♪ it's 5:00 a.m. at cnbc global headquarters and here's your five at 5 breaking news on boeing. federal prosecutors are reportedly investigating the faa's approval of the company's 737 max planes the latest on this major developing story straight ahead. lyft kicks the road. the ride-hailing service reportedly launching its road show today we have full details president trump slamming gm saying the car maker let our country down we'll bring you more of his comments. russian billionaire firing back at u.s. sanctions saying he's here with an exclusive

interview. we'll take you live to moscow with more on that. and saudi's oil minister says opec not being pressured by the u.s. to cut production we'll bring you all of those comments ahead it is monday, march 18th, 2019 "worldwide exchange" begins right now. ♪ good morning and welcome to "worldwide exchange" i'm dominic chu. brian sullivan is off today. futures right now pointing to a relatively stable open just about flat for the major indexes. the dow just down by 3 points. the s&p up by 4 and the nasdaq up by about 17 but first, we're following a major developing story on boeing the department of transportation reportedly investigating the faa's approval of the boeing 737 max planes frank holland joins us with more

on this top story. >> they are focussed on a safety system that has been implicated in the lion air crash and indonesia last fall. authorities are investigating whether that anti-stall system played a role in last week's ethiopian crash. it's unclear whether that justice department and transportation department probes are actually related the journal says its generally unusual for prosecutors to investigate the approval of commercial aircraft. those cases are typically handled by civil cases by the inspector general of the d.o.t., although that office can make criminal referrals the new scrutiny comes as the ethiopian authorities say there are clear similarities between the two crashes. u.s. officials say it's too early to draw conclusions as data is being analyzed from the black boxes.

they are preparing public hearings boeing shares are down about 5% in the last week. new this morning as well lyft reportedly plans to kick off his road show today. they are looking to raise as much as $2 billion to value lyft $20 billion overall when it goes public we'll have full coverage of lyft's ipo plans right here on cnbc the lyft road show is just one of the big items on the calendar today we get the earnings from cannabis producer tillray. look for earnings from fed ex, and chinese electronics firm on wednesday, fed decision along with j. powell's news concerns thursday, nike and first day of eu summit in brussels and we

round out this already busy week with existing home sales and earnings from tiffany on friday. well, let's talk more about the big week ahead joining me now is daniel morris, senior investment strategist dan, thank you so much for joining us this morning. let's talk about the way the markets are setting up because it feels like there's a new i finty for risk in the marketplace. is it justified? >> well, we do think it is a lot of it has come down to a resetting of earnings expectations is what we went through in the fourth quarter of last year, quite negative earnings revisions primarily in the energy sector and of course in technology. and any of the marketplaces reflecting that. we see it turn around. we have oil prices moving up again. we're also starting to see positive earnings revisions again within technology. that's one of the key things supporting the market. the other half is the fed, more patient outlook and dovishness and see whether or not we get

that confirmed after the meetings this week. >> over the past few weeks we've seen a renewed focus on inflation, consumer prices, prices at the wholesale level also in regards to energy like you said all is playing into interest rates but in a odd way why is it with all this talk of preps prices rising more we see treasury yields at really, really depressed levels? >> well, you need to separate a couple things. inflation expectations and what's actually happening with inflation and real yields. we've had generally speaking disappointing inflation print which is is why we think the fed is unlikely to raise rates this year which the markets quite like at the same time, they are going up in line with oil, and we think that's a big part of what's supporting the equity markets. at the same time, you have real yields falling which explains why nominal treasury yields remain low you have things going in

opposite directions. that's a bit more ambivalent it at least explains why you have this environment where you have rising equity prices but very low bond yields which some people see as a contradiction but we think it's consistent. >> to what extent are those lower yields driven by the fact that we're seeing some of those yields in the european union anchored so low as well? >> well, there's always the question of which market leads the other. i think we're seeing the ecb and the bank of japan for that matter really following the lead of the fed we think about the concerns we had earlier last year which was this scenario of balance sheet runoff and hikes from the fed and the bank of japan in their own way not pushing them to raise rates. that's reverse the ecb is more dovish they pushed out their hike in 2020 and i think they're able to do that because of what the fed has done the fed as it tends to do is raising global interest rates and giving the ecb the

