and more feds speak. this time chairman powell sits down with "60 minutes" to talk about the economy, markets and his own job security it's monday, march 11st, 2019. "squawk box" begins right now. ♪ >> announcer: live from new 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 andrew and joe as joe mentioned, the u.s. equifutures are under pressure after a down week for the markets last week. the dow was down by 2.2% last week nasdaq was off even more it was down by 2.5 this morning you can see both the s&p 500 and the nasdaq trying to make a comeback, pushing into the green the nasdaq up by 22. but the dow indicated down by over 100 points because of boeing that stock closed on friday at

$422.54. this morning it's indicated to open up around $385. a big decline. >> over 200 points. >> for that dow component. we would be looking at the dow futures in the green if it weren't for boeing shares decline. we'll look at boeing in just a little bit you're talking about ten years into a bull run. it was march of 2009 when things first started really running higher we'll talk about all of these issues. >> dow only closed down 20 points after that jobs report. >> 250 points on boeing would put us up 150. so nasdaq and s&p are -- you know, but boeing is in the s&p as well. that's affecting that, but not to extent it is in the dow. >> let's look at what happened overnight in asia. obviously talks around the trade talks with china have been a huge indicator, too. we'll get deeper into that story in a little bit, but the

shanghai composite ended up by 2% this morning. and the hang seng up by 1% the nikkei closed up by .5% point. europe some of the early trading taking place there, green arrows for most of the markets. the ftse is up by better than 1% is gains of the dax and cac better than .2% finally take a look at what's been happening in the treasury market here in the united states, yield on the ten-year last week ended at 2.627%. this morning the yield is a little higher at 2.648%. >> okay. let's talk about the big story of the morning, crisis for boeing, human crisis as well boeing shares under pressure this morning after a second crash involving boeing's 737 max 8 aircraft in less than five months an ethiopian flight crashing shortly after takeoff, killing all 157 people on board. the pilot reporting technical problems before the accident which is a little different than the last crash we're going to

talk about this. the cause of this crash is going to take weeks to determine boeing and the national transportation safety board have sent teams to the crash site back in october, lion air boeing 737 max 8 crashed into indonesia killing 189 people now, here is where the story turns. china this morning suspending commercial flights of boeing 737 max 8s after contacting both boeing and the faa to ensure flight safety and unprecedented step a lot of people putting this also in the context to some degree of even the trade war with the united states boeing saying this morning the investigation is in its early stage, but at this point based on the information available, we do not have any basis to issue new guidance to operators. we'll have a lot more on this developing story, of course, throughout the morning let's take a quick check on boeing's stock we said it was under pressure and it is. off almost 9% right now. fed chairman the other story we knew about this interview on "60 minutes," powell giving a

rare interview last night, taking an up beat tone on the health of the u.s. economy and further explain what had the fed means by being patient >> patient means that we don't feel any hurry to change our interest rate policy what's happened in the last 90 or so days is that we've seen increasing evidence of the global economy slowing down. although our own economy has continued to perform well. >> powell also addressing his relationship with president trump. the president's been critical of the fed chair's job performance, but powell says that has not influenced his policy decisions and he also defended the fed's independence >> i don't think it would be appropriate for me to comment on other elected officials or on the president. >> can the president fire you? >> well, the law is clear that i have a four-year term and i fully intend to serve it. >> so no, in your view >> no. >> all right we'll have more on powell's "60

minutes" interview and the reaction later in the hour. couple other big stories that we're watching this morning. president trump's fiscal 2020 budget proposal will call for a 5% cut in non-defense spending while increasing spending on military and border security officially be released late they are morning includes 8.6 billion dollars in border funding for the wall as well, which will no doubt be a big point of contention for democrats also the government set to release january retail sales that happens at 8:30 a.m. eastern time this number will be widely -- more widely skrcrutinized than usual after 1.2% drop in december the release dates for the retail sales numbers have been later than usual because of that government shutdown. and gasoline prices are on the rise the survey showing prices of 6 cents up over the past two weeks. that's to now 2.50 per gallon. still .9 lower than a year ago in the meantime, want to get over to china and talk about white house economic adviser larry kidlow's comments, saying

that he's bullish about striking a trade deal with china by april. eunice yoon joins us with the trade mood in chie nana and als want to talk boeing with you as well, eunice >> reporter: sounds good, andrew well, chinese officials have been also expressing optimism, though over the weekend at the national people's congress, some of them were pushing back in kind of subtle chinese ways. so, the governor of the central bank had said that both sides had reached an agreement in a consensus on the currency and crucial issues but said they discussed the need to observe the autonomy of each other 's monetary policy. just because the currency is weakening, it doesn't necessarily mean we're manipulating it, it could be of the economic conditions. the central bank governor also said as part of the trade deal that china would absolutely not engage in competitive

devaluations to help its exporters. so the stumbling block from the u.s.'s perspective has been how do you enforce that? how do you make sure that beijing sticks to its word the u.s. wants to have the ability to reimpose tariffs and also don't want china to have the ability to strike back the chinese don't really like that idea. in fact, the vice commerce minister eluded to that over the weekend saying that with china is okay with a, quote, implementation mechanism so they don't call it an enforcement mechanism, but that that mechanism needs to work both ways so, this lack of progress now has been raising speculation that president trump and president xi aren't going to be meeting as soon as people had thought, as you know, the expectation was for march. now that's not necessarily the case however, the vice commerce minister he didn't comment on the timing, but he did say that the officials here have hope

he pointed to the latest round of discussions in d.c., saying that the vice premier ate a hamburger for lunch and that trade representative robert lighthizer had a chinese dish of chicken and eggplant so, he said to him and to the chinese, that's an indication that the two are looking to find common ground. >> eunice, back to andrew's point, he brought it up in the boeing story earlier, is there anything -- any hint you're hearing that what china is doing right now in terms of grounding that fleet has anything to do with the trade talks >> reporter: i haven't heard anything that it's directly related to the trade talks from what the civil aviation authorities have said, this is purely because of safety reasons. they said that there were two air crashes, which, of course, are the ethiopian airline crash over the weekend and then five months ago the lion air crash and that the two looked very similar and both involved 737

8s, the max. and so, for that reason, they said as of today they're going to be suspending boeing aircraft, that particular aircraft, in domestic flights. so, they also had put out a statement saying that they're in touch with the faa and with boeing and that once they could determine whether or not the aircraft was the reason or not, then they would make the next move. >> if it had absolutely nothing to do with the trade -- absolutely nothing and no one anywhere, anywhere had said it, don't you think we would still ask the question still to ask it even if no one intimated that or no one's eyebrow twitched, don't you think people would -- >> my eyebrow twitched but in terms of official, official lines, no, i have not heard from the company i haven't talked to any officials who said the two were related. >> do you think if they had that

chicken -- >> what was going on -- wait, wait, give you a little context. also over the past 24 hours there's a lot on social media where people were actually giving each other tips on how to avoid getting on to a boeing 737 8 max plane. >> we're all wondering about it here. >> i look at my flights for tomorrow. >> the question i had -- >> there were apparently there's an app that you could use and that it could help identify the aircraft so, with that in mind, you know, the civil aviation authorities want to make sure that people don't get too nervous in flying. in fact, already we were seeing today just looking at the different flights how the airlines have been switching over to 737 800s, which according to -- >> eunice to put a fine point on it for one second, in china there's only 96 of these planes, correct? >> they have like half of the flights -- >> yes. >> so the question is how much in terms -- this is the question in terms of what could happen in

the united states relative to china in terms of delays, what it actually does to the economy, what it does to productivity, is there a sense this is going to create a meaningful problem in china because they're going to ground these planes? >> not -- no, not yet. that is because they've already been switching over a lot of these model. we've been looking at the models that they're switching to and a lot are 787 800 models which phil mentioned to me and explained to me that this is a model that is older but makes a lot of sense because the number of seats are the same. we also saw switching over to 737 700s, which i presume are older than the 800 and also to some air bus planes. they've already been switching over in order to make sure that there isn't any disruption to air traffic. >> but the reason why people are raising their eyebrows is that typically, at least historically, when there has been a crash -- >> even if there wasn't, you still would. believe me you have those big eyebrows to

raise, too. >> typically the home country, if you will, that's made a plane airworthy or not, has been the leader in terms of determining whether a plane will stay in the air or not and this is being done clearly -- >> i think cayman islands, too. >> ahead of any decision or even investigation by the u.s i'm not saying it's the wrong decision i'm saying that because this decision has been made in the midst of all this, plus you have this trade war, that there's a conversation happening. >> whether there was or wasn't there would have been a conversation eunice. >> yeah. >> you just mentioned chicken. this is a bigger story in "the wall street journal" today, which did you see this we've been breeding chicken so quickly to develop large breast muscles for people who like breast meat that there's soming a normalities result called squishy, the meat gets a little squishy and calling it spaghetti

meat because it pulls apart so easily or too leathery so that you can't cut it it's like woody breasts it's referred to but we talked about chicken many times in the past. >> see, that wouldn't -- but that wouldn't be a problem actually out here because asians generally like dark meat, more than they like white meat. so if you're growing all the chicken breasts, keep all the chicken breasts, yeah. so over here people like the chicken leg or they like the feet. >> we're called "squawk box" and we have a long-running conversation about getting skooefed out about chicken if you ever seen the way it's packed and they put it in there and a lot of times there's stuff that goes in with the packaging that you wouldn't want in there. just reading this is not good for the first thing in the morning, was it? >> the time they've cut -- they've cut the time in half to raise a 6.3 pound bird to 47 days half the time -- >> when you do that, when you're doing this kind of stuff, this

makes you wonder about all that. it's breeding. it's not gmo-type stuff, right this is just breeding to get -- i've often said i would like an eight-wing chicken so you don't -- you can -- people love wings. but any way. >> these are changes in chicken that started showing up in 2010, 2013, 2015 these are pretty -- >> did you read this, andrew you won't play along with us. >> i saw the article it was funny i thought it was clever. >> you don't want to talk -- you got other things >> you guys, but actually a couple years ago, joe, i know you have been talking about chicken a lot over years i remember one of the first conversations i had with you was enlightening you about beer can chicken. you were asking about that. >> that's a song, too. >> beer can chicken. the way you cook a chicken, you stick the beer can yeah >> we actually will be looking at if -- we'll look at tyson and pilgrim ice pride and perdue. we'll start with helen of

troy it's reportedly putting its beauty products unit up for sale, according to"the wall street journal." the division makes products like a pert shampoo to fetch about $300 million in a sale according to analysts. cyber security software maker fire eye was upgraded from overweight to neutral at jp morgan chase it is undervalued and its recent billings have been strong. still to come this morning, another major brexit deadline ahead for british prime minister tereheresa may let's look at the biggest premarket winners and losers in the dow. we told you already that the biggest loser is going to be boeing winners this morning, start out with apple up 1.8% followed by caterpillar and nike

