beware the ides of march, march 15th it's scott's birthday. happy birthday, son. i hope you have a great one. "squawk box" begins right now. good morning, everybody. happy friday, and wack to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernan and andrew ross sorkin. our guest host for the next hour is steven grasso he is director of institutional sales at stewart frankel also, a fast money trader, and it's great to see you, steve >> great to see you guys thanks for having me >> let's check out the u.s. equity futures at this hour on from friday. yesterday you saw that the dow was up just barely up by 7 points s&p down just barely two it was down by two and a half points the nasdaq was off by 12 1/2 points what we're talking about now is

the s&p 500 and the nasdaq ending three-day winning streaks. the dow eeking out its second straight gain. this morning he are looking at green arrows across the board at least at this point. dow futures indicated up by almost 80 points s&p futures up by about six and a half, and the nasdaq up by 25. take a look at what happened overnight in asia. there were green arrows mostly there, too the nikkei was up by about three-quarters of a percentage point after the bank of japan decided to leave rates unchanged. hang saeng was up by half a percent, and then the shanghai composite was up by about 1% then if you take a look at what's been happening in europe this morning, again, green arrows across the board there, too. biggest gainer is the ftse, which is up by over half a percent, but you see gains for all the other major markets too. then, finally, if you take a look eight what's been happening in the treasury market here in the united states, it looks like the ten-year note right now is yielding 2.625 still those rates really incredibly low when you consider how far we've come >> we're going to get back to today's big business stories in just a bit

first, before we do that, we have breaking news overnight in new zealand. at least 49 people were killed and more than 48 others injured in a mass shootings at two mosques. cnbc's math use taylor is covering all of this from singapore this morning remarkably tragic situation. matthew. >> absolutely. the prime minister of new zealand calling this the nation's darkest day we did get an update from police officials just in the last little while, and i have confirmed that 49 people shot dead in an attack on two mosques. 41 killed in one location alone. seven at another mosque, and one person dying in hospital a little later on. local health authorities say as many as 48 other people are in hospital being treated for gunshot wounds it's believed 20 of those are seriously injured and critically hurt now, christ church on the south island of new zealand does remain locked down with people telling -- with police telling people not to go to any mosques. four people have been taken into custody.

three men and one woman. one man believed to be a 28-year-old australian-born citizen has been charged with murder, and will face court tomorrow now, the attacks took place just as people were going into these mosques. that is the latest back to you. >> okay, matthew taylor. thank you for that remarkably, guys, i don't know if you saw this, the shooter had a go pro on them, and was live streaming some of this on facebook live. the video has since been taken down, but it is a terrible, terrible story this morning. in the meantime, we want to turn back to corporate news. this was not the segue we had planned for, but we have news on facebook their shares are lower not related to this, but because two high level executives announced they are leaving the company. a big shake-up here. the chief products officer chris cox and we should say a very

close friend of mark zuckerberg. he was what's app -- then what's app's vice president chris daniels both decided leave the company. chris cox saying in a facebook post yesterday the company's new focus on measures liken crypted messages will be a "big project" and we will need leaders who are excited to see this new direction through. cox is one of facebook's first 15 engineers who worked his way up the company and played a crucial role in building out facebook's news feed and was a close confidentant of mark zuckerberg chris dap yells served as head of what's app's messaging last may. he took over at the departure of what's app's co-founder. there was some reporting overnight.

tendered his resignation this is now all of a sudden becoming public altogether today. >> chris cox, though, saying in that post that the new direction for facebook encrypted messages and such, is something that leaders are going to have to be excited about. is that indicating that he was not excited about that and chose to leave because of that >> i don't know. i do think there was a time a yoer or two ago where i think there was from my reporting it was just that he had thought about leaving before the company. not because he didn't love the company. >> just because he was ready to go to -- >> because he is ready to move on zbrool he disagrees with the company's new policy on private messaging. >> he said there was a debate about leaving a long time ago, and that given the problems that they had, he had ultimately stayed potentially longer than he had anticipated >> it's a negative for the stock this morning, but is it an ultimate positive where zuckerberg is looking at private messaging versus him not -- as

joe just read the first paragraph, how do you read it, though it's negative for the stock this morning. >> it's a lot to try and digest to figure out this private messaging, what happens from it. can they mono ties it how they've been able to mono ties these public feeds it depends how you carry that out. >> exactly well, it's up 30% year-to-date right now, and they did -- you remember when they originally tweaked the news feed. that was what had everyone thinking the advertises were going to run for the hills you can't avoid facebook if you are an advertiser, you have to be with facebook, but obviously, this morning you are going to see a little bit of a negative bias. >> all right well, move on to another name that we seem to talk about just about every -- at least every day. i guess want to see what it

looks like >> this is a small suv >> we're talking about a segment that is the most popular in the world. it's not going to be here for a while, and last night in california at the tesla design studio, elan musk rolled it out on stage after showing us the other models that are already in the tesla line-up. this is the model y. if you are looking at this saying, wow, that looks good i want to buy one. well, be prepared to wait. the versions that start coming out, the soonest you will see a version of this will be late 2020 that is the long range version with a range of 300 miles. that starts at $47,000 the standard range or the base price vehicle, that elizabeth be delivered until 2021 with a price tag starting at $39,000. the range in terms of how far you are go fully charged between 230 and 300 miles. here's muvg talking about what he expects in terms of demand for the model y.

>> i'm confident that it will be of any midsize suv it will be the one you want and, yeah, i think it will probably sell -- i think it will probably do more model y's than xm3 combined most likely yeah zplool this year they are expecting to deliver between 360 and 400,000. at least that was the guidance when the company reported fourth quarter earnings and gave its guidance for 2019. speaking of 2018 and everything that not only elan musk, but tesla have been through. well, he addressed that last night after bringing out the model y. >> it felt like aging five years in one

it was really intense. thank you for supporting tesla through this difficult period. thank you. yeah having unchord a number of new vehicle unveilings for tesla, this may have been the most subdued we've seen elan musk whether that's because he is being taken to courts by the sec who would like to see him held in contempt of court, whether he has been advised to be a little bit more subdued, this was just a little bit -- just a little bit more subdued than we usual will i see elan musk the model y, first deliveries, guys, at this point scheduled to begin late next year, and that's if everything goes as planned. >> all right, phil thanks i guess you might be -- you couldn't help it, maybe, to be a little subdued based on -- >> everything you've got going on >> can i just ask phil one

question looked like a small suv. it didn't look that much bigger than -- >> second back society >> it said you could get up to seven people in it, and i thought how would you do you that >> trunk >> i haven't had a chance to look inside there, but i thought the same thing, andrew it's really more of a crossover utility vehicle. i think that will be the big question when people look at it, how does it compare with the other vehicles in this segment he is saying, well, look, we think we can be as popular as anything that's out there right now. let's take, like, thety oat rav 4 as just one popular model that's out there that's certainly a possibility, but it's such a competitive space. there's a lot of sales potentially there, but it's also much more competitive than the other segments that tesla has been entering into >> did anybody get a chance to look inside, or this was just a real sneak peek? >> they gave people late, late, late last night out here on the west coast they gave a few people a chance to go inside, but keep in mind, becky, that is

a concept, and we have seen this before look, when i covered the model x, people went inside and said, this is fantastic. it was different by the time the model x finally came out not radicily different, but different, and that's why at this point people look at this and say, well, it looks good we think that there's a lot of potential here let's see if they can deliver it on schedule at the price point that they're laying out right now. >> all right, phil thank you very much. phil lebeau. >> you bet in the meantime, apple is out with a new ad emphasizing the importance of privacy. the ad doesn't have a single line of dialogue, but it does have a lot of pictures and a lot of snip heets of places where people want privacy, during the bathroom or maybe during one-on-one conversations at the end it has a text reading that "if privacy matters in your life, it should matter to the phone your life is on. tech rivals google and facebook are under increased scrutiny for their handling of private consumer data. tim cook has spoken out about this

this is the first time the company has really put on an advertisement to try and take advantage of what they see as their privacy it versus some of their competitors. >> apple has never been in the public spotlight for having privacy concerns. >> it might have been the opposite of it when they won't open the phone we're doing more for your privacy instead of being, you know, on the receiving end of just selling your privacy to everyone on the planet >> i love the ads. my only anxiety, and i'm knocking on wood -- >> oh. you're anxious about this? >> no is the day that, you know, you -- as they build out their services business, and it becomes more about your images

on i cloud and everything, that there's some mass hack attack and everyone's images or whatever becomes public, it's one of those ads that, you know, in theory is perfect, but also it's bold. >> they hopefully -- >> it's totally different than selling your data. >> totally different than selling your data and making that your business model fair point >> how many people can fit in a phone booth? what was the record? >> got to look it up on the guinness book of world records >> how many people know what a phone booth is >> when you were back in college, you seemed like a frat guy that would stuff themselves in >> you can get 12. dpepds on the size of person >> you could get seven people in there where. >> do you remember the model x is that the original or s it was the s >> s first roadster i couldn't fit in the roadster even >> you joked around about in the trunk they have those two seats facing backwards in the model s where they said it could fit six people, which i don't know how the safety was, but they said it

was safe i don't know where they're fitting these. >> it just seemed like -- it looked like there was definitely not a third back seat, right how do you do seven? >> i read that they could get up -- you could pay $3,000 extra to get -- it starts with five, and you could somehow get to seven. >> you know, a lot of escalades, there's the one and then there's the -- >> you spend $3,000 extra, and you get a bigger car >> they give you the effect escalade instead of the tesla. >> i'm looking it up there were new records set in 2012 >> really? >> it says only seven women, and i can't believe that's the record >> seven women that sounds -- >> folks are pretty smooth they weren't oompaloompas where. >> they were very flexible they were gymnasts >> that's weird. that is -- >> they never got them out >> that's weird. you saw someone's arm, and it wasn't even their arm. that's very strange. >> right >> in other auto news, uber is reportedly planning to kick off its ipo next month reuters says that the ride hailing company will launch its road show in april that ipo is expected to be one of the biggest tech debuts ever.

theed with journal says that uber's ipo could value the company at $120 billion. you believe those numbers? >> skeptical over everything, but i think when you see the market what the market is willing to tolerate, so this would be very bullish if the market tolerates the higher numbers. take the over under on that. >> i would probably take the under. >> new development on boeing's grounded 737 max planes. the company now suspending delivery of new planes after they leave the assembly line we'll talk about what that means for the stock and for the company after the break. plus, i'll be talking to wells fargo ceo tim sloan live from the official opening of hudson yards here in manhattan. that interview coming up this morning at 8:45 a.m. eastern time you don't want to miss it. as we head to a break, here's a look at the biggest premarket winners and losers in the dow. sfx: [phone ringing]

