york, where business never sleeps, this is "squawk box. ♪ good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin, who is back. good to have you back. >> back from satsle. i'm learning about all of the things that happened during the commercial breaks. >> yes. >> and we're learning about -- >> it's always a story itself. what happened behind the scenes in seattle >> your and your management of the entire process i told andrew it was great. >> very well done. >> and it was a lot of work for you. i said it wasn't awful -- >> which is high praise. >> exactly. >> you know, that was hard he had to fly out there, you know -- >> go and watch everything that happened -- >> massage all the people. and starbucks is at a, kind of critical juncture. and it's hard whenever you lose a guy like howard schultz, especially given the last time. >> yes.

>> but they also have a lot to navigate through in terms of this new -- and just everything else with -- i don't know who can afford -- it's almost like an elitist space in this populist environment we're in, $5 for a cup of coffee not everyone does it, right? a lot of people do -- >> a lot of people do, which is why it's a -- >> there are starbucks people -- >> i think the big issue for them in the u.s. -- the china thing is still a remarkable, crazy story, over the top. the question is in the u.s., how do you continue to grow when you're by the way on virtually every corner to begin with. >> and anyone can walk in now and say i'm going to hang out for a while, right >> well, that was kind of always the case. >> really? >> just a new institutionalized policy. >> you think so? >> look, i think what they've effectively done is say to the managers, use your best judgment. >> exactly does that give you a lot of confidence remember the last manager that was using his judgment called the police. you know, that means there's

28,000 people that have different ideas about how to handle things, basically. >> but i think the idea, the presumption is to try to let people hang out on the assumption that one day either they'll be a customer then or in the future. >> and by the way, starbucks isn't the only company that has this any company that is dealing directly with consumers, you are putting your employees on the front line and anticipating that they will be the ones dealing with things. think of airlines having to deal with angry customers who come through the doors, too you are hoping that your employees do you well. >> right >> yeah. >> right but i will say that that was really orchestrated in a certain way, the whole release by howard schultz, to maybe indicate that he's serious about 2020, poe potentially -- >> i'm not sure that that was orchestrated in that way, to be honest with you. >> do you see the lead on all the websites that's saying that his party has moved way too far left he's staked out a central

position on entitlements and deficit and -- >> the real question, if he were to pursue the presidency in 2020, or whatever he might do, and i am not sure what he'll do in the end, but if the democratic party was the place he was supposed to be, whether that actually works. >> when he started talking yesterday, i actually started wondering if he would run as an independent. because some of the things he said really did castigate the far left of the democratic party. and i guess what happens to the democratic party. >> i mean, we've talked about this forever, can you actually run as an independent? he was part of the no labels and some of the other efforts, but it's very -- >> all the time i thought he was a no label in sheep's clothing because he's so far -- sjw, he is a social justice warrior. i can't believe he ran a for-profit organization. i can't! as out there as he is with, you know. >> what he talked about yesterday -- >> virtue signal, moralizing, the bleeding heart, just, you know -- >> you know what, though, and i don't want to be put in a position to defend -- >> i just think it's a wrong way to get there, just pure -- >> i will say that no matter how -- whatever you think of his

political views, you talk about ken langone on one end of this, he is the epitome of the american dream. >> absolutely. david novak talked about that. >> when you talk about the true american dream story, he is it and one of the things he said -- by the way, because it was when people were crying going into this meeting with hundreds of people at starbucks, he talked about the idea, not just of the american dream, but saying that today, and even where he started in brooklyn, he said it was supposed to be impossible. even then it was supposed to be impossible. >> right. >> and i think to really just sort of appreciate what that means is -- >> we had david novak on earlier in the show yesterday, and he was talking about what an incredible job he's done as a leader with building that company. ken langone said that. and correct me if i'm wrong, but he was almost tearing up at the end when he said he wished his parents could see this moment. >> yes, yes, yes that was actually -- there was a similar comment that he had made that was also emotional in the same respects, so -- >> no one had any idea that

coffee could become what -- i remember before -- >> people thought it was crazy. >> what was it, 1993 when he started? >> 1983. >> but we didn't realize that -- like i said, i didn't know what a vente no-foam 2 hrs latte -- now it just flows right off my tongue not a cream and sugar, give me a large with cream and sugar. >> i don't know if you remember, because we had this conversation on the set probably five or six years ago with allen patrickof a gentleman named howard schultz went to him looking for money in 1983 and said i'm going to put coffee on the corners at these very higher prices i'm going to use italian names and he thought the guy was crazy. >> right, yeah. >> oops. >> right. >> so. >> from there. all right, well, andrew's back we have lots of ground to cover today. let's start, though, with u.s. equity futures this hour yesterday was a mixed day for the markets with the dow down by about 13 points. the nasdaq, though, continued to power on, set a new record once again yesterday, and this morning you are looking at green arrows across the board.

dow jones doing a little catching up. it looks like it is indicated up by about 105 points, at least at this moment. nasdaq, even with the gains we've seen over the last several sessions, looks like it is indicated up another 22 points this morning it was amazon and netflix leading the way yesterday, and we'll talk more about those stocks later this morning. s&p futures this morning indicated up by about eight points overnight in asia, stocks were higher there as well the nikkei was up by about 0.4%. the hang seng was up 0.5% and the shanghai composite closed ever slightly higher once again in asia, technology stocks led the way you saw big gains across the board. this morning with the early trading in europe, you're going to see that most of the major markets are trading higher the dax looks like it's up by almost 0.5%. stocks are higher in france and in london. spain is up by 0.75% italy is the one holdout, down by about 0.6%. finally, take a look at treasury yields yesterday the ten-year treasury closing at 2.917%. yield is pushing even higher, up

towards 3% right now at 2.952%. china's zte signing a preliminary agreement lifting a ban on buying from united states suppliers, getting the firm back into business. now, a seven-year ban, if you remember, was placed on the company in april after zte was caught illegally shipping goods to iran and north korea. also, different category, same country facebook has now confirmed a "new york times" report that has data-sharing partnerships with at least four chinese companies, including huawei, the world's third largest smartphone maker it's come under scrutiny from u.s. intelligence agencyover security concerns. the "times" reporting sunday that facebook's data-sharing partnerships could allow the data of users' friends to be accessed without their explicit consent. facebook denies that and says it was to allow customers to use features on the mobile devices. >> i still don't understand this. >> and facebook is winding it down and says it will end the partnership later this week and end partnerships with other chinese firms. here's what's at issue

for those of you who use an iphone, in addition to going on to the facebook app, there are other ways into facebook so, if you're on -- >> before the app was an easy thing to use. >> but even irrespective of that, even right now for example on an apple phone or on an android phone, there are things that have been built into the phone that would allow you to like things even when you're outside of the app so, if you're living in another part of the environment of your phone, you could be on another app and want to like something that then would then show up on facebook to do that, what the article's suggesting is that they effectively allowed access through the system to the device makers and so, there was a license that allowed that to take place and when it was tested on a blackberry, your old favorite company, what they realized is not only were you able to like and do sher things, you could access vious extra pieces of information outside of it it's not clear that that information then went to the servers of these companies -- >> that's what i wonder. like, it sounds like it stayed

on the phone and people would go back -- >> and that's what facebook, what the hardwear makers and what huawei have said. huawei in particular is more complicated than a samsung or apple -- >> because of the relationship with the chinese government. >> -- because of the security issues. >> it's one thing if this is information they can harvest and another thing that only you can see on the phone, if it sticks around on the phone. >> i absolutely agree. the question is, it may be an issue of potentially harvest, meaning the opportunity was there. the question is whether someone actually did. >> right. >> and i don't know if we've gotten to that point yet, and that's in the story, so. okay, in the meantime, elon musk this was a hell of a meeting yesterday. elon musk winning a vote of confidence from tesla shareholders, keeping the combined chairman and ceo roles. the shareholders also striking down a proposal to remove three board members and the company revealed it will build its first factory outside of the united states it will be in shanghai elon musk said it is extremely likely they will hit a model 3 production rate of 5,000 cars

per week by the end of this month, something he's promised to do. >> it's like, whoo this is, like, i'll tell you, the most excruciating, hellish several months i've maybe ever had, and a lot of other people at tesla, but i think we're getting there. >> take a look at shares of tesla right now. they're up about 1.5% this morning. they have been down -- what are they, down 7%? i think 7% in the past two months for more, tim higgins is tech and auto reporter at the "wall street journal." good morning to you, tim. >> good morning. >> that was one of the more emotional moments i've seen elon in, especially at a meeting like that >> yeah, it's kind of like a revival hall for him all of his biggest fans are in the room lots of investors come and they're really excited to see him. you looked at twitter beforehand and they were just giddy to get in and see the show. >> what did you make of the

5,000 number it's a promise he's made before. they're not there yet. >> yeah, it's the bogey, right it's a figure that he's put out there before he's missed on a couple of occasions. it's really been a year of what he's called manufacturing hell, this inability to ramp up production to a level that would be able to generate cash and make the company operating profitability, gaap profitable and so, he says when he gets to 5,000 a week continuously, that will allow the company to be cash flow positive in the third and the fourth quarter, which would be a big relief for the company that's been under this great pressure to turn the ability to do this. >> thus far, the model 3 cars, which are supposed to start at $35,000, are not really starting at $35,000 in terms of the ones that are coming off the production line now. they're much more expensive. and in fact, of course, they announced plans just about a month ago for an even more expensive version before, really, they ever get to the

$35,000 price tag vehicle. when do you think the production of that price point vehicle will really emerge? >> well, elon yesterday told shareholders he's expecting that next year. he's on twitter, previously talked about how the economics of making that $35,000 vehicle just weren't there while he was ramping up so, what he needs to do is make these more expensive versions that have higher margins and then can bring in that less expensive version that he sees is really bringing the masses into the car, mass-market vehicle. >> what's your take on, and it's really a question about his approach to talking about certain things he talked about this factory that he plans in china, yet, there's no deal yet to do it and so, the reason i ask is whether you think that that's just another effort -- i mean, people criticize him for being too promotional and trying to, especially during this period, which is clearly quite

complicated for him, to try to keep investors believing >> right the idea of what's next. the tesla investment story's been what's next, what's the next exciting thing he can do. well, he has been talking about china for a while now and he's wanted to go into china in a way that no u.s. automaker or any foreign automaker's been able to do, and that is without a local manufacturing partner. the government recently said that they would allow electric carmakers to do that, and he's been in talks with shanghai city government for a while, and there's been this suggestion, and he's said it before, that he thinks he can get in there now so, the details of exactly how many vehicles he plans to make and when he starts to do that will be of great interest, in particular, previous statements have suggested he could see 200,000 vehicles out of that factory a year this is really a factory for the model 3, probably for the model y, which is the next vehicle it's a compact sport utility vehicle. these are going to be the high-volume vehicles for a

