♪ i'm andrew ross sorkin along with joe kernan. becky quick is off let's show you how things are setting themselves up. dow looks like it could open off 16 points. s&p 500 off about four points. rounding up there, nasdaq off about ten points major averages closed the day yesterday at their highs of the day with the s&p and nasdaq shrugging off some losses. boeing will be down by, what 18 points? >> there's a riff. i'm looking at becky, who is not here, and then i'm looking at you. boeing is down 118 points. >> it's like a physical riff, idealogical. >> no. >> we're much closer >> we're much closer >> than people think >> 100 times closer than people

think. >> yes idealogically -- >> people ask. i say there's nothing -- there's no ax about it people think it's tv it's not >> that's true i thought, wow, you -- yeah, that's -- >> take a look at what's going on in the markets overnight in asia right now. >> we have some tape carlos ghosn says he is innocent, and this is a new video message released by his lawyers overnight. it comes from last week because he was set to give a press conference on thursday, but then he was re-arrested, remember, by japanese prosecutors his attorney says the new video

message was recorded a day before his arrest last week. it is nearly an eight-minute video, and ghosn accuses nissan executives of a plot to take him down because they were afraid of a merger with the automaker's partner renault. >> this is a conspiracy. this is not about specific events this is not about greed. this is not about dictatorship this is about a plot this is about conspiracy this is about back stabbing. that's what we're talking about. we're talking about people who really played a very dirty game. >> a dirty game. ghosn's lawyers said he planned to name the nissan executives that he believes were plotting against him in the video, but his defense team decided to remove that part of the message with ghosn's approval. nissan, though, has said that ghosn is solely responsible for his arrest, and prosecutors

allege that on several occasions between 2015 and 2018 ghosn arranged for a company that he controlled to get part of money that nissan sent -- part of the money that it sent to an overseas distributor totaling, i guess $15 million, and they suspect that ghosn received $5 million. nice number. >> i'm trying to get to the conspiracy part of this. one thing i was thinking about, is -- was he a u.s. citizen? >> i don't know. >> where is his citizenship? the only reason i say this -- >> i count on you for these things >> as a foreigner to japan, you would think that if it was from the u.s. or, well, france may be more complicated depending what's going on here brazilian-born you would think that somebody should be screaming from the roof tops, meaning diplomats, on his behalf if this really is a conspiracy right? i mean, if there's something totally amiss here, that to

me -- >> does it make sense to you that a merger with renault would be such -- >> french, lebanese, and brazilian citizenship. >> they would go through all the trouble of the huge conspiracy because they -- now, have you been in renault? i sort of understand that. i wouldn't want to merge my company with a french automaker, i don't think. would that be enough reason to -- maybe they've gotten better i don't know >> i don't know. >> have you been in one, a renault? >> i think i have over the years. >> kind of -- >> i think the question is is it possible -- look, is it possible this whole thing spirals out of control? meaning that they wanted to find something to push him out of the company originally i believe that i'm sure that there are people in the company that wanted to push him out of the company. i don't think there's a question about that the question is whether all the acts are criminal, and the question is the way that the japanese have behaved in terms of keeping him under lock and key or in prison in this case,

whether that's appropriate and what that says about the legal system in japan. what does it say about doing business in japan? >> he is in right now until april, you know -- you ever been in jail? >> i have interviewed lots of people in jail, as you know, but i have -- >> that's different. >> i have so far, knock on wood, stayed clean >> it's very loud, and it is definitely very locked, and you are, like -- i'm told. i'm told a week they take your shoe laces for a reason if he really did -- if there was money headed to -- that ended up $5 million with him. do you think they're making that up, or -- because that's not -- you're not allowed to do that. >> clearly there's money moving around or people he was doing business with were also doing business with him. there's conflicts. no question there's conflicts. the question is are those conflicts criminal conflicts