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>> boeing has suspended deliveries of the plane. although we'll continue to build them at a rate of 52 planes a month, the maxets will be grounded for weeks if not longer the software upgrade can be tested and installed boeing could end the week shaving as much as one-tenth off its market cap in the long-term. a lot of analysts remain unphased practically every firm this week has published a note on the aircraft manufacturing giant maintaining their previous rating saying the long-term outlook is unlikely to be affected joining us right now, though, is jeffries defense analyst, sheila kay. nice to see you. help us understand the distinction as they continue to build these planes, even though they're not going to be delivered and there's going to be the software patch or fix, is it just a software patch or fix, and do we know >> dwoent know yet >> is it possible they're going to have to do some significant

retro fitting that's not being calculated by analysts and investors right now? >> it appears it's still a software fix we could have additional pilot training, but because they're manufacturing at 52 a month, this is going to impact the cash flow it might be hard to make up where. >> when people say software fix, what about -- people also talk about sensors. sensors, i would think, would be hardware, not just software. >> on the lion air it appears the sensor had a faulty reading, so that could be fixed as well as an m-cast upgrade we've heard a lot about in the last week additional pilot training might be required in terms of the deliveries, what we're forecasting in our scenario analysis is a two-month delivery delay to customers. we're thinking about the impact to cash there would be probably a push-out to 2020 >> and the resolution for all of this meaning when there's some kind of software pa much that the faa is going to accept and training and whatever else you think is going to be required happens when

>> we're giving it to two months given that it technically started in november as they started working on it with the faa. >> and in terms of what that means for the stock? >> it's -- the program is about 30% of sales 30 billion in sales simply speaking on a cash basis, this program generates about 500 million of cash on a monthly basis for boeing the 737 program. the two-month push-out is about a 12% hit to the company's total. >> which one >> what do you think they're going to have to pay the airlines >> i think the airlines are being loud if i was an airline right now, i would probably be looking to place an order for a max because i know the long-term program will be intact, but i think there's a lot of vocal posturing out there. there's 80 customers for the max. >> but if you are norwegian air and you say you got to pay me for these grounded planes that i'm not making money off of. >> we saw that last year with united technologies and the gtf engines and its issues with boeing it might be through,

you know, wide bodies or narrow bodies we won't -- or it might be through service contracts. there will be penalties for the groundings >> when you look at andrew's point, when you look at how much it's going to hit cash free throw, is the number $2 billion per month or $2.5 billion between the billion on the deliveries and what they're going to have to pay airlines $1 billion roughly, and that's a shorter term duration of the hit? >> boeing generates about $15 billion of free cash flow per year how we're thinking about the free cash flow hit is drars 500 million a month. $1 billion in total would be pushed out to next year. that's not including compensation that is just a delivery delay because they're manufacturing at such a high rate 52 a month they're scheduled to go to 57 a month sometime this year we think that catch-up might not be possible whe >> very quick curve ball we had a guest on from one of the unions the other day who made an interesting comment about repairs and inspections of these planes and a lot of that

now happening internationally. not on u.s. soil, but elsewhere, and he made the argument somewhat of an america first argument, but a safety argument that some of this needs to be done in the united states, and oftentimes it's being done elsewhere, and then being brought to the united states, and they're actually having to do a second fix to some of the repairs that didn't happen elsewhere. do you think that the safety record and what's taking place in ermz it of those repairs and inspections that are being done out of the country to save money by the airlines should be brought back to the u.s. >> i think i'll go back to pilot training i think additional pilot training might be required globally you see pilot shortages. you see shortages in aerospace just because the production is so strained because they're producing at such high volume. i wouldn't necessarily say there's different geographies or having different maintenance practices. >> okay. fair enough. sheila kay, thank you. appreciate it. when we return, we're going to talk about the new developments in a case against

volkswagen then admission scandal we're talking about celebrities coming forward and saying that they hired the college prep firm at the center of the cheating and bribery scam, but that everything they did was above board. "squawk box" will be right back. obvious. sometimes, they just drop in.

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welcome back new this morning the sec is suing volkswagen and its ceo over the diesel emissions scandal. the s.e.c. says that volkswagen, in their words, perpetrated a massive fraud and repeatedly lied to u.s. investors volkswagen says that the s.e.c. complaint is legally and fact l factually flawed sharsz are up 36 cents >> i said -- you guys i think were talking about it. >> i did >> don't beware the ides of march. kids grow up so quickly. it's frightening to me my favorite picture, and i tweet thd out, but i love that shot. he was such a cute little guy. yeah i think. i don't remember that shot being taken or anything, but that was

his chicky that he is holding right there. he used to walk around with this little -- looked like a little furry. that thing fell apart, and at one point we left it out in the desert, palm desert. not in the desert, but in a hotel room in the desert, and we did back flips to get that thing back he just said where is chicky anyway, it was cute. he is big. he is grown up now >> happy birthday, scott >> that's -- there he is next to me you can see -- >> resemblance >> and height. height is happening. when i was 17, it was a very good year. i want him to have a really good year and a great day >> is he taller than you right now? >> no, he is not taller, but he is getting there >> i do. you know i'm a crier >> our kids are -- kaly. kids are -- >> i got four.

goes quick every day you got to be grateful for, and you love to see the unique personalities in each one of your children and each milestone really gets you emotional when you think about it >> and, you know, getting old is -- i start doing math you know what i mean >> can't do that >> i see shattner, and i think he is 88 i'm fine then i think i add 13 years on, and i go, holy crap, i'm -- and this gives you a reason to get old. then you can handle each year that goes by because your kids are growing up >> is he a junior or senior now? >> sophomore >> oh, sophomore great. that's awesome so you have a little bit of time left that's great >> it's awesome. >> happy birthday, scotty. >> you are thinking of the twins, right, and -- >> got a whole little -- >> coming up, you want to put a damper on all this let's talk ge. shares trading back above ten after the company outlined its

new strategy we're going to show you what ceo larry culp told jim cramer last night on "mad money," and i talked to an analyst about the prospects for ge investors as we head to break, here's a look at yesterday's s&p 500 winners and losers ♪ measure up? a cfa charterholder does. you've worked hard to grow your wealth. make sure you're working with a wealth manager who can grow with you. cfa charterholders have the investment expertise to unlock opportunities other advisors might not see. learn what a cfa charterholdr can do for you at therightquestion.org

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zblanchts u.s. equity futures strong up 89 now on the dow for the implied open the s&p indicated up eight points nasdaq indicated up 31 1/2 time now for the squawk planner. pay attention. your whole day should be based on a few of these things that we're going to tell you right now. they involve economic data points of note we're going to get the empire state manufacturing survey at

8:30 a.m. eastern. then at 9:15 new readings on industrial production in february then at 10:00 the latest reading on consumer sentiment in march plus, january jolt employment data some people watch to get a current read on what's happening in the employment sector ge's ceo is calling 2019 a reset year during a call with investors, he laid out plans on how to tackle the company's many problems which seemed to soothe at least some nerves on wall street shares of ge rose by 3%. he didn't stop his tour there. last night he chatted with cnbc's jim cramer on "mad money." >> i think the message was pretty simple. our strategy is clear. we want to strengthen the balance sheet and set our businesses up to play and win. 19 will be a reset year. if you look past 2019 into 2020 and 2021, we'll be on a better path >> joining us for mow is jean

dre, rbc capital markets what did you di think about what you heard? >> you know, for us, the big event was they held this meeting. larry culp had been ceo for five and a half months, and this was his first opportunity to get in front of investors and set goals that he could be held accountable to having this call was important setting the targets was important. there was enough underlying positives that we think continue to fuel the bull case. >> what were the positives, and let me just say he laid out targets that he has to hit, but they're targets that probably arpt going to be really tough to hit for another year and a half or so before you really start to see what's happening in 2020 because they basically said forget about 2019. it's not happening this time >> yeah. just to be clear this is a longer turnaround process, and 2019 looks like it will be the trough if you want to pick out some positives, one of them was that the cash flow -- free cash flow for 2019 was not as bad as what everyone feared. we had down $2 billion, and they

gave a range of $2 billion to zero that right out of the blocks there was a bit of a relief yesterday morning. >> i would assume you have to be patient if you are going to be an investor who jumps into this right now. >> absolutely patient. but for us the story changed dramatically when larry culp stepped into the role. if you were going to guide a company of this size and this complexity, you're making an enormous bet on leadership, and we've had experience with larry. we covered dan for 15 years. he is the right person >> dean, it seems to me that larry is finally getting his sea legs at this point, but is he -- i'm a shareholder in ge. is the -- are we looking at a double from here because, you know, we were thinking about a zero, and people were factoring in ge was going to be nonexistent. that to me has tremendous upside what do you think about? >> the bounce is off the bottom. you can start making a pretty

aggressive bull case here, and i have heard numbers like $20 in 2020 along those. sound catch why i where, we're taking a more measured approach on the sum of the parts. looking at what each one of the underlying businesses, how much they're valued at. that takes us up to $13. it's still 30% up side from here we're going to look at this as an incremental positive. >> to steve's point, though, it has not been long since people were saying this could be going to zero. it could be gone is that a possibility off the table at this point? >> those were dark days in the fall when you started looking at the liquidity crisis and look at what calls on cash that they had. since then, you've had a number of events. most important, which was the sale of their biopharma business that brings in $20 billion of cash, and that day you saw the bonds rally and that liquidity crisis taken off the table

>> you said going into this that you really wanted to hear more details aside from the free cash flow did you get the details you were hoping for >> so one of the disappointments was there were not more details around cash flow projections you have the whole walk from 2018 free cash flow to 2019 free cash flow. you knew what the big buckets are, but you didn't get precise denominations. we're still -- there's not a lot of calibration here. this will be something we'll all be watching very carefully, but for starters, this is a cash-free cash flow recovery story in our minds >> dean, thanks a lot. good to see you. >> thank you a. >> a lot more to come. the consequences are mounting from operation varsity blues we're going to tell you about the celebrities speaking out about using the prep center at the center of the scandal. we'll even talk about a back and forth over the firing of senior person at tpg yesterday whether he resigned or was terminated. there's a debate about that. later, our squawk newsmaker of the morning. tim sloan, we're going to be

live from hudson yards, which is opening up last night. there's a big day. a ribbon cutting ceremony. we're going to talk to the ceo of wells fargo about financing the huge development project as well as his testimony this week in front of aoc on capitol hill. stay tuned you're watching "squawk box" here on cnbc ♪

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welcome back we got more fall-out this morning from the college admissions cheating scandal. the hallmark channel has fired actress lori loughlen for future projects she was indicted as part of operation varsity blues. loughlin is accused of paying half a million dollars in bribes to increase their daughter's chances of getting into the university of southern california makeup retailer sephora has ended its partnership well her daughter olivia jade, and both daughters will reportedly drop out of college at usc. this is now -- we had a big conversation about what should happen to the children who were involved in this some of whom appears may have known what was happening others may not have. other celebrities who used the college prep company run by rick singer at the center of the scandal are also speaking out. joe honest monday tweeted

mr. singer's company provided nothing more than minimal consulting services to our family, like so many other families with the college application process. fortunately, our kids were able to pick from a number of schools to attend due to their hard work and their merit. thanks phil mickelson tweeted, "our family along with thousands of others used rick singer's company to guide us through the college admissions process we are shocked by the revelations of these events. obviously, we were not part of the this fraud our kids would disown us if we err tried to interfere." meanwhile, i should tell you, bill mcglashan, who started the rise fund with bono, there was a sequence of emails yesterday where he sent a note to all of the partners effectively resigning from the company, and an hour later the company sent him a note saying, actually, right when you were sending that we were term naturie terminatiu he said you just acknowledged that you received my resignation letter how could you terminate me i just resigned first.