market like asia and the model y will be particularly important because we're seeing kind of an excitement for suvs in that market >> hey, tim, there's a huge short position in the shares of tesla. andrew mentioned the stock's come under extreme pressure over the last month or so as people are really kind of focusing on what happens with this he said yesterday, elon musk said yesterday that he thinks he can have this 5,000 production goal, 5,000 a week, met by the end of this month. that's a key number, because if he can't make it, he's going to need to raise more money are we going to know in three or four weeks if he's going to need to raise more money or not >> well, at the end of june, early july, we'll see the quarterly production results, and then we'll know. we'll know what he did now, at the end of the first quarter when we saw that, he was supposed to be making 2,500 a week and he didn't he got to be about 2,000 and the market was sexualessent saying we see progress getting towards those goals. in a lot of ways, elon has this

luxury of almost being like horse shoes or hand grenades, and getting close enough to that number, but to show momentum towards what the ultimate goal is the question is how long he has that luxury, right when will the markets start to say, hey, you actually have to hit this 5,000 mark. and not just 5,000 a week once, but continually do it. the ability to generate cash is to occur over the entire quarter, and a lot of manufacturing experts are saying the next challenge will be making sure that the supply chain can continue to meet that 5,000-a-week rate, which it hasn't had experience doing up to this point. >> hey, tim, real quick, final question elon's clearly racing against the market, racing against these production issues, but he's also racing against competitors where do you put tesla right now relative to the competition, both in the ev market side of things and also given some of the autopilot type of features that have made it so successful thus far >> well, the jaguar i-pace is

coming towards the market quickly. early reviews seem to say it's pretty impressive. that's an all-electric suv that's going to hit the market then you have general motors out with the cadillac super cruise and the new ct-6 sedan, which is like an autopilot but is actually marketed as being able to take your hands off the wheel in certain driving scenarios i've been in it. it's pretty impressive, and it definitely is getting a lot of attention from the folks in the kind of driver assistance category who think it's pretty advanced. >> okay. we're going to leave the conversation there, tim. thanks for waking up early on the west coast appreciate it. >> thank you. all right, let's catch you up on the broader markets. joining us with that is ryan payne, president of payne capital management, also jay jacobs, who is head of research at global x funds. and ryan, let's start with you it's been a bit of a push and pull with what we've seen. we're worried about the erl trade coerns, anhing that might blow up, or we're looking at fundamentals and we think things are great obviously, the fundamentals kind

of winding up this week, but what do you think is going to carry the day? >> i think fundamentals at the end of the day i think a lot of this is just noise. and if you look at it now, the market trades at a nice discount to the beginning of the year, so i think a lot of the bad news is kind of priced in already. >> where do you expect stocks to end the year >> i'm going to say higher, if i was a betting man. >> a lot higher, though? that's kind of a broad -- you're kind of saying maybe higher in that sense. >> my bold prediction would be the highs that we hit in january, i think at some point we'll exceed those this year i think a melt-up is probably a big possibility we could see one before year end. >> jay, what do you think? >> well, i think what we're going to see is just incredible earnings this year, especially driven by some of the tax reform and just continued global growth, but we are seeing valuations come down so, what you have there is kind of these, you know, conflicting factors, but overall, i think we'll see overall market growth by the end of 2018. >> technology's leading the way right now. are you a believer in these technology stocks? would you put money into them right now? >> i think what the market is getting wrong about technology is they're kind of day trading

they're trading it really quickly because they want to make a quick gain and they see that this is the end of the cycle and they're trying to squeeze out kind of the last return they can. what they're missing in the technology space is you're seeing incredible disruptive technologies setting up for the next 10 or 20 years, whether that's robotics, electric vehicles, fintech. so, if people think of technology as the long-term buy and hold opportunity, i think they'll be better set up for the future. >> meaning you think these prices are fair valuations and there's really a lot more to be kind of wrung out of it? >> yeah, if you can be more specific within the technology sector and really isolate those high growth opportunities, i think the valuations really aren't that lofty, frankly. >> what does that mean what do you like >> i really like the tin if he can space. you're see disruptions in payments in back office software for banks. a lot of this has gone under the radar for the last couple years, but it's completely up ending the sector. >> fapg f.a.n.g. stocks are really leading the way. >> most investors have a lot of f.a.n.g. exposure already, so i

wouldn't advocate for adding more of that look at other technology stocks that are really up and coming right now. >> i'm glad you guys are wearing different ties if i had to try to figure out which one of you was jay and ryan and keep it straight in my mind -- are you guys the same person i mean, you've got -- with the yuppy beard -- >> no, way no way. >> they're saying the same thing! who are you? >> i'm jay. >> that's ryan. >> and you're ryan are you both -- are you sure >> i don't know anymore. >> i mean, look at you guys. anyway, you guys can't come on together. >> ryan has much lighter hair. >> thank you, becky. >> yes easy to tell them apart. thank you for coming in. they both look like they could be brothers. >> i've been over here, listening closely. no, but at the same time, at the same time, i've been going back and searching ray dalio. you saw his comments if you search ray dalio cnbc 2017, cnbc 2016, we have sort of

summaries of his comments to us in davos. >> right. >> talks to us every year in davos.es>> y do you remember? it's hard to remematbewh he said, but it's surprising what he said, because you have to put that in the context of what he's saying now, and it's not -- you know, he's always very thoughtful, but these aren't great comments that were being made in terms of being right about what was going to happen for the next year. so, whether we believe what he's saying now, will you go back and look at some of this stuff >> i will do that during the break. >> back in 2016, he said that it was more likely that the next move the fed was going to do was qe because the economy's going to be so bad in 2016, they were going to need to go back to qe then in 2017, he said that there's not going to be any global growth because central bankers are pushing on stream and you can't get any more out of this debt cycle that was clearly wrong then in 2018, this year, in january 23rd, he said anybody that's holding cash now is going

to look really silly, and that was the exact top of the market. so, i don't know whether ole ray is, whether we need to stop everything but he might be right, because the goldilocks is sort of the consensus right now for the economy, so maybe he's right, but we'll talk about that. probably won't be on again in davos next year. place your bets! sports wagering is now open in delaware we have today's top water cooler stories, including some bacon news, straight ahead we'll be right back. will you go back, please do you remember? ♪ finally. hey ron! they're finally taking down that schwab billboard. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? ...no minimums.

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welcome back a new study from lloyds says that manmade risks could cost global cities $320 billion a year it says things like cybercrime, interstate conflicts and market crashes are a much bigger threat to economic output than natural disasters like hurricanes, floods, earthquakes and volcanos, which is interesting, because there have been so many people saying look out -- >> except for buffett. >> well, except for basically

anybody in the insurance industry this is lloyds if you're putting your money where your mouth is in terms of risk, their point is, there are far bigger concerns we need to be worried about, including cybersecurity, which is what james patterson came on yesterday to talk about, about how that's a huge threat. >> i'm sure tom's buying up coastal properties all over the place without worrying at all. anyway, delaware has become the first state outside of nevada to allow sports betting the state's first legal sports bet was placed yesterday by the delaware governor. it was a $10 bet on the phillies to win wow! probably got pretty good odds on that for a big payoff. that's a rare occurrence lately. i should talk about the reds sports bets are now allowed at three racetracks in the state. in the first three hours of business, nearly $170,000 was wagered. and you know what's coming up on saturday i'm worried. i'm worried. >> race? the big race >> i'm worried about justify we're going to have the owner of

justifyon. i'm worried because bravazo in the last race, if he had another few feet, he would have won. >> is it going to rain >> bobby baffert says he's looking more and more like american pharoah, which -- but then another guy said at the preakness, really, he was tested and it was a first time that he could feel the hooves right behind him and that he was tired. so, we'll -- i don't know, but it's going to be a big -- >> but is it supposed to rain? i don't know the answer -- >> i have to look it up. >> are you putting money down on this >> no, no, no. we're just going to have -- >> broadcasting it. >> you're broadcasting it. i'm not sure that you could actually -- that's interesting. >> i've got the whole schedule -- >> we don't have any -- >> the coverage is coming up on nbc. >> member of the family, so who knows. >> and remember american pharoah with the wheels up and he's going all in

is that embargo? >> we're going to do a little bacon news when we come back >> oh, yeah, bacon news. sorry. you didn't have one of those doughnuts with bacon on it, did you? >> no. from last week, i did not. i did not. >> you blew your -- you're allowed to say that, but i'm not going to say it. but you wasted all your energy on the regular -- >> glazed doughnuts on friday. >> you had seven and change. >> then i have to say, is it the princi, at the starbucks reserve place -- >> what is it? >> it's the bakery they have there, at just the reserve places it's an italian thing. >> some kind of quid pro quo, you have to mention starbucks now? >> no, i'm just thinking of all i ate yesterday. >> promised to mention starbucks every report >> you're the one that brought up starbucks at the start of the 6:00 that's high praise from joe. you're never going to get more than that. the race for the triple crown is on justify will run on saturday in a bid to become the 15th horse to win the triple crown.

and aviation company wheels up is inking an exclusive partnership for featured branding the horse's owner will join us with kenny dichter, coming up next take a look at yesterday's s&p 500 winners and losers ♪ that's what i like about you

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in times square. good morning, again, everybody! let's take another look at the u.s. equity futures at this hour we are talking about green arrows across the board. dow futures indicated up by about 111 points right now this comes after the market was down, the dow was down by 13 points yesterday, but we did see the nasdaq setting a new record yesterday. this morning, green arrows once again. looks like the nasdaq is indicated to open up by about 20 points, and the s&p, which ended up yesterday, is is now looking like it would open up another 7 1/2 points this morning. tell you about a couple of stocks to watch. hp says that it expects up to 5,000 employees to leave by the end of fiscal 2019 as part of its ongoing restructuring plan that's more than previously forecast hp is forecasting a pretax charge of about $700 million related to layoffs u.s. steel plans to restart another blast furnace in granite city, illinois, hiring 300 more workers as a result.

