick benenbroke you know, jacques, if i could

get one thing out of your expertise, it's what the break even is for domestic producers because it's all over the map for me i heard they got so good they could make money at 45 or 50 and then all the articles this week are they're using money at $70. do you know -- i guess it's different for all different producers, but what's the blended rate for where these guys make money and are induced to produce >> that's a great question and it is a moving target because of the costs involved i think you can probably think in the permian basin $40 to $50 barrel range. but those costs are going up as the input costs are going up too. >> if you had to pick one thing on why we're back to $80 or brent or wherever on wti, it's not necessarily the saudis it's venezuela

why didn't we know this was coming and how can it get worse than where -- a year ago i thought it couldn't get any worse and it's even worse. >> you're correct. venezuela is the main issue. if you look back in the last six months when venezuela's oil production began to slide significantly, oil prices are up about $20 per barrel global inventories are down about 5% so this has been the main wild card that has really put turmoil into the oil market. the next step is actually sunday with the venezuela presidential election so the question will be what will be the u.s. reaction? do we cut off the ability for u.s. refiners to import venezuelan oil and that could be the next leg up in the oil market. >> so less saudi -- you don't ascribe that much. that'll be the next part >> exactly and the opec meeting on june

22nd at that point what we think is going to happen is that opec will continue their deal which runs through the end of the year however, there is a little wiggle room for them to raise production and get to their quota limits by a couple hundred thousand barrels a day but it won't be that significant. so all signs are pretty bullish at this point for oil. >> i was just going to say, you know, the election saying with air quotes, there's all this talk as he said that maybe the u.s. put for many sanctions on venezuelan oil if they hold this election at the same point, why even bother at this point they're imploding so fast. i mean, their protection declines so rapidly. doing a fine job on their own. >> yeah. and a stronger dollar, you would think, would not mean higher oil prices usually it's the opposite. but earlier, i want to get to you on someone was talking about emerging markets and what the strong dollar and the higher yields mean. now there's stress in emerging

markets now in currencies? >> i think it's probably more to do with the higher yields. >> it is, yeah >> i mean, and the dollar. so we're looking for some stability in yields. what i would say is we're probably near the end of the february pricing but debate is three or four fed rate hikes we're roughly at 3.5 to 3.75 as long as we can get those to stop moving up, we'll see stock markets stabilize. i think we'll also see emerging currencies stabilize >> what about the dollar versus the euro or the yen? >> we'd be looking for -- again, we're looking for stability. recently the dollar's been surprising to the upside in terms of data releases and the rest of the world has been a little subdued we think that has potential to turn around. even started to see some data points change. >> you don't think it's a 1.10 euro >> we think it's corrective. we think the longer term story is monetary policy convergence

i think it's going to be harder for the u.s. data to keep beating expectations some of those global expectations are pretty low. they might actually start doing well >> and where'd you grow up >> i grew up in new zealand. >> new zealand, okay so you're not quite as excited about tomorrow as did -- >> the royal wedding he's talking about. >> yeah. >> you're part of the commonwealth, aren't you >> yes i don't know if i'll be up before 4:00, but excited >> north of south island >> north >> thank you >> couldn't you tell from the accent i could. that was a north island accent coming up our news maker of the morning. elaine chao is going to join us. you do not want to miss this conversation but first, our very own wilfred frost is live in windsor ahead of the royal wedding do you have coming up? >> the royal wedding's expected to cost $45 million and that tab will be picked up by none other than her majesty the queen can she afford it?

after the break, we examine the royal finances what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

hello. give me an hour in tanning room 3. cheers! that's confident. but it's not kayak confident. kayak searches hundreds of travel sites to help me plan the best trip. so i'm more than confident. forgot me goggles. kayak. search one and done.

coming up, the trade debate. getting a little bit more dramatic we're going to talk to china strategist leland miller about what he thinks is next for the negotiations don't move we'll be right back.

♪ 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. ♪

♪ good morning and welcome to "squawk box" right here on cnbc. we're lye at the nasdaq market site in times square

i'm andrew ross sorkin with joe kernen and michelle "closing bell" -- michelle caruso-cabrera blackstone had staking hilton private. in a leverage buyout and took it public in late 2013. when they bought that thing, the timing could not have been worse, but they made it out and made it out so successfully, it's been one of the great success stories. the food and drug administration haze approved first-ever treatment to prevent migraine headaches. it's going to be comarketed by novart novartis it will cost $575 per month. and for those who suffer from migraines, a lot of people looking forward to this. also shares of nordstrom taking a very big hit in pre-market trading this morning nordstroms did beat on the top and bottom lines that's the good news but here you go. comparable store sales at 0.6%

