yesterday to close around 400. it's tuesday, march 12th, 2019 "squawk box" begins right now. >> good morning, everybody welcome to "skbuks." we are live in times square. i'm becky quick along with joe kernan and andrew ross sorkin. let's take a look at equity futures at this hour you'll see that things are relatively flat right now. the dow down by four points. s&p up by four points, and the then the nasdaq indicated up by 11.5 as joe mentioned, it came after a big market day yesterday major averages closed at their session highs.

again, that gain was the biggest we've seen since february 15th will you see that the nikkei ended up thin in europe where there is some early trading majority taking place as we hear more about the brexit talk, it looks like the ftse is flat at this point. cax higher dax flat, too. a little bit of lack of momentum across the board well see how things shake up as we go deeper in the trading day. take a look at what's been happening in the treasury market here in the united states the ten-year is yielding 2.666 >> let's go across the pond and talk a little about bit about the new brexit negotiations. prime minister theresa may announcing legally binding assurances from the e.u. in a last ditch effort to persuade parliament the pound moving higher

overnight on that news we will get a lortd from london in just a couple of minutes. >> the faa at this point doesn't plan to ground it closed above 400 after all is said and done. that was down 22 you can do the math for how effective the dow is it's been up over 300 yesterday. the low yesterday was 365. it actually came back 35 points, so at one point it was down over 55 points yesterday. came back to close down about 22 after gaining back 35 or so from the lows it's getting back another seven or eight this morning. that implied open on the dow up again, and that was up most of the premarket session.

>> it's just begun, but the agency is going to mandate that boeing make a software fix a little bit about the software yesterday. an automated flight control system that played a role maybe in the crash of the lion air jet that fell back in october in indonesia. boeing confirmed late yesterday that it's going to deploy that upgrade. meantime, the fall-out continues for boeing singapore now temporarily suspending operations of all 737 max 8 aircraft in and out of the country's airport, and the move effects five airlines, including silk air, a regional carrier that has six 737 max 8s. boeing's u.s. customer including southwest, american, and united. >> united has 14 >> they continue to fly the plane. >> look at the numbers this morning. southwest has the most i think american has something

like 31 or 32 of those planes. >> what would you get on >> i don't know. >> do you think the faa should grountd them all >> if two of them went down in

the united states, i think they would have already >> but they didn't they went down do you think the faa should ground all -- you are going to let other people -- i'm saying you will let other people fly. i actually think i'm not an expert in this, but there's part of me that thinks maybe you want to ground them for a couple of days as you try to figure this out. >> i think they have the boxes now. they're going to be able to figure out a lot more in the next couple of days. >> you dow think the faa should ground them? >> i don't know. this is like when you -- >> you see my point? i'm saying i think it would be -- >> if you decide your kids can no longer ride with your parents when they're driving, but you still let them drive with everybody else on the road >> it's similar to that. i feel myself saying the faa should ground every single one of them, but if i was flying one tomorrow, i probably -- >> i have checked on all the flights. >> if i had a family member flying >> because the faa has not grounded, if you were to try to

cancel or change your flight >> you are the loser on it >> interesting. >> this is really just a video it's not really happening. these are cab drivers. he does this for a living. i'm not in any danger. >> how does that -- >> yeah. >> speaking of driving and maybe autonomous cars that would maybe solve -- >> what what is? >> maybe autopilot on tesla would. i don't know elan musk's lawyers slamming regulators late last night they're arguing that the s.e.c. was infringing on musk's first amendment rights in this case.

regard egg tesla's finisheding his lawyers say the tweets in question did comply with earlier s.e.c. settlement terms. >> did they? as a ceo, you don't get to say whatever you want. you can't say things that are will have a material impact on the stock. >> secondary argument that he is making beyond the first amendment argument is that the comments that he made were not material there comment fell within that that's the argument. i don't know if it will hold water. i think given highway clear the settlement was and specifically this idea that these tweets were going to be vetted in terms of reality and clearly that they

were not -- >> we decided that -- >> despite the process put in place, it's going to be -- >> the problem is we have decided and determined that the s.e.c., they have -- that his judgment is not great with these things, which is why he needs to run it by somebody else. >>. >> the hard part for a judge is do you strip him of -- due say -- the drakeonian thing to do would be to say you can't work at tesla anymore. the impact of doing that on shareholders -- >> which is why the s.e.c. didn't take strict steps he does not respect the s.e.c. he says he doesn't care what they say >> what you do do? if you strip him of his title, is that in name only does it matter >> is it a toothless agency? >> do you fine him an extraordinary amount of money? that probably -- by the way, if you fine him enough money, he might then have margin calls and have to sell the stock

>> news just out for united health it is changing how it hangdss rebates. the drugmakers give to insurers. the company will require new employer clients to pass those rebates on to the patients who take the medications this policy will apply to kbrsz that sign new contracts after january 1st, 2010. although existing clients will be able to keep their current setups you mean after 2020? it's already past -- >> i believe 2020. >> yeah, 2020. anybody who signs one after 2020 on this, and obviously, this is going after what the administration has been trying to crack down on who is getting all of those rebates? if you don't pay list price. maybe it's a way to try and derail the administration or congress from taking stricter steps to say that you can no longer pass those rebates on it has to be a list price that goes to everybody. >> and mark your calendars

this is going to be interesting. apple announcing a press event on march 25th. we will see. a lot of people waiting to see different programming and production on a number of big shows, including this jennifer aniston, receipt witherspoon show with b morning tv >> shade of business >> probably not.

>> unveil on whatever apple news is going to be, and texture plus plus >> in the meantime, we are continuing to follow the ongoing crisis in venezuela. protests expected again today as rolling black-outs show no sign of stopping. in fact, let's take a look at a video of an explosion that rocked a power plant in caracas overnight. they've been without power sense thursday the united states is now taking more actions the state department is pulling all remaining staff from our embassy in venezuela's capital city it means that we no longer feel that they are safe being there we're preparing for something else that's not the official word mike pompeo tweeting this decision reflects the

deteriorating situation in venezuela as well as the conclusion that the presidents and diplomatic staff -- it's become a constraint on u.s. policy >> could be a lot of that. >> coming up, a crucial day for brexit theresa may winning key assurances from the e.u. ahead of today's vote. we're going to take you live from london next as we head to break, here's a look at the biggest premarket winners and losers

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that's why we go beyond the numbers. want more from your entejust say teach me more. into your xfinice remote to discover all sorts of tips and tricks in x1. can i find my wifi password? just ask. [ ding ] show me my wifi password. hey now! [ ding ] you can even troubleshoot, learn new voice commands and much more. clean my daughter's room. [ ding ] oh, it won't do that. welp, someone should. just say "teach me more" into your voice remote and see how you can have an even better x1 experience. simple. easy. awesome. welcome back there is a big breakthrough in brexit talks ahead of the key vote today steve sejwick has more steve. >> andrew, the mood of people in westminster and the united kingdom are sthig they're going to get a deal, not get a deal through parliament is moving very quickly i can tell you hour ago it was

doom and gloom she rushes over to straussburg and has a meeting with jean claude juncker where, they managed to get legal assurances that britain wouldn't be tracked with the irish backstop, which is basically an agreement that creates a customs unit that we can't move forward with a free trade deal. hard brexiteer within it is conservative party i just spoke to jacob reece about understanding the legalities he says he is waiting on his own lawyers it from his own group, erg, to tell them what they think of it.

let's listen in. >> but i'm waiting to get legal advice because there's an old line, isn't there, that the person who appoints himself as an own lawyer has an ass for a lawyer, and i don't wish to put myself in the position of an ass. >> he doesn't want to put himself in the position of being an ass he is saying that government's own lawyers, jeffrey cox, the attorney general here, and he is going to get up in an hour or so time and tell parliament what he thinks about whether this is moving the goal post on whether the u.k. will have to endure indefinitely a customs union with the e.u why is this important? it's absolutely key for the dup, for the unionist politicians who back the conservatives, and its absolutely key for a key 104 mp's who voted against mrs. may when she had that defeat on january 15th where she lost the greatest defeat any government had in british parliamentary history. 432 votes to 202 she's speaking to remainor mp's,

to cabinet ministers, and speaking to a dup brexit spokesman, and they are all unsure whether this reduces or eliminates those risk. if it eliminates, then she'll get her vote through if it just reduces, i'm afraid to say that brexit will go on a -- she will not get her deal today, which could lead then tomorrow to a vote on no deal brexit and lead on thursday to another vote about extending the whole article 50 process mrs. may's tand liesingly close to getting a deal she wants and getting britain out of the e.u the problem is she may well be just short of that blou >> steve sedgewick, across the pond thank you for that.

>> the market is going to react. >> the auto sector for example, huge integrated supplies.