u.s. steel is also backing its full-year earnings guidance, and that stock looks like it's up about half a percentage point. credit suisse will pay nearly $50 million to settle a justice department probe into their hiring practices in asia that investigation looked into whether the company hired people from government agencies in asia in exchange for business and a little bit of bacon news mexico's retaliatory tariffs on u.s. pork could lead to lower bacon prices for a while u.s. pork producers looking to keep more supply in the domestic market, but longer-term producers could pull back on supply, leading to prices at or above current levels in the next two to three years, so get your bacon now is what they're trying to say. >> that's always a good idea. the chase for the triple crown picking up this morning, picking up, ending -- this is it, the belmont stakes undefeated thoroughbred justify

is favored to win. a victory would make this horse the second triple crown winner in three years the last horse to complete, obviously, the racing sweep, was already a couple of years -- 2015 seems like yesterday it was american pharoah, when it was spelled weird. wheels up cashed in on that victory and the private airline company is hoping for the same result with justify. joining us now with more on the partnership, kenny dichter, ceo, elliott walden, president and ceo of winstar farm, co-owner of justify. should have done this before the kentucky derby, would have gotten the cheaper price probably on that. >> you know what, joe, we play the odds four to five coming in on the rail and we were talking backstage. the one slot, the one, on a rail, it's the number one slot of people winning -- or actually, horses winning the belmont, so we feel like we're in great position. >> you're already decked out in some wheels-up paraphernalia, elliott. looks good. >> it looks good, feels good

it's a first-class company with a first-class horse, so we're excited. >> i think you're overdoing it in a suit to have the wheels-up down the leg >> that's mike smith's job. >> but walking around here, don't people think that's a little strange >> well, i'm from kentucky, so fits right in. >> so it doesn't matter. we all remember american pharoah. >> three years ago, you're right, it felt like yesterday. >> but it ran so many -- whenever you'd see, and you know that, see, your kidneys, you're smart. every time you run him across the finish line, all you see is wheels up on his leg so that's what you're thinking this time around. >> justify, i would say you've got to start with people we love the horse and we think, look, we're putting our undefeated record on the line with justify we love the horse, but think about the people winstar farms, kenny trout the china horse club this is a great group of partners the china horse club -- >> bobby baffert. >> bobby baffert mr. t.o. >> now saying the horse is acting more -- i don't know. you know, bobby talks a lot, but he says it's acting more and more like american pharoah. >> like a champion. >> that he's breathing a certain

way, he's just feeling good about himself. i don't know whether all that -- can you really -- >> can you feel it of course! it felt like -- >> your answer -- i think it does work because they're amazing. >> listen, as a marketer, you think about, a, justify, what a great horse. >> beautiful horse, too. >> this partnership, starlight racing with jack wolf, such a great group of owners and partners in this horse that we looked at it -- >> converging with all of eli's betting now. >> all green lights. and listen, we've got it talk about ratings. if you have a horse that's won two of the three, the ratings are going to be the biggest since the olympics so, second quarter, 2018, this is going to be the highest rated broadcast, and it's split evenly, male and female. how is a marketer with 25, 30 million people going to be tuned in here on traditional tv? forgot social and everything else it's all green light.

>> this is the nbc schedule. so, it doesn't start on saturday it starts on wednesday, on 8:00 p.m. on nbc sports network you've got "dark horses. then on friday you've got two or three shows on nbc sports network showing that and then you've got it on 2:00 p.m. on saturday, on the sports network, 4:00 p.m. on big nbc. >> we're also showing these guys a little bit of new york tomorrow, raeos. baffert's going. mike smith, dino's got to keep the meatballs -- >> can baffert get in? >> it's all set. they have us all set up over there. we're excited. >> no small feat over there. is it 4-5 right now? >> i think he'll probably go off less than that when the fans start -- >> i told you why i was worried. you told me not to worry i was worried about bravzo -- >> mike smith was playing a lit cat and mouse -- >> the preakness. >> he was wrapping up the last 50 years the horse is doing outstanding that's the real key. how is he doing physically. >> had more time to rest this time between -- >> yeah, three weeks instead of

two weeks, but his energy level, his weight, those are the kind of indicators you look for as a horseman, how the horse is doing. >> that's another big deal that he didn't race as a 2-year-old. >> yeah, he's still learning this is just his sixth start so, it's an incredible ride, and he's an amazing horse. he's like lebron he's big, strong, beautiful. he's a fabulous horse. we're excited. >> and he's only got to carry around the jockey, instead of five other players or four other players. >> very good point. >> lebron's got on his -- >> that's a good point. >> what do you think when you saw him finish in this last race and knew that he could be a triple crown winner? >> well, the interesting thing is, you know, i don't know if you saw the ce or not. >> i did. >>ut it was extremely foggy. >> i couldn't ev see i was listening to the announcer. i don't know how he called it. >> the announcer was amazing. >> amazing job larry collmus. and they come out of the fog at the eighth pole and you still see the blue shadow roll of bob baffert's trademark, see you

could see him in front but mike knew he had the race. the last 50 yards, he's thinking about three weeks two weeks ago. he's saying i need to save him. >> because he saw the finish line and knew he had enough, but that horse was coming up fast. >> they were coming. but you know, i think at a mile and a half, he's going to get in a nice rhythm. he's got a beautiful stride. it's a big racetrack with wide turns. he'll do well. >> kenny, i have a sponsorship question. >> go ahead. >> so, when you decide who you're betting on, because effectively, there's a bet this is like betting on a horse, right? a little bit, because by the way, if the horse is not in the frame at the end, you don't get the value. so -- >> here we are today talking about it, too. >> i would say this, we've already won. when we locked this partnership up and ben sterner and when they called us and said lightning's going to strike twice -- first off, the horse is going to win i'm up on camera five, horse is going to win but secondly is we've already won. the exposure we're going to get,

you know, in china >> china >> china horse club, we have millions of people we already have a built-in owner base of 200 members. >> okay. >> that are part of china horse club. >> would you rather have justify win on saturday or a big, successful wheels up ipo in 2019 which would you rather have? >> both! >> joe, i'm selfish. what i want is a real successful ipo 2019 with all of the partners, including the china horse club, in there in the ipo, so we're bringing it all together by the way, justify will go celebrate down at win star farms. >> is there a bonus program if the horse wins >> i'm not at liberty to say, but i would say i'm dealing with some great horse guys that like incentive. so -- >> it's a yes. >> i would say there could be some incentive-laden things in the deal i would say that we were very creative in putting it together. a win-win. and again, i think from wheels up's perspective, our members, our investors, our partners, our pilots, everybody's won already. so, we're pulling hard for

justify, and thank you, elliott, for including us. >> you bet it's a great partnership. >> you've got a cfo that's done things like this before, right >> eric jacobs >>. >> he's the justify of cfos. >> and this is -- was it about the ipo when you -- >> i'll tell you right here, 500 to 750 days. i'm in days now, not in months or years anymore we'll be public in that range. >> how many months is that for those of us who don't -- >> 500 days? >> i don't know, a year and a half. >> 18 to 24. >> actually, trump's been in office for 500 days earlier this week, so that's how long it is. >> we're 500 to 750 days away and looking forward. we also added another great horse, ken napolitano, formerly of bloomberg and ion, on the sales side, helping brian reid and the rest of our crew sort of scale up our sales initiative. and again, we might need to take some lessons from the china horse club we want to be an international player. >> keep us updated how many citations do you have

>> six effective june 30th this year, so plenty for you. >> maybe now you and andrew can fly -- >> prior to that, there weren't -- i mean, do you go below global express ever? >> well -- >> agreeing grigor doesn't. >> i flew jetblue the day before. >> grigor is a citation ten guy. we've got to sell him a membership congrats on the billion stuff. >> i imagine he is anyway, thanks. >> all right, nbc, 4:00 p.m. you've got to love that, right i mean, this is pretty cool. we waited how long for the last one? and now we could get two in, theoretically -- i mean, i don't get ahead of myself. >> don't jinx things. >> i've got two words for you, big brown. >> there were three in the seven -- >> i've got two words for you, american pharoah. >> okay, good. >> one word, justify. >> justify justify my love. when we come back, we'll tell you what history's greatest economist would say about the biggest issues we face today

from trade and deficits to tariffs. that's the subject of a new book by oxford economist linda yuen then, at the top of the hour, a "squawk box" exclusive with investor leon cooperman. he'll sit down with us and tell us where he's putting his money, more than $3 billion to work, next on cnbc let's stop talking about diversity, and actually be more diverse. as investment management professionals, let's measure up. cfa institute. when it comes to travel, i sweat the details. late checkout... ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a... ...hotel without breaking a sweat. because we now instantly... ...search over 200 booking sites ...to find you the lowest price... ...on the hotel you want. don't sweat your booking.

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time for "the executive edge." german auto parts maker reportedly banning its 235,000 users from using facebook, what'd yap and snapchat on its company-issued phones. they say we think it's unacceptable to transfer to users the responsibility of complying with data protection laws and that's why we're turning to secure alternatives pretty interesting. more good news on the jobs front. the number of job openings is now officially greater than the number of people looking for jobs this is the first time this has happened since this data started being recorded, wasn't that long ago. it was only back in 2000, but still significant. job openings rose to 6.7 million at the end of april.

that's more than the 6.3 million americans who were unemployed during that time obviously, though, if you've got more people -- >> it's not a clear matchup of skills. >> skills gap story. >> or maybe not a matchup of geography, too all kinds of issues. >> yep good jobs market, though. coming up, tackling -- what's up? what are you looking at? >> nothing. >> preparing >> i was just looking at one thing. we have a great guest coming on. >> awesome i know that, of course. >> i know. >> okay. tackling the economic challenges of today using the lessons of the greatest economists of the past that's the subject of a new book by linda yuen. she will join us after the break. right now, here's a quick check of what's happening in the european markets not a lot. some green and red over there. we'll be back. ♪

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. welcome back to "squawk box. president trump has focused on economics. like everything else in economics, the debate has been going on for a long time here to help us figure out what

we can learn about the economics problems of today, linda yueh is here we welcome her to the show >> thank you >> before we get to this, there's a great debate on this set especially when leisman is here on whether economics is a science at all where do you stand there >> it's not quite a science. it's a social science. >> it's a social science, but can you be right >> i don't think you can be right. this is why truman wanted a one hand economist you do the best you can. but when i was writing this book, one of the quotes i picked up from joan robinson, she said the point of studying economics is not to get ready-made answers but to avoid being deceived by economists >> okay. let's go down the list of some of the way you've thought about some of the modern questions relating to some of the historical famous economists

i want to start with this one. can china become rich is the question how would carl marx answer that question >> he would say no until they became truly communist so basically china is a communist country politically but they've grown well because they've injected market forces he would say you've deviated from the principles. if you want to get to the end of point of prosperity, you have to look at principles once again. equality, stability, all of that but he wouldn't recognize china today. the economy is so capitalist in some respects, he would literally be turning in his grave. >> is inevitability -- is inequality inevitable? >> it is the answer is yes, but governments can do something about it in a capitalist system, you're always going to have people do better than others for instance, we're in the digital age. those who know how to innovate in this age will do better than

those who used to work in manufacturing. but arthur marshall believed in helping the deserved poor. so you have to think about it's a political choice once you know you're going to have income inequality, do you do something about it? and importantly, how much you do it's not an economics question >> we always talk about it's not a real nobel prize it's given by a different society. thank god, though. because carl marx would have gotten one >> probably. >> and therein lies some of the rub in that a guy like carl marx could win and a guy like martin friedman could win they are opposed on every issue and could both win where's the real truth where's the objective truth in economics when stiglets can win and -- i don't know. >> somebody else on the other side >> or paul krugman can win >> yeah. and i think this is -- i think

it's absolutely fascinating how economic thinking ideas come into vogue each of the people you mentioned, you're right. their ideas are not only on a different side in terms of ideology, some of them were proved wrong later on. and so i think what you see and i found this looking at 200 years of economic history is that you have periods where some ideas gained a lot of popular support. and it seems to be transforming the world. >> there's a whole group of people that still argue that marx was right it's just that it hasn't been implemented correctly in -- >> do you think any of them would have changed their views by now meaning if friedwas around, how would he think about today would he think about tod any differently than he did before he passed? >> i think he was pretty sure his views were right and everyone -- >> it's easy when you're right if there ever was anyone objectively right. >> he had strong libertarian views. but obviously his main work was

that he explained the great depression it wasn't the causes anybody else said. he showed there was a contraction in the money supply. the great contraction in the 1930s actually caused the crash of '29 and then caused the economy to go into great depression he would say central banks are doing the right thing now. >> i'd go back further after adam smith, do we need to read in ig >> that's a good point, really short book >> didn't we figure it out in '66? >> so many of those are with us today. the invisible hand how supply and demand determine prices trade, he talked about -- >> those are the objective truths i think do exist in economics and all this other stuff is at the margin >> yeah. i think the fundamental economic principles have been around for a long time. >> should be required reading for millennials, linda so we don't think socialism might work >> thank you for coming in

when we come back, we have an exclusive interview with leon cooperman. stay right here. to most, he's phil mickelson, pro golfer. to me, he's, well, dad. so when his joint pain from psoriatic arthritis got really bad, it scared me.