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finally approve it less than three weeks away march 29th is the deadline how can may get from here to there? well, by march 12th, she must offer parliament another up or down vote on her divorce agreement with or without revisions. if lawmakers approve it, she could still try to make brexit happen by march 29th but it's possible she might need more time to rush through all the necessary legislation. in which case, she could ask for brief extension to the deadline with an uncertain end date if her deal loses that first vote, may's promised a second separate vote on march 13th. that could allow parliament to decide whether it wants the uk to exit the eu with a deal, just not may's deal, or with nodeal now, if no deal win asthma jurorty, then without any comprehensive arrangements over trade, customs or citizen's

rights, britain would still leave the eu on march 2th, but if enough lawmakers dislike that option, may is guaranteed a third vote on march 14th to consider a possible extension. if that idea wins parliamentary support the uk would ask europe for more time to consider its options. theresa may wants to limit any extension to three months, but it's not clear whether the eu will suggest more time than that, demand less time than that, or offer no time at all. if that third vote fails on march 14th, the uk could be back to square one. the challenge here is that the parliament behind me, guys, is just so divided. there are so many fragmented constituencies, all pushing different options i tried to outline there. the real challenge for theresa may is finding a way through those various constituencies successfully in order to pass

her deal, but all indications so far is that she'll face the same problems she faced about a month ago and there's an overwhelming majority of mps who will vote down her deal. the real question is which route will she herself try to push for and could we end up with a postponement to brexit and all indicates that will be for businesses who have been nervous about the potential cliff edge at the end of this month. >> willem marx, thank you for that across the pond in london this morning when we come back right here on 'squawk" another big win for disney captain marvel dominating the box office we'll talk about it next as we head to a break, take a look at the futures. dow component boeing weighing big time on the dow this morning. dow up about 116 points. "squawk" returns in just a moment imagine traveling hassle-free with your golf clubs.

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>> you can watch all that tomorrow night catch two new episodes of "the profit" tuesday at 9 and 10:00 p.m. eastern time right here on cnbc disney winning big at the box office this weekend. the latest piece of its marvel universe "captain marvel" raking in more than $150 million over the weekend. the super hero pictures scored the biggest world opening of all time for a female-fronted film check out shares of disney this morning, you're going to see that they're up by about 4 cents. 113.85 last trade. coming up, powell speaks talking about the fed chairman sitting down with "60 minutes" we have some highlights, plus how the markets could react to all the comments coming out of the central bank, and much more, of course, on boeing following the weekend crash of another 737 max 8 jet. the stock down sharply today.

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♪ >> announcer: welcome back you're watching "squawk box. live from the nasdaq market site in times square. good morning and welcome back to "squawk box. shares of boeing are getting really slammed this morning. down about 35, 40 points, now 37 points following the fatal weekend crash of an ethiopian airlines jet it was a boeing 737 max 8. the airline is now taken its entire 737 max 8 fleet out of service in the chinese government ordered its airlines to do the same moments ago, we learned that the

black box has, in fact, now been recovered and boeing is shaving more than 250 points off the dow in pre-market if it were to open at its current level, you can see we're down about 113 points. so, you would see green across the board if it wasn't for boeing this morning. fed chairman j. powell giving an interview to "60 minutes" that aired last night steve, good morning. >> good morning. fed chairman j. powell in wake of strong kritism from the president sat for an interview with "60 minutes" explaining and defending fed policy and saying for the first time point blank he believes the president cannot fire him and reporter scott pelle asked him initially to respond to the president's criticism, which he wouldn't do. >> i don't think it would be appropriate for me to comment on other elected officials or on the president. >> can the president fire you? >> well, the law is clear that i have a four-year term, and i fully intend to serve it. >> so no in your view

>> no. >> powell gave a similar outlook on both policy and the economy about which he's up beat as he did in his speech the friday before the march 5th interview and his press conference at the end of january, but he gave some details about the fed's new policy of patience >> patient means that we don't feel any hurry to change our interest rate policy what's happened in the last 90 or so days is that we've seen increasing evidence of the global economy slowing down, although our own economy has continued to perform well. >> so, he put head winds from china and europe at the top of his list along with cyberattacks, which is we don't talk a lot about that but apparently the fed is worrying about it talked about highly leveraged firms and its concern there as well as seeing a big job for the u.s. is increasing labor force participation. powell also said concerns about the unsustainable u.s. deficits and the possibility congress might not raise the debt ceiling. now, in an unaired portion of the interview which cnbc did see

full transcript, they were closer to normal levels over long periods of time. >> what was the surprise for you? i know you're going to say you couldn't be surprised because you're steve leashman. >> less of a surprise than a question, response to presidential criticism or is this part of an effort by powell, which i'm pretty sure he had in his mind when he became chairman to be more transparent and more public. and i think it might be a combination of it. >> definitely reaching a larger audience. >> he went to press conferences after every meeting. there's two reports that we don't talk a lot about, we report on them, that he put out that have peeled back some of the layers of secrecy on bank supervision that didn't exist ahead of time. those efforts he generally has, he thinks the fed needs to get out front maybe and one of the problems it doesn't explain itself enough to the public. i'm not sure that will solve any particular problems for the fed because the fed needs to be

there in part to be the font -- point of criticism >> joining us now todd sal moeny, senior vice president, rob martin, what was with the jobs number? >> jobs number was a weak number, but you know, you do have to take that into consideration it's coming off several really strong numbers. we've been expecting the slowdown in the job market for a long time. we think it's tariff induced but just ask 320 was probably too high 20 was probably too low. we look at the job as running at about 150 in an underlying case. >> it's tariff induced, not just that the labor force is now shrunk on the the point where it's hard to get the type of worker that you want >> people have been complaining about inability to find labors we heard powell talk about that last night since 2014, 2015 and yet we keep adding 2 million or so workers per year. i don't think it's the shrinking

labor force that drove it this particular way. >> how do you connect the dots which tariff initiatives are causing the slow downs in jobs >> yeah. we really trace it back to the tariffs on china, chinese imports into the united states tariffs on $250 billion worth of imports, we think that's had an outsized effect on manufacturing and that's kind of spread into the rest of the economy from there. >> even though manufacturing has been better than it's been in the last 40 years? >> manufacturing has been growing fantastically. we're on top of that story all last year. just shocking strength in manufacturing, lots of new manufacturing establishments coming online, yet a lot of those establishments were reliant on chinese imports and it's a brand new startup you simply don't have cash flow to pay 25%. >> we had a bad week in the stock market, which was different than january and february but i noted that on friday had a chance to really get out of hand and it didn't. it was only down 20 points

on the s&p, we're right at the level where a lot of analysts brought their numbers to after december we're right around 2750. a lot of them are saying that's where we're going to end the year, many have brought down the numbers. so, i mean, this just doesn't seem that horrific at this point. it could get bad, but at this point where are you? >> yes, it isn't that bad. we hit that -- went up to that 2,800 level. >> again pulled back. >> yes we i think four times hit that level last year. >> yeah. >> pulled back at least 6% over a two to three-week basis, at the worst 16% back in december so, yeah, you had some technical resistance up there. you know, i think one difference, though, is back in 2018 the fed was -- ever time we hit that resistance level the fed was either getting ready to raise rates again or they just raised rates now we have a different sort of -- the fed is a lot more

dovish relative to last year you just have to wonder if that dovishness eventually pushing the s&p through 2,800 and above the level that you were just talking about where all these analysts think 2750 is the level. >> so what were you coming into new york and you called us and said i'm going to be up there >> yeah. >> honestly, you're from shaffer. >> cincinnati, ohio. >> why are you up here >> there's a trader's expo. >> is that what it is. have you been in this studio before >> i haven't been in this studio the nycs, it's been several years. >> is it a shock to come to andrew's city here, compared to cincinnati it's a much -- it's intimidating to us people from the midwest, isn't it >> but the restaurants, you know, you know that. >> what about the traffic and the airports >> you know what i came in saturday, joe. traffic was fine and i actually thought there would be more cars on the road this morning it's so early. >> you go to a sporting event in cincinnati can park near -- it's just so much more livable, isn't