opportunity to do it lower and you see a bigger acceleration in eurozone growth which we think we actually will see. >> daniel morris, thank you for those thoughts we're just getting started on the show. coming up next, trump blasts gm. the president lashing out at the auto maker on twitter. what he's saying after a phone call with the company's ceo. but, first, a cnbc exclusive sitdown. russian billionaire going on the record talking everything from sanctions to paul manafort we'll take you live to moscow with more of his comments when "worldwide exchange" comes back after this break (danny) let me get this straight.

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and see how you can have an even better x1 experience. simple. easy. awesome. welcome back to the show president trump blasting general motors the president taking to twitter, urging gm to reopen its manufacturing plant in lordstown, ohio. the president going as far as saying, quote, gm let our country down late last night trump then tweeted just spoke to mary barra, ceo of general motors about the lordstown, ohio, plant, i am not happy that it is closed when everything else in our country is booming i asked her to sell it or do something quickly. she blamed the uaw union i don't care i just want it open. gm shares moving at least a little bit to the upside right now, just about flat in trading

$38.10 the last rate there in pre-market trade. switching gears, one of russia's richest men is going on the defensive or offensive depending which way you want to look oleg dare pas ka is suing the u.s. government demanding, they lift sanctions against him jeff joins us live from moscow with more on this very big interview. jeff, how does hi feel about these sanctions? and what's he going to do about it >> reporter: well, he feels emotionally and financially which is why he's asking for $7.5 billion here. back in april, 2018, these sanctions were imposed the treasury then said he was part of a group of wealthy russians who had a malign influence on world business affairs. he hit back saying the treasury has overstepped its legal bounds let's hear what he says.

>> i hope that sooner or later people will recognize it's wrong. we'll try to assess the facts and actually it's getting worse and worse. last hearing in congress when people start blaming me personally for any sort of things which i had not connection even with, not just based on fact, just fantasy. and of course it's given me total understanding that the legal system in u.s. may be the last resort where people could assess the facts and to see, you know, what justice would be. >> reporter: and of course, oleg dare pas ka's name has come under scrutiny by robert mueller looking into allegations that moscow interfered in the 2016 presidential elections oleg deripsaka acknowledging he

had a business relationship with paul manafort, then campaign chief for now president trump. but deripaska insists that there was no information passed to him by paul manafort on the campaign let's hear what he had to say about paul manafort. >> let's state the fact. yeah manafort last consultants, which not all this balderdash and blah blah blah russian state. it's total balderdash. never happened never offered. last consultants was in africa and not very good because there was no result. 2011 never seen him after >> reporter: and dominic, one of the remarkable things i think that's come out of this conversation is just how powerful these sanctions are from the u.s. treasury oleg deripaska says the russian

or federal bank are willing to deal with him. that's why he's fighting against the u.s. treasury to get himself off that list. back to you. >> so, jeff, there are many things i want as well. i want more money, too i'm not suing the u.s. treasury, but what is the likelihood that he will succeed in this lawsuit? will he expect to see anything coming out of the treasury because of his lawsuit against them >> reporter: well, of course, the legal process will have to run its course here, but i know that already a number of learned lawyers have gone on record as saying that they don't think that this suit will prevail against the treasury they argue that the treasury and secretary mnuchin had good grounds to put him on that sanctions list but we will have to wait and see. oleg deripaska saying that he believes in the legal principle and the legal system in the united states and he believes it

will prevail in his favor, but this may take a year or so before we ultimately find out whether he's been successful or not. >> so, jeff, also one other point here, oleg deripaska has been seen as an ally of russian president vladimir putin how much of that plays into how he feels he's been treated does he feel that president putin is casting a shadow overhim as well? >> i asked him specifically whether he was put up to this, whether the kremlin and the president had actually put pressure on him to do this now because the original sanctions list was put out in april of 2018 so, here we are in march of 2019, almost a year has passed since he's been forced to run down his ownership in the two aluminum businesses that he founded. so, why the delay?