>> it's not just identifying which industries are going to be effective or would be. the question is sort of given that we don't know what the ultimate outcome is going to be, how do you play these industries are there any industries here you want to say i want to definitely be heavily invested in are you hedging? what's the move? >> i think at the moment it's really just sitting on cash and trying not to play anything. the volatility has been so high. i think a lot of votes will be at the risk of looking silly it's much too high to take really big bets. i think some, though, you know, the banking sector, for example, the bank of england has come through and said an extra trillion dollars of cushion. as soon as you see some stability, you see it. those kinds of sectors, whether there's really to flip the switch change coming are out of more coming. >> what do you think the impact is here in the u.s.? >> i think it's minimal. look at the s&ps 1% of revenues the whole index goes direct to the u.k., and it depends a little bit on what happens with

some of the other big macrotrends, whether the rest of europe has gone to recession u.s. china is a much -- >> do you think this effects tourist and travel >> it's interesting. i think expedia came out recently and said they've seen a ticking down of some of the bookings to the u.k. zroo does that make any sense to you? >> i would plaj something else unto itself. >> i think if you look at pounds, i think if that continues to stay weak, there's an uptick when the news came out that there was some movement you may see travel pick up snoo when we come back, this morning's big movers, including a personal style service gaining as much as 25% overnight next right here on ""squawk box"" a little later we'll be talking about president trump's budget and china trade talks with house minority leader kevin mccarthy that interview coming up at 8:00 a.m. eastern time. "squawk box" will be right back. .

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>> stocks to watch shares of stitch fix are sharply higher the on-line personal style service reporting better than expected quarterly results the company reporting an 18% rides in the number of active customers. it previously warned investors to expect no users growth during the quarter, and that stock is up by about 25%. the maker of home security products also forecasting results for this year that are below what the industry is expecting as it faces more competition from do it yourself offerings like google nest that stock is now off by 13% and then volkswagen says that its namesake car brands missed profit margin targets in 2018. earnings were hurt by sales incentives and currency headwinds. also, up front investments for electric vehicles and stricter

emissions testing and that stock right now is down by less than 1% new this morning renault, nissan, and mitsubishi are teaming up to form a new governing board will will replace the structure that was set up by carlos ghosn leaders from the three automakers announcing that decision at a news conference in japan overnight. morgan stanley out with a big call we have the details on that call in just a moment whrn. as whaed to the break, a look at yesterday's s&p 500 winners and losers we see breakthrough medicines getting to patients in record time.

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>> good morning. the story is front and center. the faa says that boeing 737 max 8 jets are still airworthy following a second crash involving a plane nowhere near below yesterday. they got to 365 yesterday. down almost 55 points on the session, and then closed down about 20 they're from last friday before the crash. elan musk's lawyers slamming regulators late last night

musk had until last night to explain why he shouldn't be held in contempt over a tweet that he sent last month about tesla production his lawyers say the tweets in question did comply with an earlier s.e.c. settlement. the tech giant is expected to debut a new streaming service and bundle for apple news. experts also say apple could introduce a new low cost ipad and a new version of the airpods. u.s. equity futures at this hour are indicated down 20 -- i wear those things they fall out, but i wear them i don't wear them that much. >> i wear them all the time. >> did you see any of the crazy stuff about the -- >> i have read >> about what? i didn't hear this >> you don't know if it's real, though >> i know. i know no, i'm -- >> wait. fill me in i don't know what you are talking about. >> it's so close to your inner

autoer and brain that there is some radiation of some kind that is different than headphones, and they're worried that in animal studies that -- >> kids use them all the time. zoo that's what i worry. it's way too early to jump to those conclusions. they've said the same thing with cell phone use, and with trillions of people -- with billions -- >> thousands of -- >> i say billions and -- you would think you would see some -- >> all i would say is that bluetooth, the frequency and wave lernd lengngth is so much a a cell phone it's night and day.

>> if you had the big, leak beats things, it's spreading the waves farther away from your head, and over a bigger surface area aye read a lot about this. >> conspiracy television >> how about i saw samsung has competing products, right? have you seen those? i don't know i saw them >> i defer to you on that. >> i don't know. >> they're almost too small for that you walk and you have to -- >> that's good for you, isn't

it you don't need to talk to the common people as much. >> i'm suggesting they're not big enough >> i'm a huge fan. >> welcome to both of you. let's start with you because yesterday we did see the markets pick up pretty handily you think right now, though, the

markets are on a little bit of a high, and that there is a down turn that's coming when it comes to the u.s >> well, i think you look at earnings and what they've been able to deliver. last year and then the revisions that we've seen this year down wards. that's really my concern is that as the market was on a sugar high the first couple of weeks of this year, we see some revision earlier -- late last week and then a bit of a bounce. ultimately, earnings expectations for this year are now around 4%. right? they were at 8% when we started the year they did come all the way down to 4%. i think that's something to keep an eye on, right >> did you think the december lows were a better place for this markets, or did you think that that was overdone >> i think ultimately you just have to look at valuation, and right now it's not at place where it's worrisome it's not super elevated levels, but at the same time it's not cheap. you are left with what are erjsz going to deliver if they're expected to deliver 4% this year, there's want as much enthusiasm like last year when we were looking at double

digit earnings i believe valuations are fairly reasonable, and we have policy uncertainty that's been weighing on the market and causing volatility in 2018 potentially. >> you mean the trade deal >> first we saw with the fed the fed was key. right? the fed backing off. that should get greater clarity on trade and perhaps even brexit the most important thing on all of this is as long as the u.s. currency, the dollar, stays relatively stable or even weakerned some, and valuations are still generally reasonable >> how much of this is just the emerging markets better just like morgan stanley? >> i was just going to basically mention that it's a relative call

>> you could get valuation that is are at a 52% discount to the u.s., and you get a currency tail went as wrl. >> i agree with that kpleelts. typically the dollar cycles end at the end of the fed tightening cycle. we could debate whether we're there, but we're probably pretty close. if you think about what last year was all about, last year was about the u.s. growing above trend and china growing slightly below trend, and what this year is about is the u.s. slowing back towards trend and china doing everything they can to stabilize growth >> where in the meernling markets do you think is the best possible places? >> i mean, when you look at

valuations and emerging markets, may i dare say china is actually one of the places that looks appealing, right not in the short-term, but if you think in the biggest driver of expected returns is valuation outside of earnings, china is close to one-third of msci index. when you are making a call on em, you have to believe that china is going -- >> the stimulus that they've been putting into place is probably not going to kick in in full force for a little while yet. >> that's absolutely correct. >> just to the point of what happens with the earnings. if we're looking at earnings just flat, let's say, what does that mean? valuations here already reflect

that >> i think you would see multiples expand to driver markets forward. we're still in a very low interest rate, and we're all in a benign inflation world you know, there's very little to suggest that this cycle is going to end that's going to be -- it's going to be parts around the world where valuations are more reasonable >> do you disagree with any of that >> look, as i said, i think the u.s. equity call is more do you actually think that earnings will deliver what they're going to deliver if they do -- we've seen cases where earnings have gone down and the market goes up i can't -- i have no productive power of what's going to -- for me it's more around what relative looks more appealing, and from the dow perspective and emerging markets >> thank you both dpor coming

in >> thank you >> do you watch twitter at all sorken >> i do. i do i'm now watching -- i was paying attention to this fascinating interview, and i want to understand about -- >> this person wants me to meet a woman who feels the same way that you feel about your -- >> that feels the same way about him. >> as you feel about your airbods. interesting. did you also know what day it is yesterday was national -- >> national airpod day what are we on pancakes >> national pancake day. >> it started in the greenroom >> i in ipod 7:00 a.m. to 7:00 p.m. completely free short stack. you know

leave your airbuds in, and -- anyway. an outbreak about the swine flu. we'll explain that next. then, later, we're going to talk to the head of one of europe's largest industrial manufacturing companies siemens about the slowdown that's happening across the pond and what it means back here at home as well stay tuned you're watching "squawk box" here on cnbc so, the whole world is talking about ai. big, bold promises like... it'll find life on mars! but here's the thing. you don't live on mars. (beep) you build wind turbines. supply car parts to thousands of cities.

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sfwla we're taking a closer look at the soy bean market this morning. china is committed to buying an additional ten million metric tons of u.s. soy beans, but there are demands concerns that have sparked new doubt u.s. tariffs have been weighing on chinese imports of soy beans, and how a swine flu outbreak is further complicating the trade relationship so far more than 111 outbreaks have acted -- of swine fever have resulted in china it's the recalling of one

million pigs to try to halt the spread of that disease it's expected to hurt demand for soy beans which are used for feed per bushel >>yeah beans in the teens that used to be the rallying cry. coming up, europe has seen its growth forecast slashed in recent weeks we'll talk about the chief executive at euro manufacturing giant siemens about the european economy, and as whaed to break, here's a look at what's happening in european markets today. at&t provides edge-to-edge intelligence, covering virtually every part of your healthcare business.