there's a back and forth about dpsh. >> is that about the pay that goes with that why? >> at minimum it's about reputation if you actually read the -- >> what's it really about? >> if you read his first note, it was this heart-pouring i'm sorry. not i'm sorry because he wasn't acknowledging that he had done what was alleged, but it was one of those, and then i wonder whether -- >> if you are sorry for bringing shame and embarrassment to the firm, shut up and stop klaining about it >> anyway, it's a story that i think is going to continue on, and i wonder how many other people are going to turn on each other. that's what i think will happen here there's going to be more of it >> all right coming up, the nhl playoffs begin next month, and lord stanley's cup is in our studio this morning along with commissioner gary beckman.

he will join us next with some big sponsorship news for the nhl, and as we head to break, here's a quick check of the european markets green across the board you know, up about a half a percent. at&t provides edge-to-edge intelligence, covering virtually every part of your finance business. and so if someone tries to breach your firewall in london & you start to panic... don't. because your cto says we've got allies on the outside... ...& security algorithms on the inside... ...& that way you can focus on expanding into eastern europe... ...& that makes the branch managers happy & yes, that's the branch managers happy. at&t provides edge-to-edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & when this happens you'll know how to quickly react... will it feel like the wheend of a journey?p working,

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can. just this morning the nhl announcing that they're renewing their partnership with enterprise through the 2022-2023 nhl season joining us now to talk all things hockey, commissioner gary

bettman and enterprise president chrissy taylor you know, we always do this. you have a very good prop whenever you're able to do this. you use that stanley cup as much as you can, don't you? >> it is the most iconic and historic trophy in all of sports. >> it is >> it has its own charisma you've seen what happens when you bring it into a room full of people everybody wants to touch it even though they're not supposed to and get their picture taken with it >> people have done way worse with it. i've seen the players. >> now there's a cup keeper. >> why are you not supposed to touch it >> you got to earn it. >> so if you wear a glove, can you touch it >> yeah, okay. >> who is the cup keeper >> we have a variety from the hockey hall of fame. >> is there security as well >> they act as both security and the protector. you know, they get pretty special treatment when they try to go through airports >> you ever get tired of

everyone -- you're the commissioner of the nhl. all everybody wants to be talking about -- we should be talking about gary bettman >> in this era of social media, a little bit of privacy is good. let's talk to chrissy. >> good. so what does this do for enterprise >> it's amazing. >> it's a great partner. >> it is it is a great partnership. and we're really excited to extend our contract with the nhl. you know what? hockey fans, they're enthusiastic, they're loyal, and guess what they love to rent enterprise cars they rent a ton of them. so we're excited for the playoffs they're coming down the path we have a new commercial and the commercial really shows that enterprise is more than just renting cars but it also features the most famous, you know, nhl star which is the stanley cup >> gary bettman? oh >> really, you know, the stanley cup, he's doing what our customers do he's renting a car he's sharing a car he's buying a car. he's commuting and he also wants to go to the

playoffs he wants to look good so he's renting from our exotic division >> how do you know the nhl fans are all loyal do you track it? >> yeah. we have research that shows they're five times more likely to rent from enterprise. >> that's impressive >> our fans tend to be better educated, more tech savvy. and to have a collaboration and partnership with enterprise has been phenomenal. they cut across all of our platforms whether it's digital social media or nbc. and quite frankly, when they sponsor things like the hat trick challenge and this year going forward, they're going to donate $1,000 for each hat trick to a charity in the name of the player that has a hat trick this year we already have 84 hat tricks which may be a record. >> that's amazing. i've seen one. chris kreider. which makes he kind of sad rangers, i can't tell you what -- who the stars are now.

>> they're rebuilding. it's going to be okay. >> are you sure? >> yes it's going to be fine. >> are you done with expansion >> we're actually going to expand to seattle. >> what's the name >> they haven't picked a name yet. they're not starting until '21, '22. but they're going to have a completely redone arena and they're going to have a name probably over the summer >> no way they can match the golden knights success, is there? >> the enthusiasm is incredible. in fact, they currently have deposits for over 33,000 season tickets in an arena that's going to be about half that size it's going to be another huge success. >> do you -- do people say great job with the golden knights to you? that's the best expansion in history. >> actually, i suppose imitation is the highest form of flattery. whoever thought the nfl would think to go to las vegas but it was after they saw what happened to us, i guess everybody is now thinking it's a great sports town. >> i wonder why. >> and they love the golden

knights because the team was born there and it gives the team an identity in the community. and when you go there, the buzz is palpable. >> i'm not going to -- i always bring up my 70 inch screen and high def and it's just -- >> terrific. >> it's unbelievable and it's so different than, you know, what people used to think about the at-home experience >> and nbc does a great job. and the playoffs are coming starting april 10th. and every game will be available nationally courtesy of the nbc platforms. >> well -- >> how's that for a shameless plug >> that's fine because it's not just nbc. with nbcsn and also on cnbc. >> occasionally, yes >> some people, you know, fall asleep when they're watching it on cnbc. and then it's still on cnbc the next morning we have these huge ratings >> nobody falls asleep -- >> at the end. >> they leave it on. >> oh.

>> he's unbelievable, isn't he wow. >> so defensive. i thought a fight was going to break out there. >> no, no. we've done this before >> we have thanks to gary bettman and chrissy taylor also the winter classic is now exactly what -- how many years has it been? >> well, 10, 11? we were in notre dame this year. >> i know. i saw that phenomenal i love when it snows and you're outside. anyway, thank you. >> thanks for having us. >> chrissy, come back. we'll talk more about enterprise when you come. >> thank you when we return, our guest is former house majority leader we'll hear his thoughts on u.s. trade, operation varsity blues, and much more. we'll sit down with eric cantor in a couple of minutes and later, we'll be talking to the ceo of this mystery stock. the top performing s&p stock since the market low ten years ago. ren bcawbo rht"squk x"ig he ocn ♪

♪ save like a hero with synchrony bank, and catch marvel studio's captain marvel now playing.

i cowe can do theyour screening at her house. hi. this is the man that's going to check your eyes grandma. cognizant ai solutions are helping healthcare companies advance diagnostics and prevent blindness in patients with diabetes. everything looks good. you have beautiful eyes. ♪ the path to a trade deal the focus turning to when president trump and china's president xi plan to meet. we talk trade and much more with eric cantor. tesla rolling out the y.

but will this vehicle be a hit for elon musk and his investors? plus, the kylie jenner effect a billionaire's exclusive deal with ulta beauty giving the company a boost last quarter and the stock has been red hot we'll have an interview with ceo mary dillon 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. our guest today is eric cantor he's going to be with us for the next hour. great to see you thanks for coming in lots to talk with him in a moment, but before we get to

that let's look at the equity futures at this hour things have picked up a little bit over the last hour you're now seeing the dow futures up above 115 points above fair value and the nasdaq up by 38 points here's what's making headlines at 7:00 a.m. this morning. shares of facebook are lower in premarket trading. that follows news that chief product officer chris cox and what's app daniels leaving the company. the departures comes after zuckerberg shifts facebook's focus. almost down 2% uber, meanwhile, is set to go public next month. this is according to reuters it's said to be seeking valuation of $120 billion. this news comes shortly after the ride hailing rival lyft kicked off its own ipo process the s.e.c. suing volkswagen and its former ceo accusing them

of perpetrating a, in their words, massive fraud the accusation stems from volkswagen sale of billions in debt the commission says vw sold the debt during a time when executives knew that the company's diesel vehicles were exceeding -- you might recall -- the legal emissions. >> were you supported to say venetrcorn >> i know volkswagen and our guy over there >> i pause the same way when i read it. >> yeah. i think you just do it with a lot of certainty and -- >> as al michaelson during the russia games in the hockey games that were from back then the same authority >> we'll try to say the next part with authority. the market watching every move in the path to a trade deal with

china. kay kay kay kayla tausche joins us >> she could meet to finalize that deal. the treasury secretary steven mnuchin after testifying on the 2020 budget said the two presidents will not be meeting this month as previously planned. but they're still committed to a summit >> we've had conversations about coordinating a presidential visit. and i think they're still determined and willing to come to mar-a-lago for that visit but again, the specifics of that have not been worked out >> one complication -- to avoid the optics of coming halfway around the world and give the trade concessions on u.s. soil if she takes a stand alone trip, chinese negotiators have suggested it would need to be a formal state visit

akin to the red carpet obama rolled out for xi. not a casual golf retreat. trying to pin down what exactly would happen and where is nearly impossible xi could add a trip to europe. bloomberg says a summit would happen at the end of april if at all. we will wait and see what the official word is as of now, it's all over the map. >> kayla, thank you very much. let's get to our guest host for the hour eric cantor. he's now vice chairman and managing director with moelis and company. what kayla just had to say, take your years of being in washington to read the tea leafs of the situation >> i think if there is any bipartisan agreement in washington, it's the agreement we've got to go in and man the sort of competitive push against china. i do think that both republicans

and democrats from the leadership on down support president trump's position in getting tough with china it's been a long time and prior administrations have not taken this fight to the chinese the way that this president has. and we see it's difficult. and the question is going to be whether there's going to be such a push to have a deal that we give in before we need to because there's some big, big things that have to happen long-term, i think, for us to maintain the competitive edge. >> if it's bipartisan support that they think, yes, we need to be tougher in negotiating with them, where do you think it would come down in terms of those who would back him if he says now here's the deal and we're going to get this much and maybe it's not everything everyone wants to see. >> first of all, i think the one breaking point would be to match it up the tariffs. i think there is a lot of pressure right now on the agricultural sector. there are individuals representing those especially upper midwest states who are

very, very upset because they feel their community's suffering. >> that's pressure for a deal anyway no matter what. >> but i think, you know, where the president and mr. lighthizer have made a legitimate stand which is in these forced tech transfers, forced localizations, obviously the ip theft is something that you hear every day bantered about in washington and if the administration does its job, if it's out there communicating with both sides of the aisle keeping them informed as to what's going on in this negotiation, they can buy themselves some time but as we know, listen we're in the political season already. i mean, you saw the announcement yesterday of beto o'rourke now in the race. and everything is going to become political i worry about this issue with china. because right now this is a warm issue. >> how do you think it would get political? you better get us a deal and get it quickly >> again, i think there could be

an instance in which certain sectors -- i mean, if you -- one of the things i have a problem with in the trade arena is that we are sitting here and the president has pocketed wilbur ross' study on the european auto issue. if you want to know where there's a breaking point in washington, that's a breaking point. >> oh, if they come out and say forget it. we're going to put tariffs on european cars. >> while we are negotiating with china. i mean, that to me, i have trouble making sense of that because right now we need all of our allies with us as we combat what we've seen a very aggressive posture on the part of the chinese over the last several decades. >> in terms of intellectual property theft, the chinese will have to admit they've been doing it before you can get them to agree to stop doing it >> right but we can also push for structural reforms it all comes down to the enforcement. then the chinese were going to go pushback in terms of, wait a minute, we're not going to give it up to the american government to decide whether we're making

enforcement measures work or not. and that's the rub as well >> you mean the enforcement clause that we've all heard about that says that we'll try and come to an agreement between the two nations. and if we don't, we can put the tariffs back on. >> right it's the snapback tariffs. or if there's an alleged attempt by the chinese to implement structural reform, whether they're going to be enforced or not. and our ability to monitor that enforcement. those are the things that underline the difficulty that mr. xi must be having with his people >> that's not something that sounds like it's realistically going to get resolved in the next month or so which is what the markets are hoping for >> how many times has the market gone up on news of potential chinese deals. >> every day >> it must be over a dozen times. >> it happened yesterday, if i'm watching this correctly. >> i'm not so sure the market continues to believe this stuff.