it >> i need to get to a yankees or mets game and see how that is. >> full year where are you for gdp? >> we're at 1.9% that's just because -- just because we -- >> tariffs again >> you hate those tariffs. >> i hate those tariffs. it's first quarter 0 .4%. as soon as we get through the first quarter, back to 2.5% growth quarter on quarter. >> that brings it down to 1.9. >> that's right. it's like in college, you get that one d pulls down the average forever. >> is that -- >> i never -- >> i might have actually but it was a pass/fail. i think it was a pass/fail no one saw it. >> i flunked out of college the first time i went. >> no. bio chemo. physical bio chemo i couldn't even tell you -- i can't remember -- any way, that's not -- you'll hear a lot of criticism if it's only 1.9

after spending a trillion dollars on the tax cuts. >> that's a fact but i think that criticism ebbs if we get that rebound in growth we're looking for a rebound in growth starting now. we think that the tariffs are supply shock those effects are short lived. things pick up really quickly here going into summer and so people will forgive a weak quarter if you're seeing 2.5%. >> you think they don't resolve the china problems >> so if they don't resolve the china, it depends on what happens with the china if they keep the tariffs at current levels, we're comfortable with our forecast and comfortable with that slerks acceleration. >> firms are adjusting. >> acceleration from growth in q1 to 2.5% in q2. >> starting now. >> does that lead to a possible flat 2020 or negative year at some point is there a recession on the horizon for you? >> there's going to be a

recession some day, but we don't see it on the horizon. we're really enthusiastic on the manufacturing. not in 2020. not in 2021. the reason is that manufacturing rebound you were talking about we see real productivity growth in the u.s. right now. that auto make gone with the steel jobs is adding net manufacturing jobs to the u.s. as we speak. >> all right >> except for the tariffs. >> you don't have a year-end target, do you >> not a year-end target, but one thing we do like, joe, is again with respect to 2018 there is a lot of cash on the sidelines. now, does that cash come in this year to drive stocks higher? i don't know but that is one bullish perspective. again, with the dovish fed behind it, i wouldn't be surprised if we're well above 2750, 2,800 by year end. >> are you going to take any cincinnati team past one round in the final did you see yesterday houston just all over cincinnati. >> yeah.

you know what, i'm an ohio state fan, joe i'm just hoping they get into the tournament >> it's going to be tough. rutgers is not bad. >> they have beat a lot of top 20 teams or played well against them at least. >> it's going to be tough. it's tough every year. >> it's tough every year, it is. >> i got a big bet with buffett again. i get to take over his twitter account. i would reek havoc i would. >> what do you have to do to get that >> i have to get all eight. >> all eight of the elite eight. that's like impossible he knows that. he knows that. he's like laughing yeah, i'll give you a million dollars. >> what does he win? >> he never pays up. he wins pretending to -- >> he wins nothing no, he gets nothing. >> warren to make a bet he has no upside on. >> that's a good point. >> no downside. >> exactly no downside. >> thank you >> thank you >> and this is not cincinnati. just remember that just keep your eyes open >> i'll have to get up here more

often. >> really? >> oh, yeah. >> you can come up. >> it's a great town. >> it is a great town. >> it's a great town. >> it's the best town. coming up when we return right here on "squawk box," carlos ghosn was hoping to attend a board meeting here this week we'll tell you what a court in tokyo thought of that request. take a look at currencies right now. stay tuned, you're watching "squawk" right here on cnbc.

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welcome back to "squawk box. let's check on the shares of boeing right now boeing indicated down 37 1/2 points, down almost 9% following the fatal weekend crash of an ethiopian airlines jet a boeing 737 max 8 this is ethiopian air is part of the star alliance even, which you see when ever you, i think, united is in it, any way, always a star lounge. >> at newark. >> go to davos the airline has taken its entire 737 max 8 fleet out of service and the chinese government ordered its airlines to do the same indonesia also grounding the aircraft for inspections we'll be talking to a boeing

analyst at 7:20 a.m. eastern time at this point, boeing would shave more than 250 points off the dow at its current price level. the u.s. equity futures at this hour indicated down 122 on the dow but the other indexes are in the green today. time right now for the executive edge carlos ghosn recently released from a japanese jail now he wants to attend nissan's board meeting. it does not look like it was going to happen. ghosn was ousted from the auto maker and wants to go to the company's board meeting on tuesday, report lid. he's facing charges of underreporting his salary over $80 million over ten year. japan's nhk reports that the request had been denied by a tokyo court. ghosn's lawyer is going to appeal that decision nissan removed ghosn as chairman, but he still remains on the board. okay coming up, when we return, getting active in the energy sector we'll talk to the founder of a private equity firm that is looking for some more opportunities in u.s. oil gas.

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welcome back to "squawk box" this morning a private equity firm that specializes in energy investments is taking aim at pgd energy based in denver, colorado the investment firm plans to nominate three candidates to the board to boost shareholder returns. joining us now is one of those nominees ben dell we're thrilled to have him here this morning i want to talk about this and maybe talk a little bit more

broadly about what's going on in the energy space but make the case about what you think has to happen at pdc >> fundamentally this is a company with good assets, good cash generation. and a large amount of corporate overhead i mean, this is a company that should be making attempts on capital employed and the making a 3%, 4% >> what do you think this company could be worth if managed the way you would want it to be managed >> we fundamentally believe these assets are worth about $5 billion to $5.2 billion. which would be $67 per share >> you're getting a heisman, tau talk to the hand they're not interested in you doing this >> most don't want to give up their jobs this management team is being paid year in, year out for the last ten years without share

price performance. that's something we want to change we want to see real alignment with share price enforcement as well. >> what kind of conversations have you had with other investors thus far >> i think if you look at the usemp energy space, energy investors are frustrated this has been a sector where for the last ten years, it's essentially flat we've seen $1.1 trillion of capex spend. it's 1% if you include specials. we've received 2$250 billion of capital. >> if you get three people on this board, what can you do? >> that would be three of eight. the question wouldn't be we have control. and the following year would be around if we have additional people if we can get the management team to embrace our strategy >> is your sense if you got three, it would be now haenough >> especially because other board members are independent.

end of the day what we're proposing is they return cash to shareholders, generate a return. these are not particularly controversial items. >> broader question, price of oil right now we can look at buying wti right now where do you think it's going to be in the next five months >> right now you're seeing a real reset in the industry where operators are being asked to become profitable. the last shareholder boom, it's been about growth, not returns now we're seeing you got to return cash and on capital employed if you look at what's required to make a return, it's probably around $70 a barrel with $3. >> not for the big guys. if you're exxonmobil, you can do it at $35. >> they'll say that. but it hasn't been in double digits for the last five years so they'll tell you that individual well economics work at $35 and that's really a of cycle economic number where they're looking on a forward basis

but their reported return hasn't met historical metrics >> you think they're going to slow down in terms of drilling >> i think overall, yes. we've seen that already. we've seen a lot of people guide that 2009 production -- it's going to decelerate from '18 levels >> meaning what? you think wti will go up >> it depends what the market looks like and gdp is a big number out there but supply estimates for the u.s. will disappoint >> one thing i was fascinated to learn in commercial break is you're in the water business how did that happen? people don't think of that when it coms to energy necessarily. >> we're a large land owner in the permian. we own the surface rights.

we supply fresh water to regulators water on the fresh water side and also on the zpoedisposal si. >> it's interesting. ben, thank you appreciate it. thank you for coming in. still to come this morning, boeing shares under pressure as china grounds commercial flights of the boeing 737 max. it's the second accident for this aircraft in the last five months we will talk to a boeing analyst on the impact on the company "squawk box" will be back in a moment -i call it my comfortable future plan.

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live from the beating heart of business, new york, this is "squawk box. >> good morning. welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equity futures at this hour the dow off close to 100 points right now. going to explain why in a moment the nasdaq looking higher, 25 points high per. and the s&p 500 up about seven points

one of the reasons the dow is off big this morning is boeing after a crash in ethiopia, several global airlines suspending use of the 737 max jet. the black box has been recovered from the crash site. but given that china has come out ahead of the u.s. and others in terms of grounding these fleets, big questions about the future of this particular model. we're going to have a lot more on this story in just a couple of minutes meantime, we have some other headlines breaking right now >> we do let's tell you about what's happening this morning a widely watched economic report is just about 90 minutes away. government will be out with retail sales at 8:30 eastern time this a big deal because the number we got in december came as a huge surprise to economists when it fell by 1.2% fed chairman jay powell thinks that interest rates are fine right where they are at least for now. he made his comments in a "60 minutes" interview