was the president involved in making him push ahead with this lawsuit at this point? no, he says. and on that issue of how close he is to president putin, it's not true he suggests that actually he is a close ally of the president. but i know that people will make up their own minds as they look at the evidence on this. but for the time being, he insists that he is doing this because he's been personally injured financially and emotionally it's been very tough over the last year to be detached from a business that he spent most of his life building up. >> all right our thanks to jeff cut more with that big exclusive interview with russian billionaire oleg deripaska. coming up next, drilling down on crude price. they're slipping overnight we'll tell you what's driving that leg down. later on, the power ball jackpot went soaring we'll tell you how much is at stake when "rlidexanwodwe chge" returns after this

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welcome back to the show i'm dominic chu. futures showing some stability the dow only off by 29 points of these futures moves hold into the opening bell the s&p up by two points and the nasdaq up by just around 12. oil prices a key focus for many traders over the course of the past few weeks because of some sharp moves to the upside. right now wti crude slipping by a bit off by two thirds of one

percent. ice brent crude 66.79 off by one half of 1% opec needs to stay the course when it comes to production cuts he spoke at a conference in azerbaijan overnight dan murphy is there and joins us with more. what were the headlines coming out of those particular meetings, dan? >> hi, dom we had the opportunity to speak with the saudi minister and he says that opec needs to, yes, stay the course. he also said that more work needs to be done to preven another glut in the oil market and says there's a broad consensus now that many major producers are looking at an extension to the current opec supply cut a chord listen in. >> we're guided again by what actually materializes in the marketplace in terms of inventory. so, until we see it hurting

consumers, until we see the impact on inventory, we're not going to change course >> reporter: we also had the opportunity to speak with russia's energy minister alexander novak and he essentially disagrees with his saudi counterpart saying it's too soon to speak about an extension. i had the opportunity to ask him about compliance which has been a major issue for russia and he gave an assurance that russia will be more compliant within the next few weeks listen in. >> translator: part of the signed agreement we plan to reach those figures by the end of march, beginning of april this is earlier than in the same period two years ago, by about one month. >> he has spoken about possibly extension to the opec? would russia support extension

>> translator: it's a little premature to talk about this, any discussion will be discussed in may/june this year. we have planned the meeting to take place in may while the ministerial meet willing happen in june and we shall have a clear understanding of the market conditions in the summer and any predictions for the second half of the year. >> reporter: dom, there's also a new question now about whether or not the scheduled april opec meeting will go ahead. we heard today from the saudi energy minister saying that ministers are going to need more clarity on what happens with those iran sanctions which they may not get until may. we'll see whether they do recommend that meeting does not go ahead >> what's the general feel or tone of these meetings in azerbaijan do they like the fact that oil prices have been buoyed up over the course of the past couple months now >> reporter: yeah, absolutely. since the slump we saw in q4 in oil prices we have seen that significant recovery, but the

general consensus that we're getting from ministers here is that there's still a high degrees of uncertainty in the market, not just coming from what we see out of the united states but also these duel u.s. sanctions providing a lot of wild cards for these guys to deal with. >> dan murphy, thank you so much for those updates on opec. joining me now is global head of commodity strategy at rbc capital markets and cnbc contributor. thank you so much for joining us this morning you heard what dan said. >> yes. >> there are so many conflicting feels and reports coming out there between russia and saudi arabia, so what exactly on balance does this mean for the oil market does it mean that we will see these production cuts stay, maybe get extended >> yeah. i think we're likely looking at a full year agreement. it does not surprise me at all the russians are saying too soon to commit to a full-year deal. the russian corporates hate shutting in production i mean, they benefit from volume the state takes upside of higher prices