i've been skeptical this is so easily recollect if ied. that's again what i fear sometimes when we hear that the president's priority is to reduce the deficit, i don't think that that on the trade deficit side, that's a quick fix. that's not going to do the long-term structural reforms >> lighthizer is there every time you get optimistic, he's there saying no the things that you think we need to do, he seems to be a stickler for that stuff. up to the point of where we don't even do a deal >> right. >> so in this white house, things ebb and flow. who's got the president's ear on any given day. i don't know about navarro i don't know about some of the doves on china but lighthizer is the guy in charge, isn't he >> right >> maybe it's good maybe we don't get anything, but maybe we get a deal that actually means something >> again, i worry about the entrance of politics in all of this every time there's an additional individual in the -- on the

democratic side and what are we up to now? i don't know what the number is. 13, 14, whatever it is i just worry about the volatility in the introduction of that dynamic into this equation and what that means for the president and where the polls are. this is all sort of the mix, the lens through which to look at this >> i was watching beto i guess you've got to say. and all i can figure is he bears a strong relationship to rfk's kids is that the main deal with -- i mean, he was a three termer, right? not a single bill. not a single piece of legislation except naming a building was the one bill -- >> i was leader. i don't even really remember having beto there. >> i swear he looks like a kennedy. is that basically it >> i think he comes with certainly a star quality >> why though? because he looks like rfk! >> he also had unanimity in a democratic base when he ran against ted cruz because it's

somebody the democrats reviled. >> who do you think is the most interesting in the democratic party right now? >> look, i will say this i wore as an american about the direction of one of our two major parties going towards socialist. i'm sort of bemuse ed as a republican to watch the division and the rancor they are dealing with so i think if you look at somebody like -- and we talked last time about aoc, which i've heard a new acronym of the meaning of that acronym, it's absolutely out of control. if you think about what she is putting out there,s a pir rational or the other, what i really worry about are these bills. cory booker, he's on a medicaid buy-in bill. medicare buy-in bills. there's bills that pay for tuitions for everyone. this stuff is really, really dangerous, in my opinion then you add that onto elizabeth warren who now says we've got to nationalize corporate

governance we've got a bill from amy klobuchar who wants to make m&a that much more difficult then we've got chuck schumer and bernie sanders' bill that will limit the ability for companies to do buybacks i mean, this stuff is just dangerous. >> two people recently -- you might know this guy. i've had two people and they look nervous they're sort of mainstream democrats. and the choices they have right now, none of the above both of themcauliffe >> though one mentioned joe biden. >> biden's already going to be in >> how do you feel about biden >> a democrat just recently said he can't be -- maybe it was -- >> i don't think the democrat party is going to be smart enough to nominatecauliffe what do you think about him? >> he was my governor. >> for me it's hard to think of him as anything other than a clinton --

>> but you look at what happened in virginia. he left with his approval ratings intact he had no real uproar. you know, he was -- >> so he was a good governor >> you think he's relatively reasonable >> way too reasonable for the democratic base. >> would you like to see the president primary his own party? >> no. the president's not going to be legitimately primaried >> would you like to see that? >> no. he's got 90% -- >> that's this got ya. >> it's not a got ya we talked about everything else he doesn't like in the democratic party and i also know he is not -- i think you can fairly say that there are lots of things about the president you also don't like i thought it was worth asking the question >> let's just say this. >> it's your question. not eric's question. it's only important to you >> look at the policies that have been the consequence of this administration.

that's what i want to keep saying and let me tell you something. with the other party acting the way it is, it is going to come down to that because if the other party, if they're so yams on wanting to go after trump, they certainly are not -- >> i'm a big fan of a lot of the policies that you talked about that are anti-capitalist but i also think some of the policies that the president has clearly put forward are policies i know you disagree with >> the policies in terms of economics, what are they in terms of regulatory reform -- >> instead of andrew saying he knows you disagree with. which ones do you disagree with? he knows you disagree with some of them. >> with the president oftentimes you have to separate the rhetoric from the action >> maybe we can get mitt romney to primary him then he can lose ohio, florida, pennsylvania, michigan he won missouri, right is that what he won? did he win missouri? like he won by three votes, he won missouri >> eric, you can stick around.

i'm actually going to miss you now. i'm not going to stick around. i'll be back on the show at 8:00 this morning we've got a big hour ahead related companies, chairman and founder stephen ross, he's been compared to robert moses we'll also talk to tim sloan from wells fargo. that interview from hudson yards in just a little bit and up next, elon musk unveiled the model y we'll have that coming up. and check out this beautiful chart. this is ulta beauty. since the bottom ten years ago the stock is up 7500% and climbing the company just reporting results. ulta beauty ceo mary dillon will be our next in the next half hour stay tuned you're watching "squawk box" on cnbc so with xfinity mobile

i can customize each line for each family member? yup. and since it comes with your internet, you can switch wireless carriers, and save hundreds of dollars a year. are you pullin' my leg? nope. you sure you're not pullin' my leg? i think it's your dog. oh it's him. good call. get the data options you need, and still save hundreds of dollars. do you guys sell other dogs? now that's simple, easy, awesome. customize each line by paying for data by the gig or get unlimited. and now get $250 back when you buy a new samsung galaxy. click, call, or visit a store today. ♪ welcome back to "squawk box. the futures right now indicated up 128 points this morning the nasdaq indicated -- he's playing it and he's here and he's playing -- >> that's because you love it so

much they want to make sure they make you happy. >> you didn't like it when you heard it earlier >> but now i like it that you hate it. >> anyway, the futures are up. >> any way to nudge you. i know you have certain things that drive you nuts. >> i like the song i do like the song but my problem is -- >> they play it every friday i know >> it's okay now that's why they do it. it used to be they thought it was clever to play it on a friday >> when i found out things like leaving a closet door open would annoy you, i'd go and open them all for you. >> it's getting worse. a lot of things. >> you should never show your tells. >> you know what else? recycling for me >> why >> just splitting the one kind from the other like, if i see the wrong kind of trash -- we have two bags. >> you have to put it in the right one? >> well, duh we have two. >> i thought you meant recycling was the problem. >> no. a lot of things are -- >> the puzzle. i don't want like that either. >> you like things in their

lane when we come back, the unveiling of the tesla y we're going to check out the car and the stock right after this "squawk box" will be right back. people know aflac... aflac! ...but not what they do. so we're answering their questions. aflac is auto insurance, right? no. uh uh. is it homeowner's insurance? no... uhuhuhuh! is it duck insurance? nope. ahhh! do they pay me money directly when i get sick or injured? yeah. aflac! you got it. you know aflac! boom! get help with expenses health insurance doesn't cover. get to know us at... aflac dot com.

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elon musk taking center stage last night with the model y. phil lebeau joins us with more on what happened and how the crowd reacted. phil, it's great to see you. >> good to see you, becky. the analyst reaction so far has been it was pretty much what we were expecting a ho hum event more subdued than we've seen elon musk in past reveals. this is when they rolled out the model y last night at the tesla design studio in hawthorn,

california the deliveries of this small suv, more of a crossover utility vehicle start late next year the model y will be built not only at the fremont plant but in china. with a range of how many miles it can get, between 230 and 300 miles. >> basically long range we would expect to be $47,000 and then some time in 2021, we'll have the sort of standard version which will have a $39,000 price point. >> and that's pretty much what we were expecting. that we would see a price slightly higher base price than the model 3. after the event, they gave very, very brief test rides, if you will, to some of the people in attendance including some of the analysts the feeling is, look when you look at these vehicles, remember the deliveries will start on the high end first. so in the fall of 2020 you'll get the performance version, long range version, dual motor versions those will all start between $47,000 and $60,000.

then in the spring of 2021, at least the plan is right now that they will start delivering the standard versions which will start at $39,000 and that, of course, is if everything goes well in production of these vehicles here's musk talking about the challenges his company's been running into when it comes to building vehicles. >> the difficulty in value of manufacturing is underrated. it's easy to make a prototype and difficult to mass manufacture that prototype -- mass manufacture a vehicle reliably and at scale. >> as you take a look at shares of tesla, we should point out i'm not sure anybody on wall street is surprised by that last comment. nobody, nobody in the auto industry thinks that mass manufacturing of automobiles would come along without any hiccups. that's what tesla has experienced. one more thing, becky, joe, and everyone back there as you take

a look at the shares of tesla, they're a little bit under pressure right now in part because the analysts are all saying the same thing. which is, looks nice let's see if they can deliver it as planned let's see whether or not this cannibalizes model 3 sales over the next year and a half >> yeah. all right, phil. did you figure out how to get seven people in there? >> there is a -- joe, there is a version almost kind of -- i don't know if i'd call it a stretch version, but there is the capacity -- >> wheel base is longer? >> i suspect it might be a slightly longer wheel base we should point out that in some of the analyst notes i've been reading and the analysts had a chance to sit inside of it, almost all said the same thing feels like a model 3 with a little bit more room we'll be curious to see how tight it would feel with the two extra seats in that third row. >> all right i don't know if you were watching, we actually got into a discussion about phone booths, how many people you can fit into

a phone booth. you can fit seven people in any of those cars. in a mini cooper, i bet you could get seven people in if you really tried >> the question becomes how many people actually buy a small suv or crossover utility vehicle for that third row there is a segment of buyers who want the third row but there are a lot of people and this has come out in research who look at it and say how much am i going to use that? will i use it for somebody to sit back there or to use it because it's extra cargo space >> if you have three kids, it just -- i don't know it seems like that was the reason that everyone has an suv is because some families just can't get by on -- >> sure. there are certainly some people who want the third row no doubt about that. there are some people. the question is how big is that segment. >> it even drives some people to minivans that's how dire the need can be for space to where you, you know, end up driving one of