>> all right >> i'm going to withhold judgment until we know more. >> okay. i've heard you use that term before remember >> and it was the right decision to withhold judgment >> yes, yes. >> because i was withholding judgment before the mueller investigation, and i -- >> yes >> i withheld judgment because -- >> well, you were withholding judgment, not overall disdain for everything involved. let's get a check on -- there's no buffer here >> i know. >> there's no buffer there's no one here. anyway, let's check on some of the big stocks on the move today. wynn resorts is in talks now to buy australia's largest casino operator called crown. crown resorts. crown confirming the offer of $7.1 billion roughly $10.50 a share that's a 26% premium to yesterday's closing price. crown is building a new casino in sydney targeted at high roller gamblers. where are most from? china typically.

we hear that standard charter, meanwhile, is expected to pay about $1 billion to settle a longstanding probe into violations of u.s. sanctions. the company has been operating under a deferred prosecution agreement with the u.s. since 2012 that's tied to its banking for customers in iran. shares of zogenix are tumbling today. they say the fda rejected an application to review its drug to treat seizures associated with a rare form of childhood epilepsy the fda cited a certain nonclinical -- a lack of nonclinical trials >> okay. >> let's talk about trade turmoil that is still the big issue on the table u.s. trade representative robert lighthizer reporting a new tariff, new list of tariffs on e.u. products. it has retaliation for subsidies to airbus. juliana joins us this morning, and she's got more on this good morning >> good morning, andrew.

well, a question we've been asking for quite some time now is when president trump may turn his attention more firmly to europe when it comes to trade. nowit's to merge that the u.s. is considering tariffs on $11 billion worth of e.u. products ranging from aircraft parts to wine now, this move comes as the trump administration looks to retaliate against e.u. subsidies for airbus, which the world trade organization ruled had adverse effects on america now, this marks just the latest turn in a case that's been going on for 14 years. you may be familiar. now, as you just alluded there, robert lighthizer has weighed in he said he hopes to reach an agreement with the e.u., and he added "the time has come for action." now, in terms of the airbus side of things, airbus has told cnbc that they think this is totally unjustified. they say knee taken all necessary measures to comply with the elements highlighted by the wto, and they've commented further that boeing, by contrast, has not shown any willingness to comply with wto's

findings with regards to their subsidies. the european union is preparing for possible retaliation at this stage, and the european commission over here has said that the level of proposed u.s. counter measures was greatly exaggerated. that's according to reuters. as i said, this has been going on for about 14 years, but this marks a distinct escalation in tensions between the u.s. and the european union i want to give you a quick look at how airbus as well as the broader aerospace and defense sectors are trading on the back of this news airbus down 1.44%. tala down as well. 1.44%. overall we are seeing a pullback in aerospace and defense we'll have to wait and see whether this is just the beginning of further escalation in tensions between the u.s. and the e.u. back to you. >> thank you for that. in the meantime, we have to talk more about this college admissions scandal because we've got an update for you this morning. actress felicity houghman and 13

other people have agreed to plead guilty of schemes that involved paying millions of dollars in bribes and cheating on entrance exams. she said she is ashamed. we have to get the entire apology because, you know, most people don't do apologies right. she did it right she said she's ashamed of the pain she caused her daughter, family, friends, colleagues. the education community. under the plea agreement, it is likely that she will serve only a few months in jail, if any 12 other parents and the former men's tennis coach also entering guilty pleas i was very impressed with her apology yesterday. i don't know if you saw it >> i saw it, and i -- you know, i don't know exactly how justice should be meted out. it's a nuanced issue >> what's -- you're saying -- >> i'm saying that -- i'm just saying that we know as parents we have -- we can at least understand the motivation for

doing all you can. >> right >> but i also understand that for kids that have completely busted their hump for their entire career, for them to lose a space -- a place to someone that didn't is bad i don't know do you think that thery should actually do time >> some time >> some time not community service or something? >> i don't know. >> do you have a feeling on whether jussie should have done some time? >> who >> jussie. i know even bringing that up -- >> i was going to read you >> i was going to talk about justice being meted out in different places >> the felicity apology because apologies are an art, and i think it's a lost art. >> one that in our relationship that you haven't learned very well, but go ahead