was only half of what analysts were expecting you're looking at that stock now down over 7% in the pre-market this morning we are less than 24 hours away from what is expected to be the most watched news event of 2018 the royal wedding. and our very own wilfred frost has a look at the big money behind the event and just who's picking up the tab >> the queen's total personal wealth is estimated at $490 million. that stems from an investment portfolio of around $150 million and large amounts of property including in norfolk and scotland she doesn't actually own windsor castle nor buckingham palace they're in the royal direction trust along with the crown jewels the queen can use them, but not sell them. most of the queen's income comes from the koun estate which she also does not own. it has a value of $16 billion stemming from large amounts of property in london and some 2

million acres outside of it. she receives the sovereign grant each year which is roughly 15% of total income generated by the crown estate last year that came to $58 million. the remaining 85% goes to the uk government she also gets around $20 million per year of income from the private pool of capital that has existed for the sovereigns since the 1300s. again, no access to the capital. similarly her son charles the prince of wales gets his own source of income around $20 million per year from korn wall. it's up to the queen and prince of wales how they disperse that income among their children. >> vc money from the 1300s that is old money. doors will open to the castle 5:00 a.m. tomorrow morning for the 600 guests to begin arriving that's east coast time 5:00 a.m. >> she keeps 15% of her income from -- 85% goes to the

government i mean, that's like eisenhower days >> it's a very high tax. that's progressive >> sounds pretty good, about right? >> yeah. i'm on board with that what do you think? >> you're lying. you aren't you just feed me, don't you? >> i try >> she's doing okay though she's doing all right. >> yeah. she's doing just find. in a statement, robert lighthizer said the nafta countries are nowhere near a deal there are gaping differences on intellectual property, agricultural markets, de minimis levels, energy, labor, rules or origin, indications and much more also on trade china denied it offered the u.s. a package which would cut the trade surplus by $200 billion u.s. officials had said yesterday that china was

proposing just such a deal however, a spokesman for china's foreign ministry did say that constructive discussions are still taking place joining us now is leland miller. leland briefed eu officials before the previous round of talks. good to have you here. >> thank you >> did you advise them not to give a history lesson? >> i did not i think that's its own soap app ra but it does show the team is very much in complete discord over which strategy, what tactics, how you handle this from a tone perspective, and also pain threshold. you have to be willing to call this -- you're either going for a short-term win or long-term battle and i think the team is deeply split in the middle in terms of what direction they should go. >> not surprising considering what we know about all the individuals involved so we get three pages of notes and there's one thing that's highlighted in bold from you a trade war is no longer the

worst case scenario. what in your opinion is the worst case scenario? >> well, happy talk in d.c. always makes markets happier but right now we're at the verge of a potential short-term deal which will actually put the united states in a worst position than it started at. president trump took a lot of grief for escalating tensions with china up. he's created a lot of leverage and the worst case scenario right now would be to concede the leverage that we have right now in these talks for something like deficit cutting these measures temporary tariff cuts, narrowing the deficit. whereas he correctly identified the things we should be going after from the beginning it's fair play market access it's chinese cheating like zte so you have a position -- you have these correctly identified problems but a short-term win wouldn't net you any of these victories. >> he would be taking too little if he focuses on just reducing the deficit, the trade deficit with china or just getting some increased or decreased tariffs

on cars, for example >> it wouldn't even be taking too little it would be extinguishing leverage and then you'd end up with the same problem without u.s. leverage and without having addressed any of the structural problems that actually created this problem if had the first place. >> a lot of people were baffled by the zte decision where it looks like you back tracked. but people who negotiate a lot said he needed to retain zte as leverage, throw them a life line for the next 30 days because the minute zte goes bust and it was going to go bust, then he's lost a chip. do you buy that argument >> right one of my colleagues said he changed his opinion based on this on whether trump tweets matter because had the president simply quietly talked about modifying the penalty for zte, this wouldn't have generated much of a storm. they got what was effectively a death penalty. instead the president tweeted out about saving chinese jobs.

you know, that got people fired up for this. breaking iran sanctions, breaking north korea sanctions, lying about it a second time so the zte gate, it has generated congressional opposition that just hasn't been seen before. so i think this may be changing some of the dynamics of what the president could do >> who do you think was responsible for that tweet besides the president? >> well, i think that for zte, you have -- right now secretary mnuchin is in charge of regulatory policy. it may not be true two weeks from now but right now he has given the treasury secretary the green light. this has obviously angered peter navarro and the hawks on the trade team but this is something in which i think they went too far. they didn't think about the repercussio repercussions. they're getting enormous pushback from everyone on this and it's going to effect what they can do on trade >> got it. thank you, leland. >> pleasure. a big development in the ongoing saga for control of cbs.