those. i don't know it's hard. thank you, phil. joining us now with reaction to the intersection of the tesla y, garrett nelson at cfra. and you heard phil i think most of that, garrett, it was -- anything surprising in this is it as exciting as previous rollouts for elon musk >> we viewed the rollout as a bit of a disappointment. and what you saw for several days ahead of this unveiling was the stock trading higher and what you're seeing now is a classic sell the news situation. what we thought was really disappointing, if you go back to tesla's shareholder meeting last june, elon musk said that the model y would be unveiled about this time. but he said the first deliveries would occur in the first half of 2020 now for the higher priced versions, we're looking at the fall of 2020 so the timing -- and that's very

important difference because we think tesla's going to be facing a lot more electric vehicle competition from the likes of audi, jaguar, bmw, mercedes, and others starting with the 2021 model year which will first be available about this time next year. so those models will already be out by the time the first model y versions are available to consumers. >> yeah. you have a question? >> i was going to ask eric just what he thinks about what's happened with the s.e.c., too, with elon. >> you know, it's really -- it's pretty amazing though. i know that this latest sort of series of tweets by elon musk, you know, he had to go back and correct himself because he misstated the amount of productivity in terms of the output for next year you know, if you go back to the original tweet that gave the s.e.c. a lot of angst, that was his tweet about the ability to take the company private

that he had the money lined up and he didn't. >> he was told by the s.e.c. to not do that anymore. >> i think there's a certain amount of common sense just rein yourself in. the s.e.c. says you're tweeting something that has an impact on your stock price or investors, you cannot do that unless you've done it properly and followed the rules. i don't think that that is a unreasonable ask on the part of a ceo of a public company. >> garrett, how much does that play into your thinking in terms of how you rate the stock? do you even try to get your head around that? >> so that's one of the considerations why we currently have a sell rating, why we downgraded the stock to a sell last month you know, elon was required under the s.e.c. settlement last fall, required to have oversight of his social media. so before anything hits twitter, someone is supposed to review that post and approve it it just doesn't appear that those protocols were in place or are in place

so they're going to have to prove that and we'll know more very shortly on this situation >> hey, garrett, we've gone from both ends of the extreme you had an analyst that said there's no mote and tesla doesn't get batteries more cheaply. and we had ron baron yesterday it's got its own planet in his view, tesla does where are you on that? is there some advantage that tesla has with the way it procures batteries or the price? does it have a lot of advantages in that regard >> based on our research, they have the best battery, the longest range. you look at what they're offering versus other competitors, it's a superior product. now, the real problem they're facing in our opinion all goes back to the reduction in the federal electric vehicle tax

credit which stepped down from $7500 to $3750 on january 1st. now, that credit steps down again on july 1st. and then will go away completely at the end of this year. and that's why in our opinion, their sales have really dropped off significantly since the start of the year. it's a head wind that they're going to be facing throughout this year and into next year when the model y hit this market there's going to be no federal electric vehicle tax credit. >> that skyline look familiar? >> i was just going to say, i hope everything is well in richmond >> garrett, thanks >> thank you. >> see you around. when we return, the kylie jenner effect. ulta beauty reporting strong results thanks in part to the newly minted billionaire the stock has been on fire for a long time. in fact, it's the best performing stock in the s&p 500 since the low ten years ago. ryile going to talk to the ceo ma dlon next right here on "squawk box. dmother's doctor.

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still to come on "squawk box," ulta beauty just releasing earnings we have an exclusive interview with mary dillon next. then the college cheating scandal continues to unfold putting a spotlight on the very lucrative college consultant industry we're going to take a closer look at the services that could cost parents hundreds of thousands of dollars to get their kids into school and hudson is open for business. real estate mogul stephen ross and wells fargo ceo tim sloan will join us in the next hour. "squawk box" will be right back.

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welcome back, everybody. a beat on earnings per share and revenues for ulta coming in line same store sales blowing past expectations at 9.4% also kylie cosmetics from kylie jenner continues to be a popular boost to their sales joining us now is mary dillon, ceo of ulta beauty thanks for coming on great to see you today >> thank you i'm thrilled to be here today. >> we were talking earlier about your stock it is the best performer in the s&p 500 since the lows ten years ago. i think the stock is up more than 7,500% over the course of

time but lately you've been getting a lot of traction from the kylie line why don't you tell us about what happened with that, what that partnership has meant for you. >>happy to do that first of all, i'm thrilled to be here at one of our ulta beauty stores this is where the magic happens every day. the interaction between our guests and associates and online, of course. beauty is full of possibilities. i think last quarter is a good example of how it all comes together from a physical and a digital and even emotional and human perspective. you asked about the kylie jenner launch it's been fantastic. kylie's been a great partner for us we launched her line we're the first brick and mortar distribution for kylie, exclusive. we're thrilled with how the launch has gone. she's got a few instagram followers, like 129 million, so she's a great influencer but there's many brands that did very well last quarter

i think the most important is it shows that, you know, for us for beauty, it is important to be both in a physical environment where people can touch and feel and experience a brand as well as online. >> let's talk about the retail picture overall. it's been a rockier picture for a lot of places. ulta and beauty have stood out for all of that. why has your industry and your stores, why have they been able to fend off what so many other retailers have struggled with? >> i think last quarter is a great example. we had great traffic to our stores, strong growth online and services business. it really is because beauty we think at ulta beauty we bring it together in a way nobody else does it's a great way to be a only any channel and digital retailer and importantly interact with our associates who love beauty

we will continue to invest in both in the future >> does that mean you think you're amazon-proof? >> well, listen. i like to play our offense and for us it's about bringing all things beauty all in one place. we represent every major category of beauty, services, price points all up and down the spectrum, brands that can't be found anywhere except for ulta beauty for us, that plus services are something that really differentiates, we think, ulta beauty from any other competitor >> ulta is loved on the street right now. there were zero sell ratings on wall street even before you came out we the latest earnings report what do you say to the analysts when you're talking tothem >> well, it's all about the results. there's no question. and i'm really proud about the results we've been posting for many years now because it really is about bringing beauty to life in all of its great possibilities

it's really about having an amazing associate team across the u.s. that really loves beauty, loves what they do, and makes our guests feel welcome. for us, i think we look into the future and say how do we continue to evolve our model and make sure that it's extremely relevant to our brand partners that we're a great source for growth and a great place to work so i think for the analyst, that's all good. i think we just delivered it proves the case. >> this might be a weird question and it's not because of -- it's not about me but do you -- will you get into fillers and some of the modern technology that might be -- i don't know, you may need a physician to get involved? i don't know what the beauty industry is going to look like in ten years but i figure like everything else, there's going to be incredible advances. would that ever be part of our offerings, do you think? i don't know

>> you know, listen. there's so much innovation happening each and every day in the beauty category. skin care is a great example skin care is very much on trend right now. it's really about the wellness of skin. >> laser stuff >> that's certainly in the spectrum of things that are available to folks to us, we sell products that people love that are really bringing their skin to life in a glowing and beautiful way as well as the whole gamut. >> i need more than pallative things >> i'm sure there are places to get that. >> i don't need an artist. i need a surgeon >> well, i'll tell you men's grooming is a really great booming category for us. it really is with the trends in beards and hair and skin care and even makeup for men so there's a lot happening for men as well. >> i don't like needles, though, in my forehead have you tried that, cantor? >> no. >> no, i've thought about it but no way >> no.

needles in the forehead. >> mary, let me just ask you it sounds like you have control of all the things you can actually control which leads me to the things you can't control. when you start looking at the economy, you have had the benefit as everyone else has of operating in a good economy and at times a booming economy what do you think would happen if the economy would turn down and have you seen it with the weaker retail numbers we've been seeing recently? >> sure, becky we are constantly thinking of the health of the consumer clearly we feel the health of the consumer is quite strong we see that in many cases in retail at ulta beauty. one of the beauties of our model is beauty is a category that is important to us in our every day lives. pretty much under any circumstance in our stores we cover every price point. really we're able to flex our

model to meet our guests on whatever they want to spend. >> thank you for joining us today. mary dillon, ceo of ulta great to see you >> thank you coming up, the college cheating scandal has put one of the fastest-growing industries in education under a microscope. we're going to hit that topic next and check out the futures. they're strong this morning. ipig gains in the dow. we'll be back. -driverless cars... -all ground personnel... ...or trips to mars. $4.95. delivery drones or the latest phones. $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade.

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the fallout continues from the college admissions scandal in which wealthy parents paid for bribes and fraud to get their children into elite colleges private equity firms tpg says it fired executive william mcglashen who was charged this week he says he wasn't fired, he resigned he's accused of paying $250,000 to get his son admitted to the university of southern california robert frank joins us now with another layer of the story which is kind of like an onion almost. >> yeah. we had phil mickelson yesterday -- >> the guy dealt with a lot of different people so it was a legitimate thing for awhile >> it's like madoff. he is a legitimate security business and so he had his legitimate securities business then the side business. and what this whole scandal has done is cast a spotlight and

legitimate parts of college education. that's college consultants there are 8,000 private educational consultants in the u.s. that's quadruple the number of four years ago if you add in test prep and tutors, the numbers are estimated to be close to $12 billion a year now, college consultants say that william rick zinger that's the guy we were just talking about, the man at the center of this cheating ring he was just a bad apple in an otherwise important industry that helps guide students in their college process. demand is soaring for kids of younger and younger ages >> every other day i have a second grader or third grader's parent, family calling me asking what can we do as a second grader to help with the college admissions process and i say, there's nothing we can do the only thing for you to do is that your child do what he wants to do. if he was interested in art, ceramics, painting, music. let you children explore those

passions or talents. then take it from there. >> now, many advisers charge around $15,000 a year with others charging by the hour at over $1,000 per hour most expensive programs can run to hundreds of thousands of dollars. some estimate college consultants are used by one quarter of the students at private colleges now, the advisers say their focus is helping kids figure out what they want in a school, steering them to the best fit, and giving them a road map to get there. the bull market is likely to continue the acceptance rate at stanford is now under 5%. >> is that because there are so many more people applied or so many slots have been bought off? >> so many more people applying. you've got a lot of overseas students now applying. what this guy told us yesterday is that the calls since the scandal have just exploded so this has been -- i expected that a lot of existing customers

would want to call and make sure they're not doing this and maybe be skeptical about the industry. he said there has never been a bigger day than the day after the scandal. >> people didn't realize >> people didn't realize and this is all part of the debate of do the wealthy who can afford these things have the advantage? >> to me it's brought up the question of this kind of slippery slope and what's okay and what's not clearly if you're paying a $1.2 million bribe and pretending like you were involved in sports and activities you were not involved in, that's a clear cut case >> and some of these programs where it's hundreds of thousands of dollars -- >> yeah, what are they giving you? >> some are getting you valued internships. i'm not quite sure how that works. so they're actually -- some of those getting you into programs that help you in college not getting you into the college, but getting you in the interships, the overseas philanthropic chips. >> that's so hard. >> it's almost getting to, like, preschools in manhattan. >> i've seen it. i talked to andrew about that.