>> i just want to read you what she said she moved me she said i want to apologize -- >> she moved you you're the american airlines crier. >> i'm ashamed of the shame -- i want to apologize to the students who work hard every day to get into college and to their parents who make tremendous sacrifices to support their children and do so honestly. that's what -- to do so honestly >> you think she wrote this? they don't have p.r. people? >> i don't know what happened here, but then she said this transgression towards her, her daughter and the public, i will carry for the rest of my life. my desire to help my daughter is no excuse to break the law or engage in dishonesty i thought she said it, and she said it straight >> i saw a picture of her and her husband, william h. macy, and he looked like he came right off the -- like he had been shooting off the set of whatever -- >> yes >> it's really taken a toll on him or he really does look like

that >> it took extra time, but virginia completed its redemption year. tell you what we mean by that if you don't follow it that closely. >> winning the men's college basketball championship just a year after being the -- here it is the first number one seed ever to lose to a number six team in the first round. the university and the cavaliers tied it up with just 12 seconds left, sending the game into overtime then they ended on an 11-0 scoring run. the 85-77 victory over texas tech was the first national title in school history. i would have got up this morning and saw it, and all i saw was a score. i did not realize that -- what a great game it was. i saw president trump say what a great game why? it was eight points. didn't realize it went to overtime with just 12 seconds left i guess we'll forget about some of the calls in the auburn game eventually, and i will say that i admire this coach who said

this year "own last year." own that you're the first number one seed to lose to a six seed part of your history use it own it it's awe new year, and look what happened all the way all the way. congratulations. awesome. great. >> where did you end in the brackets >> we both have been -- >> just at the bitter bottom >> no, no, no. out of 45, i was 14th, i think it's been -- there's been nothing that's happened for the last two weekends that mattered to us. >> i know. >> we were -- our maximum number of points had been registered two weeks ago. >> we could dw down even farther. our maximum points were what they were -- they were what they were a couple of weeks ago when my last time -- all that mattered was i was ahead of you by maybe -- i think -- i'll get you an exact number. >> we'll find out during the commercial break >> i can do it right now i have it right here >> you can see how joe --

>> i'll see it really quickly. a new read on the health of small business in america and maybe my own health. we'll bring you the numbers and talk to the former head of the small business administration karen mills. we'll do that next as we head to that break, here's a look at the biggest premarket winners and losers >> wow you lost to becky. you were 25th. let's build a better world for investing. let's hold ourselves to the highest standards of ethics. as investment management professionals, let's measure up. cfa institute.

transparency. expertise. these are the building blocks enduring relationships are built on. as investment management professionals, let's measure up. cfa institute.

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we have new data out kate rogers has the details. >> good morning. nfib optimism ticking up ever so slightly this month by .1% to 101.8, marking the second month of incremental gains after hitting the lowest level sense the 2016 election back in january. this month well above the historical average it's a look at how optimism has been tracking over the past year now, the biggest gains this month were in her job openings, plans to increase employment those who believe now is a good time to expand and earnings trends to the down side, the big ers drop this month were in inventories, plans to increase inventories and expected credit conditions on inventories, more firms are planning reductions than additions right now. now, labor quality still in the number one spot yet again this month as respondents single most important problem near record highs at 21%

taxes along with government red tape and regulations, those two are tied as the second most important issue right now for main street. 60% of small business owners say they've tried to hire, but 54% reported few or no qualified applicants that is an increase from last month's number also, 39% say that they have job openings right now, and they currently cannot fill. that is tied for the record high on that point from back in december back over to you, guys >> okay. thank you for that for more on the state of small business in america, joining us right now is tara mills. the former administrator with the small business administration she's also author of fin tech small business and the american dream, how technology is transforming lending and shaping a new era of small business opportunity. it just came out on thursday good morning to you, karen first of all, you surprised by the optimism >> well, you know, i think it's actually steady state. you know, small businesses like the rest of us are sort of hanging in there on this wave of

good economy everybody is looking over their shoulder saying, wait a minute, this has been going on a long time you get this a little bit mixed vi view i think the canary in the coal mine singing yet small business is an early indicator when things go south, and i think so far steady as she goes >> speak to this because i think it speaks to the book and the title when you talk about the american dream and you talk about technology in the same sentence >> small business lending and technology is going to be a big plus this is one of the reasons i wrote this book. in the old days, you know, you would go with a pile of paperwork to a bank and wait