david faber is live at the stock exchange in the faber household, the level of excitement? cbs, viacom, royal wedding >> the royal wedding has gotten no play in our household zero none >> you're a media guy. have you talked to jenny about that >> yeah. i've talked to the entire family they're very focused on shari and leslie that's not the royal wedding that's anything but. what was that "game of thrones" with the wedding in it >> i referenced that earlier the red wedding. the red stone wedding. >> this is the red wedding, what's going on between these two. and of course the special committee of cbs' board of directors. yesterday the entire board as you know and you were talking to ken auletta about it earlier and have covered it as well. deciding to go ahead and issue this dividend.

not issue, but say that they will potentially issue it's all show at this point in terms of the dividend that would be issued. that if it were actually issued would have the effect of taking down the control of national amusements from roughly 80% to 20% there by preventing shari redstone from having any meaningful input on changing the board or anything else at the company. it's not going to happen, most experts will tell you. i know andrew's weighed in as well by the way, you can rescind anyone to delaware law any time you want to before it is before the record date. but the court here may have to weigh in on the bylaw change that, of course, would be required a 90% vote of said directors to approve that dividend in two meetings 20 someddays apt it's not going to happen is the point. but they went ahead and did it anyway which is just another reflection, guys, of just how

nasty this has become. and where it stands right now in terms of this struggle between shari redstone and leslie moonves and the special committee of the board of directors of cbs which we've been reporting on for months now which is not about economics but is about who would run the combined company and how much free rein they would have to run that company she wanted moonves to do it. he wanted to do it completely his way which meant no interference whatsoever really from her and not having anybody associate associated even being on the board for some time. but certainly wanted him on the board and as i reported many times, moonves wants no part of him having to do anything with this combined company if it were to come to being which seems, well, likely at some point but probably not with moonves running it >> hey, david. is there any way this can --

there can be a happy ending to this story both for leslie and for shari. we talked so much on this program about how right now it appears if leslie wins, shari could still win. if shari wins, leslie loses. but also shari could lose. so there is this sort of element where they almost need each other even though they don't want to. >> you know, of course it should have come to that to begin with, andrew and i think in these kinds of stories what's become so fascinating and you covered them through the years is the inability of two people to really figure out a way to communicate and come to a compromise that makes sense for both sets of shareholders. yeah you could imagine that in some alternate universe, tempers will calm down. moonves will say okay you can stick bakish on the board. we've kind of come to an agreement on economics at this point. we'll move forward and i'll give it a few years i just don't see it. i just don't see how they can

possibly do that i didn't see it a few weeks ago when i reported that it was likely at some point she would move directors and potentially mr. moonves. i certainly don't see it now given they have sued they've gone ahead and said they were going to issue this potential dividend even though again it's not going to be issued i find it hard to imagine. i guess you could imagine it you tell me. in situations like this. and this is somewhat unique. you think you see it all and then you suddenly see this not to mention a lot more about delaware law but it seems hard to imagine she will eventually get what she wants which is these two companies together but not with mr. moonves running the combined company. >> all right, faber. get to work. we will see you at 9:00. and wouldn't you know it, andrew heard yanny and i heard laurel >> i'm shocked >> i think that's right. i might be wrong about that. that was just two days ago >> i know it's only been a year and a half and i've been trying to get you to say one positive

thing about trump for a year and a half you've been trying to get me -- >> he heard coffeffe but he didn't do it. he didn't come up with it. is that your -- >> i was going to say i thought it was funny >> let's end it here >> it was something funny in that video just to reference, you can go on twitter and see the video. >> posted by the white house >> it's weird where visually you saw one thing with the dress i heard laurel there's no doubt in my mind it was laurel it's weird when we come back, we're going to ask elaine chao laurel or yanny also about the president's transportation plan. weal be right back pah! that will never work.

no, no, no, nah. a bulb of light?!? aha ha ha! a flying machine? impossible! a personal' computer?! ha! smart neighborhoods running on a microgrid. a stadium powered with solar. a hospital that doesn't lose power. amazing. i like it. never gonna happen.

the sun goes down. you run those miles, squeeze the toothpaste from the bottom and floss to set a good example. you fine tune the proposal, change the water jug so no one else has to, get home for dinner and feed the cat. you did a million things for your family today but speaking to pnc to help handle all your investments was a very important million and one. pnc. make today the day.