i'm so glad i went to colorado they were glad to have me. they were like, come on out. then i was in boulder. you know, just seemed so much simpler. we're back with our guest host eric cantor who went to about six different schools. you're so over educated at this point what do you think of this? >> look, my view is this was -- the college admissions process is so opaque that, you know, we really need to get a little bit of transparency here it's almost as if this was waiting to happen. because no one really knows what goes on. you know, your child, because i've had three that have been waiting for that e-mail to come to find out whether they're in or out i just think the opacity, something in today's world with -- >> are you saying that as a former lawmaker? there needs to be less opacity but from a regulatory perspective? >> i wouldn't doubt somebody in washington begins to think,

look we've got a lot of federal funds flowing to these schools and if this kind of shenanigans is going on, maybe we ought to take a look at what these processes are really about and what kind of transparency we can afford >> that's why this harvard lawsuit is so riveting it was the first window into what harvard actually does to select its students. and it is such a mystery that's why these consultants are making so much money whether they've got the formula or not, there's just -- there's no detailed list of here's what you have to do >> trying to look at the racial breakdowns >> correct pit also revealed how much they give to legacy and big donors >> but then i just think -- i get back to the money involved with college sports. and there are some great -- the top schools will let people with a "c" average in if you excel at a certain sport which allows thoem sell tickets to that sport which allows them -- i mean, the

one thing that seems to be the one thing that's common to all these discussions is money >> yeah. >> even -- does that make it -- does that somehow make this whole thing sort of tawdry >> what's happening now, a lot of the colleges are making a proactive effort to go after underprivileged children kids from different soc socioeconomic backgrounds. >> the $1.2 million that one of these families paid to make sure their kids got in, would it have been okay if they gave $1.2 million straight to the school >> it would have been okay but wouldn't guarantee anything. what you realize in the suit is $1 million doesn't get your kid in anymore. >> are you sure? >> yes if you look at the telephone transcripts, what the guy says is a million bucks doesn't cut it anymore and there's no guarantee i can get you a guarantee of getting your kid in >> then you can write it off at a charitable gift.

double greed >> that's right. so a lot of it is a foreign giving to these universities that has just ratcheted up the price of a donation that gets your kid in. >> you know, i've thought about overseas students coming in. i know that's one thing. but if you are a state school taking state funds, how -- shouldn't you be basing a percentage -- i know mitch daniels has looked at this at purdue purdue won't let as much come in >> that's a constant debate. i think maybe one-third are allowed in from out of state at the virginia state schools some in north carolina, for instance, it's a lot smaller than that. >> they are cracking back at a lot of places because it's more profitab profitable you can charge them more money >> usc -- people said when did usc get to hard to get in. >> they did. >> they reached out to so many out of staters and out of country that it became really hard for a california resident to get into usc. >> it used to be ucla, usc when i lived out there.

and now it's i think sc might -- at least on par now with ucla. it's amazing the numbers are staggering a lot of schools are under 10% i checked out -- i did check out colorado it's not quite under 10% i'm happy i went -- >> i went to rutgers loved it >> i think it's like 60% my kids looked it up and go, dad, it's 60%. so you should see the campus. you would die to go to colorado. anyway, thank you. ck rhtquawk box" will beig ba

the fallout from the boeing crash with the company's entire fleet of max jets grounded facebook shakeup two high level executives say they're leaving the social media giant including one of the company's first engineers. and inside the neighborhood redrawing new york skyline we're live at the opening day of hudson yards to talk about the real estate, amazon's pullout from queens, and a news-making interview with the ceo of wells fargo. the final hour of "squawk box" begins right now ♪

live from the most powerful city in the world, new york, this is "squawk box. >> good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with becky quick. andrew has made his way to the left side of manhattan for some big interviews did take him awhile to trudge over there you walked 36 blocks, andrew how was that any tough neighborhoods on the way? >> no, we drove right over here. >> oh, you did >> we are at hudson yards. you're going to be seeing steve ross in just a moment. he's with me right now in one of the biggest real estate spectacles today is the day it is something.

it is transforming new york city in so many ways. we're going to spend time with the man behind all of it in just a little bit >> excellent just before we get back here, let's look at the futures quickly which are solid again. it was a rough week last week, but a good week again this week. extending the 2019 rebound from that december selloff, whatever you want to call it. here we are on the s&p i spared grasso. i didn't mention of his s&p. >> nice of you to do it after he left >> he didn't have to defend himself. you can see up 137 now on the dow. and 2.62% on the 10-year note. first some breaking news overnight in new zealand

at least 49 people were killed and more than 40 others injured in mass shootings at two mosques in the city of christchurch. authorities arrested one man and charged him with murder after two other suspects were taken into custody police also defused explosives found in a car new zealand's prime minister says the national security threat level was being raced to its highest second mark. president trump said my warmest wishes goes out to the people in new zealand. 49 people have senselessly died with so many more seriously injured. the u.s. stands by new zealand for anything we can do god bless all. all right. a few stocks on the move this morning. facebook announcing the departure of chris cox and chris daniels. cox said in a shift in facebook's focus would benefit from new leadership although he did not explicitly move private

messaging. and tesla unveiling its new model suv. elon musk says deliveries will begin in the fall of 2020. take a look at the shares of tesla today which are down 3% on something. i guess whether it's disappointment or it's friday. >> the stock has been a bit of a downdraft. investors have spent months waiting for trade talks between the u.s. and china to get resolved but with tariffs continuing to bite, it looks like the countries are still not where they need to be. kayla tausche has more right now on an update on this >> good morning, becky the u.s. and china have continued talks over a series of phone calls this week which chinese state media said made concrete progress. last night at a white house reception for st. patrick's day, a conclusion by mid-april.

>> the china deal is going along incredibly well. afternoon where is bob lighthizer i think he's just a big negotiating machine. i can't imagine that he's even here if you are here,you're doing a great job. we'll have news on china probably one way or the other. >> as that deadline nears, former trump administration trade officials are speaking out. gary cohn earlier this week said trump is desperate for a china deal while rob porter the staff secretary who had organized the trade agenda for the first year and a half of the trump administration before his dismissal last year writes an op-ed today that says, quote, mr. trump's aggressive measures have reshaped the trade/negotiation landscape introducing both uncertainty and imp i impetus to action. porter says continued tariffs

are important leverage to maintain to deliver are china hasn't before. unclear if that will land with mr. trump in the final weeks joining us now to talk more about trade and over factors to affect the market in the near term -- really jim paulsen? you're going to talk all these -- what do you think is going on withlig lighthizer? actually, we all have to be pseudoaware of all this stuff, i guess. i don't know whether that's what i want to necessarily talk to you about at this point. what i saw you write recently was something that struck me we're still in a sweet spot which people don't seem to understand in a lot of different ways you were a little bit less sanguine a year and a half ago you think this is a pretty good environment? >> well, we're late cycle, you

know so there is the risk of recession. joe, i agree that it's elevated. we're late in the cycle. but i think it could go on for a little while you know, since 1950, when you bend between 1% and 3% inflation, that's been a sweet spot for the market. the stock returns when you're in that realm have been 30% higher than when outside the sweet spot those returns have been less when you look at your year ahead returns, you only have negative returns about 15% of the time versus almost 25% of the time when you're outside the sweet spot i think the other thing, the average multiple outside the sweet spot is 4.5 times earnings going back to 1950 looks like there's considerable downside risk. but when you're in the sweet

spot, the average multiple is 18.4 times earnings which means we're slightly below average right now. so i think people are underestimating if we stay inside this sweet spot the stocks maybe could do a lot better than people think here for awhile longer. >> that's interesting. what do you think the final outcome of this looks like in terms of timing and how much we get accomplished >> well, i think the -- here's the thing. i think a lot of that agreement is probably in the market it will be a catalyst when it comes to fruition. you know, i think it'll still be a good thing i think it's going to get done over the next couple of months

eventually i'm not sure how immediate it's going to be. but if it does get done, i think it does a lot for the chinese and global economic outlook. and it could go a long ways in reducing recession fears and if you reduce recession fears, there's going to be a lot of people that find themselves underinvested in equities. it could have significant impact if it has finally come to fruition >> heard you talking about late cycle, recession, things like that and we always say cycles don't die of old age and we all have our own ideas about what brings about a recession. i guess a financial crisis could bring about a recession, but normally it's inflation, isn't it or at least a fed mistake one way or another if inflation stays relatively low for whatever reason, whether we're importing it from the rest of the world or whether it's technology, could we have an

expansion like australia that lasts 25 years or something? is that possible >> well, i wouldn't rule out anything, joe. we've had the weirdest recovery ever in post-war history there's been nothing like this recovery coming from the sluggishness to the weird bizarre policies we've employed to the inability to raise confidence until the last couple of years. everything's been weird about this recovery. so one weird thing could be it could last much, much longer than people think. i think it's possible. and you're right i think the end game is probably overheat last year we were ending this recovery inflation had risen up to 2.9% we were going to take it out of the sweet spot obviously rates were going up. not only the fed, but bond vigilantes the fact we've paused the recovery, the fact we've slowed growth i think is a wonderful result it probably is going to elongate the recovery and it's also going to elongate the bull market. and rather than worry about

slower growth, we should probably embrace it. and invest for it. >> okay, good. all right, jim jim paulsen, thanks. we appreciate it you're a renaissance man, so you can talk about anything. we'll see you again soon thanks coming up, we head west, but only a few blocks west, to check in with andrew he's got an skbinterview with te man behind new york's new neighborhood >> we are at hudson yards. the grand opening just a few hours away from now. i'm going to be speaking with the man behind all of it stephen ross in an exclusive interview on the road to this day. transforming the city of new york stay tuned you're wchg quk x"n bcatin"sawbo o

♪ just hold on, i'm comin'

♪ hold on, i'm comin' ♪ hold on ♪ don't you worry, i'm comin' ♪ here i come

welcome back to "squawk box. the futures right now indicated up 137 points on the dow up 37 on the nasdaq. s&p indicated up 11.5. been strong all morning long today marks the opening of the new york newest neighborhood it's a multi-billion-dollar development known as hudson yards. andrew has made his way over >> thank you, becky.