>> we see the economy as in a good place we think that the outlook is a favorable one. what we've said is that we would be patient >> we'll have much more on his interview later this hour. and news just out from nvidia they are buying mellanox it will allow them to reduce in the video game industry. shares up 10.4%. the ceo of nvidia will be joining "squawk alley" later on today. >> given with what's happening in gaming and crypto and this puts them squarely in -- a big part is the cloud. this should help them but they're paying a good premium. also big win for starboard which

got on the board of mellanox back in june they seem to have successfully pushed this stock up quite remarkably if you look at the chart. >> all right the china trade talks seem to be a moving target for the stock market last week, talk of a possible deal being signed in april but maybe xi isn't coming after all. i think, i don't know, his calendar had been blocked out then it wasn't senior fellow josh meltzer joins us now i guess what's in the deal is important, i guess >> absolutely. what are we going to see and is this going to be what we'll be able to say we're going to walk away or is this sing goto bea process that goes on for many, many months. i think if we're serious about

resolving the core issues u.s. has with china, then this is going to be a weigh station that will require more continued focus by the administration for a number of months if not years. >> so then we don't want to sign a deal in a month. >> i think we've got to be very wary about this notion that there are these big solutions out there that can just be resolved with these one off deals. the core issues with china which has been around far long time really go to the heart of a lot of the way that china's economy works, the china economic model, so to speak. these are not changes that china can make quickly or rapidly. it's not clear if there's a political desire to make them in the first place. so this notion that there is somehow an outcome that can be done with a single deal i think really misses the extent of the challenge we're facing at the moment >> ast night when it appeared that president xi wouldn't be coming at the affaorementioned

time, there was some movement among political types in china that they were willing to change some of their previous stances on having to acquire propriet y proprietary -- are you privy to what happened in chinese political body, i don't know which one. >> i think we're certainly getting signals from china that they are prepared to start looking seriously at some of the core demands and issues that the united states has been raising certainly around the whole tech transfer issue and the way that gets carried out we were under this 90-day deadline which was expired at the beginning of the month it was never a realistic deadline within which to do the deal in the scope and address the issues that needed to get done i think the postponement could be seen as a good thing. to the extent the administration sets a new deadline, takes into

account the realistic sort of time frame that's needed for china to move. but even with those signals getting out of china, i think this is really just the beginning of a longer term negotiation and a longer term attempt by the u.s. to move china away from some of the practices which have cause sod much trouble all over these years. >> what's that going to look like exactly if you're saying it's going to be a complex and time-consuming endeavor to get the real deal. how will it look for both the united states and china? will it be every couple of months we'll hear, things are going well so we're going to put another extension on how long this takes and, you know, do you think that china will go along with that? will president trump go along with that? if it seems that progress is

being made could take a year, longer than a year >> i don't think the administration has done a good job of setting the scene for this type of outcome when xi was in mar-a-lago and they announced the greatest trade deal ever. which was a package of additional purchases i think really the administration needs to lay the ground work domestically into what's going to be used to remove china to focus on the issues and play out over a slightly longer period of time frankly, that's what other administrations have been doing. this is a hard problem it's not going to get solved quickly. not because no one's paid attention to it in the past, but just because china's very large economy, they've got their own domestic concerns which made them moving or changing complex and difficult as well. you know, that said, we are in a particular moment certainly the use of tariffs and ratcheting up

pressure on china i think has drawn attention in a way that hasn't been the case in the past that's a good thing. the key is how do we use this leverage in the most effective way. and are going to drive real changes, real market access over time rather than sort of, you know, deals that are going to be good to sell politically but are not going to move when it comes to what matters economically >> it certainly was met with a lot of consternation and pushback in this country to do tariffs. did you just say you think at this point that was the right thing to do? >> so to be clear, i'm absolutely not in support of tariffs but taking into account this is where we are at and the u.s. economy has certainly -- businesses have hurt and have incurred costs as a result of these tariffs. but they have also been effective at generating a level of attention on this issue that has not been here in the past.

let's use this moment as effectively as we can. >> all right, josh thanks >> thanks. a lot more coming up on "squawk" this morning to talk about this monday. we're going to look at some stocks to watch right now. and then boeing shares under pressure this morning following a second deadly plane crash involving its 737 max jet. and could elon musk face a spobl h aivy on forisctiton twitter? what it could mean for the stock. stay tuned when you retire will you or will you just be you, without the constraints of a full time job? you can grow your retirement savings with pacific life and create the future that's most meaningful to you. which means you can retire, without retiring from life.

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is significantly underinvested in research development. so have you recovered from the hour >> you mean the daylight saving hour >> you know the hour you get in the fall >> is it worth it? no. >> that's always nice. >> uh-huh. >> does it make up for saturday? >> no. because it's 6:12 in the morning right now in real life it's 7:12, i know. >> i want to know whether this is a coincidence or not. do you know what day it is >> monday. >> national. that -- napping day. >> that cannot be a coincidence. >> we should celebrate >> actually, i think we are going to talk about powell's comments again, so i may do that during -- i think we have a whole segment about that that's when i was planning mine. >> okay. >> i was going to wait until after the show.

>> it's better during. don't you have things to do after? don't you try to -- >> get it all underway here. when we come back, boeing's stock is under pressure following this weekend's deadly plane crash in ethiopia. the black box has been recovered and we have more on that story after the break. check out the futures. you are looking at both the nasdaq and the s&p in the green. dow futures are down largely or entirely because of boeing's losses dow futures incad wnditedo about 113. "squawk box" will be right back. when you look at the critical issues facing our world, what do you see? we see breakthrough medicines getting to patients in record time. we see harnessing natural gas unleashing the promise of clean energy. we see engineers simulating the future to improve today. at emerson, when issues become inspiration,

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welcome back to "squawk box" this morning aviation authorities remain at the site of an ethiopian plane that crashed yesterday killed all 157 people on board the boeing 737 max aircraft came down minutes after taking off. we're going to get over to phil lebeau with more details >> within the last 20 minutes we heard they have recovered the

cockpit voice recorder they will start analyzing those depending what the shape is in a number of questions have surfaced over the last several hours. first of all, the faa and the ntsb, they are investigating this crash a lot of people are saying well this is just ethiopia investigating. huh-uh they are part of it as well. meanwhile, china, indonesia, as well as some airlines around the world including ethiopia they are going to ground the 737 max fleets to the questions of whether this is a safe aircraft to get, based on the information available we do not have basis to issue new science to operators when you look at the accident that happened on sunday in ethiopia, it crashed shortly

after takeoff and the pilot had radioed to the tower shortly after takeoff, look, we're having problems. we need to come around and land again. the circumstances of this, remarkably similar to what we saw back in oklahoma with the lion air 737 max that crashed off the coast of indonesia problems with the anti-stall automatic technology that's at heart of the problems here whether or not the pilot had struggled to skovr come that to kiep it from stalling at takeoff, boeing has clarified pilot procedures they did that in november, issued it to all of their operators including ethiopian airlines did the crew in this have the cues they have not determined

what it is but the similarities, that's what concerns people look at the increase in production for the 737 they're supposed to go up to 57 per month later this year. and by the way, those are all max 8s they have more than 5100 on order for the backlog. take a look at shares of boeing. since october 29th, that's when the lion air crash happened. you can see that boeing has outperformed the market. it drops in october and it's under measure this morning >> phil, stay with us. we're going to talk more about this this raises huge dwes for boeing i spoke with dennis muilenburger and asked him in the wake of the lion air crash in october if he had any concerns about the safety of the 737 max 8. here's what he had to say. >> bot 20to the line here very

important, is that the 737 max 8 is safe. rez are in control of the pilots they're designed the same way the previous 737s are. take advantage of those systems. and the proof of that is you look around the world today, all of our customers are flying all of their maxes daily around the world. the airplane is safe and we're very confident in this. >> journal suggests, though, that there wasn't more prevalence placed on this because you are all interested in making sure training is kept to a standard. >> as we go to the max, part of what weptd was seamless trading. we designed the airplane to behave in the same way even though it's a different airplane design, the control laws that fly the airplane are

designed to make them -- it was not as easy to ma lip late >> that's why it's important to use the procedure used for that situation. a stabilizer procedure the approach for handling that is to hit the cutoff switches, the same exact procedure in the ng as in the max we've pointed back to that with what we recently issued. >> sheila, obviously very early in this investigation. still not clear what happened. but as phil pointed out -- >> the big focus is it's a accident 60% of sales, the 737 is about 25% of total company sales and it is a part of the cash

flow but also in january when they put out guidance, they reaffirmed their position with the 737 going up in production from 52 a month to 57 a month. >> phil also pointed out the huge backlog there are about 5,000 of these planes on back order it is their largest numbers for from flying. and if you have other airlines considering and doing the same they put out a separate bulletin for additional pilot training after the lion air incident. we've seen groundings with the engines back in march. that was just the indian air authorities. similarly the 787 with a battery issues go back pretty far. >> ten this did talk about the

pilot training they put out this notification back in november but is that snuff? are there concerns about what's happened since >> definitely concerned. especially because you had a veteran pilot in this case in ethiopia who was in charge of the aircraft we don't the the had -- but it raises the question. he should have known how to handle its in a certain situation. if that situation developed. and again, we don't know that's the case here. but if that situation developed, did he follow procedures was he able to follow procedures or was there something in the mechanics of that airplane that caused it to continue to move down guys, we don't know for sure right now.

it's rare you had coincidences with crashes >> were there a lot of complaints from pilots about the stalling during takeoff? i thinkabout -- i think about boeing, we think all these things are so safe for the last 10, 15 years all of a sudden they're addressing this issue which i'm not saying it caused the crashes, but we talk about it a lot. putting this mechanism in to prevent stalling, was that something pilots were concerned about? >> first of all, you're talking about a brand new 737. so the structure of it changed slightly they moved larger engines into the plane so it would be more fuel efficient had to move them closer to the fuselage as a result, when the max 8 takes off under certain situations, it may run into a stall situation. that's why they had the

anti-stall technology put into these planes there was not a lot of complaints but there were pilot who is came back after the lion air crash and said this was not fully pointsed out to us boeing says we told you but a lot of pilots said no. >> how many planes are there now in the u.s.? >> there are 350 737 maxes >> if they were taken out of circulation in the industry, what would happen? >> there would be a hundred -- >> i thauought you said 350 >> worldwide. >> are we talking about major delays >> so you ground it and could replace it with the 737. it would cause --