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hanging with mr. cooperman leon cooperman is here to talk philanthropy, the markets. that interview is straight ahead. vote of confidence shareholders reject the bid to remove elon musk as his chairman role the corporate story and much more just minutes away and relationships can be complicated especially when it comes to advertising ken auletta joins us.

as the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york, this is "squawk box. oh, boy. good morning welcome back to "squawk box" here on cnbc we have a heck of a two hours coming up. live from times square i'm andrew ross sorkin along with becky quick and joe kernen. look at equity futures on this wednesday morning. dow would open up higher a couple headlines to bring you. perhaps the biggest right now is victory for elon musk at yesterday's shareholder meeting. rejecting the idea to split the chairman and ceo jobs. both will be held by musk.

and 5,000 model 3s per week is the goal if he makes it he says he can turn the corner without having to raise new money if he can't we might be having this conversation all over again. meantime, facebook also saying it has data sharing partnerships now with four chinese companies. they've come under some scrutiny by u.s. officials because of security concerns. the four companies are smartphone makers and lenovo however, they have wound down the partnerships or is in the process of doing so. it also denies a report that data of users' friends could be accessed without users' consent. we'll also get revised figures in about 90 minutes. expected those numbers will be revised to show slower productivity growth. also be getting updates on labor costs and the trade deficit. we have an investing legend on set with us this morning. lee cooperman is here.

lee's in town to be honored at the cancer research foundation's annual breakfast this morning. it's a charity he has given generously to. we're going to talk a lot about that charity in a bit. but we want to thank you for being here >> thank you for having me appreciate it. >> i'd like to get your broad overall take on this >> i think we're heading to normalization. we've been and continue to be in a very abnormal environment. when you think about it, $9 trillion of sovereign debt around the world carry a negative interest rate makes no sense you lend money to germany today, you get 46 basis points for ten years. it's abnormal. and we're heading towards normalization. so i have to define normalization. normalization to me is the economy grows 2% half percent comes from growth, other from productivity. in a 4% nominal world, i think

it should be 2.5%. i think it'll get there within the year and the 10-year ought to be closer to 4% my guess is it takes two years to get to 4% in that world, a 17 multiple in the market is reasonable so if i take 17 times 158, th's a little bit under 2,700. and the market i2,725 or whatever it is this morning. a fair valuation market tops are socialed with over-valuation i think the high for the year is 50 points over what it was in january. the low for the year is under where it was in february so round numbers, 2,500 low, 3,000 high and i would be a reducer on strength, not a buyer on strength i think the market is adequately valued and my guess is inflation and interest rates will catch the market some time next year >> you would be a reducer on strengthen the markets

meaning you would sell stocks on that would you buy in dips in the market >> sure. bond market is homogenus >> there's another big investor, someone we've had regularly on "squawk box" who had a note out last week that's just been written up he says he's very concerned about how the economy is setting up for 2019. he says at bridgewater associates, they are bearish on almost all financial assets. what's different about this? >> everybody's got one i think ray who is a very nice person, i believe in january he said cash would be a dangerous asset. >> i mentioned that. >> and a hell off of a selloff in february. i'm sympathetic to the idea that some time in the next 12 to 24 months, there'll be events that catch the market in other words, i believe that >> to catch the market >> i think inflation and interest rates will catch up to the market as we normalize

if we get the 10-year over 3.5%, that could be competitive to the stock market we're not there yet. the conditions normally associated with a decline are not yet present. the economy is getting stronger. >> when you say two years, you give prediction for this year. you said what kind of decline. >> you could have a bare market. i think it would be a premature. night follows day, you have a bare market one day. you have it when people least expect it. often on the program i've talked about the great life with john templeton. bull markets grow in skepticism, die in euphoria. we clearly have optimism but i don't think we have many signs of euphoria. we'll get there. we'll get there. i think the tax package of the president could create fiscal issues next year you know, it's -- we have very similar stimulus at a time the economy is employed. there's a lot of issues out

there. and i'm guessing it's premature but i'm guessing some time late next year, this will come through. >> you said 3,000 or so. how about 2019 if there is a bear market, could it be from 3,300 on this s&p >> that's not my forecast. i would say i would think it would be comfortable 3,000 >> for 2019 too? or just for -- for 2019? >> bear markets generally speaking are perceived recessions recessions last about a year bear markets last about a year and they typically go down from their peak again, i don't want to miscast that i don't think it's time to call for a bad market, but if i had to have a hunch, i would say sometimes in the next 12 to 24 months which is not saying a lot we'll have a bear market >> it just depends on from where. this could be the low -- >> i'm being pretty specific.

>> the lows we had a couple months back could be the lows of the bear market. >> lows for this cycle but not for the bear market. i would assume if you took 20%, 25% off of 3,000 -- >> off 3,000 >> -- then we'd make a lower low. again, i think it would be premature to make that forecast today. bear markets don't materialize out of immaculate conception they come around for fundamental reasons. either the stock market sees a recession coming, if anything the data is getting stronger jamie dimon would say we're in the sixth inning to me it's more of a valuation issue. i think the market has done a good job of discounting the news that's out there we have to hunt around for things off the run that have not been as successful in the market >> you think policy makers or donald trump -- if trade got out of hand, could that bring it faster >> yeah. i would say i'm a free trader. i believe in the law of comparative advantage. i'm not a fan of what we're

saying and doing in trade. but the president has generally backed off on things and, you know, one of my neighbors in florida gave him a great deal of money, enough money that he met with him personally and the president assured him he was prepared to listen to his advisers he was very negative on nato when he was a candidate. and all of a sudden, mr. mattis told them nato was important and good we're okay on nato so if he listens to his advisers, hopefully enough people in washington will tell him, let's back off on this. >> i just remembered your letter about trump. so you're -- how are you now >> my letter was on obama, not trump. >> about obama, but trump, you -- after -- what was it? after "access hollywood" i think you were -- >> no, no. after obama -- my letter to obama, i've retired from politics >> you've never said anything about trump. you didn't back trump though >> i had dinner with him. >> did you back him before the election >> i didn't. but it's very complex.

you know, i'm not about to tell him how to conduct himself >> i remember something we spoke about, i said it's a binary choice and you were like, well, this was too egregious. >> the issue of style -- >> right there was one of those instances that you said i can't possibly back this guy. >> when he mocked "the new york times" reporter that had cerebral palsy that's it i rember that. >> it's interesting. had dinner about two monthago with a gentleman who's 74 years of age, came here at the age of 20 from hungary broke. he's now worth about $14 billion. he said he saw what socialism did to hungary it destroyed the country america was heading down a socialism path with obama. trump reversed that. that's good. there's a way of doing things and not doing things i would say the style concerns

me and ref a referendum in november. >> you can't do it if you don't get elected. romney couldn't get elected and trump, you know, somehow appealed to enough democrats or whatever they were on the populist message to actually get in to be able to do those things it's looking a gift horse in the mouth. if you're saying we would have never reversed another slide into socialism if hillary clinton got elected -- >> look. i told this gentleman -- i did not vote for president trump okay i didn't vote for hillary clinton. i wrote in mitt romney but if three years from today trump ran again and the best the democrats could do is sanders, clinton, or warren, i would vote for trump despite all the problems the trouble is bernstein made a comment quite a while ago. >> he's unhinged at times. >> he said president trump is a president of his base. he's not the president of the

country. i would like somebody to be more unifying he could accomplish what he wants to accomplish and do it in a different manner >> what do you think of howard shultz >> he's a decent guy >> he lives sort of in the american dream category. >> i would say, listen you had a guy on yesterday i would vote for president i've known ken langone for almost 50 years. he is absolutely the cat's meow. at 82, he's probably too old to run for president, but we need a centrist we need a moderate we need somebody that unifies people that works together you know, in a sense, what president trump is saying and doing is what ronald reagan said he did when he ran for president, what did he say he said i want the government off the backs of people and did that by reducing regulation and reducing taxes it's ditto for trump he said i'm going to basically restore the lost prestige of the united states of america i'm going to do that by

rebuilding the fence what president reagan realized was you can't rebuild the fence and do all >> do you think we're destroying the image of the country >> i don't want to go down that path i had an s.e.c. issue and many people thought it was my letter criticizing president obama. i've lived the american dream. >> you said you thought he was going the path of restoring the image of the united states >> he is trying to do that but there's a way of doing it. no look we know what the deficiencies are. there's no secret. and in november you're going to find out from the american people, are they squarely concerned about the economy or about the image of the country sbreg integrity? i think there is a risk the country turns more blue. i don't want to go down that the president was a fabulous

host i had dinner with him in the white house july of last year. and he was a fabulous host he's the captain of the ship and i always root for the captain. >> to turn blue so recently after sort of rejecting blue to get donald trump elected, the country had to reject blue and i think it did it hadn't come back in four years, i don't think we'll see. or two years even. i don't -- since all we know is what we read in the media, i don't know what's going to happen this november usually the average is 31, you lose 31 seats for the incumbent. >> i know the country is going to survive the country is going to survive. we have a great country. we all love our country and we would like the country to do well and move ahead. and we'd like everybody to prosper. which is the whole thing originally with runyon and other

things you want to really improve the world. >> yes >> you want to leave the world a better place than when you came in >> we wish we had more time. but we know you're going to the runyon breakfast this morning. >> i've been on the board for 26 years. another great guy got me involved dael fry my view of dale is if he would back something, it's worth backing. they're making major moves it's part of my mantra and i basically of the view -- nobody associates with pablo picasso. but he said the meaning of life is to find your gift the purpose of life is to give it away. >> did i do the breakfast? >> you were the host you were great i learned more about your background you're really a rocket

scientist. >> fellowships given out to the smartest minds it's not clinical. basic science. >> we're looking for the young scientists that think out of the box. >> by the way, funded nearly 3700 young scientists and some of the researchers that have come through this -- >> because we raised $12.7 million. you know, go to your rolodex an hit up your friends. and this morning being presented by one of my heroes. ken langone is goi to give me the award. ken is terrific. >> lee, you're terrific. we appreciate having you here. >> we've got to do it again. i want joe to get upset with me. >> i'm very upset you haven't been on our show for awhile. there's no other show for you to be on. >> you guys have a great --