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growth in europe looks at what could be a slowdown that's according to a new forecast from the european union and the ecb. growth targets were slashed for all the major economies in the region including germany, france, and italy. for more on the euro economy, let's welcome joe kaser. thanks for joining us today. >> good morning. >> are you in the middle of what -- as you look around at seamans business, do you see there's a slowing in the general economy in europe? >> well, we haven't seen it in our business here. i actually like what i see in terms of automation, industry,

and health care. as a matter of fact, it's been slowing down if you look at the sector such as automotive. not unexpectedly because we have been at the peak of the site to see that it's getting a bit slower >> is that china related or is it due to the skirmish between the united states and china at this point? or there's got to be other factors involved but is that part of it, would you say? >> well, i believe the world today is not really anymore. if the two strongest economies in the world have their different way of thinking about things, it definitely does slow down the global trade. that's clear we have not only seen deceleration of growth in europe, we've seen it in china the latest forecast also for the

u.s. tell us that it's going to go south so we try to be mindful about what we can do the best thing honestly is the type of uncertain situations i talk to my customers because they pretty much know what the demand is, what the customers think. it's a reliable way of managing a company through a slowdown >> so joe, you operate in china. you have for a long, long time you've got a lot of employees there. you're a technology company. if i were to ask you to pick a side, united states or china, in the discussions that they're having, do you have similar concerns to the trump administration and the way china conducts business or are you going to give me an answer to not ruffle feathers anywhere would you pick a side? >> no. the united states is our biggest

followed by germany and china. we have more than $40 billion in the next years that's the united states which we are here today and i feel good about it and then china, i mean, about $10 billion they're our customers. what we don't like is if people talk about each other. you always like to have people talk to each other and find a common ground and get differences out of the way that's what we have been as a company. what i would really like to encourage people is talk to each other. you know, if there is unfair trade, we need to go fix it. if trade deficits result from the fact that, you know, people confuse the lack of competitiveness with unfair

trade, then innovation and productivity is the key here and not additional tariffs because at the end of the day and you see that we've been all suffering from a global slowdown. >> hey, joe. for years we've always talked about siemens and general electric not only as being, you know, competitors, but also as being similar in terms of the asset mix. has ge -- have their -- the troubles at ge, has that helped siemens? or has it illustrated to you that maybe the conglomerate business model or power or whatever parallels you want to draw, maybe you've learned from that has it helped siemens or maybe you learned you want to do things different than ge >> if you want me to pick sides here, that's simpler than the china and u.s., obviously. but look i'm not commenting on my

competitors' challenges. it's obvious they need to go fix things and to have a strong ceo in the meantime. so i believe they will get their way. first of all, i tell my people take your head down. focus on your customers. be innovative. which we today announced siemens is the number one on patents in europe way before all other companies. so innovation has been the life blood of companies i think the lesson learned for our conglomerates struggling is that in today's world, focus matters much more than synergy, adaptability of corporate cultures matters much more than size. and i think that's the lesson learned. and if you look at what we have done in siemens in the last five years was a significant focus on

the business and there is going to be more. so people should watch out capital market and see that the focus is going on in siemens and we focus the company more on industry and health care. >> we're out of time, unfortunately. i was going to ask you to take a side in the brexit but i know you would -- you'd be very tactful in that too but we're out of time. you're saved by the bell here, joe. please come back and give us an update good to have you thanks >> thank you when we return, one presidential candidate has made the case for breaking up big tech we will talk to a former white house technology officer about the backlash against companies like google and facebook each day our planet awakens with signs of opportunity.

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wall street hoping to build on a big rally overnight we'll tell you what's driving this morning's action and where you should be putting your money to work. thinking of buying a second home in new york get ready to pay a lot more in taxes. a new bill is being floated targeting the rich still airworthy. that's what the faa is calling boeing 737 max 8 airplane following two deadly crashes in the past six months.

we're going to speak to a pilot and address the safety concerns as the second hour of "squawk box" begins right now. live from the beating heart of business, new york, this is "squawk box. >> good morning, everybody welcome back to "squawk box" here on cnbc i'm becky quick along with joe kernen and andrew ross sorkin. the markets showing a mixed picture. the s&p is indicated higher. so is the nasdaq dow futures indicated down by about 20 once again, it is boeing dragging down the dow. it's indicated down by -- it's got a pull of 50 points on the dow futures. you would see the positive territory if it wasn't for those losses we've got a lot to talk about. boeing announcing the 737 max 8

is airworthy the most recent crash was this past weekend in ethiopia prompting several countries to suspend those aircraft they plan to implement it in the coming weeks now, the government set to release the index. economists expect headline inflation and ex-food and energy to be up to 0.2% up for the month. and look at shares of adt. they're under pressure this morning. posting an unexpected loss as far as revenue that came in below estimates. also intensifying competition. adt now off this morning about 13%. every time i think of adt, i think of tyco back in the day, if you remember. home security systems in the age of the internet have been up ended by all new sorts of

technology few other stocks to batch this morning fuji film? remember that? they got to drop the film. poor film company. i feel bad for them. why did i buy all those photomats? that huge investment i thought, people love pictures. you're going to get them quickly, this is going to be around forever anyway, 890 million -- >> i think of that movie with robin williams when he played that creepy guy at the photo place. >> they made attempts to diversify over the past months this one to bolster health care business meanwhile, tesla ceo elon musk's attorneys say he did not violate the s.e.c. and rejects the

attempt to hold him in contempt of court at a panel in austin, elizabeth warren reiterated points from her blog post last week she said we want to keep the market place competitive, not let a giant with manipulative advantage snuff you out. joining us now to talk about this is ed lee cnbc contributor and annise chopra he's now president of care journey. welcome to both of you and set this up. she may have hinted at this before but this caught people off guard. >> full fort and in such stark terms. she offered really specific ideas, breaking up in the case of amazon their. she's framing a debate about

where competition -- it's not about price fixing which is the traditional way we look at ma noplies. >> it's been great for consumers. >> it's free or it's cheap and it's convenient, right where is the harm there. but if you look at the broader landscape, thereby concern in edging out other companies we think of the internet as this big expansive place. it's really three companies. >> that sounds like the european model. >> it's gaining traffic just in europe >> speak for yourself, lee you can go into that building with all the -- >> it's one of the few bipartisan things we're seeing >> i was hoping you'd walk the walk you'd get woke to the woke on this both of you. now here's your idol and she's saying these things -- you love her more than -- >> >> in september she talked about

this original idea i thought maybe she'd do something. but there is a -- and you're trying to sell airline tickets at the same time that expedia is paying you barry diller talks about this all the time >> you don't have to break the company up >> by the way, she's not suggesting from what i understand to break google up or amazon she says the idea you should not be able to compete with your own customers. >> sell the stuff on the networks you build yourselves. >> right >> then the question is you get into white label costco has a new product and then their own product the question is if that's okay. >> annise, how would you be l k looking at it? >> first principles, the u.s.

tech economy is the envy of the world. but it has to remain a vibrant marketplace for the places that follow so to me the purpose of her presentation is to start a conversation >> really? >> this new green deal is aspirational we don't really mean it. what if it's an absurd conversation withry lick louse goals in the end >> it's a fair conversation. >> the expert agency is actively studying whether or not our merger guidelines are in the area to understand the underlying harms if there are any and if the consumer standards should be revisited. we are having that debate. >> i guess i go back to the idea that if consumers are really winning on this then it's great for americans and if you start to mess with that, i worry what

that means particularly as you pointed out, we are the leading place for technology >> it's the goose that laid the golden egg >> my only comment i'd make is we have an immediate opportunity to get the guardrails right in the tech economy these big firms are massing up -- >> no one's arguing the privacy. >> one thing i'd add -- despite -- it is a worthy debate what i found most interesting in my twitter line, a lot of the start-ups actually like the idea you need to look more closely at them. >> i bet >> that's part of the argument which is are you crowding out the next -- >> they also like to be able to sell themselves to them. aneesh, let's go back to this point. i get what you say about collecting this data information.