>> it's been the biggest drag on the dow. is this justified at this point. >> given the magnitude for the 737, we saw after the lion air crash a hit to the market cap from october to the year end >> you've got twoin a row, that's a different scenario. and again, we don't know but if you were to follow this, if it weren't a coincidence, what would be the impact >> i think we go back to the fact that boeing invests billions of dollars in flight testing. if it was such a simple conclusion, it would have been drawn out in that. >> also we're saying that veteran pilot -- that's not like a 30-year pilot or something what i'm getting at, phil or

sheila, how often does it -- after we go through everything that we can possibly look at, how often is a pilot error that doesn't come into the conclusion a lot >> i don't think there's any way you can say that a percentage of accidents -- each one is so unique and so unusual that there's no way of saying that. i mean, it's a number of factors that play together >> how do you guys think about the overlay at least the question that people have raised this morning in terms of china's decision to move on this as quickly as they did whether you think it relates in any way to the trade war? >> i think china veered back in november as well when you look at the 787 battery incident, individual airlines decided to ground the aircraft >> so you're saying no you're saying it's inrelates >> it has a lot of factors that

go into how folks are negotiating or may be thinking about what to do >> phil, you think this is trade related? >> i think it's less trade related and more safety related. i think it might play a factor, but i think the chinese, the indonesians, the ethiopians, all of them are saying two accidents, very similar within five months of brand new airplanes. that's enough to say we want some answers before we are confident. >> the discussion we had hear early on, you know, not on camera was -- i mean, would you think about getting on a 737 max? it probably crossed your mind. >> i'm flying tomorrow and i looked to see what kind of plane i was flying on. that's saying nothing other than it raises questions. >> i would be wondering whether the airline is safe.

so i don't think we need to make something out of what may or may not be you know, i don't know >> phil, what happens next if the faa is going to be picking up and kind of leading the charge on this what do you anticipate will be the next steps >> i think it depends on what comes out of the flight data recorder as well as the cockpit voice recorder and they'll be able to compare those results with what they see out of the lion air crash because they have some of thoetz indications from those two black boxes. if you see something similar, investigators say there's a problem with stalled technology there, i wouldn't be surprised if they move very quickly here >> very quickly to do what the to ground all the planes >> i think it might be -- i don't know they will move to ground them, but they will move boeing to give us answers in

terms of how to resolve it you go back and look at the battery liner battery fires, and investigators as well as boeing said that was one incident let's see what's going on. and i believe it was within maybe a week, a week and a half, there was another plane coming from japan into boston and there was a fire there and boom they went at it right away because the -- now you've got two. these thing -- they will move very quickly >> it's just weird because the system itself, it's not like there's a glitch or something, it doesn't seem like. how many flights have -- how many successful takeoffs and landings around the world have there been on 737 maxes where the pilots didn't have an issue? it almost sounds like there's some type of -- >> joe, joe -- now, that's a

question i can't answer. who knows if pilots have been having problems or if it's been 100% smooth and then yao got other factors and circumstances. >> the indonesia flight -- i believe correct me if i'm wrong, phil, i think i read earlier that that was related to a faulty sensor. the original crash >> they had replaced the sensor, the angle of attack sensor at the front of the airplane on the outside. they had replaced that from previous flight right before the lion air crash whether or not that sensor is the cause of that crash, we don't know they have not come out with the conclusion the bottom line is this, guys. the data will show that. and as soon as they put two things together, if there are two similarities, that will immediately lead investigators

to think, okay, here's the issue. at least what we think is the issue that needs to be addressed immediately. >> sheila, if the carriers are looking at this today, nez planes are going to be delivered in the months it takes to investigate this accident. would son-in-law of those carriers say i want to wait until there's an investigation that shows what happened with this >> we're not there yet we'll see if they decide to make a comment. >> do either of you have a view that effectively if this tragic accident were to have taken place here in the united states whether the reaction from boeing or the faa would be different? >> i think the ntsb and faa are acting fairly quickly as phil said we'll see what happens in the next weeks >> my guess is the regulator and

the company are probably moving aggressively >> i think they're moving very quickly here i think -- you know how this goes these are not unusual, hey, it's kind of random that we had two of them in five months >> was moving the engines the way you described, what was your description? >> you had to -- because you were going with a larger, more fuel efficient engine because the idea behind the max is that you have greater fuel efficiency, greater range for these airplanes than the previous generation of the 737s. because they are larger, you couldn't have them in the same exact spot on the wings. >> it causes them to stall >> no. you're jumping ahead here. >> all right. >> so if you had to move the engine closer to the fuselage. as a result because of those changes and some other technical changes in terms how how they're

putting the aircraft together, it created a situation in the ae aerodynamic -- >> well, that's not good, right? >> no. but boeing's counter to that is, look there are procedures that all pilots have in place that -- to handle this. >> apparently not. >> well, we don't know that, joe. >> i know. i know i know but pilots do need to -- >> that's at the heart of the questions here >> it just seems like one of the criticisms was pilot didn't update where you need to educate everyone then you have a couple of things like this happen, i'm just asking the question. maybe the plane seems more predisposed to having that problem. that must be it. >> well, that's exactly what investigators are asking, joe.

literally. and that flight data recorder, it'll give reams of information. along with the cockpit voice recorder was there something else that happened somewhat a part of the plan that broke down >> i had heard this radar that tracks the plane did show it going up and down pretty drastically. which leads you to think it would be related to something similar in indonesia right? >> and the motion was the aircraft -- that's why people are saying, boy. you've got one that did this you have another that did this subpoena is there a problem here with this anti-stall technology that wants to force the nose of the plane lower so it doesn't stall. >> all right, phil thank you very much.

sheila, thank you. we appreciate your time today. by the way, coming up later in the gordon >> he's the ceo of continental he flies all the time. big jets would be interesting to hear his comments coming up, jerome powell goes on the record his "60 minutes" highlights straight ahead right now the dow is down due to boeing we'll be right back. ♪ you don't call the first plumber on the list do you? ♪ you wouldn't hire a two-star mechanic. so why do you stick with a bank that treats you like this? isn't it time you look for better? ask your friends. ask your co-workers. we're pretty sure they'll send you over to us.

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how they serve even the hardest-to-reach customers. cool ♪ some news out from nvidia this morning it is buying mellanox technologies for about $70 billion in cash. that will boost the data center business and allow it to reduce its reliance on the video game industry this would be nvidia's biggest-ever acquisition and shares are indicated higher on this up just under 1% we should point out the ceo of nvidia will be joining "squawk alley" later this morning.

meantime, big week for tesla starting today the deadline for elon musk to respond from an order explaining why the judge shouldn't hold him in contempcontempt tesla also announcing it's raising prices on the high end models for more on all of this, want to bring in mark lehman from jnp securities good morning to you. do you think there's a great part of this even if they strip him of his title, would it matter >> i don't think there's a great defense to it. i think he'll try to come up with a couple of lines of argument, one that it wasn't material, and two, it was basically in line with what tesla had announced publicly i agree with you, andrew

there's probably not going to be a number two at tesla for a long time swrooel to see what they determine. but it's going to be very hard to be a number two at tesla with elon musk there. >> how would you measure the relevance of what's happening here he said he will defend himself i imagine he has to. if you're the judge, how do you think about it >> well, i think you look at it in the framework of what they prescribed given the history with elon musk and what happened the last time. you have tho look at a larger issue which is what is the message from the overall community? what is the s.e.c.'s function? do they and do people have to pay attention to that. it's about authorities and

following the rules. we've seen that in the political arena where somebody said don't go on twitter and somebody went on twitter this seems to be a theme across politics and business. >> here's a curve ball for you a lot of people talking about whether he'll get stripped of his title. but there's also talk of fines he paid $20 million last time. what would happen if a judge said, look, we're going to fine you $100 million does he have that much in the bank and would he put the risk there? >> that's a lot of money even though this is a huge company with tens of billions of market cap, that's a big statement here i don't expect that. but if that happened, i think people would wake up and i think the community would wake up. again, i'm not sure if that's going to be the find, but last time it was $20 million and he violated that.

so we'll just have to see. i don't see $100 million, but i see something quite significant. >> the stack now trading at $287 where do you think it should be and wrmp where were try end the shelf rooms around the country and now you buy it online and you get to test it don't like it, you return it but it's not dwrn -- i think to completely shut down the network like you described was jarring and i think he's obviously retracted that everybody got an e-mail this morning talking about changes to that program that was not even a month old. i think the more worrisome thing is i was looking on the website last night trying to check for a new car. and you look at for the more

expensive model. you can't walk into most showrooms and pick up a car of your liking we the kind of accessories you like, you can't do that. you gone online now. >> do you think that's a demand problem? i'm sure the tesla bull wills tell you they've figured out the supply chain >> i think that's a demand problem right now. i think that's an issue going into the end of the quarter that you see that it has no problem getting any color you want for the expensive model 3 at less than two weeks i think that's app issue the bulls that tell you the supply is plentiable, or whether i got

a -- >> therefore you think the stock should be worth what >> i think it's at a good spot here okay this is a 2019 story not a first quarter or march story. if they get the kind of demand through the rest of the year that they expect to get at the price points thatter now seeing which is slightly lower than you were -- this is still the best market place burger you can't get anything that matches it from a luxury car maker right now. appreciate it. jay powell sitting down with "60 minutes" over the weekend to talk interest rates and his own job security highlights and debate on interest rates is next quarterback will be back so with xfinity mobile