>> you know that now you're going to hear from people this is your home here >> you have several segments that are all very good >> you try to get them to come back >> next time come for two hours so we have a chance to talk specific stocks. >> thank you >> loyalty when we come back, a lot more mortgage rates. big focus. hot housing market "squawk" returns in a moment

weerkly mortgage application data is out. diana olick joins us here on set. >> big mortgage day. >> for you to be here. >> yeah. because finally mortgage rates dropped a little bit took a little -- lower compared to a year ago. the jump clearly thanks to the lowest interest rarts in six weeks. the average here on the 30 year fixed fell nine basis points to 4.75% from 4.84% mortgage rates began rising at the start of this year and moved sharply higher at the start of april. this pullback in rates began two weeks ago loosely following the

drop in the 10-year treasury yield. still 17% lower than a year ago when rates were even lower than right now. mortgage applications also increased 4% for the week. 9% higher than a year ago. buyers are less worried about rates and more worried about the lack of homes for sale pushing prices higher. that has been behind the overall drop in home sales the jump last week may have been less about lower rates and more about some more listings hopefully coming to the market >> diana, we've talked to real estate people who told us even if rates go up, it's not going to affect home sales >> for those on the entry level right now. but when we talk about those on the margin, they're desperately trying to find any home they can afford and there's so little supply there it's not just the rates. even these moves higher, they're not going to affect most buyers. it's the shortage of homes

>> diana, thank you. >> real estate people in general are pretty bullish mostly they're like guys that sell stocks >> there was this little time around 2008 not so much. >> yeah. >> what are you talking about? >> leaving the industry. >> kicking and screaming but in general remember over the years anybody that runs -- >> great time to buy >> and if rates are going up, you got to -- >> lock them in. >> there's going -- all right. when we come back this morning, the high stakes business of advertising. ken auletta joins us to talk about the industry in his new book called "frenemies." "squawk box" will be right back. time now for today's aflac trivia question. how did fred smith come up with the idea of fedex? the answer when cnbc "squawk box" continues thanks, dad! break a leg! aflac?! not that kind of break.

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now the answer to today's aflac trivia question. how did fred smith come up with the idea of fedex? the answer a paper he wrote at yale that earned a "c. all right. delaware has become the first state outside of nevada to allow

sports betting the state's first legal bet was placed by delaware's governor yesterday. it was a $10 bet on the phillys to win sports bets are now allowed at three tracks in the state. nearly $170,000 was wagered. coming up, we're going to head to washington to discuss news from the beltway. as we head to the break, take a look at u.s. equity futures. we're in this triple digit green this morning looking to open higher when we return "squawk box" will be right back.

♪ good morning welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. morni among the stories front and center, signet beats estimates that had surprised analysts who

expected a loss. comp store sales did fall by 0.1%. but that was smaller than the consensus. signet did change its forecast northrop grumman had struck that $7.8 billion cash deal back in october fop win approval, northrop had to supply to competitors for missile contracts. and then twitter announcing a new convertible note offering. it depends to offer $1 billion in convertible notes in 2024 the e notes will be convertible into cash. twitter shares or a combination of both at twitter's discretion. stock is down by 2.4%. all right. former nba player dennis rodman is the first person to have met both president trump and kim

jong-un. and now he may be heading to singapore and eamon javers joins us with more i just googled it. he was on "the apprentice" at one point. >> so many "apprentice" connections, aren't there? >> that connection is rearing its head. >> it's the pipeline to power in washington >> i was on one episode as well. i think -- >> cramer was too. he was on several, i think >> did you win >> no, no, no. judging. judging. >> oh, judging >> yeah. >> i thought you'd be good as a contestant. >> no. no way no way too much work. >> you and gary busey. >> yeah. hard to tell apart >> you had to run around selling widgets. >> is there anything that will come out of your mouth at this point that you thought you'd never say? >> no. back to you. >> yeah. there's nothing that can't be

said at some point in this world. right? it's amazing >> it feels that way let me tell you what we do know. the dennis rodman thing, unconfirmed. but we know this summit is now set. it's on/again, off/again sarah huckabee sanders tweeting last night it's going to be on tuesday, june 11th 9:00 a.m. local time in singapore. that will be monday, june 11th at 9:00 p.m. eastern time. it will be on the sentosa island that's a luxury island we'll see what comes of all this the president last night in an event in washington suggesting that things are going well in terms of the planning for the summit >> north korea looks like it's moving along very well a lot of relationship being built, a lot of negotiation going on even before the trip. but it looks like it's coming

along fine we'll see what happens very important it'll be a very important couple of days. >> so the president not making any specific guarantees for an outcome there. but just suggesting that things are coming along fine. and then as for dennis rodman, a couple of media outlets are reporting this this is not confirmed yet by the vast majority of media outlets his agenda issued a no comment when approached by this. but we know dennis rodman has been in north korea about five times to meet with kim jong-un they've got some kind of a relationship that's developed over the years it certainly seems possible that he could go there and play some kind of a role as a good will ambassador the former nba player and the north korean leader, an unlikely pair, to say the least but stranger things have happened we'll watch and see what happens. >> stranger things have happened this week. >> that's right. you're lucky

we're all very lucky with all this happening every day but you've got to suspend disbelief at some point and just go with whatever it is if you really start thinking about it, you'd be like i can't do this. >> did you see the philadelphia eagles event at the white house yesterday? that was a fascinating moment, right? as a philly boy, i was looking forward to getting a selfie with nick foles and some of the team. >> that's the real question though you know, i've had people argue both sides that you invite them, if three show up, you do as well as you can with three and you go forward with it if -- or, then again, if it's obviously a -- sort of a political move, a statement that they're making and it's going to embarrass the white house and you, then maybe you don't. i mean, i can -- it was tough. >> sarah sanders said this was a political stunt on the part of the eagles the eagles players have been quiet about this you haven't seen a whole lot of tweeting the team has put out one sort of bland statement and hasn't said anything about this. it's clear the owner and the

team are trying to avoid being drawn into a drawn-out confrontation here but if ten people were going to show up, you could have turned it into a lunch or something like that. and done it in a different format but the president just didn't want that image of him being snubbed by that many people. >> he thinks it's a winning issue. he keeps pushing >> and he pushed this as a national anthem-related issue without mentioning the fact that none of the eagles players were among those who kneeled during e natial anthem. >> that wasn't the point is there any doubt that the 77 players that decided not to come were not siding with anthem kneel -- >> well, we don't know so many of them haven't commented. maybe they just don't like the president or they're against his policies >> but i think if you connect the dots, if 80 were going to come and then they're down to 3, it had something to do -- >> not necessarily having something to do with kneeling. >> we just don't know.

right? until we interview them and they're not talking. >> and then they would come next week when he's in singapore, right? they would have come next week when he wouldn't be at the white house. >> they offered the other date, and the other date happened to be during the singapore summit that's not going to work so this thing seems like both sides sort of crept up close to doing something. >> amazing thing on fox was, you know -- >> they took the pictures of kneeling to pray and put a generic kneeling when the eagles hadn't >> context matters >> i love the eagles great team but it's too bad i wish none of this was happening with -- because sports was one place you used to be able to go where it wasn't all -- but everything is so triable now. >> lebron james and steph curry saying on the nba side -- >> not going at all. >> but they agree on not going to visit the president it's gotten to the point where this president, you know, there

are not that many teams that will go to be seen with him. he's cited a bunch that have come, but when you get to that point -- >> eamon, the cavs might not have a chance to say no, i don't -- i don't know. things can always turn around. you never know >> you're doubting the great lebron james >> almost won the first game didn't go last year either all right. time now for the linkedin workforce report joining us now dan roth. you're late. you're late. because it was the jobs report was on june 1st. so the linkedin report was pushed back. we count on that before the jobs report to get an idea on what's going on and it came out a little bit later. >> it's a little bit late, but i'm going to take you so deep in the numbers you're not going to mind the fact this is coming a few days later. >> can you believe that there's now more job openings than people looking for jobs? >> it's crazy. there are -- so this month we

saw 4.5% increase in hiring. year over year, 5% month over month. and in the last -- this is the first time in the last year we haven't seen a double digit increase in hiring month over month. it's been such an insane run for hiring and to your point, the question now is not where do you find the workers but if you're an employer -- not where you find the jobs but if you're an employer where do you find these workers? >> and as an employer, what do you do to lure them? as employers are forced to pay up if you really want to find that >> maybe we'll see pay increases. until then, they're doing whatever they can to not have to pay more you're seeing people locate jobs in cities where the labor market is not as tight. more creative scheduling for people where they are going to get people -- flex time. different hours. and i think we will look back at this period and say this was the start of the real boom of automation or the real spread of automation because you're increasingly hearing employers say they're

investing in machines. machine learning in a way that will enable them to not have to worry about trying to find workers anymore. they're just going to automate their way out of this problem. >> so this is the moment >> i think it is i think we'll look back, like, these were the glory days? and what we didn't realize -- >> we've had people on as recently as yesterday and said i think it was ken langone who talked about minimum wage yesterday. saying he hopes that doesn't lead to automation but if it's not the minimum wage doing it, it could be you're not findi ining employees. >> employers are saying they are doing this it's not a question of whether or not they're going to do it. they're saying i can't hire -- if my sales go up 10%, i've got to hire 10% more people. that math doesn't work out i just need to get machines in here >> so can your data show that the oil industry is turning on the production they're looking for? it does. >> third biggest industry -- the

industry that had the third biggest amount of growth was gas and oil. it moves up with the oil price and if you look at the flows of talent from places like dallas and austin to midland texas, it's in the hundreds of percent increase in professionals fleeing those towns and going to where the oil is >> what do you see in areas like construction because that number was actually pretty strong in the jobs picture. >> same. construction autos. krpg transportation manufacturing. and finance. those are the areas growing. in fact, the only industry that shrunk this month was media and entertainment. >> what can you tell us just in terms of the industries that are struggling the most to try and find employees >> anywhere where there's manual where you need workers to come in that is the hardest one. where you have to get people to do to move forklifts to move shifts front line workers to truck

drivers, there's incredible demand i think part of it is some of the workers have left the -- if you look at people no longer in the workforce, a lot of those people are people who worked those jobs and the opioid crisis has taken a lot of people out of the workforce. a lot of truck drivers, for example, have retired. that's a big problem the other one is if you need trained engineers. it kind of hits both sides of the market >> all right, dan. thanks. >> can i say one more thing? >> go for it >> it's my son's 13th birthday i'm not there to say happy birthday to him this morning >> mazel. >> his bar mitzvah is on saturday you coming >> got to check the mail >> what's his name >> jack. >> jack, happy birthday. good to see you. >> he's the man. like that "seinfeld" episode when we come back, is the ad industry in trouble? ken auletta joins us to talk about his new book it's called "frenemies."

the futures this morning have been up across the board dow futures right now indicated up by 138 points those are higher levels than we started out the morning. s&p futures up by 8 and the aqby 20 points stick around we'll be right back. one of the most rigorous exams in the world. demand the best. demand a cfa charterholder. cfa institute. let's measure up.