for them, they don't like the agreement. they always have to negotiate. for saudi arabia and the rest of the producers current prices still remain below their fiscal break even they would like to see prices higher from here and want to make sure president trump carries through with certain commitments on sanctions last year the saudis were caught off guard when they issued exemptions so they'll wait to see what president trump does with the may decision on iran. >> one could argue that whatever opec plus, whatever you want to call them, the partnership, whatever they're doing is working. because prices are marketedly higher both for crude oil and for gasoline prices, so what is the argument against doing that? >> i mean, really from saudi's perspective, when prices were the in the 80s, they were getting a lot of pushback from india and china and also from president trump. the biggest factor last year

which caused them to change course was pressure from the white house. and the white house basically said, look, we helped you out, saudi arabia you're going to help us out with additional barrels on the market but they thought that basically iran would be taken almost to zero and very caught off guard by what happened now what they're saying is president trump, we know you're going to basically issue decision on iran in may. we're watching what you're doing on venezuela sanctions, don't expect us to preemptively flood the market. >> you brought up president trump. there is this notion right now that the u.s. wants to kind of get rid of the cartel aspect of opec and friends how does opec feel about that? and how can they react to the rhetoric coming from the white house and u.s. lawmakers >> they're really watching the no-pac bill in congress to say opec is a cartel what they're saying and the opec officials were saying last week in houston is fine, you want to

get rid of opec, you want to break us up, fine, we'll max out production we'll take prices back down to 30 and u.s. shale producers will pay the price for that so you have to make a decision, washington do you want to have us providing stability for prices or do you want us basically to max out production and take out one of your growth stories in terms of the economy, u.s. producers. >> all of this plays into this contextual move by these partners in opec to have a meeting sometime in april or not. >> right. >> based upon how production is moving so will they have a meeting? is there enough data by opec and russia to maybe continue those production cuts going into the second half of the year? >> i think they're absolutely right. we won't know on the iran decision until may why have a meeting in april. why put this added pressure on the organization going into a meeting. why not punt the decision to june i think that's going to be the likely course of action. and at that june meeting again, i think we're likely looking at a full year extension based on where we are now. >> where do you think brent prices are and wti prices are

headed over the course of the next six to nine months? >> we've been constructive on brent prices our forecast was we would average $68. wti would average 60 there are wild cards that could take us higher we talked before, dominic, u.s. pulls the trigger on secondary sanctions and says to india and china, you have to cut your venezuelan imports or we'll lock you out of capital markets like we do on iran, that would basically really, really crush venezuelan exports there are real significant u.s. policy actions which could push these prices higher. >> thank you we appreciate it. still ahead on the show, hitting the road lyft is gearing up for its ipo road show. the details ahead. later on, a double dose of merger talk this monday. the names that need to be on your radar when "worldwide exchange" returns after this your joints... or your digestion... so why wouldn't you take something for the most important part of you...

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hitting the road, lyft report lid kicking off its road show today we'll break down all the big details straight ahead. on the record, oleg deripaska talking everything from sanctions to paul manafort in a rare, exclusive interview with cnbc. we'll bring you more of his comments coming up. and president trump slamming general motors why he's saying the car maker, quote, let our country down. it's monday, march 18th, 2019. you're watching "worldwide exchange" right here on cnbc ♪

good morning and welcome to "worldwide exchange" i'm dominic chu. brian sullivan is off today. let's get you up to speed on top headlines. frank holland? >> good morning, dom here is what's leading cnbc right now. the transportation department is report lid looking into the faa's approval of boeing 737 max planes according to a "wall street journal" report and that probe is focussed on a flight safety system that is suspected of playing a role in the fatal lion air crash in indonesia last year boeing shares are down about 2, almost 2.5% in the premarket right now. now big ride share nudes lyft report lid plans to kick off his road show today. they're looking to raise as much as $2 billion. that could value lyft at more than $20 billion when it goes public the president is blasting gm the president tweeting that the company, quote, let our country