trump administration continues to look at all options to fund the president's $1.5 trillion infrastructure plan things like possibly charging by the mile instead of the gallon implementing a vehicle miles traveled tax joining us now transportation secretary elaine chao. it's great to see you. >> thanks for having me. >> we live in such a world you're not going to get by with $200 million you're trying to do it on the cheap. >> no, we're not trying to do it on the cheap >> that's what one side says

the other side says public private partnerships will do better because you need the private sector to watch what you're doing it seems we're so far apart on how to do this too >> i think it's really important that we all come together on a bipartisan basis to enact a transportation bill and infrastructure bill. now, as you know, the infrastructure proposal made by the administration was sent up to the hill on february 12th of this year. so we're waiting to discuss with the congress on how best to proceed. and there are many options on how to fund and finance this infrastructure proposal. you mentioned the public/private partnerships certainly user fees and including the private sector in financing our public infrastructure has a long history in our nation. and so we need to look to the private sector or at least not discriminate against them and not disallow the private sector

from being able to finance public infrastructure if they so want to. and there's a great deal of interest in the private sector to help in the financing of public infrastructure. we see it a lot in other countries. we see it in western europe. we see it in england we see it in australia i think, if anything, we need to do a better job of familiarizing people with what the private sector can do. there are many private pension funds, undocument funds. they have to invest over the long-term. and they like conservative investments. and they like in particular collateral that will not walk away there's a long history of using the private sector's funds in many different ways all around the world. i think we need to get more familiar with it there are many examples in the united states as well. but we should not be discriminating against the private sector in allowing --

disallowing them from investing in public infrastructures. >> we had richard trumka on. >> i know him well >> he kept going to there's a long history of the federal government having to step in where the private sector is not going to do things and that, you know, you can imas take is versus what your take is. >> i don't think there's much disagreement i think that's why a bipartisan effort is necessary. because we all want infrastructure to be improved. our country's infrastructure is deteriorating. so there's no disagreement that we need to invest in our country's infrastructure it's good for our country's productivity it's vital for our country's competitiveness overseas it's essential for improving the quality of life for our citizens and residents. i think there's a lot of agreement as to how much we need improved infrastructure.

>> secretary -- >> the key is how to fund it and finance. i think that's a good place to begin to discuss the options >> could you weigh in on elon musk we had a segment earlier this hour about a new test track he has and a new partnership he's pursuing in los angeles. big questions, though, about the cost of this type of thing obviously, it's a private sector operation. in terms of where you want money going, though, do you look at it and say it's a great thing or do you wish that we're looking at other options? >> well, first of all, i've been there. i visited the site august of 2017 i visited the project in particular in the infrastructure bill proposed by the administration, there's a provision for transformational technology. so for transformational

projects and 10% of the federal fund willing go toward projects that are transformational we're tech neutral we won't be top down there will be a provision that will be available to transformational technologies that will improve the way we live and work. >> on that note, the d.o.t. launched the drone integration pilot program. very exciting. what we noticed is that amazon was not one of the companies that ended up attached to any of the plans that were ultimately picked was that by design should we see anything in nefarious there? >> we didn't know. we deal with consortiums sometimes members of the consortium are sometimes blind to us. we decided these are on merit basis. well over 140 consortium projects applied at the initial phase, ten were

selected as i said last week when i announced the ten pilot programs, i said there are no losers we are learning about drones and how they need to be integrated into the their air space so there are no losers. >> madam secretary, thank you. did you listen to yanni or laurel >> i'm on team laurel. >> i'm with u!yo >> you cheat i was laurel. >> no. how do you gauge the greatness of an suv?

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coming up. don't miss an exclusive interview with the ceo of churchill downs. and the impact of the supreme court's sports gambling ruling and don't forget the preakness tomorrow

people don't invest in stocks and bonds. 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 that something wonderful can happen. those people might just get what they want out of life. or they could get even more. what they want out of life.

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final check on the markets what happened? i think we were up 70 at the highs on the dow we're now down 16 or so. >> campbell soup. >> maybe i can't imagine but you're right, ann they got problems. with millennial's. >> i don't think it's

millennial's. >> i have tomato soup. >> i called it blushing bunny. >> the ten year at 3.1 or so which has been the story of the week, i would say. i don't know what it means for the fed. >> thank you to michelle. >> thank you. >> and we don't agree on much but we agree on laurel. >> on laurel well, i don't know join us on monday. >> we flip-flop. >> "squawk on the street" begins now. good friday morning. welcome to "squawk on the street." i'm carl quintanilla david faber here dow futures are 82 as the major averages try to erase a small earnings for the week. europe