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welcome back to "squawk box. our next guest writes in his new book the industry has gone from mad men to math men. want to bring in new yorker magazine staff writer and legendary writer -- can i call you a legend ken auletta's here author of "frenemies: the epic disruption of the ad business and everything else. we want to welcome him here this morning. congratulations on the new book. >> thank you. >> you've written about so many different things over the years and written so many different books, what led you to this? >> the old watergate adage follow the money if you cover as i do in the new yorker and have written books about the media via television or newspapers or magazines or apps and facebook and google, what funds them? it's advertising and advertise -- so then the question is, is the funding

mechanism advertising being disrupted the way they were disrupted in the past? newspapers, magazines, television and as i delved into it, i found out that they were and the consequences of that are profound 97% of facebook's revenue comes from advertising almost 90% of google's newspapers, magazines, one of the reasons they're so thin today is because advertising has drifted away >> we've also seen a sort of flip it seems we're moving in another direction which is back to a subscription model for at least some parts of the world. plus you have these layered on top of it. is it possible, you think that this could all -- the whole script could flip all over again any time soon? >> no. and the reason i think that's a pipe dream is the one thing hillary clinton and donald trump agreed on in the 2016 campaign is that the american working and middle class which is the bulk of the population had not -- their income had been frozen for

the past decade. the average citizen pays roughly $250 a month subscriptions that doesn't account for electric bills and telephone bills. how are they going to be able to pay for that it's not going to happen affluent people could. but most citizens could not afford it. so i think it's a pipe dream i mean, it's a delicious thought, but it's not realistic. >> are mad men more interesting than math men? >> they always are >> you always study the people behind all of this well, i had both in the book mad men are the creative types, the people who rely on instinct and gut and make decisions are usually more interesting and artistic the engineers and the data scientists are the math men. they are more and more predominant particularly in a world where they think the future is to get away from the interruptive ads, we need to target people. we need to target messages at

people and we know you bought a suit at barney's two weeks ago, if you want to go in now get 20% off another suit, would you like that but at some point does ken say hey, how do you know so much about me that's the issue >> what about this collective sense, there used to be ads that have run and have become part of culture. this is true of tv at large. in such a fragmented world, does it make it easier or harder, actually, for the advertiser to actually become part of the zeitgeist? >> i think it's harder now, you'll have some ads that will break through and have an impact but in general, they're just such a multiplicity of different platforms that people can go to. and the 30-second ad is very tough to duplicate nielsen says that 55% of the people who record a show skip the ads. then you get netflix and amazon. they don't have ads. and people are growing up in a

world where ads are not dominant and they have ad blockers, 20% of americans have an ad blocker on their cell phone. so they don't get ads. that's the frenemy that the advertising world faces. >> ken, we talk to martin sorrell all the time before he left wpp he saw this coming a long time in advance. >> he's a major character in my book >> still doesn't seem like he was able to move wpp to be able to protect itself necessarily. is it just a problem that even if you see it coming, there's nothing you can do about it? >> yeah. the world has changed. and you could try -- i mean, he successfully took his holding company, largest holding company in the advertising world and got into pr and branding and other things that have reasonable profits. you're dealing with -- you're climbing a hill where how do you deal with the fact that people don't want to be interrupted on

their cell phones? you can be a brilliant businessman and not be able to solve that problem >> who was the most impressive character you came across during your travels working on this book >> well, i -- there were a couple, actually the main character in the book is a guy who's not well known outside the advertising world but is a power broker in and that's michael casser. he's a charming character who represents at a -- >> media length. >> yeah. at a negotiation between the client and the agency and the platform of the publisher, he tends to represent all three you say isn't that a conflict of interest he says no conflict, no interest the other in the ad world, this guy robert greenberg who created rga is just an enthralling character who basically says my ad agency is not an ad agency anymore. i'm a venture capitalist i'm a design firm. and he just does all these things he's a 70-year-old man who rides

to work on a motorcycle. has hair down below his shoulders. he's an interesting cat. >> you talked about facebook and google where's amazon ultimately play in this? they have been steadily moving into the advertising world in a way that's almost been stealth >> they have and actually advertisers welcome that because they like to see a competitor to facebook and google amazon has the most valuable data of anyone what google has is who you search your interests what facebook has is what you and your friends are interested in amazon has what you actually purchase so that information is valuable. and if you think about search, for instance, half the people who do a search for a product don't do it on google anymore. they do it on amazon so advertisers say, my god, if we can have access or use the data that amazon has, we could target much better but again, you're back to the privacy issue. >> you have jeff bezos on one

side doing advertising and on the other hand he owns "the washington post. >> which drives donald trump crazy. and he's very opaque i mean, he doesn't talk about "the washington post." he doesn't talk about trump. he doesn't talk about, you know, the data he has on people. but that's a company that shakes google and facebook. >> okay. the book "frenemies," ken auletta. thank you. when we come back, stocks ahead of the move on wall street check out the futures this morning. they've been building through the morning. right now looks like the dow futures up by 140 points, s&p up by 8, and the nasdaq up by 19. "squawk box" will be right back.

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let's take a look at a couple stocks to watch shares of amberella takes a hit. the maker of camera components which is a primary supplier for gopro reported better than expected earnings for the latest quarter. business has stabilized and that its new product pipeline should provide some growth. yelp downgraded. the sector down from overweight. does yelp -- can k you look up

"squawk box" on yelp >> as a location >> as a -- i want to see what -- >> what your ratings are >> no, because i was going to write my own and just say joe is unbelievable >> is that who's writing all those tweets >> now i've blocked everyone else but yeah but can't you do that on yelp? as a restaurant, write your own. >> restaurants, coffee and tea >> you're not supposed to. >> can competitors write reviews? >> yes of course. that's the problem with half of these things >> we don't really have competition. >> there's no competition. >> not for us. coming up when we return, shares of tesla. they're higher following the annual shareholder meeting the company giving upbeat guidance on production we will give you the details after the break. whoooo.

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tripadvisor. the latest reviews. the lowest prices. stocks in the green and nasdaq coming off a record close. but are there looming market threats investors should be watching that story straight ahead. job openings hitting a historic high along side one problem. worker shortages but one state is getting creative we'll explain.

plus elon musk in the spotlight after a rocky period for tesla. >> this is, like, i'll tell you, the most excruciating hellish several months i've maybe ever had. >> the highlights from the news-making shareholder meeting coming up 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. welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross sorkin let's get a check on the markets right now. futures up triple digits right now. that's close to the best levels we've seen so far. nasdaq indicated up 20 that would be another new high on the nasdaq which has been diverging a little bit setting new records, s&p

indicated up 8.5 or so treasury yields have been going back up. we got down in the low 2.8%. now back up. the bund is all the waydown on yield where it was before all the italy stuff. >> although in italy yields were pushing up even this morning pushing higher on concerns what the government is going to do. you'll see some divergence in those cases too. >> just not worried about it will i you know what i mean it's too nice there. no doesn't matter what form of government they have it's italy right? >> great vacation spot >> won't change the food or the wine or the scenery or the sunshine or the people >> yeah. >> what? >> nothing love italy >> we worry so much about -- life's too short >> we had somebody the other day saying it was rough when some of the -- when rome was sacked, but they survived that too >> and think the greeks. how about those islands? how can you screw things up when

you have the greek islands for tourism? you got to work hard to not have a -- you know? in the meantime, why don't we get to the headlines this hour shares of tesla are higher in the premarket following tesla's annual shareholder meeting elon musk keeping the combined chairman and ceo roles also struck down a proposal to remove three board members here's what musk said about model 3 goals. >> we just did a big set of upgrades and we're spooling out the production lines again and i think it's quite likely that we'll achieve 55,000 -- 5,000 cars a week number >> that is the number he needs to hit in order to go back up. also making mentions by the way about a new factory in china which is giving a little bit of a spark to the stock as well quarterly earnings out this

morning for jewelers in its latest quarter expected a loss comparable store sales did fall a tenth of a percent. that was a 2.8% decline. however, cignet did cut. did get an update to buy raising the price on the stock from $193 citing the health insurer's market share gains also making headlines, china's zte. reportedly signing a preliminary agreement lifting a ban on buying from united states suppliers. this would get the firm back in compliance then became a bargaining chip of sorts in this big trade war or tariff debate depending on how you want to position it. between the u.s. and china >> let's talk about those trade

war fears. rising yields also fed tightening what other challenges could be facing markets in the near future mike santoli joins us with more. >> good morning. yeah those fears of course could flair up again but the markets have assimilated those in large measure i do think that, obviously, it's not going to come as a surprise if we get more trade aggression or if the fed tightens again but here's a list of things with the market feeling more comfortable, obviously, perhaps today getting to a three-month high in the s&p 500. what you might look out for that isn't quite as obvious one of those things, i call it goldilocks goes awol also without a lot of interest rates coming down a little bit in terms of bond yields. if we actually see a bit of a flare-up in this idea that the economy is running tight and labor markets, logistics, look at the ism reports all that stuff would lead to potential risk number two which is the fed is perfectly happy to keep a fourth fed rate hike.

that would perhaps get a signal next week about that the ecb is also meeting next week so a lot of things are out in front of us. then a global financial mishap we're at that part of the cycle that you have to be alert on this one thing would be as a global market shortage. basically you see these little bit of flare-ups of u.s. deficits, fed tightening, balance sheets going down. so those are the things. but right now i don't know what you do about that. i don't think you necessarily get defensive. >> it just feels like there's this push and pull on the markets. this week we care about fundamentals last week we cared about global trade wars >> we cared about italy for a day. >> day and a half, maybe but it's this back and forth, frenetic pace for the market we care about this, don't care about this you have to ride it out. >> and you have to acknowledge that the market has reset itself in the last three or four

months >> and earnings power keeps picking up as all of that's happening. >> right that's one of the pushes in support, yeah. >> all right thanks joining us now chief global strategist and head of emerging markets at morgan stanley investment management. got a fascinating piece, an op-ed piece in "the new york times. titled, the millionaires are fleeing maybe you should too arguing that the exodus of millionaires could suggest or at least espre certain things about nations. since you're an expert on emerging markets, let's start with that. then we'll get back because i'm fascinated by the millionaire story and hope that some day, like, join andrew in the ranks of that. but just heard mike say things have gotten a little bit better after the recent selloff emerging markets were supposed

to do great, and they didn't as much as people thought. was the demise greatly exaggerated? are they okay now? ready for a rebound? >> yeah. compared to a decade ago emerging markets are still 10% 20% lower in market terms. the u.s. stock market since then as we know is up about 70% or something since it was where it was a decade ago so i think that emerging markets have done a lot of the workout in terms of the excesses they had. that's where we've had to sign the performance. i don't think this is the start of a new bear market and emerging markets it was perfectly natural to get these kind of wobbles in the first year or two. so i still feel that there's plenty of opportunity available in emerging markets. a lot of the excesses have been cleaned out. of course there are pockets that are of concern

this har this goes back to the millionaire conversation >> so ken auletta just said follow the money so you can follow the money. and we know about states when states within the united states intraunited states, when they become less friendly to people with money, they move it's different for countries it's interesting watching the inflow and exit of millionaires. i almost look at it -- if you have a million dollars, you choose where you love. a lot of people can't. when you get up to the point where you can be mobile, that dictates it. turkey you just mentioned huge exodus of millionaires at this point. i guess the currency hasn't been helping that >> yeah. in world trade, there are 15 million millionaires

the number actually changed. just hundred thousand last year. you know -- >> but of the hundred thousand who moved, were they billionaires like, you're probably not talking about somebody who just has a million. >> that's the base taken by this research data set for this here's the fascinating thing i found. that the locals know better than foreigners which is that we typically find that in terms of crises or bounceback in financial markets, locals know better than the foreigners do. the foreigners are usually lost in terms of getting into a market and getting out of a market that's the issue with turkey two. the local people have been exiting. so last year, 12% of the turkish millionaire base fled the country. that's a staggering number and the only country in the world with numbers similar was venezuela. tells you what is going on >> for the united states, there was an inflow but flat with

previous years france got a lat and supplanted england because of brexit or something >> yes >> france is a little -- not quite as bad >> but france in terms of, you know, persistence exodus >> they hate millionaires. >> under macron, you've seen a slowdown in exodus but britain was a safe haven for many millionaires. we saw exodus begin last year. we spent so much time on politics and trump, et cetera. but what the money is really telling you is that the markets and don't care about politics too much or they on one hands are concerned about what's going on, other hand they see the positive with the tax cuts. and this sort of thing is a wash so i think here the best strategy has been to ignore the politics but in emerging markets, it is extremely important. >> it's not just politics, i would guess.