i'm a fan of that. i am a little concerned when rebreak them up just because they're big. you can't fall on the traditional view of a mow nnopoy >> i think the more appropriate conversation we're having is are the existing rules being enforced to ensure a competitive market place >> that's a healthy conversation what warren is talking about is different. do you have any concerns about her take on this or is this something the democrats really pick up and run with as an election issue >> the political issue is this is going to be in the primary for sure to the extent they're not working in the broader economy that is to say we're not spurring entrepreneurship and innovation start-ups can get access to the

infrastructure, if you will, to compete side by side those principles, pretty critical for competition now it's are we using information in the manner that has a similar property i'm not sure we need to go as far as the breakup but i think there's work to be done on evaluating economic effects on merger conditions and other aspects to make sure we have that. start with data price to have a piece. >> breaking up these companies doesn't necessarily solve the problems that senator warren brings up. i think that's where there's a gap in understanding how their -- i don't think it necessarily changes the dominance of search, for example. >> aneesh can you speak between

a white label product that a costco might sell at their own store that competes with a branded product versus what's taking place in these marketplaces online? >> look, the core issue is whether or not the market places are accessing information that might be hard for others to see or access in using that. whether it's the white label or brand eed product, doesn't mattr >> when they look at what white label product to sell, they know how many people are buying them. and if we could offer batteries under our own brand for less, we can do "x" better. >> when you walk into costco, it's a reasonable expectation they know what you're shopping for. you may have an idea of what they do. that's a trade you get walking in the door. you may not know that the conversation you're having on facebook links back to a google

search that had a relationship on a different computer for a different reason and so that whole conversation about your expectations for the context in which you're using digital market places, that's why we called for that bill of rights that may be off today. and that's the part i'm most excited about. >> thank you for your time today. coming up when we return, the boeing 737 max planes are still airworthy according to dadp stau stay tuned. you're watching "squawk" here on cnbc 3 -driverless cars... -all ground personnel...

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welcome back to "squawk box. launching a new realty --

loyalty program for chipotle >> the company's teaming up with venmo to build buzz during launch week depositing surprise amounts from $1 to $500 for those that sign up this comes at a time when digital is growing quickly for the brand. up 66% and accounting for 13% of sales. the ceo told cnbc exclusively that loyalty will further engage customers with its digital platform >> i think this is going to be a multiplier effect on our digital business people get more engaged, more committed in our digital system with the loyalty program >> under his leadership, chipotle has been moving to create it more seamless in

installing and testing out drive throughs for the digital orders also second make lines in the stores to speed up the process >> chipotle has a significant advantage in we've built dedicated kitchens to serve digital orders and we've integrated those kitchens with our app and delivery drivers so the orders come in a way that's seamless. they don't interrupt the flow of the line in the restaurant >> we know how much these matter to big brands like starbucks and dominos. they allow you to further engage, send promotions directly and obviously it'll be a boost for business >> you have any nachos yet >> i didn't bring anybody out. >> they don't. so what? quesadillas? >> not yet they do tacos. they have purr ree tburrito bow. >> you don't have something i want, i'm not going to be loyal.

>> not even for some free money? >> no. not if they don't have things i want to eat. you need to earn my loyalty. >> we know you're a taco bell fan. >> well, i thought he'd be doing it because he's from taco bell, niccols. >> you grilled him on that last time >> i did now for is a check on the premarket action, dominic chu joins us with a look at the markets that are moving premarket. >> i would say this i'm a nachos bel grande myself. tesla down this morning. target priced by analysts at nor gan stanley. it's now 260 bucks it was priorly $283. they do say the stock may be fundamentally overvalued but strategically undervalued. the rating says equal weight shares of coca-cola are down by

around a percent 15,000 shares premarket. downgraded at hsbc to a hold rating the target price also cut. impact thg i thinks like toe is a taxes and retailers as well. and we're going to end with boeing down another 2% on shares premarket. cutting the stock to a hold rating on the heels of last week's failed ethiopian air crash. they decided more balanced valuation at current levels given uncertainty because of that crash so those balance out to a more balanced rating. >> thank you so much for more on the market action and on boeing in particular, let's bring in scott nations. nations chair cio and president and cnbc contributor what do you think of the action we're seeing this morning? >> i think the interesting thing

about the boeing proice action it hoped right on it rallied and rallied pretty impressively to get back to $400 i think that's an interesting level. while we're down just a little bit today, that 365 low yesterday is just above the 200-day moving average that's 358 right now so while boeing has had a tremendous run, gained almost 50% in the past three months from its low in december, you would think that those levels would be really important. >> hey, scott, i look at this and technical levels seem they would make no sense in a situation like this. this is something where the news and what the faa decides beyond that only the big round numbers are

going to matter. we had some ugly news yesterday as far as the stock is concerned. it rallied from that 365 low so i'll agree. we've had five months of investigation of the lion air crash. and we're not going to get more information -- >> but one plus one does not equal two. in this scenario >> i'm sorry >> one plus one does not equal two in this scenario this is an entirely different situation. if they find there are any sort of consistencies or problems that mirror up, that this is t not -- if you look at this and say technical levels or what happened five months ago, had i have a hard time mo thinking any of this is going to follow suit. >> i understand your point i think part of what is going on here is we're going to pay attention to what investors have

to say the faa reiterated their airworthiness rating yesterday normally what happens is the regulator in the country that received the plane and that would be the faa in the united states most other companies will defer to them. china not deferring to them. that's the first time that's ha happened in a long time. some of the geopolitical concerns are what are weighing on boeing right now. it's absolutely a wonderful company with a horrible story right now. and a real problem certainly a problem for a very popular airplane they have 5,000 m 737s in the backlog lop of let's face it, the problem is we are going to figure out the problem that's the way we investigate.

>> what are you watching this morning? >> i think it's interesting the s&p rallied throughout the entire course of the day yesterday. obviously the dow jones was the laggard because of the way that a price weighted index is measured the interesting thing is we're now getting m&a back in the chip space, technology space because of the nvidia deal interesting that the inquirer rallied on that news i thought that was interesting apple obviously still way off its high but apple had a great day as well to the level they're going to be concerned -- >> you have concerns about this breakup talk we were talking about the plans to break up something that vempblly becomes reality and do you have any concerns? >> no and no in i don't think that thinks that that is likely right now.

whether or not it should, i don't think it's simply possible the fact that facebook seems they want to change their business model entirely. and the stock just has not reacted to that. that maybe we don't really understand what zuckerberg is thinking he wants to essentially capitulate to the people who are worried about privacy concerns good for him but we don't know what that's going to do to the company and the fact the stock didn't sell off on the news >> thanks, scott good to see you. >> thanks. coming up, earnings from retailer dick's sporting goods expected to hit in a couple minutes. and then the faa saying the boeing 737 max 8 is still

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still to come on "squawk box" this morning, a new wealth tax could make owning a second home in new york more expensive. after the break, we're going to talk about that and a lot more back in a moment

a plan to tax the rich on multimillion dollar second homes in new york city has rapidly moved closer to reality. robert frank joins us now with more on that good morning >> good morning. andrew cuomo announcing yesterday his support for a so-called pied-a-terre tax in new york city. it's got some support from the city and senate and council. you could call it the ken griffin tax. this is an idea that first came around in 2014 but it languished in the legislature until ken griffin bought that $238 million condo in january which sparked new calls for the tax. city speaker cory johnson

tweeting, enough it's time for a pied-a-terr tax. it would apply to properties at $5 million or more that are not the primary residences or the residences of their parents or children it would rise from 0.5% to 4%. plus a fee of $370,000 for properties over $25 million. now, ken griffin just as an example would owe about $9 million a year on his property the tax would raise about $650 million a year in total. the real estate industry, of course, gearing up for a fight the board of new york saying a tax would lead to proposed sales activity. >> let's talk a lot more about this i imagine there's going to be a debate on the set and elsewhere. this is not the first time the bill is being presented.