down after closing its lordstown, ohio plant. the president said he spoke with the president mary barra >> thank you for those headlines, frank holland check on the other headlines from this morning. incomes francis rivera with the late tles. >> good morning. the midwest is bracing for flood waters to rise even more after historically high waters have been blamed for the deaths of three people the record snowfall in february followed by heavy rains the rivers are cresting. 11 million americans now face the threat of flooding. president trump celebritied st. patrick's day with a torrent of tweets. what caught the most attention was his attacks on the late senator john mccain, referring to him as last in his class and accusing him of sending the fake dossier ties of the russia and

fbi and media. the tweets drew sharp condemnation on capitol hill. a few twist on a childhood favorite is here the famous jelly belly jelly bean was created more than 40 years ago and is now looking a surprise ingredient cbd oil. the cbd infused jellies come in 38 flavors due to the popularity, orders can only be placed directly through the manufacturer spectrum confections dom, those are your headlines. >> thank you so much for those. quick check on your morning setups futures pointing to a relatively stage open the dow off by 32 points, s&p up by 2 and nasdaq up by 13 joining me now is anthony chan chief economist over at chase. anthony, we had a big breakout some traders say on friday got over that 2815 level and stayed there so does this mean now that those risk assets in the marketplace are again more attractive to

those investors out there? >> i think the market is starting to feel even more comfortable with the notion that the central bank is going to be an ally in this game remember that when richard claret is telling you that their models are not infallible, they're talking about average inflation tightening, all that is a friendly message to the financial markets. when they say their models are not infallible, that's probably the biggest understatement of the decade when you look at the inflation target of 2% and you compare that to core personal consumption, you have to go all the way back to 2008 to find a year where the inflation rate for that year came in at 2%. and by the way, this is not a criticism of the fed this is actually a positive statement because maybe it's time to give themselves a pat on the back and say we've done a great job but now we can relax a little bit and let the inflation run hotter or the economy to run hotter simultaneously. >> we use the term goldie locks

so often in business news to refer to certain conditions. right now we have a situation where inflation core is relatively tame yet wages are rising at a slightly quicker pace than many had thought it would. isn't that a goldie lock scenario for the u.s. consumer and by proxy the u.s. economy overall? >> absolutely. now the consumers or workers are getting more and can spend more and the economy can grow faster, but the real wrinkle here, dominic, is that when you look at the relationship between wages and overall inflation, that has actually weakened over the last decade. so, when you see wages running hotter, they're not too hot because after all the federal reserve wants average hourly earnings to grow at 3 and 4% they're not above that target, a little hotter is good and you couple that with the fact that that relationship is weakened there is no other way to go than to let the economy run a little hotter. >> the economy may run a little

hotter what does that mean overall for the general environment on wall street does it mean cyclical sectors, economically sensitive ones like financials and technology start to really assume leadership again in this kind of environment? >> that's a great point. you don't necessarily have to go that far you just say that there is support out there because let's face it the economy letting it run a little hotter is exactly what you want because it is slowing down on its own. in the first quarter already the atlanta federal reserve is looking for economic growth to slow down to 0.4%. we're not going to get the 2.9% growth we got last year. this year growth will come closer to 2% again, need a little bit of support because the underlying trend in growth is softer. i'm not so excited about the cyclical sectors is my short answer. >> anthony chen at chase thank you for joining us with those market thoughts. one of russia's richest men is going on the attack russian billionaire oleg deripaska suing the u.s.