we are here inside 30 hudson yards. this is steps away now from the new corporate headquarters just down here from kkr. we've got wells fargo. we're going to be talking to the ceo of that company. behind me over here. right? is the equinox hotel and stephen ross is going to be living here in just a little bit. the hudson yards neighborhood spanning a seven-city block and 14 acres of public space it is a real estate spectacle. it's an historic moment here in history. related chairman and founder stephen ross who spent the past decade this could turn out to be your life's work though >> well, i'm optimistic. i believe there's something beyond i can't tell you what it is, but i believe it >> so this is grand. i wish people could see on television just the grandeur

tell me what this means for you personally >> for me it's hard to believe you've been working on something for ten years and you have these ideas, these dreams of trying to do something different and to bring it to fruition and opening today, you know, it's a great moment. one i obviously waited for for a long time. but we still have a lot more to go we have another phase, another 6.5 million square feet. to date we've completed 11 million square feet. so it's probably the largest development done in the united states. >> how many tenants do you have now? what's the oups look like? >> of all the offices we have completed, we're 100%. and we've got the greatest names in new york. they saw there was a need for this in new york that's how we started the project. addressing what we thought was the need of the office tenants then we knew if we got the office tenants, we then would be able to get the retailers. we'd be bringing people here

i mean, there'd be over 50,000 people working here at hudson yards. and then we were able to get niemann marcus to take the fifth, sixth, and seventh floor of the retail. now today we have over 100 retailers, roughly a million square feet, of which all opened last night it's kind of exciting. >> how do you think it transforms the city and the real estate business in new york city a lot of people talking about the city moving west and south what do you think ultimately happens? and what happens to midtown manhattan? >> new york is a place where people really want to be where corporations want to be. where young people want to be. it is expanding. so new york needed a place, a future and i think -- and you look at the office buildings that were here in new york they were obsolete over 70% of the buildings were over 60 years old. we saw there was a great need for modern office buildings. because today, you know, technology has changed

what people -- expectations and how they do business, it's totally different today. so this is really accommodating those needs. >> all right let's talk about those needs there's been some controversy over the past month in this city about the needs of business and the idea of brings business to new york and all of the public policy implications of that. amazon obviously walking away from new york after a real protest by some of the local politicians. how do you think that changes the dynamic? and by the way, some of that conversation has been pulled even into this project which is to say that there were tax incentives and other things that were put in place to make this happen >> that's kind of like, you know, what the progressives are talking about in trying to really have business kind of -- they don't need to be -- cities don't have to do anything to attract businesses they shouldn't do things to really grow the city i mean, what's really funny is while we were attacked for having subsidies

the bloomberg administration put in place the sub sidies to build the infrastructure the subway, the expansion of the seven line, the hudson river park, the expansion of the javitz center. they put in infrastructure and that's what caused us to want to bid and to build this. if that hadn't been put in there, we never would have built it so people said we got the subsidies. but those dollars were to serve broader, the greater west side which is really where the growth of new york can occur. it's really the only place that has the opportunity for new york to continue to grow. >> this is just a new neighborhood in new york and it really offers all the modern con conveniences. and embraces the technology, the sustainability, the people want today. it's really meeting the needs of

what is -- the demands of what people want in new york. and that will keep new york the greatest city in the world let's face it. it is the greatest city. when they get together, we can keep it the gratest city. >> the other idea is this idea of a pied-a-terre tax. what do you think the implications of that could be? >> i think that could destroy new york you have people having apartments here and today the prices in new york are large they don't have to come here and to put a tax on them that doesn't exist anywhere, we dissuade people from coming to new york i mean, i think it's -- you know, i think progressives are going a little overboard in trying to say, hey where can we get money how can we tax the rich? >> let me ask you because we've spent a lot of time talking about this city. there are infrastructure issues in the city. is it a revenue problem? is it a cost problem is it a money misspent issue

if stephen ross who has effectively been -- you've been not king for the day but king for the decade in terms of building this, if you could do that to the city, how would you do it? >> i think a lot of it is a management problem i think you have to work more with the unions. and i think we all have to get behind it, come out with a plan to make it efficient and i think, you know, we're able to correct problems certainly you've got to think about it and got to use your brains not just throw money at problems and you have to have a plan. i think that's what we really are lacking. it's addressing the plan and getting everybody behind it. and it's -- like every city, where do you put the right resources? >> where do you think we are on the economic cycle i imagine this has to play a huge role in your decisions to make new real estate investments. >> i think we're near the end of a cycle. we've had a great run. you know, typically you'd expect something to happen.

but business is optimistic i think the trump administration has done a lot of great things to spur the economy. at the same time, you have, you know, the progressives who were trying to kind of dull that growth and it's going to be interesting to see what happens. i mean, we're going into the election phase and a lot's at stake. >> you've been compared to robert moses what do you think of that comparison >> i don't know. what he's done for this city and state and all the infrastructure and everything, i mean, we build neighborhoods. you know, it's a dream to do something that's really transformational this certainly is transformsal. >> it is stephen ross, thank you. congratulations on what i know is a tenured journey and a lot more to come guys, back to you. >> it would be cool to be a builder like that. i mow my grass and i'm like, job well done. i'm looking around like -- i mean, he's looking around at that and it's him. it's pretty cool

i think it's awesome >> it's a remarkable thing, you bet. >> it is all right. thanks coming up, big tech got another black eye this week. a report that some of -- and i actually -- >> don't mow your grass. i know >> no. but i think it's a great job >> that somebody's done. >> yeah. facebook data sharing deals are under criminal investigation meanwhile, apple coming out with a new ad touting the importance of privacy so who can consumers trust we're going to ask a former s.e.c. chairman tom wheeler and get him to weigh in on calls from washington for a big tech breakup. stay tuned you're watching "squawk box" cn bc see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy.

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welcome back to "squawk box," everybody. we've been watching the futures this morning and so far it looks like things are still strongly in the green. dow futures now indicated up by about 128 points s&p futures up by ten. then the nasdaq up by 35 coming up, just about an hour now until the opening bell. we will get you -- sounded like my mike wasn't on. we'll get you set for the trading day straight ahead on "squawk box. still to come, wells fargo ceo tim sloan will join us live from the official opening of hudson yards here in manhattan he'll talk about the bank's business, the u.s. economy, and the controversial questioning by congresswoman alexandria

ocasio-cortez this kweek week. >> if there was a leak from the pipe line, why shouldn't wells fargo pay for the cleanup of it since it paid for the construction of it >> because we don't operate the pipeline we provide financing to the company operating the pipeline. >> that interview micong up later this hour. "squawk box" will be right back. it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life. could yyeah, of course. files? what is going on guys? oh hey, servicenow frees us up to do the work we want to do. so we're digging out from all the work we don't want to do. ugh, getting rid of so much paperwork.

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welcome back to "squawk box" on cnbc. live from the nasdaq market site in times square. here are the stories investors are going to be talking about. it's a busy morning for economic data on the final trading day of the week february industrial production is out at 9:15 eastern then 10:00 eastern we'll get the latest university of michigan consumer sentiment index also out at that time, the labor department's jolts report which measures the level of job openings the founder of the now-defunct bitcoin exchange has received a two and a half year suspended sentence in a tokyo court.

he was found guilty of data manipulation but innocent on embezzlement prosecutors wanted a ten-year sentence mt. gox filed for bankruptcy insider trading may be tempting but not all that lucrative. a new study from st. john's university finds half of all defendants made less than $60,000. who were close to the market moving in. activity around two massive ride sharing i the pos kicking into gear next week. deirdre bosa joins us with more on that front. >> good morning.

uber will be meeting with sell side analysts to help them model its business in the early days they wanted to know things like ride sharing's market uber and lyft, they are now more more than a decade old and here are the phi things they say that investors will be looking for in the coming weeks. one capital allocation strategy especially in uber's case as it diversifies far beyond ride sharing. two, their long-term pricing power. three, what do margins look like in maturity? they also want guidance on how they find pay and keep drivers in the long-term they say that a key metric will be customer and driver acquisition costs. these are tough questions for both companies that are deeply unprofitable and really reflected in the complexity of

the ride sharing business. some brokerages tell me they haven't yet decided which analysts are going to be cover these. made for internet transportation or logistics analysts. back over to you guys. >> okay, great thank you. apple meanwhile is out with a new ad emphasizing the importance of privacy. without a single line of dialogue, it ends with text that reads, if privacy matters in your life, it should matter to the phone your life is on. tech rivals google and facebook are under scrutiny for their handling of private data and of course the government's still trying to get that apple iphone open to see i guess apple does put their money where their mouth is they came under a lot of pressure from that that's one of the few times where i actually agreed with them when most people thought in those cases --

>> right in cases of a situation where you can stop some harm or something, i'm in favor of being forced to turn it over it's a slippery slope. >> all these things are nuanced. is what apple's business model is relative to some of the competitors. >> you're their customer, but not really they're selling your information to them. yeah tim cook has been very front and center about that. we're joining right now for more on the privacy debate and calls for breakups of big technology for that we welcome tom wheeler. he is the former fcc chairman during the obama administration. he's now with the brookings institution and he's the author of the book "from guttenberg to google: the history of our future." thanks for being here today. >> good morning. good to be with you. >> let's talk first about the privacy debate that is really taking off in washington and around the country after what we've seen, maybe things that people didn't really

realize was happening with their information with some of these companies. what do you think? is this an area rife for regulation >> i think you did a terrific job a minute ago in summarizing the situation. there is a kind of digital alchemy which takes place where your information and my information is somehow transformed into an asset that is used in markets and other activities tim cook standing up for privacy is not only an important issue i think he calls it a human right. but it's also a way as you out putt out a minute ago of differentiating his product from, for instance, his competitor operating system for phones he said you have to pay me to

get the ios operating system, but i'll protect your privacy where android says we'll give it away in return for giving it away, google gets to collect all that information. so that's really what is going on here. there are two different business models and at the heart of this is the dominant business model of silicon valley which is this digital alchemy. i'll take you information and make it my corporate asset whether we can move to the kind of thing tim cook is talking about where you pay for services, that is the debate coming up. >> i think it's a much broader issue. we can sit and talk about the companies involved with us at facebook, google, something like that but really if you look at what's happened to business in general over the last five to ten years,

just about any time you want to download an app, buy a product, sign u for a loyalty product, and in some cases you're buying products that have digital capabilities to spy on you if they choose to you're asked to sign a privacy disclosure where you as the customer have to say yes i agree to this. always says something like you have no rights if you don't like it, too bad. put itself in a position where they are begging for regulation. do you think that that will actually take place in washington where people can't agree on much of anything? >> well, we have to move on from the days when consent with this as you say excessive legalese was sufficient if you read the privacy notices

that for the typical websites at a typical reading speed, it would take you four months to read them all. let alone understand them. basically what they say is you will agree to this or we won't provide you service. it's a coercive type of service. >> and you have to give up your rights to sue in most of those as well. >> exactly and we can change the rules whenever we want, we just have to say, hey, we changed our rules. but we have to move on from that and we need to start thinking about what are the new kinds of standards that ought to be put in place and i think what that means, becky, is we need to move the responsibility to protect privacy off of the back of consumers and onto those who profit from using that information. right now, you know, it's -- well, if you read this and therefore we can do whatever we