senator brad hoenen first looked into it. good morning, senator. when you think about this tax, what do you think the impact would be on the economy of new york city? >> let's just start with the fact -- and thank you for having me this morning to talk about this -- that we're leaving a lot of money on the table in new york city. these are individuals who don't make new york city their primary residence and therefore don't pay income tax so new york city controller has estimated that amount at $650 million a year that could go toward the important infrastructure >> senator, just to put a fine point on that statistic, it's a static statistic as if nothing changed in terms of the tax itself changing the economics

interest in buying second homes in new york city the reason i mention that is it's very possible that people would look at this decisional cost and say you know what i don't want to buy that second home, right? >> well, let's look at the fact that if you're purchasing a $6 million second home, you're only paying about $5,000 a year additional in this new tax so that's not a lot of money and we're talking about in many instances the global super rich who are looking to new york city as a security deposit in which to keep their money. they should pay a premium, frankly, on our laws, our system of infrastructure, our police and our fire they need to pay for that in order to keep their money safe that's in part what this tax is about. >> i have questions about how this is going to be implemented. first of all, you have to prove it's not their primary residence. which has all sorts of issues not just for those elite

foreigners you talk to but a lot of people that own an apartment and also own one for the parents or kids in new york city is t the second is how do you deal with the getting under the $5 million mark or each of those thresholds where the tax kicks in at a higher rate. what will you use to value the apartments for this tax? most people don't get their homes appraised every single year >> we're going to use a fair market value it's something the department of financial services here in the state of new york is well equipped to assess when it comes to determining whether an apartment is an individual's primary residence, we have a formula through our star rebate program that is very equipped to assess whether someone spends six months or more as a resident of new york city also look at things like whether

they're registered to vote, where they get their mail, et cetera. >> that's a huge new bureaucracy that you'll have to set up to implement this tax that's going to reduce what you get from the tax, right? >> i think we already have that bureaucracy established because as you know, keeping residents in new york city is sometimes and for some people an actual part-time job. so new york city, the state of new york is established in determining whether someone is a resident or not. and in terms of the burden on the individual to whom this tax is directed, maybe they should become residents of new york city and pay income tax like the rest of us and keep our subways moving >> senator, the separate question, though, goes to this

and robert and i were talking about it during the commercial break. there is a view among those in the real estate industry and i don't think it's a wrong view that by default, not only will the prices of expensive homes come down, but it should trickle down in terms of pricing on homes under the $5 million mark. do you agree with that and when you talk about the burden on new york city or new york state taxpayers, it seems to me that if prices come down, that will affect any homeowner no >> well, i think there are larger forces at work, of course, in the real estate market and one always has to be aware of that. but i believe that this additional tax which is in place in other world cities is reasonable it is applied in a progressive manner and it's fair. because at the end of the day, hard working new yorkers are paying income tax and the global

superelite who have second homes in new york are not. so they have to pay their fair share. we need to make sure that is a message that's loud and clear across this country. >> you've seen high tax states, right? illinois, connecticut, other places and you've seen the same thing done we're going to do it this way we'll tax the rich then they move and you don't get their money. i know you've seen this happen do you really not think that's going to repeat itself here and there's going to be a flight you think ken griffin is not selling his place when it's $9 million more you think all these people won't go to florida? i know you love new york city. you think it's great but they going to move kbt you add two and two together and see what the unintended consequence of this is going to be. >> as a responsible legislator,

i know that -- >> hopefully you don't do things that are going to be negative. >> we have to moderate and understand what those are. but we're talking about real estate that is valued at $5 million or more. we're talking about really a handful of people. 5,000 people is the estimate who are going to be impacted by this >> 5,000 that you don't need in new york then. >> we're also looking at foreign nationals who purchase property. russian, chinese, saudis who purchase property in new york that they're using the apartments as security deposits in the sky this is a real estate proposition that should make money on it. >> other cities in the world have done this but those cities that have, look at london, paris, sydney all of those real estate markets fell after this tax. now, there could be other reasons for that for instance, brexit in london

but you have to look at that example and say isn't that going to happen in new york city don't you recognize that prices in the short-term if this passes are going to decline >> well, i do understand that there are global trends in the real estate market but i also understand that new york city needs to fund its subway system, its affordable housing and make sure the infrastructure that makes our city so attractive to foreign nationals continues to thrive. and that's really at the end of the day to accomplish here 250 bad you don't have the money from amazon to help fund all those things >> you know, amazon is welcome to re-establish its second headquarters in the city of new york >> same kind of thing. >> they have to go through a public review process like every other company that wishes to be here in our great city

>>down, i have very mixed views of the situation i have to admit. i didn't have a mixed view of the amazon situation you know, we all have this idea especially of those of us who live in new york and new york city that we think this is an attractive place to live but people will flock here it just so happens that new york state happens to be the largest gra grantor in the entire country of incentives to be here. it's a remarkable thing. when you start to think about stripping away those incentives and there's a conversation going on about that. when you think about adding taxes on top of different real estate proposals and things like that, i do have a real question. i think it's a legitimate one about whether you think that this city just by default is as -- will be as attractive as it was yesterday >> here's the deal

if we don't fix our subway system and allow middle class new yorkers to get to work on time, to pick up their kids, to go to the doctor, the city's going to come to a screeching halt >> amen. i don't disagree at all. >> forget about your multimillion dollar condominiums in the sky we need to repair what's beneath our feet that's what we're trying to do up here in this legislative session, during this brugt pros which we're about to go see the deep issues on this. do you think tlvrs -- when you think about where taxes are generated and how they're spent in the state, i can make an argument that they are remarkably misallocated. >> i don't disagree with you in e terms of the progressive nature.

real estate is benefitted by the fact that apartments are assessed on rentals. not on condominiums or co-ops. so we have a assessment system that values a multimillion dollar apartment on pennies on the dollar because it's being assessed on the rent stabilized parent down the block. that's one of the reasons we need this pieed-a-terre tax. >> how much of the revenue is ultimately distributed over the state of new york relative to how it's spent on things -- >> say again >> i was speaking how the revenue is generated out of the city as the rest of the light is

distributes throughout the state and does not come back to new york city. >> that's a great point. >> when you talk about subways and infrastructure, that's part of the problem >> that's a great one. took more than half of every dollar that new york city sent to albany and, you know, sent it to other places throughout the state. we are the economic enjoy for the entire region. that's why we need a good subway system that's why we need affordable housing. that's why we need to continue to attract talent across the world. and if we don't have that infrastructure in place, we're not going to do it >> appreciate your time. this is a debate that we know will continue. thanks again >> we'll be ragt back. servicenow put our workflows in the cloud.

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it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. . earnings just out from dick's sporting goods. beat the consensus estimate by a penny. revenue was also above forecast, but same store sales fell more than expected. and dick's gave a full year profit forecast that falls below street's expectations. it now sees earnings from $3.15 to $3.35 for the full year that compares to the estimate of $3.34. right now shares are down by almost 5%. boeing expected to report orders later this morning just days after a crash in ethiopia

raised new concerns about the safety of the 737 max plane. phil lebeau joins us with more detail >> good morning. we have more countries as well as airline that have decided irrespective of what the faa says about the airworthiness, they are going to ground the max weights. there are now 25 airlines who have said we will not fly this plane. there are 22 that are still flying it. the faa maintains the airworthiness. flight control upgrade, that's expecting to come next month more airlines and more countries are now grounding the plane or saying you know what you can't fly it inside this country. meanwhile in ethiopia, the crash

investigation focuses on the black boxes. they'll go with the ntsp sound r sent out an e-mail after the company announced they are going to work on upgrading the software the max family has completed hundreds of thousands of flights safely we are confident in the safety of the 737 max and in the work of the men and women who design and build it. take a look at shares of boeing. we will get that later >> all right, phil stick around we're going to bring in another voice in this conversation anthony roman, founder and ceo of roman and associates and a

horrific management a management you haven't flown a max 8. >> no, i haven't but are similar in design and procedures and the max 8 is an augmentation system it simply forces the nose of the aircraft to go down should it pitch too high during the takeoff. a but for you to extrapolate to my next question, it would be a leap of faith for you to do that do you at this point feel an experienced pilot that is up to speed on the 737 max 8 can fly the plane as it exists safely every time i'm alluding to do you think this is an inexperienced pilot >> number two, is there an issue with the -- boeing and the faa

felt that training was not necessary in the and even advising the pilots the system was working in the background was necessary >> i'm just wondering whether there was an actual glitch that happened or whether we're going to finally decide this was a pilot error problem. because how many flights have been made with this system that you made the 737 system? how much have flown shaft. >> but the solution is to turn off the system. >> that's exactly right. >> it says shut it down. >> when you're in the cockpit and just take off and a 500,000 pound plane starts bucking home.

>> it's a pilot who is inexperienced. >> they have not received training in the system >> if you had to get on a plane in the next hour or two and go to lagarde, would you get on it? >> i think i would >> you would >> there's now a keen awareness amongst the board amongst all professional pilots as to what the system is. >> i thought that was a case bn mop -- >> i've flown ethiopian air as a passenger and i did notice some anomalies during the landing phase. >> really? >> where they pitch the aircraft up to soften the landing and that's normal. but the aircraft pitch should remain stable once that's done and what i found with ethiopian

air, that the pitch oscillated up and down. numerous times before touchdown. never experienced that in commercial aircraft. >> you think that's a training story? >> well, i thought that was a first office being broken into commercial flying this aircraft. but then i learned in this specific accident se sequence that the assistant pilot only had 2 hurkss hours not a terrific thing in the the. >> that's more than the pilot had in this? >> yeah. it's sufficient. >> the first mate had what couple hundred >> couple of hundred >> all right, phil you have a question, phil?