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patient. >> joining us now, julia coronado and chris campbell. chris is now chief strategist with global consulting firm duff & phelps i thought this was interesting they're saying chairman powell is a different approach through his predecessors because of his background different than yellen, bernanke, and greenspan. and he's more polished than others >> i wouldn't disagree >> i know you wouldn't because that's what you said but the criticism of the rookie whatever you want to call it, the rookie mistake back in the then he kind of back tracked and learned from his mistakes. that didn't seem that polished greene span at least we didn't know what he was saying so he

couldn't move the markets. >> i was lucky enough to get to know chairman powell i think his approach is a unique one. i think his geek speak can be nothing but good i think some people criticize the fed for maybe speaking too much i think that the -- again, the new level has been i think really effective at, again, i know people criticize but -- >> you don't see any -- you don't want to ascribe any blame to his comments back in the fall for what happened with -- now, what happened in terms of him changing his opinion the facts changed or he misinterpreted the data the first time oornd >> the economy, you know, wasn't

strong enough to warrant a december increase and a well below normal comment i mean, you don't ascribe any blame or he didn't misstep at that point >> i don't see it that way i certainly don't hear that from clients. >> you don't have stocks in your portfolio. >> i do have a fair amount of stocks markets rise and fall. >> 120% is quite a fall. >> in the level of transparency as it's been good is a reason we're laumpnching the challenge i think is real. i think the charity powell approach has been different than the past chairmen. i think the level of transparency is something to applaud. >> julia >> i don't think it's all that different in approach.

it's been an ef vaugs -- to be more responsive to the public. i think what happened in the fall was the economy was changing and markets were changing very rapidly. and it's always awkward. it was awkward when yellen had to manage these. it was awkward when bernanke had to balance them. sometimes you face these -- >> they didn't have inflection points they just sat on zero. >> no, you don't remember when yellen pulled back they were going to so it was a very similar situation that can run into problems sometimes. one of the reasons that fed speakers tend to be so rigd is because it keeps them out of

trouble. so when he sort of speaks off the cuff, if you listen to what he said. he went bound the l -- he went from a long way to neutral. >> to being in neutral yes. but that reflects sort of what's happening on the ground in the economy. which is -- it's an inflection point. we've seen things slow pretty quickly globally, domestically >> hopefully you have people in charge of the post important bodies on earth that aren't just looking at trailing data they have an idea of might be coming >> i know it's disturbing, but they're not -- they don't have the secret weapon. >> other people at that time saw some slowing numbers >> right and they did too aacknowledged that and then

shifted. it's always going to be an improper process >> all right thanks coming up, a lot more on "squawk. is there another battle over well funding the futures right now under pressure especially dow as questions mount about the boeing 737 max 8. we'll have more on what it mnsea for boeing and the dow "squawk" returns in just a moment -so much of our future is ahead of us.

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boeing under pressure. the jet maker shares down sharply this morning after the second fatal crash in just months of a popular new airplane model. breaking thorn, nvidia buying mellanox technologies for $7 billion and the white house releasing its proposed budget for 2020 the acting director of the office of management and budget will join us as the final hour of "squawk box" begins right now. good morning and welcome

back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross sorkin the dow now down 132 when i say the futures, i mean the dow. the s&p which is probably more widely used maybe not in mainstream but for a lot of players, up seven. and the nasdaq is indicated up about 28 but the dow jones is down because of boeing mostly a large part, actually more than the accounts for more than 133 points of downward pressure in just boeing. we'll talk about that in just a moment but treasury yields at this point are still at 2.6% and change 2.64%. the black box has been recovered from the fatal crash over the weekend it was a boeing 737 max 8.

the chinese and indonesian governments have also ordered airlines to shut down 773 max 8. coming up later in the show, we'll talk to gordon bethune who will be our guest. that's going to happen at about 8:45 eastern time. mellanox will be bought by nvidia for $7 billion. that deal is worth $1.27 a share in cash. mellanox shares up by 8.7% nvidia shares trading higher as well and nvidia ceo jensen huang will be on cnbc at 11:00 a.m. eastern time facebook upgraded to buy from neutral at nomura

and the president set to unveil his annual budget today we're not expecting it to balance. ylan mui joins us with more. >> reporter: there are three big themes that are going to drive this budget. we're expecting to see rosy and of course money for the border wall now, first on the forecast, a source tells me the economic growth will hit 3.2% last year and then taper off next year of course this is way higher than the outside consensus right now. the cbo projecting that growth will be below 3% this year and that it won't hit 2% for the rest of the decade now, on those federal spending cuts, the white house will seek $2.7 trillion in cuts over the next decade. but even with those steep

reductions, the budget is not expected to balance until the year 2034. the why is will be many -- asking nancy pelosi and chuck schumer put out this statement congress refused to fund his wall and he was forced to admit defeat the political reality here is that this budget is mainly going to be a messaging document we know the president is not going to get all the things he asks for, particularly all that money for a border wall. but it is a sign that the administration is throwing down the gauntlet and preparing for a fight. >> thank you very much joining us right now is the office of management and budget acting director russell vogt thank you for being here today >> thanks for having me. >> explain what this budget is going to lay out

it's our understanding they would like to spend more on defense. congress would probably like to spend more on discretionary. >> we're $22 trillion debt we need to do something about it it balances within 15 years. we think that's an important debate to have congress may resist it, but we also think that they have an interest in -- we hope they have an interest in maintaining -- in getting rid of the deficit that's the conversation we want to have with them going forward. >> where are the spending cuts in your budget >> the spending cuts are at the discretionary spending levels. all the act sis you see around washington, d.c., they're in welfare reform, foreign aid, we're making many forms knots

what we call a cut many are savings and reforms to make things more >> overseas contingency operations can you explain that to us in the budget according to the kplechb l2011 the president, though, would like to see more spent on defense. how does this come into play >> sure. the budget proposed is an increase in defense up to $750 billion. previously this year it will be $716 billion wengs it's important to continue to rebuild the military from the years of the obama administration we propose to do that both within the current log caps that exist. and as you mentioned are coming down and we think we can put forward all the additional money that is

necessary in what is called the over -- it has no cap to it and we're able to is without a $300 billion cap deal to increase the caps that are in law that congress often doesn't pay for. and there has really contributed to the large deficits that we're seeing in the next ten years >> but you realize that budget watch dogs say this is a back door way of increasing that spending without -- we want to stick to those caps. the overseas contingency account is something that is not capped. we need to avoid a $350 billion cap deal that we cannot afford as a country

>> so you don't want to stick to the caps when it comes to defense. >> we want to stick to the caps and continue the rebuild >> you did have an op-ed talking about how you think that congress really has to come in and cut spending and join in doing that with the president. last week when i started looking at some of the numbers it's not the amount of money that's changing. when you too it's medicare and medicaid it's defense depending and then increased spending for interest payments on our debt the budget is not necessarily going to tackle any of that. how do you get at the biggest issues >> the interest spending we do, it's a problem i think you're getting at the structural issues that we have with regard to mandatory

pending. this budget has more mandatory savings. we continue to keep the president's commitments to seniors who benefit from medicare and social security we can reform mandatory savings. we propose to do that in this budget the president has done that in the last two we also need to look at reforms that's been used as an excuse to get rid of wasteful programs and discretionary spending which is what congress can control every year opposed to things like medicare and medicaid >> again, this president has made commitments to the american people in this budget, we continue to put forth mandatory reforms. by having reforms and commence proposals to make the programs

work better at the same time as maintains the commitment >> the early news reports says this budget will ask for $8.6 billion for funding for the wall with mexico. is that correct? >> we do have an $8.6 billion request to complete the wall this is in addition to the billions of dollars we are securing through the president's declaration of a national emergency. as you know, this is an area where we're tired of being right. the border situation is deteriorating by the day when we started the conversation throughout the year. but i don't know how you can continue to make that assertion when the department of homeland security secretary and the commissioner of the customs and border control continue to go to the hill and say that we are having record numbers of apprehensions and we will be having more apprehensions in the first six months >> it sounds like there are a

lot of differences on how the spending should be taking place where, if any, are there any areas that the two see eye to eye? >> we'll see in the coming days. i'll be up on the hill testifying the next few days on where to find common ground. that's an important conversation we look forward to development and child care and those kinds of opportunities structure in lowering drug pricing. but that's an important conversation we're going to have >> thank you for your time today. and we have some news just in from barrick gold and newmont mining all of this follows an attempted buying

the two companies now saying they want to go unlocked originally this transaction said it would only work if they owned the company outright now saying instead that perhaps this is a better way or at least a different way or a possible way. he was on with jim cramer last week where the joint venture idea was hinted around. all right. big anniversary here at the nasdaq 20 years of the qqq etf. we'll speak to a nasdaq ceo. check out the shares of boeing down after this weekend's ethiopian airline crash. the stock down just under 10%. almost $40 u'ay duned yore watching "squawk box" on

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welcome back to "squawk box. the futures indicated triple digits down on the dow but the s&p and the nasdaq, you

know, up 25.56 this morning. n vvesco celebrating the anniversary of the qqq right now joining us too talk about a key new inquiry by the s.e.c. let's talk about sort of 20 years. >> it's been amazing for the investors. tenth year anniversary of a bull market you've seen almost 19% on growth rate it's really a great way for people to invest >> if we were sitting here 20 years from now, how much more of

the business do you think is going to move into the etf world? >> yeah. it's a very demon question i think it's an incredible vehicle. that it'd be topical for people focus on >> they're all going to continue to driveup >> do you think the passive investing is going to be the bigger slice >> i don't >> you don't interesting. cap weighted indexes in particular what will continue to grow is smart beta investing >> and what about people who are effectively actively managing money through etfs >> so it's going to continue to be a very important component of how people manage money.