months, and suddenly fintechs have come on the scene, and they've really challenged the big banks and the small community banks to get a better customer experience. then amazon has come in and square and big tech is on the playing field. data now -- >> i think this could be a gam changer, and a positive, but, of course, you know, ai and the black box that brings a lot of risks as well. net-net i'm not sure that technology and small business won't find a happy future. >> how much are you a believer that what is taking place on the innovation side in fintech, which as you said, and it's really a spectacular thing, almost goes uncovered in how

important it's going in the last couple of years in terms of loans that the likes of squares and others have provided to small business how much of that do you think ultimately will push the big banks to change their focus and get back to serving and servicing those small businesses or do you think that this is just a biforcated market, and you will have the big guys cover the other big guys, meaning the big companies, and some of these fintech smaller companies covering small business? >> i think big bairnnks have decided they do not want to see this territory to the fintechs or to the amazons and squares of the world. jaime dimon, he is investing a ton of money you see bank of america. brian moynihan, he started as a small business guy in thebank. i think they think this is an area where they can still have margin the consumer business technology is going to squeeze margin there. small businesses are more

complicated. i think the banks, including the community banks, says have sort of seen, you know, the fintechs on the horizon, and instead of running away, they are reinvesting in this market i would not count them out yet i also think amazon and square and pay pal are going to be big players. you saw apple come in. they don't have their balance sheets involved yet. i think they are on the fence a little bit about how much -- >> is amazon friend or foe to the small business >> both. the good news is that you are selling your product on amazon you can reach a lot more markets. the bad news is they could put up a competitive product tomorrow, and they know how much you're selling they can also influence your pricing. it's a good news-bad news. >> karen, we got to run.

it's a curve ball for this early in the morning you're in san francisco, specifically, but since -- >> i am. >> since you're in stannan fran, you're talking about banking do you want to pitch anybody to run wells fargo? any ideas? >> wells fargo is a great bank they're going to find their way. they were one of the number one sba lenders. i wish them well, and i think they're going to be a player even in the new technology game. >> karen mills, congratulations on the new book. it is called fintech, small business and the american dream. >> there it is coming up, one of today's biggest water cooler stories a new treatment, cancer treatment, showing some promise. we have the details next "squawk box" will be right back.

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right now on cnbc.com. an experimental cancer vaccine showing a potential for patients researcher call it a vaccine because you don't prevent a disease from it. the disease is already there, but it causes a person's immune system to fight the disease. it's not the first time this has been tried, obviously. it's used in people who already have cancer. in this case it was lymphoma it was a small trial, but it has positive implications for other types of cancers funded by damon runnion, cancer

research center. the cancer research institute as well merck, celdex provided clinical materials. they got it from a tumor, stuck it back in the tumor after they sort of ramped up the immune cells, but then some tumors at discreet locations were also -- it wasn't just where you injected it back in. it travelled through the -- either lymph or blood, somewhere else that would be good news. it's very early. very preliminary it made it on to your favorite aggregator of news >> what's that >> the dredge report >> dredge report >> i'm following other medical news, and this is the botox news >> yeah. >> rivals making some big inroads into that. there's a brand new one coming out. a third company for frown line therapy that lasts longer than botox. another company that makes a

treatment is trying to figure out a new way to sell it, and they're under assault. allergan down 40% from its highs in 2017. >> when they can do it without needles, that's when i'll be interested >> that's always been a stumbling block for me, too. needles in the forehead. forehead just -- arm i can deal. i think. buttocks not that bad at least initially in the forehead is a tough one you remember restasis, the stuff that causes your -- the eye watering drug. that's going off patent. allergan has been tough. you love them. in terms of it was an interesting drama and saga ended up in dublin, right? i need -- >> you need what what are you saying you need >> i'm saying that makeup is becoming less and less effective. right? your benchmark -- you're eventually going to need a