>> quick question for anthony. how long do you think it will take for other airlines or countries to become convinced again it's okay to have the max 8 flying >> it's becoming a cascading problem. the faa says that boeing is coming out with a new fix. but sometimes the fix creates more problems than they help so time will tell. >> thank you have this there's still so many unanswered questions. but thank you for answering many of them. screenin up when romn coming up when "squawk box" returns. hi. this is the man that's going to check your eyes grandma. cognizant ai solutions are helping healthcare companies

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and insithe final hour of " box" begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box. >> good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with becky quick and andrew ross sorkin the futures now are down 45 points or so most of that i would say -- check the boeing in the last couple of months let's say it's solely due to what we're expecting it's about unchanged it looked like the other indices if it wasn't for boeing. treasury yields haven't done

anything in weeks. and i'm not going to talk about it anymore actually, it's 2.65% this morning. let's tell you other stories investors will be talking about today. the united states says it is safe to fly the boeing 737 max 8 jets faa issuing a statement following the crash of the ethiopian jet. it's been working in the aftermath of last year's lion air crash. meantime, singapore and australia suspended flights into and out of their airports according to flight global about 40% of boeing 737 max fleet around the world has been grounded british prime minister theresa may in a last ditch effort to persuade to back the brexit divorce deal. it is still unclear whether

lawmakers in the uk will agree to make strategy parliament is scheduled to take a vote on the deal a little later today. also, elon musk's lawyers slamming regulatorslate last night. they're arguing they were incringing on the first amount rights his lawyers say the tweets in question did comply with gene l general. some fireworks expected out of washington today on president trump's budget as well as banking and trade. ylan mui with maore. >> let's start first with the budget house democrats are planning to confront acting white house budget director on a number of

issues the flash points include not just the border wall but also the president's proposal for big reductions in medicare spending as well as new work requirements to qualify for government benefits and their projections for trillion-dollar receive sits starting this year he's going to get grilled by the committee. he's expected to be contrite in his written remarks he says he takes full responsibility for the bank's many problems and he wrote that we have worked to remedy these issues and we have worked to address the root causes that allowed them to occur in the first place he says wells fargo is a better bank than it was a year ago. but there are 60 members or so of financial services committee. so he is going to be sitting in that hot seat for awhooile. over in the senate we are going

to hear from u.s. trade representative robert lighthizer this hearing is going to be about the world trade organization but there are reports that lighthizer -- we'll be high alert for any comments he has to make guys, i have a -- my coffee here this morning so i will be able to run around and bring you any developments as they happen back over to you >> all right thank you very much. ylan mui joining us now to talk about all of this is house minority leader kevin mccarthy. leader mccarthy, let's start with the budget from yesterday how'd that go over in the house? >> it's like most presidential budget lays out a framework the concern from yesterday was they may not be on the house

floor. >> what would it mean? >> well, a new article that came out today is that if you've watched the democrats, they lost a number of votes on the floor seems like they're fighting. felt like the new democrat socialists that's what they call themselves really took over leadership last week while if you watch the resolution proposed against the language that omar used, they had to water it down to even get it to the floor. now the latest argument is they don't believe they could pass a budget on the floor and they didn't want the public to see that so the latest conversations and talks in this article is that the democrats are thinking about not even doing a budget. >> you've had problems with that in the past. do you have any advice for nancy pelosi she said she didn't want to move

to impeach the president and caught criticism. >> what she said was correct what you have and nancy pelosi has this inside her conference answer you have tom stier out there claiming he has a list bigger than the nra. he does town hall meetings inside democrats' districts to get them to make a commitment for impeachment. so i think what speaker pelosi was trying to do is tell her conference this is the wrong path to take i believe it's wrong to do and try to slow the train down because they have no pay sis for trom. >> i thought that too. i'm a caring guy and this morning i was trying to offer condolences to some people that will remain nameless about, you

know, not impeaching trump but when i saw what some people maybe just laying in the weeds here's what they're saying about -- that she was crazy like a fox. according to one democratic grasal aide, to me she's laying the foundation to impeach saying i didn't want to do it but the things that came are -- you're not necessarily looking at it at face people i tried to console didn't seem kron soledd -- why would sh say this before mueller is out if mueller comes out and -- >> trying to quell the forces before it's there. >> she'll say hey, i didn't want to do this but look at this. >> i don't know about that

he's saying you're going to win the final battle >> there's going to be a lot of pushback from a lot of people. this is all they wanted to do for two years. >> he's been wanting to impeach this president from the day of the election but if you watch what he's been doing, he's better than down playing the mueller investigation. they are finding there's no collusion. we're come up on the two-year collusion of adam schiff saying he has conclusive proof that he's never -- if i were a democrat -- you haven't seen the mueller report have you? >> i have not. the hundreds of interviews

they've gone through, the millions of dollars spent. and both sides republican and democrats say there's no collusion going forward. >> but to be fair, nancy pelosi says unless there is much more significant evidence >> of course nancy's going to say that all before you had the cohen hearing. now, think about the michael cohen hearing. there were new questions that arose. and the whole point of why you have a investigation of a mueller investigation, it was all premised on the idea that cohen had gone saying they paid for this dossier that was not true. but that was the foundation of it that got knocked away. but you have raised questions. adam schiff's own staff went to new york four times, spent more

than 10, 14 hours with this witness. it's kind of different than what adam schiff said before. now we're finding that adam schiff has now met with the owner of fusion gps that gave you the dossier that didn't tell people before when the committee still are concerned. saying there's no proof, there's nothing coming down this there's nothing coming down the floor in a substantial legislation. they aren't winning the things they brought to the table. >> look. i think that's -- leader, i think that's -- >> hope springs eternal. >> i think it's impossible to look at this situation and --

>> you're right. hope springs eternal leave him something to grasp at. i don't want to get up in the morning if there's nothing to hope for >> leader, where i wanted to go with this conversation is to a bit of a different place for a moment >> sure. >> which goes directly to a number of companies in your state. the facebook, googles, and other big tech companies including apple. over the weekend, at least changing the market places with which they exist and then very recently talk about being bipartisan rupert murdoch's news corporation, in australia now suggesting that google should be broken up. where do you stand >> i think there's really concerns and if you watched in the last majority, i brought into

congress 95% of all searches on the internet go through google if you go on the second page, you lose about 90% of the eyes when you type in -- if you put something negative in there, that'll be the first place you go to. there's concerns i had twoweek before our primary in california if you put in the california republican party, it said our ideology was naziism if you watch what they did after the last election where many people were upset at the google meeting because hillary did not win. and you've heard the other options inside google where they fry to direct or utilize it for certain people to turn out or what's popping um if you typed in the wort idiot.

there are really concerns about that also, are these companies becoming a different form of a type of company? are they a media company are they a content company and those elements, really the law applies to them differently. and those are the concerns we have that's why i think it's very important they all come before congress but i believe you're wrong about elizabeth warren she said she wants to break them all up >> thank you for your time today. coming up when we return, a lot more coming up with john hess going to talk about the price for oil, investment volatility, whether growth in shale is masking weakness and maybe we'll talk toy trucks. you're watching "squawk" on cnbc will it feel like the wheend of a journey?p working, or the beginning of something even better?

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i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪

welcome back to "squawk box. the futures indicated down 62 points, 63 points on the dow the s&p still holding onto a fractional gain. up less than a point the nasdaq indicated up about eight points this morning. key players in the energy

world are gathering in houston this week to talk about the biggest issues facing their sector brian sullivan joins us with a special guest. >> hey it's a name and guest you know very well. john hess. he of the toy truck at chryst mat time we might get to that john hess of hess oil, thanks for being with us. jim cramer has note had td -- it a fair price for oil right now >> the key challenge for the oil and gas industry is investments. we're simply not investing enough in oil and gas to keep up with demand and offset production declines. the agency has made very clear that that number should be last

year $410 billion. and this year $420 billion the price has to be high enough to encourage that investment >> but i don't need to tell you if you're a shareholder in a company like a hess or any other and you start spending a bunch of money on exploration, i'm going to be upset. because i want free cash flow. i don't want to hear about e&p i want to hear about what's my cash flow. how does that balance out? >> that's a great question i'd say investor expectations a couple years ago was drill, bay by, drill. now it's show me the money what does that mean? the focus used to be on production growth. and now it's on return of capital. what's interesting in the past year, their spending is starting to go down in response to the investors saying we want you to

have capital growth but live within your means and return the capital along the way. i'd say the investor proposition, the hearts and minds of investors have to be regained and we're going through that what's interesting is last weekend, i know becky interviewed darren woods great company exxonmobil they' some are tapping the breaks, cutting back so they can live within cash flow >> ilove the interview you sai about darren woods with exxonmobil, right? and everybody here is talking about the permian. what about the bakken up in north dakota you have a unique portfolio. you're in the bakken of north dakota do you feel like investors don't give you much credit because there's so much attention on the permian, we've forgotten the other areas. >> one is the bakken, one is permian, and one is also the

eagle fur. what's important to know is they have a 15-year inventory of drilling locations in the bakken and we're growing our bakken to go to 200,000 barrels a day. then we're going to do what we want them to do. we're going to run it to be a cash generation machine. the key thing about our portfolio, it's balanced and the best rocks for the best returns. we have over 5.5 billion barrels of boil in reserves that we discovered there exxon is the partner we have 30%. by doing that the key point for us is that we can grow our cash flow and our protection we can grow 10% a year out to 2025 any business where you can grow

cash flow at twice the rate of the top line, it's a business you want to invest in. most shale producers can grow. but can't generate free cash in hess' case, we can do both. >> it is really a -- it is a cash flow story. the one thing -- we've got to work on your' piece. give it a moment here. i think this is my tenth year at this conference. to your point, drill baby drill. now it's keep your costs down. be profitable at $30 a barrel. pretty impressive. but how low can that honestly and realist mooicly go >> it's probably about another $3 a barrel. we're able to reduce our costs to $2.21 but about 30%