want, you have to opt out. you have to go to, you know, 20 different places before you can opt out from this one network service, et cetera we need to move it onto the backs of the companies that are profiting and say they have a duty of care they have a duty to say -- to anticipate what's going to happen and to mitigate it and they have a duty to collect only that which is necessary to provide the service. go ahead >> you know, i look at that and agree with you on this stance. when you start hearing from elizabeth warren and others who want to break up big tech as using monopolistic behavior, consumers are way better off than they were before. because a lot of these big companies at this point are using their power to bring prices down for consumers. so what's the problem? where's the fault? >> so the way that the digital economy works right now is that the company collects your

private information, hordes it, and turns around and then makes that available to the marketplace. you can only come through me if you want to get this kind of granul yularity in this place. so folks have been saying elizabeth warren came out with her proposal saying we ought to break it up. i think antitrust needs to play a key role but there are three ways you look at antitrust issues one is, yes, the break it up the problem there is is the lawsuit going through court is a multi-year six to ten year kind of issue and the judicial tests right now are somewhat in question >> but break it up how just get back to the point of whether this should happen or not. break it up how? >> let me get to that. >> okay. >> the second option is to use

antitrust concepts to protect competition in mergers we have not been aggressive in that area. and the third is to use antitrust to protect competition through regulation you asked the question, break up how. so i think the question is break up versus break open that we talked a minute ago and how all of this private data gets horded by the companies then the companies then use that to gain the market control if that information were opened and connected with other services -- i mean, think about facebook, for instance facebook beat myspace even though myspace was owned by

rupert murdoch it was beat in an old fashioned my product is better kind of competition. but today with 2.25 billion subscribers and hordes of data, if you come along andsay i've got a better idea. i want to have a better product, you can't take them on because the asset is that digital information. so how do you open that up and provide for interconnection to encourage competition? >> it's a lot to think about we'd love to have you back soon to talk more about it. tom wheeler. author of "from guttenberg to google: the history of our future." when we come back, another "squawk" news makers we'll head back to hudson yards for an interview with tim sloan. we'll speak with him on the state of the big banks, recruiting top talent, and getting grilled on capitol hill

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how they serve even the hardest-to-reach customers. cool ♪ welcome back to "squawk box" this morning i'm inside 30 hudson yards we are now steps away from what will be the new regional headquarters for wells fargo the bank also a founding partner

for this neighborhood. you can only use a wells fargo atm machine in this area good to see you. >> good to see you >> you're also the largest financier of this operation. >> that's correct. we led the financing the tower we're in and we led the financing for the one next door. >> how much does he owe? >> they're a great client and we've had a long relationship with them. they're good for it. >> how did you decide to get involved in this prot? how did you decide to move this headquarters here? >> sure. great question so we're -- our largest facility here, the lease was coming up due. and so we looked at how they will be for the team members the team members are interested in making part of the new

development. >> when i spoke to stephen, he seemed to suggest we were at the end of a cycle i asked you about the cycle because clearly you're making loans both on residential and commercial real estate these days where do you think we really are and how's that affecting your decision making? >> well, you know, it's interesting because i think we've all thought that we were in the ninth inning. if you want to use the baseball analogy of the cycle for the last five innings. i think what we're seeing is a continued growth in the economy. it's slowed a bit from last year but we don't see a recession on the horizon. certainly not next year. we think the economy will grow up to 2% this year in the u.s. >> this is going to require bringing a lot of tenants over do you worry about the cycle issue?

>> you absolutely have to worry. i think any time you're financing a project like this, it's a multi-year construction project. you have to try to imagine what the world's going to look like three, four, and five years from now. now, having said that, i think it's also a big bet of new york. and through the cycles, even though there have been ups and downs, new york real estate has been a good bet for hundreds of years. >> and you're not worried about all of the other projects you might have financed either in midtown or other parts of the city we're starting to see real estate come down in terms of pricing. >> we are. i think there's a lot of reasons for that i don't necessarily think it's an economic driver but we worry about taking risks every day. that's a really important part of our business. i think we've been worried about commercial real estate now for the last few years and you've seen actually our commercial real estate portfolio and outstanding start to decline a bit. we're still the largest lender

in this country. we love the business but having been through cycles before, you've got to be careful. >> you've had a long week. you've been traveling. one of the places you stopped before getting here was in washington >> that's correct. >> i do want to show you a clip which i don't know if you're going to want to remember or not from earlier this week when aoc asked you a couple of questions. just listen to this and we'll talk about it in a second. >> okay. >> why was the bank involved in the caging of children and financing the caging of children to begin with? >> i don't know how to answer that question because we weren't. >> so hypothetically, if there was a leak from the dakota access pipeline, why shouldn't wells fargo pay for the cleanup of it since it paid for the construction of the pipeline itself >> because we don't operate the pipeline >> so you're sitting there you're hearing these questions what are you thinking? >> i'm thinking that it's really important to respond to the question in an open and very

honest way and that's what i did. >> but i imagine you're -- as -- you guys as i imagine do murder board before these where you practice or at least think about what kind of questions -- >> you want to prepare yeah >> were those questions there wn on the list. i think that we absolutely assume that there would be questions about our involvement with a number of our customers and a variety of different industries i think the -- the -- one of the issues is whether or not financial institutions should be held responsible if something happens with a product that they might have financed. i think that was the crux of the question and my response was that the answer is no, because we don't -- we don't drive the car, we don't operate the pipeline >> do you think the politics of the moment are changing in a way where that which was traditionally the answer is going to morph >> it is not going to morph for

us our role in this country is to provide credit and financial services so our customers can be successful that's what we do. we don't make legislation. we don't make policy that's why we have elections and folks get -- go to washington and make decisions and then we make sure that we follow whatever rules and policies are needed but, you know, my focus is how can wells fargo be a more successful financial institution. >> what is the relationship today, do you think, between wells fargo and washington and the way policymakers are thinking about you recognizing i think maxine waters, again, called for your resignation. >> yeah. it is a very constructive relationship >> is that constructive if she -- when you hear her say tim sloan shouldn't be in this job, what do you think? >> you know, i balance that against the hundreds and now over a thousand e-mails that i received from our team members,

telling me how proud they were that i represented them. well, that's what really drives me is what our customers think, it is what our team members think, now, listen, folks in washington are very important stake holder we have a responsibility to be responsive to their questions. that's why i was pleased to be able to participate in the hearing. but, you know, you got to have a constructive relationship with all your stake holders. >> okay, tim sloan, great it see you. we'll see each other again in california. >> i'm looking forward to it we're talking about innovation at wells fargo. >> tim sloan, thank you. >> back to you, joe. >> we do, andrew both of us, depending who the guest is, no murder board is going to work for what we might ask guests, i think, am i right or am i right? >> that is true too. >> we will consistently -- they'll say, they'll say, well -- >> we don't have it planned. >> no, i like the way you asked those questions though with the straight face and i like -- about aoc, and i like the way

tim sort of just, you just couldn't -- he didn't give you what -- i would have started laughing probably. but anyway, i liked his response he didn't act like they were ridiculous questions, which is what you were implying with the way you were asking it, i think, weren't you, sort of >> i take no sides >> yes, they were ridiculous questions. they were ridiculous. >> i only ask ridiculous questions. >> when you were asking him, i thought that's the answer you were looking for, i thought you wanted him to go, can you believe that what was that? that's what i thought you were looking for, but no murder board is going to work. >> he's very disciplined very disciplined. >> he is he's got customers on both sides. so a lot of these -- these are the ultimate canaries in the coal mine. they got to try and please all the people all the time, which is impossible. thank you. >> that's not the pope

regulators or congress or legislators. >> i guess impact investing is in focus this morning after a big name in -- i don't use space -- after a big name in that area of commerce was caught up in an unfolding college bribery scandal and leslie picker joins us now we're asking everyone where they graduated from now, leslie >> university of illinois. >> university of illinois. >> state schools across the board here. >> we're all big ten we're all big ten. >> not anymore but i was back then -- yeah, i think we're pac-10 now >> rutgers is in. >> that was a brilliant move let's play ohio state and michigan in football. >> that makes university of illinois look a little better. we were, like, come on over. >> we have done well in basketball we have done well in basketball. >> yeah. >> we'll stick with that. >> we'll stick with that so anyway going back to the idea of impact investing, bill

mcglashan, about $3 billion in assets spread out over two funds, around impact investing in particular. he was put on indefinite leave on tuesday after prosecutors said he was involved in the college bribery scandal. mcglashan allegedly paid someone to correct his son's answers on the a.c.t. and falsified an athletic profile for his son last night mcglashan announced he was resigning from tpg. minutes later, tpg said he was terminated for cause, adding that the allegations and the criminal complaint were, quote, antithetical to the values of the firm e-mail exchange obtained by cnbc shows he both resigned and was fired, but the distinction may matter in terms of compensation. tpg's ceo wrote in one of the e-mails to mcglashan he would be in touch about the economic consequences of mcglashan's termination. meantime, tpg's second rise fund, the fund that had been led by mcglashan just had first close from its fund-raise last month. a source told me that investors can choose to reaffirm their

commitments in that fund, in other words, they have the choice of essentially pulling the capital in light of the allegations and revelations, guys >> we're going to keep talking about this, i think. >> not going anywhere. >> any other shoes to drop, i wonder i don't know if we -- >> my guess would be yeah. >> a lot of shoes to drop. >> centipede type situation. they don't wear shoes. >> i guess they're in our world too, the finance world. >> the cartoon centipede my hungry caterpillar. >> very hungry caterpillar. >> anyway, coming up, we'll check the markets -- thanks -- and check the final futures look for the trading day and final trading day of the week. don't miss an exclusive interview, john boehner, he'll be wasted -- i'm kidding anyway, he's even more wasted than usual, the ceo of cannabis company acreage holdings will discuss the pot space. there it is with the space again.

and boehner's got to be careful when you pronounce boehner's name too, his adviser worked for the firm stay tuned "squawk box" will be right back. ♪ ♪ dear tech... ♪ ♪ dear tech... let's talk. we have a pretty good relationship. you've done a lot of good for the world. but i feel like you have the potential to do so much more. are you working for all of us, or just a few of us? can we build ai without bias?

ai that fights bias? ai that helps us see the bias in ourselves? we need tech that helps people understand each other. that understands my business. ♪ ♪ dear tech... dear tech... dear tech... dear tech... let's champion data rights as human rights. let's use blockchain to help reduce poverty. let's develop new solutions with the help of quantum technology. let's show girls that stem isn't just a boy's club. let's make a difference in people's lives. let's do it all. together. let's expect more from technology. let's put smart to work. ♪ ♪

let's get a final check of

the markets this morning you see the futures have been sharply higher all morning long. right now douw futures up by triple digits. this comes after a relatively flat day for the markets yesterday. that does it for us today. have a great weekend, everybody. make sure you join us back here next monday. right now, it is time for "squawk on the street. ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with sara eisen, mike santoli and cramer and faber are off today. quadruple witching today, and we'll watch for developments in the mosque attack in new zealand overnight. at least 49 killed europe trading higher. empire manufacturing, ten year yield just below 6.1 trade optimism, ne