government demanding it lift sanctions against him. he sat down for a rare, exclusive interview with cnbc over the weekend and explained why he's fighting those sanctions. ♪ >> i hope that sooner or later people will recognize it's wrong. will try to assess the facts and actually it's getting worse and worse. and last hearing in congress when people start blaming me personally for any sort of things which i had no connection even with, not just based on fact, just fantasy and of course it's given me total understanding that the legal system in the u.s. may be the last resort where people could assess the facts and to see what justice would be. >> deripaska also talked about his relationship with former trump campaign manager paul manafort you can see those comments right

now on our website, cnbc.com. coming up next, a tax typo one state just accidentally handed out double refunds to its residents. those details ahead. plus, it's that time of year again. the march madness brackets are set. we'll break down the who's in chgerernafr iswhen "worldwide exan" tus teth

welcome back to "worldwide exchange" i'm dominic chu.

time for this morning's top trending stories frank holland is back with those. frank, march madness has to be trending. >> of course of course we'll talk about march madness because it's that time of year again. the brackets were set yesterday. the one seeds, duke, gonzaga, north carolina and virginia. the first round of the tournament kicks off on thursday now, according to wallet hub, american businesses lose about $4 billion worth of productivity that's probably a conservative estimate. >> it's a guarantee during this time of year you will find those lost productivity stats going full boor. the last time we saw three conference teams as number one seeds, duke, north carolina, and virginia all has one all from the acc. you have to go back to the big east days to see that kind of representation. >> acc great year for them >> zion is my pick duke all the way. power ball jackpot is inching towards another record high no one won saturday's drawing.

550, the eighth largest in power ball history the next drawing is on wednesday. your chances of winning are pretty slim, about 1 and 292 million. i'm still going to play. >> i already did i bought my ticket so the question is what would you do if you won? would you still be back here >> yes, for a few weeks. >> i would be back at work. >> i would have to get all any ducks in a row this kid is amazing, 8-year-old homeless refugee is crowned new york city's chess champion lives in a homeless shelter with his family. he beat out several other kids in his age group to win the title. the 8-year-old says he only learned how to play chess just last year. he'll compete for the national hit until may. >> what an amazing story >> absolutely amazing. chess is such a good game for thinking, strategy, great to see this kid just kind of jump in with both feet and now he's a champion. >> i love the fact that i would be five times his age and -- he would beat me in the first two

minutes of that match. trending today, nearly 6,600 louisiana taxpayers were mistakenly given double refunds on their tax returns most of those refunds were sent by direct deposit. nearly $26 million in all was mistakenly handed out. louisiana is trying to recover that money i would be hard pressed to give it back. >> i would i think the government will get it back at some point because they always do. >> can't fight city hall, state house or d.c >> thank you for those trending stories. well, sticking with the small business and taxes, small business owners were excited at the idea of a tax law overall. many were hoping it would simplify the process and lead to bigger cuts. so did it pan out? kate rogers takes a look ♪ wlana paul is a double winner under the new tax law, at least for now. the entrepreneur owns four businesses across iowa and saw her tax rate fall, thanks to a new business deduction she was also able to expend some

major investment, buying six new tractors totaling a million dollars. her accountant says her savings looks substantial. >>eer estimating up to $40,000 and by utilizing that we gave our employee's raises knowing that would help us for taxes this year. >> reporter: but the changes to the individual tax code paul used to lower her taxes will expire after 2025. and main street advocates point out corporations still have a 21% rate while pass-through businesses could face rates of up to 29.6%. >> while we got ground work laid for small companies, we didn't actually get there so the big corporations that make millions of dollars are actually seeing their tax rates at a lower level than many small businesses that are pass-throughs that are making less money and we don't think that's fair we think we need to get closer to parody than we have. >> taxes have long been a trouble spot for small businesses the national federation of

independent businesses that at least 10% of small business owners have ranked taxes as their single most important problem nearly every month, dom, since 1973 when if group began pulling main street. while the changes have eased that burden, advocates are asking for a bit more and i will say that lana paul went and testified before the house of representatives to say this did really help me, but what we need is permanence here. >> we speak about corporations, small, middle and large cap companies publicly traded that may have seen some of the effects of the tax cut and jobs act wear off a little bit, that the comparisons will be tough. is it the same for small businesses as well >> that's a great question we do our own polling of small businesses with cnbc and survey monkey's data. in q1 -- first quarter of 2018, 46% of small business owners said that basically they expected this would have a positive impact on their business in the next year. now, in q4, we basically saw that number drop to 31%.