>> are you profitable at 40? >> we're going make it so it's resilient there. >> john hess ceo of hess oil what is the car this year? can you reveal >> it's a special secret i can't even tell my kids or my wife so it's a top secret -- >> it's that secret? >> it is that secret i want them to be sproourprised >> thank you, brian. appreciate it. great interview. when we come back, are we at peak digital paumts? trying to force most businesses to accept cash paypal's operating officer is joining us to talk about the cashless backlash popping up across the united states stay tuned you've got to hear this. when you look at the critical issues facing our world,

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welcome back to "squawk box. take a look at the future right now. we are in the red. the red just on the dow. dow off about 53 points. but we are looking a little bit marginally higher on the nasdaq which is up about six points s&p up a little over a point still to come, we've got some breaking inflation data the latest consumer price index

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welcome back to "squawk box" on cnbc live from the nasdaq market site in times square. we're just seconds away now from february's cpi numbers and the futures are sort of where they've been most of the session. down 52, 53 now on the dow the nasdaq indicated up 6.5 and the s&p is up listen a half a point now in the morning point out that boeing is dragging down the dow. that's why it's diverting so much from the other two. the 10-year note right around 2.65% this morning our own rick santelli is standing by at the cme in chicago. rick, the numbers, tleplease >> february read on inflation, this time the consumer price index as expected. rises 0.2% on headline

in the rearview mirror, no revision to last month's unchange let's take out food and energy up 0.1% year over year these are all a little bit cooler other than the year over year -- twum they were all cooler everywhere. let's put this way we've had a lot of 2.2%. so even though 2.1% isn't a big drop, it is a glide path that doesn't seem to be breaking to the upside that's important to pay attention to of course we'll have producer prices tomorrow. we also had february real average weekly earnings up 1.6%.

>> joe, we've been spending a lot of time here if you recall last year, this year it seems to be everything in deconstruction mode we go sideways for a long time market seems pretty comfortable here becky, back to you >> all right, rick thank you very much. let's dig a little deeper into today's numbers. steve liesman is on set for that what are you finding as you drag through that >> under control, maybe a little bit light. and those dropped a little bit so it's something that the fed has to watch here. looking at it, we had this ep

sot -- you had this rise up in vehicle prices in the wake of the hurricanes and now that's come off. so that helps a little bit medical care has been under control just 1.7% year over year prescription drugs down 1% that's been under control and actually negative. there's not an inflation issue by the way, this is commensurate with the fed running half below where it was i want to talk about yesterday' numbe numbers. made the december number worse than we thought amid unemployment and stronger wage growth i want to show you first a long-term graph of the retail sales number versus the red book and you can see they go together until they don't let's zoom in, guys. take a look here this is a reason why a lot of economists are a little perpl

perplexed. more or less, up down. i'm looking at the johnson red book versus a part of the sales series that looks at the department store sales >> i should know that, but is there a difference between what the two are measuring? >> the red book is same store sales. let's close our eyes and -- >> i'm trying to remember. but what explains the divergence >> i don't know. i can't netly g ll lly -- we've online folks on the amazon, the etsys. other people saying it was going to get the online store indicator in retail. this is led, by the way, to a downgrading of consumer expectations in this quarter in the 1% to 2% rating. >> what about the number of stores that have shut down like a sears that's not there.

some of the sports sales stores that aren't there anymore. >> i'll go one better for you. this is from ryan swede at moody's. he points this out he gez. >> i don't know what they did. they were a $15 billion company. those sales according to our surveys, it's migrated some place else. >> picked up in some of the retail numbers of. we noent they don't do -- they really beefed up their stuff they were selling. >> this is one of those sort of things where the economist uses his own personal experience. i have two kids, 4 and 6 and he goes -- >> i didn't spend any less money or toys.

it w another explanation, the tax credit wore off by the oend of the year i don't think i buy that could be a measurement problem we. >> thanks, steve meantime, let's talk cash and cashlessness paypal today announcing a new step in the digital payment wars it's an instant transfer to bank feature. company says it plans to roll out for businesses in the coming weeks and international consumers can expect it soon as well joining us now is bill ready good morning >> good morning. thanks for having me >> i want to talk about the world of cashlessness. but i do want to hit this issue and this piece of network. how's it going to change the business i don't think about the transfer issue. >> instant transfer to bank

account follows a serious that have have accessed the technology's gotten faster but in many ways money access got slower which is perplexing in many ways if you think as a small business owner, when somebody handed you cash you could spend it right way. in this, is now says you can spend that right away when paid. >> i ask this question out of complete ignorance, but one of your competitors zell which is the service many of the banks are connected into, do they do instant transfer already >> so there are other person to person consumer products what we're doing with this is we have instan tan poefrs -- you

can do that in a matter of seconds. this importantly we've had a consumer offering for quite a long time. in the world of businesses and merchants, many of those don't have a debit card linked to their business bank account. now the ability to open those small businesses can give them cash that's working capital that's no longer able to reinvest. >> let's go to what is a debate in this country. this idea that cashlessness which you would think is progress may not be. which is to say that there is a fear that these cashless stores and the like actually are discriminatory against people who don't have access to cashless services. >> yeah, i mean, we have had choice as a key tenant of our

strategy we think getting consumer products thecht to use not by taking things away. this backlash of taking away cash speaks to there are still issues to deal with in digital what's the right answer? >> if somebody handed you cash, you could spend it right away. >> what do you do about -- >> andrew, i want to add one thing quickly and i'm sure bill would agree with this. cash is more expensive than credit for individuals they've done all these studies having and holding and using the cash is a more expensive way to do business. it's another series where it costs to be poor >> 100% correct. the issue has been some of the under reserve so we have

consumer financial servicing on the line these are all bringing first rate financial services to the underserved that might not have otherwise had access to the digital economy. that is important because when you think about the places you may not be able to use cash we all know it's cheaper. but if you don't have a debit card or bank account, maybe you can't take that ride we want to get access to cheaper, better services. >> when do you think you're meanfully going to be able to monetize venmo so many kids are using venmo kids everybody is using venmo and yet there hasn't been a brilliant way yet or at least i haven't seen how you plan to monetize it in a meaningful way. >> we've said we would monetize via merchant services. we're doing the same with venmo. you now see uber eats, grub hub,

a lot of these services that merchants pay for. but we're well on our way. we announced in our last earnings call, we exited last year at a $200 million annual run rate on revenue for venmo. that's still growing quite dramatically >> i just wanted to jump in here you stand to stride a vast flow of payments. >> yes >> what can you tell us about the consumer taking out your -- >> i feel like i could offer a better explanation than the broader consumer sentiment but i think what's evident for quite a long time is if you're a retailer, you're struggling to find growth. all the growth is in digital but the average retailer hasn't had the same level of access as the e-commerce players how do we democratize assets to

be in the tdigital commerce gam. >> tipping ina kshless world i now carry a lot less cash than i used and find myself in situations where i -- >> likely story. >> no, no. hold on. no, i want to tip. >> sorry, i'd love to. >> but what i really want is some thing where i can go, binge. you know >> one of the things you notice in the apps, you've got qr codes. you'll see many putting up their venmo handle i bought all my girl scout cookies using venmo. >> andrew, you could just automate 7.5% whenever you need it. >> you're a cheapskate aren't you? >> that's for you. >> all right

thank you. when we come back, we'll talk markets and whether yesterday's rebound has legs the dow's swing saw the index break a five-day skid. we'll talk about that after this break. stick ou arnd who says our bank isn't tech enough? everyone, look at your phones. the design thinking, the digital engineering, security, blockchain, and we will be first to market! yes. when we do we launch? unfortunately, in 2 or 3, hours. why the delay? cognizant is helping banks use digital technologies at scale to advance speed to market. does your wealth manager a cfa charterholder does.