scalpel, i think >> eventually. >> you don't want to do that too early, though, because i think five years later you end up looking -- you have seen some people that have done -- >> young people that, yes. then they look very old. >> exactly you put it off as long as. this is not -- to you this is like you don't even think of mortality. you don't even think of it you are going to live forever, right? >> we can only hope. i hope >> i do. this is morbid >> let's talk about the measles outbreak in the united states. it's getting worse the cases jumped by 20% just in the last week bringing the total to 465 60 of the 78 cases were in new york city. most of those coming in williamsburg, brooklyn measles highly contagious. infecting up to 90% of the unvaccinated people exposed to it, and the virus can live in the air for up to two hours after infected person coughs or sneezes. >> and mufrps is making an

ugly -- >> saw that this morning too >> mufrps can -- there can be a complication that it leads to some type of diabetes or something, too these aren't just, like -- >> did you read the story in the "new york times" about this deadly fungus that's bacterial >> that they've -- that's been -- people haven't talked about it much. you know i don't unless i -- >> i know you say you don't, but then i know you do >> oh, no. i would have to find i would have to find a spare copy of that paper >> coming up, when we return -- >> i would never fund that >> for saudi aramco. we have the astounding numbers of that deal and what that company is worth take a look at shares of disney. company upgraded to outperform at cowen the analyst said on thursday, investor day, that thursday's investor day will likely be a debt-clearing event for sentiment. cowen raising the price target from $102 to $131. a look at yesterday's s&p 500. winners and losers

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. "squawk box" here on cnbc. it's raining men myself, joseph kernan. some other men as well it's just us guys.

>> the first ever bond was worth $58 about. that was a bond deal of $85 billion. far surpasses the company's initial goal by selling only $10 billion worth of debt originally aramco expected to set its final price for those bonds later today. what do you think? >> i don't know. what's this job look like? you got it >> i don't know. look at -- >> there's some distance >> you three, and then there's me over here >> like in the, i don't know it's awkward isn't it >>. >> you rnl, campbell, you don't usually do this. let's get a check on the narkts as we await the onset of earnings you're bringing us ideas, campbell individual stock ideas charles campbell rg trading desk

at km partners you do that a lot with us because you're a portfolio manager of the small cap fund, right? or the growth fund gross margins, years ago in a down cycle were high teens now they're 50%. the company throws off $1 billion of free cash flow every quarter. they're buying back over 50% of their stock. they bought back 70% of the free cash flow that's used to buy back stock in the last quarter and in february they've got 7.5 billion of buyback remaining outstanding. we think the stock will trade at about -- it's about nine times its $50 price target we think the cycle is bottoming and will improve calendar second

half of the year >> always been views as a commodity chip player, and wild swings must have a pretty high beta now it's almost -- 58 is the highest it's ever been where do you think it could go it's about a $40 billion company at this point. 45 >> we have a target of 50. >> $50 a share >> it could even be beyond that if you get reratings by the sell side they come around to the idea that the bottoming has taken place, and there's firmer pricing. >> you've got also some macrocalls as well we get back to those in a second you want to talk individual names, or are you just -- the market has had a nice run. we've had i apullback in the data center. hand sets have been weaker

as technology continues to advance and you look for better memory, increased memory, or ics, which is what intel amd are doing, you know, there's going to be more capital spent in those fabs to make these products we think that we're probably looking at more of the value plays in technology. that's where we are positioning for the second half. >> do you think that in this first quarter that when it's all said and done that earnings drop from the first quarter of the year ago >> here's what's interesting since january 1, earnings expectations have come in about 7% a little bit more than that. they're now examined down year-over-year when the market is expecting lower barriers, lower earnings

growth rates or negative growth rates, the expectation is usually met and exceeded, and the market outperforms contrast that with last year when we had 20 plus percent year-over-year growth rates, and the market was flattening down >> in the first quarter. >> yeah. with a lower bar, the expectation of beating it is actually higher. >> do you think we end up with a down quarter or -- >> i think we'll be up >> so it will beat it by 4%. >> i think we'll beat it the reason is because i think we're going to -- china is stabilizing. we had some pmi data out recently that's pretty strong they account -- even though it's over only 15% of world gdp, they're 30% of incremental gdp in terms of growth that's critical. >> europe is a bit of a problem right now. particularly germany the u.s. is fine central banks are accommodating worldwide. we get the trade deal done that will help the global deceleration fear. i think earnings should be okay.