so we saw small business owners feeling great in the beginning of the career. it helped boost optimism we've seen the same thing with the nfib while there is still good sentiment around the law and what it brought along with it, it's wearing off a bit i think as people are beginning to do the math. >> sure. >> also realize that a lot of the cash that they've been receiving throughout the year back was part of the tax breaks which we saw on the individual side >> the big question, of course, kate, what the next big positive tax catalyst will be for small businesses thank you, kate rogers still ahead on the show, a double dose of merger talks. two of the world's largest lenders and two casino giants are both eyeing separate tieups. the details ahead. plus, sliding into a recession. why one market pro says it's not a matter of if but when. schwab's liz ann sonders joins us right after this. plaque psoriasis can be relentless.

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you're looking at a live shoft our nation's capitol, washington, d.c. a beautiful shot of the capitol building here are some stock winners that we're keeping an eye on this morning. winners and losers deutsche bank and commerce bank confirming they're in talks about a possible merger. the two lenders issuing statements about the discussions but warn a deal is far from certain. german trading up by 3.5%. el dorado's reports and caesar's entertainment are in the early stages of merger talks neither company has commented. caesar's agreed to give carl icahn three seats on its board of directors we'll keep an eye on both of those stocks in trading today. if you're watching us this morning from a plane somewhere up there, listen up, southwest and its mechanics union are on the verge of ending a long-running labor dispute both sides have reached a tentative deal for a new contract southwest shares you can see

there just about unchanged in the pre-market trade well, it is a big week ahead for investors. we get a fed decision, lots of housing data and we're on the tail end of the earnings season side of things let's bring in liz ann sonders liz ann, thank you so much for joining us this morning in london let's talk about the big developments over the past couple days, we got at least a very large hurdle in the s&p 500, one that's been at least an overhang for quite some time so does that mean from a strategy standpoint we have an all-clear signal to go back into the risk markets >> no, i wouldn't consider just having move back above key moving averages an all-clear sign i don't think there are many of those that exist in the market we have seen strong breath in the large caps much less so than the small caps i just think that another reason for the rally that we've seen

taken us to these key technical levels is the loosening of financial levels allowed for multiple expansion this has been a year where earnings expectations have been sinking like a stone yet we've seen multiple expansion. the opposite of what we saw last year when you saw unbelievable surge in earnings. i just think now we've probably got maybe not all we're going to get purely on a multiple expansion basis, but i think earnings season will be important to see whether we are in the normal environment where the bar gets set low enough that companies are hurdle it. if not, i think we may have problems again. >> so is that the worrisome part then the idea that we could see this situation develop where markets have maybe got a little ahead of themselves. you mentioned those expectations does it mean that earnings are more key in this coming quarter's reporting season than they were during the last one? >> i think they are key not only for this quarter because the expectations bar is now in

negative territory, consensus for drop in earnings to a slight degree and only pick back up to 2 to 3% in the subsequent two quarters but i think what's just as important if not even more than just how companies perform relative to first quarter expectations is what their guidance is in the outquarters and in particular what that guidance says about animal spirits and concerns about trade policy and whether that will continue to be a hindrance to long-term investment decisions capital spending that's what we need for this cycle to continue is to go from companies using their capital for stock buybacks and instead morphing it into long-term cap x. keeps inflation in check and elongates the cycle, but absent that i think the cycle could be a little shorter than what the consensus expects right now. >> during the last part of 2018 and the first few weeks of 2019, there was an increasing amount of chatter among economists and