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all right. welcome back, everybody. news crossing in the last few minutes. malaysia becoming the latest country to halt boeing 737 max 8 flights in and out of the country. >> we're seeing this with a number of countries now. you heard from australia overnight. singapore said it does not want the 787 max flying in. 25 airlines, 25 comprising about 40% of the global fleet of 737 max 8s they have shut down the plane. malaysia, singapore, australia are the latest countries to join china as well as -- who with did it yesterday oh, indonesia. you have countries saying they do not want this plane flying. take a look at shares of boeing. we get the february oorders and delivery numbers from boeing a little bit later on this morning. they're not going to show any kind of an impact because of this latest crash here, but it

perhaps is a chance for boeing to once again reiterate that it has confidence not only in its plane, but the american and southwest crews. they have confidence in it and the faa says it's airworthy. >> all right oh, sorry. thanks, phil >> you bet >> that's the worst levels of the premarket right now. down about 15 again. let's get you ready for the trading day. joining us -- are you ready? can you do that? get us ready david bianca for the americas at dws group. i thought this was a compelling comment and that is that waiting for the next recession is not an investment strategy. >> that's right. >> and we're seeing that, aren't we because it just -- it's been so long that we've been in this business cycle and we figure sooner or later -- so if you really believe is that in 2019 or 2020, it's tough to stay long. unless you say that is not an

investment strategy. i'm not going to base -- >> and you shouldn't >> but it's so easy to do. doesn't it half to come eventually >> i don't think it's going to come any time soon >> you said neither year >> not this year or next year. i think this is going to be an economic expansion for 12 to 15 years. you asked me why not 16 years or longer the uk had a 16-year experience to 2008. you see valuations right now i know they're not cheap, but they reflect either a recession is coming soon or that interest rates are still going to jump upwards. >> that's your other point how long has australia had -- >> 27 years. that's right >> but your point about the 10-year that it will not materially exceed 3% for the rest of the cycle allows valuations to stay not necessarily stretched if rates stay this low. >> right so the s&p is currently trading

just above/just slightly above 16 times but if the 10-year treasury yield stays below 3%, i would expect the pe to be 18 to 20 >> we're back to just watching treasuries and what's the alternati alternative? >> right is there a compelling alternative? there isn't if you want a real return after taxes, after feeings. you have to turn to equities i think the whole world feels that way and they're looking towards u.s. equity as a source of stability and at least i would argue reliable earnings growth some are making the recession upon us. i disagree with that i disagree with the thought there'srecession risk. but we still see the tech sector, most of the consumer sectors having up profits at a healthy pace in 2019 >> i'd love to get back to -- if

i didn't need to worry about the fed, okay? put that aside that's what caused december really and if i didn't have to worry about china and i think maybe we're seeing -- maybe we do need to worry then i can get back to worrying about italy or europe or the disillusion of the eu or brexit. or the garden variety worries we used to have so we're feeling a lot better about the fed because the fed sees they are basically at or very close to the neutral fed funds rate china, we think china has gone through the worst of its deceleration what's interesting is they've gone through the bulk of the decelerati deceleration, made a transition, not entirely but in large part toward the investing in what is interesting is right now it is a bit strong at 6.7. but it never depreciated in a big way. that's opened the floodgate for foreign investors into emerging

market asia. we think that market has the most upside. >> that's an art official way of looking at things though >> no. >> they have been propping it up instead of the opposite of what they have been doing for years. >> they have been looking to have a firm currency to attract investment, but not too strong that it inhibits the ability to export i think just being shy of 7 is the perfect spot >> okay. what is dws? >> we're a global asset manager. >> what were you before? >> deutsche bank. >> for a long time. >> for a long time >> what happened with -- when did that happen? >> i did that a couple of years ago. >> because you can come on "squawk box," doesn't matter where you are, probably get big bonuses to move because you'll come on as david bianca, not david bianca of deutsche bank, you're david bianca. >> i enjoy spending time with all three of you.

>> bernstein same thing, merrill and said i don't need merrill anymore because i'm -- >> respect for richard. >> you do? >> yes, i do >> such an instigator. you are such an instigator. >> being on the buy side, the asset management aside, i can listen to more people. >> the sell side, just got to be linguists, never really say anything anyway, thank you. and you made sense today, didn't you make sense today in. >> yes >> kudos. >> thank you. >> get out of here before the other side >> i feel guilty for saying that. >> let's get down to the new york stock exchange. jim cramer joins us. let me ask you about boeing. what abodid you think of yesterday's action, today? how do we wrap our arms around this >> i have faith in boeing. if there is a problem, they will solve it just like they did with the dreamliner

i understand these countries are absolutely -- what are you going to tell them, they shouldn't do that, they should fly, i think that -- i'm surprised the united states isn't taking action or calling boeing and saying we have to be a little concerned. and if there is a little bit of concern when it comes to aerospace, that means, done. but i think it is just going to be a roller coaster. i think it will come out and reaffirm -- you heard philson, they think it is going to be halted because i think people don't want to fly it >> until they get whatever this fix is put in place, fix the software, whatever it is >> yeah. i think the airlines, the country will hear feedback that they're being asked by everybody what the plane is, and if they want to switch, if it is not -- if it is that plane. i think it is a -- who knows what happened. i think boeing will do what is responsible. they always do what is responsible and i'm counting on

them to do that. >> what about tesla and elon musk >> elon is -- he's -- he's such a wild card. i actually thought that his comments that they -- to the lawyers it isn't material, it is a decent case. i'm more concerned about what morgan stanley says today, there may be a demand issue ands that the first time i've heard a demand issue i want him to be selling cars. >> right so when will we get a better idea of the demand if this is you can get one in two weeks at this point of what whatever color, whatever interior you want. >> i went to lamborghini, you can tell the demand because every car was sold before it came off the assembly line that's what you want to hear from them. i don't hear that yet. >> what else catches your fancy today, anything else that is jumping out? >> yesterday's rally was fabulous, led by the semiconductors nobody was talking about the transports anymore apple is a leader.

that says the semis canhave more of a move nvidia is a leader, goes up big on acquisition, don't count the semis out. i thought yesterday's rally was very good. >> jim, thank you. great to see you see you in a few minutes at the top of jim's show. don't miss more of the biggest names on cnbc from the conference in houston. brian sullivan is there. he'll be sitting down with the ceos of chevron, bp and many more an exclusive interview on "worldwide exchange" with rick perry and mike pompeo. u e tcuned yoarwahing "squawk box" right here on cnbc without the planet getting warmer. at emerson, when issues become inspiration, creating a better world isn't just a result, it's a responsibility. emerson. consider it solved. when you retire will you or will you just be you, without the constraints of a full time job?

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some news out this morning from dow component united health it is changing how it handles rebates the drugmakers give to insur insurers they will pass the rebates on to the patients who take the medications. the policy will apply to employers that sign any new contracts after january 1st of 2020 although existing clients will be able to keep the current setups, that stock up by 75 cents. >> apple announcing a press

event for march 25th the tech giant is expected to debut a new streaming tv service and bundled subscription apple news offering. experts say apple could introduce a new low cost ipad and a new version of its air pods that fit better >> nothing wrong with your ear canals. >> i know. we're all different. >> these match most. new this morning, renault, nissan and mitsubishi making a new governing board. leaders from the three automakers announcing that decision in a news conference that happened in japan took place overnight we should show you, the shares of all three automakers in the green this morning after that announcement also a quick final check on the markets, show you what's going on now seesawed around a little bit right now the dow looks like it would open down off -- about ten

points two seconds ago, now off eight points nasdaq, though, looking higher, 21, 22 points higher s&p 500 looking higher as well little over 6 points we'll show you the ten-year note as well. looking at right there, 2.634. given the tesla news and mr. elon musk overnight, let's show you what happened to the tesla stock based on the reaction to this lawsuit or really the reaction to the filing that they made in response to that >> jim brought up an interesting point, just that it is morgan stanley and others pointing out it is the idea you can get your car made in two weeks, which shows that maybe there is not a lot of demand there. we'll see how that shakes out. >> big question mark make sure you join us tomorrow, everyone "squawk on the street" begins right now. ♪ >> good morning, and welcome to

"squawk on the street. i'm david faber with jim cramer. we are live from the new york stock exchange carl is on assignment this morning. let's give you a look at futures as we get ready to open the trading session a half hour from now. you see we're lookin mixed open at this point the dow sees influence from the decline in boeing. road map this morning, well, yeah, you guessed it, that's where it starts. boeing under pressure, shares sinking in the premarket the