if i was a millionaire in turkey, i'd get out too because of the violence and safety for my family. how much is safety concerns? venezuela, i think of -- those o r not just i don't like who is the president. >> but policy feeds sbiet. in terms of, like, what's happening in turkey, what's hands in venezuela look at the other countries as a concern. there you can argue like in india it had to do with the tax. in russia, the reasons obvious very interesting is where are they going >> where are they going? >> places like canada, australia, dubai >> but not the u.s >> it's a bit of a wash. >> we got 9,000 new ones we got 10 million here or 5 million? >> $5 milli5 million. >> and only a hundred thousand moved. >> yeah. in the world these people don't move until there's a really good reason to.

they're significant home buyers. >> what about new jersey i keep talking to andrew about -- people are -- millionaires move to new jersey, andrew >> don't look at me. >> you'd go north, wouldn't you? he's a connecticut -- you are. if you go, it'll be greenwich. >> vermont >> yeah. >> if you zone this more about intra-states with the u.s. more of many countries in itself. but i think that the key message here for me is the fact that always watch what the locals are doing. they have a tendency of reading too much and also thinking that in many countries you have leaders who are trying to quote foreign investment all the time and forget that is really the domestic people which sort of send an important signaling effect about what's happening in the economy. >> it's like rats leaving a sinking ship if you can get off, you're going to swim off. >> that's the way to put it.

i think the key thing here for me is about emerging markets there's been a lot of collateral damage in what's happened over the last few weeks and i think they're basing a lot of opportunity which is emerge out there. for example, justified but after that providing in the world this year is like the polish as the euro's been sold down, it's sort of gone down with it so i think the time has come to sort of pick and choose these kind of things and the other big problem is it is so tech dominated now look in terms of the waiting of taking emerging markets. 30%. so it's very much like the united states now. >> thanks. >> good to be here >> all right good to have you all right. when we come back, facebook defending its decision to partner with chinese eleroni firms including one at was flagged by u.s. intelligence we have the details on that coming up. but first, a story in "the

wall street journal" asks why food companies can't figure out what americans want to eat we will talk to the ceo of sprouts farmers market about changing consumer tastes th'sexrit ren "squawk box.

welcome back to "squawk box," everybody. the futures this morning have been higher all through the course of the session. take a look -- or through the premarket session. you're going to see the dow futures are indicated up 143 points s&p was up yesterday and it's up another eight points today and then the nasdaq indicated up 19 after closing at yet another record yesterday we'll see where things go as we head towards the opening bell. just about an hour and 15 minutes away america's food retailers have been churning through the c suite to address the new era of eating and preferences from consumers. our next guest is changing the store concept and the product portfolio. joining us right now is ami amin meridia that's the founder of sprouts chain. thank you for being on >> thank you for having me good morning

>> for those unofficial with sprouts, tell us about it. >> sprouts is different because we were born with fresh, natural, and organic in everything we do we're pretty unconstrained we don't have the center store, cpg products in our stores so really have been for the past 15 years since our founding have been focused on fresh, natural, and organic food >> that center of the store is something that's come under assault and attack the last few years. you think about campbells and denise morrison just stepping down what is different these days with consumers what do they want to see and how do they address that >> i think consumers are changing in two ways in what they're eating and how they're eating and with the what, consumers are eating more and more fresh, natural, and organic food. there was a $20 billion business today it's over a $200 billion business it's becoming more and more

mainstre mainstream along with other companies, some of them have done a good job you know, they've got capability constraint thinking. and they're trying to make a better product, better chips, better soda to remove something from the natural taste of that set whereas you have a lot of new emerging brands who are unconstrained in the ingredients, attributes, and flavor profiles. so they're able to adapt to consumer preferences today >> you certainly identified this trend from shoppers early on but you're also facing a lot of competition yourself i think about places like fresh direct or even whole foods where under amazon they're now lowering prices on other things so your competition has gotten stiffer too. what do you do to keep up? >> you know, as a company, we've just continued to really understand the customer and evolve with the preferences over the last decade from 2010 to today we've continued to evolve our store in the fresh, natural

deli departments, private label. really focusing on friends and what that's allowed us to do over the last decade is take our average store sales from $12 million a year to $18 million a year and we're not done yet. really it's all about understanding the types of food, the types of preferences, how consumers want to eat. where ten years ago or 20 years ago customers would generally buy food and take it home and eat -- cook it today customers want it many different ways they may want quick heat products they may want a product where the retailer is doing all the work for them but they want to cook it in the oven at home. or they may want it delivered to their front door so all of these preferences continue to evolve and we're evolving with them as a company. >> great news you can go from $12 million in sales to $18 million in sales per store as you're doing this, but what's happening to your margins during that time? >> you know, look. certain categories in the store

continue to be more competitive today. so you can try to cut costs or try to run the top line. as a company that's what we're focused on when you run the top line well, our new stores are getting stronger and stronger. our new stores used to open at 250 a week now over 3,000 a week. which is over 15 million a year and they continue to ramp from there. >> what about your margins that's sales numbers again what's happened to your margins over that time >> what's interesting is the mix has changed. but if you look over the last five years, our merchandise margins have remained relatively consistent over the years. but some departments and categories in the store have lower margins but we've added fresh foods and other places we've been fortunate as a company to keep our merchandise margins relatively flat over the last years >> thank you for your time good to see you. >> good seeing you again

when we come back, facebook says it has struck partnerships with chinese companies included one that was flagged by officials. we'll talk about that when we return plus watch out youtube facebook-owned instagram could be coming for you next we will explain. because, when you really, really want to be there, but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies see it- and see it through-with digital.

facebook admitting it has data sharing agreements with at least four chinese firms one of those companies is a chinese telecom giant huawei who has been flagged by u.s. intelligence officials the agreement dates back to at least 2010 telling "the new york times" all data stayed on the phone and not on any of the company's servers. >> andrew and i were just talking about this figuring out the technical aspects of it. >> you had to give over access to this -- to be able to build it into the operating system enough so that people could use facebook in these other ways >> i stuck with myspace. i have none of these issues. >> smart stay out of it >> ai've never been on myspace

or facebook. we're going to take you live to the cme for the numbers and then later, the worker shortage one state thinks it may have the answer to this problem steve leisman's been following this story what can you tell us >> yeah, becky the government says there aren't enough workers and employers saying they can't find enough skilled workers. we'll tell you about a solution we heard of when we come bk. t srtinigh school at the lowest price... is as easy as dates, deals, done! simply enter your destination and dates... and see all the hotels for your stay! tripadvisor searches over 200 booking sites... to show you the lowest prices... so you can get the best deal on the right hotel for you. dates, deals, done! tripadvisor. visit tripadvisor.com

♪ we are just seconds away from productivity, labor costs, and trade deficit data and no word on whether president trump looks forward to seeing any of these numbers we have not heard. but the stock market's up 150 points let's check out the 10-year. 10-year was at about 2.95% or so inching its way back towards 3%. and we have a pretty famous person standing by at the cme.

and on set we have leisman. >> raised his hand >> he did. there was no spit ball in my straw, just so you know. >> he didn't see what we were doing back here. >> it's just when you can see yourself in the background and you see him, you feel inclined to do it rick santelli standing by at the cme. the numbers please you were the famous guy i was alluding to. >> well, q1 final read on unit and labor costs. wow. these numbers have really moved a lot. productivity up 0.4% and it's just not enough they haven't moved nearly enough and this replaces what had been in that spot before the final read that was 0.7%. we lost 0.3% we were expecting a number close to where these preliminary points had been set up and unit labor costs up 2.9% that's darn close to expectations it's 0.2% higher than our last read and if you want to look at the

other number that could be big, it's april trade balance of course with trade being center stage these days, minus $46.2 billion. that's a little less red than we were thinking. we were looking to a number close to 50 billi$50 billion. yes, we're at 2.95%. happens to be the mid-point to all that volatility we've had due to italy which seems to be coming back in a way not necessarily with the transmission into the markets as much but, yes the yield close on a high side 2.78% on the downside. 2.95% in the middle. that's where we sit. important level, joe beck y becky, back to you >> all right rick, thank you very much. the famous rick santelli now there are worries about worker shortages steve leisman will tell us more.

>> i think the productivity is a charge it probably will snap back in the second quarter but one of the greatest challenges we face economically, getting to those 3%, possibly 4% growth numbers is bringing up the productivity number in the efficiency of the nation which is why some of the tax cut ideas make a lot of sense which is to incentivize some of the productivity and capital equipment pressures out there. >> you hadn't thought about the lack of capex being part of the reason >> it's a huge issue but if we get accelerating economic growth, we're going to be using the resources of the economy. >> that's what we were holding out for. >> it's what you got >> you just said -- did you say possibly 4%? is th did that come out of your mouth? you said it. >> yeah. 3%, 4% 4% is a good number. who'd you have on yesterday that

was talking about 4% >> howard shultz >> yeah. anyway, those are difficult. but i do want to talk about this other thing, joe the government reported yesterday there are now more job openings in the united states than there are workers to fill the jobs throughout the company, job openings remain unfilled and employers looking to hire say workers lack the necessary skills a program in louisville, kentucky, attempting to address the problem. and address it in high school. it may seem strange and a little out of the box, but a card board boat race in louisville, kentucky, is seen as part of the solution to a national worker shortage problem it all looks like fun and games, but behind it are some serious high school students studying computer-assisted design or c.a.d. >> i was good at math. i liked drawing but once i got to the c.a.d., i was like, wow i really like this i could do this. i'm really good at it.