i think they're all going to be quite successful. >> you have a different take on that i think you think more passive, right? >> i think basically we're seeing a balance in the system any time it becomes too much investing and not enough individual investing, then there's a balance. >> i think right now it's pretty well balanced. but you could say there have been shifts in liquidity around the fact that etfs are as large as they've become. i think that for individual investors and individual stocks, it's an efficient market as well so i think that right now it's probably operating at a pretty good balance >> what i'm trying to differentiate is there's so much money cap weighted index right now. and i think there's too much in cap weighted indexes right now >> do you agree if there's a crisis that the way all these

etfs trade will create a problem? a downward spiral? >> i don't see that. i mean, look i wouldn't just look at etfs i would look at any vehicle over history. >> do you think it will exacerbate the problem >> it's hard to know >> i think you might see short-term chajs in stock prices if you have to get a cap weighted index or etf where you might have short-term dislocations meaning the selling behavior is not necessarily reflective of the company. but i also believe the markets are efficient and investors will come back in but you might see short-term dislocation ifs you see particularly kind of what i'll call the selling activity. >> can we talk about this s.e.c. investigation in terms of pricing on exchanges right now there is inquiry

that's taking place about how you price trading to the various brokers and banks. right? is that the best way to explain it >> i would say what you're talking about is in an article we have not validated. >> what does that mean >> meaning we read it at the same time you did. >> so what do you know about the investigation? beyond what you've read? >> we've read the same thing you've read. >> okay. let's take on face value what we read is accurate for the moment. which is to say there is an argument that has been taking place on wall street that the exchanges offer different pricing mechanisms for different types of brokerage houses, different size traders is there an argument -- the argument is that smaller brokers are being disadvantaged relative to larger brokers. speak to that. >> basically exchanges are obligated to provide the same pricing for similarly situated clients. so we are not allowed to give

anyone is special deal we're not allowed to do any sort of discounting every one of our fee filings is filed with and approved by the s.e.c. at the end of the day, we look at the only mechanism we have within one exchange is to offer essentially some level that might occur and. that's the only thing that we do, then i would say it creates differential pricing whether you're a big volume player >> there are some paying virtually nothing to trade with you? >> it depends on their behavior. so it depends whether they are net adders or net takers i would say honestly, they pay the exact same amount to take as everyone else. and they get the same amount to add. >> what do you mean by that? >> the market is very -- this is

a very esoteric situation. if you are providing liquidity on our exchange and making quotes available to everyone and everybody can see the liquidity you're adding, that's called you're adding liktty if you're a net adder, we pay you. the person who's taking that order and executing against it pays the exchange. so the net of that is we get a very small amount of money netted out between those who output liquidity and those who take liquidity if they're net adders, they might get more of a rebate if they're net takers, they might pay more of the fees but those fees, the add fees and the take fees are equivalent to the brokers. we are not allowed to offer any sort of special. >> we're going to leave it there. thank you. happy 20th anniversary qqq

>> thank you and coming up, with tax season in full swing, americans seeing their refunds for the first full year after president trump's tax cuts we're going to see what the impact on the economy has been or at least try to figure it out when "squawk box" comes right back

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welcome back to "squawk box," everybody.

we are watching the futures this morning and you're going to see right now that the dow is still under pressure it's down by about 156 points below fair value again, that is because of boeing which is set to shave 250 points off. s&p is in the green. it's up by close to six points and the nasdaq up by 22 after a down week for the markets last week coming up when we return, january retail data sales coming up next. we'll have those numbers in just a minute take a look at shares of boeing down this morning following the crash of an ethiopian airlines jet over the weekend stock now off over 10% gordon bethune will join us coming up in just a little bit to break it all down for us. stayun u' watching "squawk box" on cnbc

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welcome back to "squawk box" on cnbc live from the nasdaq market site in squawk square

the futures are down 150 because boeing's adding 250 points of added pressure with its 10% selloff. take a quick look at the 10-year note even though you can see they're both higher. rick has the numbers please >> all right our january look, up 0.2% on headlines strip out autos. jumps up to 0.9% strip out autos and gas, 1.2%. and the control number plugged in at numbers higher up the stream, 1.1% i'm going to start with that this is january. our last look was minus 1.7% and last month's minus 1.2% there was so much debate over

ends up worse at 1.6%. but these data points are definitely much better, obviously. and we're going to continue to monitor that soft patch we seem to be transitioning from rates holding steady at the same levels so we're going to wait for business inventories but my ges is supply this week may give us a better glimpse considering some of the significant drops outside the u.s. >> thank you for that. steve liesman has taken a look at those numbers and nodding his head in some kind of what? >> we will be puzzling for years maybe about what happened to the consumer in december right? low unemployment, strong wage growth what did they do they -- retail sales declined by 1.6% and honestly, i still sort of don't believe the numbers. we had etsy on here.

what did he say his christmas sales were up? 30%? >> huge. >> i have the retail number here a lot of stuff has just moved over to the online place and the government's not capturing it. that said, you had a bit of a rebound in january did not make up for what happened in december 2.6% on non-store retailers. but we're going to take down fourth quarter gdp i think a little bit more. and i don't know that because of the way you'll build it back very much. i want to talk about something else a fascinating reaction i got over the weekend to the payroll number they routinely dismiss over the weekend. instead they keyed in on the strong wage growth number. here's pantheon. increase to february payrolls is not remotely inkick ty of the underlying trend we expect 4% wage growth by the

end of this year that's hard to square with the idea the fed is finished hiking in the cycle a tight labor market is putting pressure on earnings and morgan stanley says this quote, the impact from higher costs is definitely starting to bite specifically, consensus margins, earnst before interest ago tax expectations for 2019 have fallen by 70 basis points to october. that's the biggest decline since the earnings recession in 2015 and they say that it's not necessarily -- what it is is they think the tax cuts into the full economy have really pushed this up which is a good thing. but over time, you're going to have this reaction it's an interesting question or interesting explanation on what happened to profit expectations and then the outlook for profits this year. it's okay if you have this page

moving to protect thundershower margins and are successful at it >> thank you let's talk a little bit more about the health of the economy, growth, and the impact of the tax cuts for that we welcome ken rogoff professor of economics and public policy at harvard also grover norquist who is with americans for tax reform he is the president there. k ken, let's start with you. combined with the weaker than expected retail sales number for december, does that concern you? >> i still think the economy is doing pretty well. the jobs number, they're hard to know what to make up from month to month i think the best guess is it will be stronger going forward the weak retail sales numbers, i don't understand so i don't know what's going on there. you know, wages are up consumer confidence is up.

i would tend to think this is a soft patch the rest of the world is in a softer patch but i think the u.s. will still have a good year in 2019 who knows. >> grover, what about you? what do you think in terms of what we're seeing in the economy, what you're seeing with taxes coming in. and then with the budget being presented. what are your expectations on all of it? >> sure. on taxes, the big changes that came with the 2017 tax bill which is the corporate rate down to 21% that's forever that's not one of those disappears in five or ten years. i think we're going to see longer run more capital broaden in the united states you saw a lot of the american earnings come back already it might as well be back already. there's no penalty anymore and overseas money coming in because we're a better investment than we used to be.

that's going to hopefully drive the productivity increases with more capital per worker in the united states. what was expected in terms of helping growth, was to take several years of that investment to kick in and begin to show everything that's showing up now in terms of stronger growth is nice to have perhaps in anticipation of all that investment that's been coming in put to better use. i think we're looking at a stronger economy because more capital per worker, that's not something that's going to change there is the five-year full expensing for business investment i think we should make that permanent. and on the personal side, those last about ten years but that will be made permanent just as bush's tax cuts were made permanent >> you think it's hard to raise taxes once they've been cut? >> yeah. not impossible, but it's

tougher. >> ken, you are a little less convinced that the strong economy is coming from the tax cuts what are your thoughts you're not dogmatic on this. >> yeah. there are two views about the tax cuts one, it's keynesian growth and another view is closer to grover's which is it provides more incentive i think the tax cuts were not a big element of why the economy is doing well. and it's normal recovery from the financial crisis i think the corporate tax cut i agree was a good idea. although i would have hit a higher one for it. >> the simply kaification for t vinls? >> no. the corporate. less exemptions. >> grover was very careful and i think very smart in saying what we're seeing now is not necessarily the effects of the

tax cuts that were expected over a five-year period i think the administration has made a mistake saying, look, they're working because of 3% growth it's a longer term thing that kicks in with wage yet to come. >> is that what you're saying? >> the investment is yet to come too. >> capex okay. >> we'd like to see the investment go up >> grover, you agree with that >> look, we change the rules so we're no longer leaving american capital overseas we make it more predictive they said we used to be able to tell investors, invest in germany. we only take 25% the american wills steal 35% invest with us and that was a great sales pitch. now you guys are at 21%, we're at 25% what do we tell people about why they should invest in germany. and energy prices way beyond americans. do we tell them now?

we are going to see more capital coming in theunited states and it takes awhile to take that and turn it into productivity. i think we're looking at a very long run i would point out the economy -- this is not some straight line recovery and a lot of those numbers have been going south for some point. so the spike up was driven by people knowing all of the labor regulations that were going to take effect if hillary had had won were not going to take effect and the regulations were -- that deregulation is also something >> can i ask you quickly, we had a conversation earlier today with the head of the omb about the president's budget today the administration is looking to increase spending on defense another 5% they're looking for a back door

way to do that without allowing domestic spending to increase at the same time. they want to spend on defense. not on domestic. when you look at all of the budget deficit issues, the deficit that we're returning with ab lot of that comes from increased defense spending how do you as somebody who is so adamant about taxes come down on that would you like to see them cut defense spending what do you think? >> there was a jump in defense spending in the last budget, and mathis told people to get used to it. we're not getting more for more defense for every dollar defense you actually get through. it's a very expensive trade there. and they have not yet -- they haven't even done a base closing commission to save billions of dollars. they haven't done that in this

presidency >> grover -- >> yeah? >> i want a philosophical question you know, it's hard to take things back. we never have. nobody in the history of the world is able to do that so let's say we do try to raise revenues somehow looking at taxing the wealthy because they don't pay enough. or their assistants pay the way they portray it now it's basically unfair do you have a way to raise taxes in a way that would actually make a difference to our budget deficit? could it be done with just rich people is there any way you could see in our future other than cutting spending than dealing with the financial problems >> growth is the best way to raise revenue. >> that sounds like trickle down though >> no, no, no.