strategists as well the likelihood of an recession was increasing, not that it would happen but there were odds that getting ready for a recession to occur late this year or into next what is your feeling is the economy due to slow down sometime in the next 12 to 18 months >> the economy is already slowing down certainly relative to the fairly blistering pace of the second quarter of last year, which by the way more than a percentage point of that 4.1% growth was soybean exports. that tells you there was a lot of activity front running the tariffs and that was unlikely to persist which it hasn't. you have different now cast gdp now atlanta fed, new york fed for the first quarter in the case of atlanta fed gdp now, you're only about .4 growth which on a real basis is quite weak, obviously. so we're already seeing a slow-down. we have 100% odds of getting

recession at some point. they happen at the end of a cycle. there's nothing bombastic about that comment it's just a question of the length of runway between now and the next recession i think absent a comprehensive trade deal, i think the runway is a little shorter. getting a comprehensive trade deal and by that i mean truly kp comprehensive. focus on state-own enterprises, absent that, and if you don't get that revival in animal spirits, then i think the runway is a bit shorter >> we talk about ten-year treasury note yields right now currently hovering at just around 2.59% yet the equity markets try to reclaim these higher levels that we haven't seen in months now is there a discrepancy, a dislocate between the bond markets and the equity markets in your mind >> well, not necessarily if the reason for the pullback in yields is not because growth is going to sink like a stone

but we've got inflation staying in check, then that's also a good environment for the stock market so, you'll see adjustments happen in terms of the correlation between bond yields and stock prices clearly this has been an environment where you've seen an inverse relationship, lower bond yields, higher stock prices. that of course could change if sort of the bond market is wrong on the inflation call. and i think there is some short-term risk that we could see inflation run hotter that may be exactly what the fed is looking for, but the question is how does that sit with an equity market that i think has built in an assumption that inflation is no risk at any time in the near to immediate future. that may continue to present a risk if it starts to filter into core inflation absent and that especially if we can see a continuation of the productivity boost, see labor force participation kick back

in, allow the economy to grow and extend into the next part of the cycle that would be longer term good news for the equity market the sweet spot the diameter of it is just a bit narrower than it was a couple years ago when the fed first start tightening policy. >> you mentioned the fed no fireworks expected generally from wall street this week with the fed meeting, but is there anything that keys in on what you're looking for out of the fed and its policy going forward? >> so, i think what everybody is focussed on is the changes to the so-called dots and the likelihood they come back down closer to where the market has been my guess is they don't come all the way down to where the market has been and they narrow the gap with the market not expecting anything the fed may move down to one hike expected for the share. i'm not sure that's a big needle mover. maybe moving to price level targeting where they want to let inflation run hot for a wile don't know how the market is going to digest that. >> big fed meeting this month

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good morning breaking news on boeing, federal prosecutors are reportedly investigating the faa's approval of those 737 max planes. lyft is hitting the road the ride hailing service reportedly launching its roadshow today we'll have the full details of roadshow and stocks in china rallying overnight on continuing hopes for a trade deal with the u.s. we'll have a full market rundown and get you trading for the trading week on this monday, march 18th, 2019 "squawk box" begins right now. ♪

>> announcer: live from new york, where business never sleeps, this is "squawk box. ♪ >> good morning, everybody welcome to "squawk box" here on skrrks nbc we're live from the nasdaq market site in times square. i'm becky quick with joe kernen. andrew is off today. peter boockvar is cnbc contributor. peter, welcome good to see you. >> thanks. good to be here. >> let's look at the u.s. equity futures. check out the futures this morning, you're going to see that the dow futures are down by 27 the nasdaq is up by 13 and then the s&p is up by about 2.5. peter last week you had the s&p climbing to a five-month high. what do you think about the rebound that stocks have made since those lows setback in december >> it's riding the hopes of what the fed will tell us on wednesday that the balance sheet will probably stop shrinking come september/october at a level well above w