>> the card board boat regatta is for students who spent the year studying sophisticated auto c.a.d. and machines to prepare for careersin commercial desig and engineering. their task float a boat with nothing but cardboard and duct tape. kylie and her classmates are just a handful of the more than 17,000 students pursuing career-specific education through the innovative academies of louisville program. the city's answer to the economic challenges that faces with a low 3.4% unemployment rate it's not far off the national rate at 3.8%, near a two-decade low. >> business was used to having labor show up at the door ready to go. there was more availability of labor. but then business wasn't as complicated. >> so far 85 businesses have partnered with the public school system >> it's one of the best kept secrets that we have here for louisville is that we have an

aviation program an aviation program is very rare i think it's probably, if not the only one, but the very few that's in the country. where a young person can come as a middle school student, go all the way through high school and obtain their license >> we provide that specialized training but also those other skills that we want kids to have the communication skills the collaboration skills the persistence. >> skills you might learn in a cardboard boat race. the kids learn a little something along the way about computer design, the limitations and possibilities of duct tape, the job market, and life guys, whether there'll be enough workers to fuel economic growth is such an important issue federal reserve banks are involved in helping foster programs like these in their own districts. all this raises the question about trade school versus traditional four-year degree we'll show what the kids and teachers in louisville think about that later on today. >> that was something that ken

langone made the point yesterday. he was our guest host. he thinks education is the most important problem facing the nation if you want to change things and get everybody on the level playing field, that's where it has to start his point is you should probably go to trade school instead of four-year colleges >> that's absolutely one of the solutions out there and one of the debates out there. what's interesting here is that trade school is often thought of something after high school. this begins as early as your sophomore year and there are 40 communities like this that are part of this next generation learning and ford is involved with this in part because it's their foundati foundation's mission but also the worker shortage one of the pieces we'll do later today, we're in a toyota dealership and there are 30 bays there and a third or a of them are empty because they don't have mechanics. an auto mechanic is not the job it used to be. it's a computer job. >> no. these cars are computerized. you can't do anything at home anymore. >> what is interesting about

this, the more i think and research this, the calculation of trade versus four year school is a very sophisticated and difficult economic calculation >> my car is in the shop today for a software update. which is -- you're kidding me. >> here's the thing. you may earn as much as a third less if you don't get a four-year college degree but you may earn much more quickly that money and if you go for a four year degree and you don't graduate and end up with that debt, the risk is much higher that you'll have this debt and not be able to pay it off than if you went to a trade school. so difficult times interesting times in that we don't have these workers out there and you just keep hearing it from employers about the lack of skills. >> i thought you took your car in yesterday >> i did i left it there overnight because i left the wrong keys. >> is this second quarter over this month >> yes, it would be. june, yes. >> okay. that's my first question >> uh-huh. >> i knew that when would -- >> i had to think about it >> when do we get the first

read >> some time in july after the end -- >> what is your work >> my work is showing 3.7% at the moment which would kind of offset what we did in the first quarter. and we might be able to do more. >> so you don't choke on it when you say it when it comes out. >> why would i choke on it a person who sat on your left 15 years, all i'm saying is more growth regardless of who is president >> practice! i'm just saying practice in front a a mirror >> i've been crunching the numbers and looking for where that extra percentage point has come in the trump administration and it's an interesting story. it's a very interesting story. >> now, let's get to -- i just -- >> no, no, no. this is the part you either don't want to hear i want to know >> it's capital equipment and a lot of it may be from the oil but there are other sectors as

well they only have data through the third quarter to get that specific the consumer's done a little bit less we'll see what happens when the tax cut starts working its way through. it's an interesting discussion and it's worth having. if something different is going on in the economy, how durable is it and what are the sources of it are important discussions to have? >> 3.7%. 3.7% i want you to get it out >> more growth is better coming up, fresh video of the first publicly available flying car i'm nervous. google cofounder larry page's latest venture and closing the gap. julia boorstin is with us on how to combat the gender imbalance in silicon valley. >> silicon valley has a bad rap for diversity. now a group is trying to change

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♪ uber launching its new bike share service in europe. this comes after they face a rough ride in europe where traditional taxi drivers have

turned violent and court bans have forced it to shut down services they bought jump, it's a dockless bike service that has rolled out in san francisco and washington check it out we have cool video this morning. larry page's single seat flying machine. it's a 250-pound vehicle called flier. you fly it over the water. the company behind it is funded by the google cofounder run by self-driving car pioneer sebastian turn among perspective business partners and others and is already taking preorder. no word yet on the price i think it's going to be -- it's a recreational vehicle >> but do you need a license >> no. you don't. it's a joy stick you do it and apparently you almost can't crash it because it'll automatically come down. >> you can't crash >> and you can't sink the

"titanic." >> you literally can't crash watch me >> there's something tested in new zealand that is a true self-flying car. that would be a self-flying taxi not a recreational thing over the water. >> i don't even like drones in the air up over my head. >> that is a toy compared to this >> i don't like drones overhead. we've seen those crash on people this should be regulated over the water, but people swim. >> i mean, it's like having people who have boats and water skiing you know, by the way, i just tried those things you ever try the things where you levitate out of the water? you know what i'm talking about? you put these boots on >> yeah. >> i did it on vacation. it's harder than on the video. >> if you lean the wrong way, you can't -- >> icouldn't even lift up properly exactly. >> never mind. move on. >> thank you, becky quick. >> crash in the water, you can't hurt yourself. yeah

>> thank you for changing the topic. with women comprising less than a third of employees at a range of tech giants including apple and google i apologize for laughing one group of women investors is setting to change all that julia boorstin is here in new york with us to tell us all about it >> thanks, andrew. these family investors say silicon valley's gender gap is back to a diversity on cap tables these group of women, six angel investors, say changes to the cap table which is what they're pushing for will drive change in leadership and ownership of silicon valley start-ups seema became coo of video chat platform house party while pregnant with her second child there's a prototype here of the start-up founder being white, single, young male

you know, who's dedicating their entire life sustaining on ramen noodles to create an empire. that doesn't look like me. >> she was convinced to leave her executive job at tumblr and co-own house party >> it's who is going to make money when a successful start-up exits. it is the road map to power in silicon valley >> #angels is focused on getting start-ups to allocate more shares to help women they hoszenst dof events to discuss the cap table gap. and they've invested in companies over three years their work with vcs and founders to place at start-ups is already having an impact as she makes sure female employees are well represented on her company's cap table the next step for the angels is

pushing for start-ups to disclose the diversity of their cap tables just as we've seen the tech companies disclose. >> what's been the reception, though -- i mean, from male-led companies early on at the very genesis which is the goal of this saying this is what we want to do? >> yes actually, it's interesting because this group of women has a network of hundreds of women in silicon valley. and a lot of these male-led start-ups know they want to get female engineers on their team they want to get female creators so they can have a diversity of thought and opinion. so they're working with this group with #angels saying do you know any women who could be a good coo. or we're looking for female engineers in this area so they all work together and then say if you attract women with equity to your company early on, you'll have a more diverse company which could benefit you in a lot of reasons. and these women could get in early on the equity of these companies as well. >> how early are they coming

>> we're taking angels >> when there's only two or three employees? that's when it has to happen, right? >> i would say two or three employees for a repeat entrepreneur, but if you have a company with 10 o for 15 employees, you could still bring on a cofounder and scale from there. >> they don't have an excuse remember is zuckerberg in front of congress. they say are you going to hire any conservatives to look over things he goes, we've tried there aren't any in silicon valley but that's not an excuse you can use here okay, sorkin it was very revealing. >> he didn't say it like that. he said the valley was -- >> he said we've advertised for them, there aren't any we can't -- >> well, if -- they've had some people who got kind of chased out of there for having different viewpoints >> 50% of their population are women, they're trying to help both the vcs and the founder

find women who are qualified to fill these roles. >> what did you say about andrew on vacation? i missed that. >> you weren't paying attention. >> what did you say? >> i'll step into it i'll tell you later. go to break. >> okay. what is all this my twitter feed is -- >> i was amazed. >> did i miss it >> you missed it >> is it true? >> no. >> all right all right. when we return, we're counting down to the opening bell on wall street find out what jim cramer is watching ahead of that here are the futures right now let's see if we can get that board up there it is. yes. it's up 140. we'll be back.

down to the new york stock exchange jim cramer joins us now. and truly a renaissance man. we've been talking about tesla a lot. the question i have. the manufacturing process. now they're wondering supposedly they start from scratch and they didn't have any of the problems that the big three have in terms of manufacturing they took a fresh approach

now i'm hearing even that is being called into question and they have a couple of ways of doing it do they know what they're doing? is it a step ahead for auto manufacturing. what do we believe >> great question. i know behr came out with a note saying they're going to have no problem and you'll see a lot of building and the cash flow will be okay and they don't need to finance. but there's someone on the other side of the trade here in tesla but i have to tell you that the report that i read is so positive it's going to call into question the big bear's argument at least for today 24 hours believed it's going to work and, joe, questioning if they knew how to made it like henry ford figured out how to mass produce. >> it matters whether they do 5,000 by the end of the month. >> they're saying they can they did a report when they

first issued saying we can bust the shorts here. i mean, this is one. it reminds me of herbalife you have a bunch of guys saying it doesn't work. and another group lead by karl icahn said it'll work. we're waiting for icahn to appear here, proverbial. when the wolves bite. >> i don't know how -- you know, if i look at the model s it's like ron baron and i want in it's amazing but there's a lot to get the model three to get to the model s. >> yep. >> it matters whether you can do it and it matters if you can do it for a price. >> i agree elon is very convincing when he speaks he's got gravatas when he talks.

>> right to start from scratch and be ahead of beemer and gm and do it better it seems like they have more money and more facilities and they should have been able to borrow some of his ideas and, you know, it doesn't seem like there's a barrier to entry. >> like lamborghini is handmade. people like that people like ferrari which is handmade look at that stock i know at a certain point, if they don't need financing, then the bulls win. if they need financing the bulls win. -- lose. one of the most famous facing in horse racing bob bav earth will join the game at 10:00 a.m. eastern

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. "squawkbox" instagram is pivoting to longer video can anyone say amen. facebook-owned social media platform is allowing users to post videos up to an hour long right now they're limited to 60-second videos a survey showed that youtube was the dominant social media network. if you could post up to an hour, i think it could be a game-changer for instagram and video. so many people use instagram it could become a new platform for not just sharing but professional services decide we're going to do a half hour show on instagram. >> i can't believe it's an hour. 60 seconds i would like to see more than that but that's a big jump. it's going to change the game. a final check on the markets. the futures this morning have been up through the day. we're going to see all through the morning.

right now the dow futures like lie they open up by about 130 points s&p futures up by 6.5 and nasdaq up by 11 it's a little bit lighter when we came in this morning nasdaq was up by 20 nasdaq set a record in the last two sessions we'll watch that right now it's time for "squawk on the street." good wednesday morning futures are strong after four days up for the s&p and nasdaq aztec continues to reassert its dominance. volatility falling to old familiar levels. europe is mixed. q1 productivity disappoints. labor costs up 12.9 -- 2.9 apple, amazon,