>> trickle down doesn't work stop with that give me a way to raise more revenue. >> the only way is you need spending restraint tough slow its growth. and have economic growth plus the government has all sorts ofs a sects. we've been making money -- >> you wouldn't raise taxes on anybody ever again >> yeah. that's a fair statement. >> this is nuts. i mean, i think the future of the next 10 or 20 years -- >> now he's excited. go ahead >> the futures -- >> how do you do it to them? >> how do you do it to them? higher marginal rates, inheritance --

>> there's no money there. there's no money there >> that's not enough money, ken. you got to go down below that, don't you, grover? >> the concept that if we, you know, cut -- raise taxes on somebody, rewaz taxes on everybody, that's been a shell game that's proven not to be true >> can you get enough out of the top 10%? >> enough what >> enough to make a difference go ahead, grover >> $90 trillion for the green new agenda where are you going get $90 trillion that's their problem, not mine the reason why the left likes to talk about a 70% tax rate is because they think you'll look at that and not notice that your rates are going up the difference between the united states and sweden, portugal, and denmark, the

countries with the high top rates. it's how they soak the middle class. a 20% that and higher income taxes. that's their goal is to raise taxes on the middle class. but if they talk about the top rate, they think they can fool you into noticing that they're not gouging everybody else >> there will be a car tax eventually too >> no, there won't >> i think going forward there's overwhelming consensus to do something in that dimension and we need to >> like the 97% consensus? i don't know about that. thank you. a lot more coming up on "squawk. this weekend marked ten years since the stock market hit bottom in the midst of the financial crisis also ten years since a pretty big bull market call here on cnbc we'll revisit both and how far we've become in the last decade.

gordon bethune will be here to talk about the crash of the boeing 737 max 8 the tragic event is weighing on the shares of boeing this morning. down 10% igngn e dow as well. stay tuned you're watching "squawk box" on cnbc mimini was born extraordinary, with more power for more fun. mini was born to do the only thing we ever wanted to do. drive. to hit start and just go. fast and far. around town and around hairpins. to leave everyone in the dust,

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at&t has the only unlimited plan that gives you your choice of top-tier entertainment. buy a new galaxy s10 plus, and get one free. more for your thing. that's our thing. of the bull run. howard silverblatt at s&p dow jones indices. things like this don't die of

old age, howard? or they do and we're just -- you know, we're ignoring the past. is there reason to think we're long in the tooth? or have we had enough rolling corrections to where we keep getting new life >> we haven't had that many corrections and we are old at this point in time historically for the 13 bulls we've had, this is the oldest one. it's not the strongest one we did that 17.47% annualized return very good historically it's 10.1% the question is as you said where do you go from here? can we still support and what speed can we do with the key measures obviously being earnings, jobs, and income >> howard, i've done some calculations where i go back not to ten years ago but go back to the top in 1999 or 2000 or something. do a 19-year look.

and the returns are mediocre >> yeah. go to y2k as an easy item. 7.5% total return on a yearly basis. >> that makes me feel better it's nice to time it from the 666 low and then it looks like we've just had, you know, this -- what'd you say 17%. but it's like 4% >> it's definitely been a shaky ride two major recessions you had the financials financials were actually worse and had a bigger impact than the i.t. situation it's a long-term situation we will eventually, you know, get a bear market. the question is where do we stand now. how the evaluations and what are we paying and what do we expect? >> where can we -- what date do we need to go where we get that 6% or 7% long-term average return if you go back to 1980, what

have we done have we done 6% or 7%? >> we've done a little bit more than that. if you go long-term, okay? back to 1928 or so, it's a little over 10%. about 10.03% long-term with dividends. about 10.03% with dividends. and dividends have been a major component of that, you are in the 7% range if you negate dividen dividends. interest rates are lower, so more comes from the capital appreciation we've had corrections but not that many corrections. the market seems to take a correction and it's a short time period it wasn't long ago we were talking about the end of the bull and the bear was there, over 19% we were closing on the 20% decline numbers. now we're talking 6.5% away from a new high from september. so again we've got volatile markets and we've got a lot more information coming out a lot

quicker than it used to be so it's hard to compare information and executability today than let's say even in 1980 >> i just wonder whether we're above or below -- depends where you time it from, but i don't know if we're above or below the median return we should expect. >> we're above right now, obviously, because we're still in a bull market take it back to when we went into the bear -- >> i want more i want to keep going i don't want a recession, i don't want it to pull back just bear with me. howard, appreciate it. aviation authorities remain at the site of an ethiopian crash this weekend killing 157 people on board. the aircraft was bound for kenya, came down minutes after taking off phil joins us with more. >> let's bring you up to speed with the investigation because the pressure is mounding for

investigators and boeing to provide answers about what went wrong in ethiopia. we should point out that ethiopian airlines, the two black boxes have been recovered. the ntsb and faa are investigating likely doing analysis there in ethiopia or if they have to fly it to another place they have the technology, but they're going to look at the data as quickly as possible. boeing knows there's pressure aside from we're working with investigators and operators. the company issuing a statement this morning saying the investigation is in its early stages but at this point we don't have any information to issue new guidance to operators. several airlines, i should point out, have decided they're going to ground this, either their own or the country, ethiopian, chinese, indonesians kayman,

they're not flying it. and two airlines here in the u.s. fly the max 8, they're hearing from customers southwest airlines, i was reading tweets from people saying is it safe to be on the 737 max 8, the airlines saying we have full confidence in the airplane and confidence in our crews. that's the latest on the story that's fast moving >> joining us right now on the squawk news line is gordon bethune. gordon, when we spoke in november after the first crash, i asked you whether consumers getting on a plane this morning, getting on a 737 max, should be concerned or should change flights. at the time you said no. do you have the same view this morning? >> i really do, although i can understand the fear of because of the proximity of the two

issues this airplane had 1200 hours on it flown by an experienced crew. i know boeing released emergency procedures as a reminder to everyone but it's been flying for a couple years now without incident this may be irony but i understand the fear getting on an 8 max that some people have. >> do you think the faa is moving fast enough we talked about it in the 7:00 hour if these two crashes happened in the united states, do you think the faa would have grounded these planes the same way these other countries are? >> i don't think so. i think they, you know, understood the pressure, but they also understand the reality th they've got an airplane flying around the world the past couple years, the irony of the

back-to-back, i believe they'll quickly identify the cause of this, because they have identified the data recorder as well as the voice recorder i suspect we should have that information in a couple days. >> do you think china and indonesia have made mistakes grounding the planes >> i can't say that because they're responsible for their own country and people's safety. i would not have made that call. but they're probably playing a conservative hand as they can. i don't know how big an impact it will have on a country like china because of the number of airplanes they have. >> if you were running southwest or american airlines, what kind of conversations are happening internally >> obviously they did that as a result of the earlier crash and, of course, there's a procedural to disconnect. this should never happen automatically because if it does you trip it, i don't understand

why that didn't happen i know they need to find that out and the voice and data recorder will give them that there is a process and pro seed your everyone has reviewed since the earlier crash of what you should do should that happen to you. >> in terms of the way boeing is going to handle this or has to handle this, how quickly do they need to communicate to the public about this situation? >> just be on the -- you know, today. today is the day saying what they're doing and get more people confident they're doing everything possible, i suspect they are, but they need to communicate that and i think they will. >> what do you think about china's move to ground the planes there >> china is a big country with a lot of airlines, so i don't know the impact or how many 8s they have, but it's probably 2% of the fleet, so the impact is probably minimal for china

but that's their call. they're making it based on what i consider limited information it's speculative on their part. >> gordon we appreciate your perspective, especially during these important times. >> glad to help. >> those are the worst levels on boeing, down 11, and southwest is down. >> southwest and american are the two american airlines that have taken delivery of those planes when we come back, we have more "squawk box. back after a quick break d turns. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. people know aflac... aflac! ...but not what they do.

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okay as we close out the show here down about 152 points now on the dow. interesting that the nasdaq and the s&p are both higher because a lot of that, at least 250, 300 points just in boeing stock. join us tomorrow, "squawk on the street" is next. ♪ good monday morning. i'm carl quintanilla with david faber, rick santelli at the stock exchange boeing set to erase about 340 points from the dow as the stock is down 12% on china's grounding of the 737 max 8 europe in the green. china up 19 overnight. ten year 264, you saw the retail sale