>> i think there will be a lot of noise they're going to blame everything they can, weather, government shutdown. know, anniversary and tax cuts for a long-term investors, i think we're in a pretty good spot historically i'm a pretty conservative person. right now i'm much more invested than we have been at other parts early going into march we deployed a lot of capital in march because we think that the second half is setting up. it could be a real good opportunity to deploy more capital. long-term investors, you're coming into a general election next year that we all know, and you're going to have people wanting to get re-elected and going to juice the economy going into 2020. that should benefit equities in many ways. >> can i just throw something else out oftentimes people say ahead of an election year you're living in uncertainty you're just living in uncertainty. >> yeah. i think --

>> i've lived -- >> i got the juicing idea. >> i think we've lived through a ton of uncertainty >> we just already lived through the juicing part the juicing already happened >> well, i mean, if you go from last summer where we sold off through the end of the year, know, you still had uncertainty around the china trade deal and other trade deals. i think that really begins to come in. if we resolve that, that is a huge hinderance to confidence in cfos who want to deploy capital. that will start to happen. hopefully the second half into next year people want to get re-elected, and i think, you know, that's what they're looking at >> micron did split. it had back in the late 1990s. it was 92. that would have been like an $80 billion company. it wasn't there for long it we want all the way back down to social digits it's gut wrenching that is a volatile stock you like it here

when ceogate was trading at $12, you talked to major insurance companies that want to deploy capital. it's a 14% free cash flow yield. that was a home run, so i think companies like micron, you know, that are throwing off a lot of cash, have a lot of flexibility in what they're going to do with that cash. whether it's reinvestment, buybacks, dividends, you know, so that's really the heart of finance when you are looking at a dcf of a business. what is it truly worth >> for micron, you have a situation where the fundamentals long-term with artificial intelligence, autonomous driving, digitalization is in place. >> thanks. thank you. >> thank you coming up when we return, a lot manager on "squawk." today's executive edge which tech executive may be the lowest paid in the country that's next. we showed you a picture of a couple of them i don't know if you can guess on this one later new jersey democratic --

democrat josh gottheimer will discuss a hot segment of the market we will discuss that, and tell you an unintended consequence of the tax code that may actually be hpi telnghe blue state. stay tuned you're watching "squawk" on cnbc [ telephone rings ] [ client ] - hey maya.

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>> you rd ready for this, guys jack dorsey may be the lowest paid tech executive in the country. he got paid $1.40, joe that's what he got last year now, that salary is a nod to twitter's original 140 character limit on tweets. some people think it's just a little too cute. it's actually a raise for him, though he declined all direct competition benefits in 2015, 2016, and 2017 obviously, he owns a huge chunk of the stock what do you think? >> i don't know. i don't. he owns -- he is a billionaire, isn't he, or close >> i'll tell you what his -- that's actually -- >> how are you supposed to -- honestly >> this is a warren buffett-esque -- >> it's nice >> worth $5.3 billion. >> there are margins -- probably good for it if he wants to take -- his credit line is good.

>> you think -- you are saying you think he is cash poor. >> no. i think he is goo good i think we both wish that we were in a similar position maybe forego your big -- >> i would b so would i. coming up, crude trading near five-year highs could -- >> get good pr for it, though. >> not really. keep working together to keep prices climbing? we'll talk about that next >> announcer: "executive edge" is sponsored by at&t business with edge-to-edge intelligence covering virtually every part of your business. your manufacturin. ... & so this... won't happen... ...because you've made sure this sensor and this machine are integrated. ...& she can talk to him &... ...yes...some people assign genders to machines... atta, boy. ... & you can be sure you won't have any problems... except for the daily theft of your danish. 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 &. & this shipment will be delivered....

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crude prices continue to climb in 2019, trading near five-month highs matt smith is director of commodity research at clifford data what's changed in the last six months to put us back into a 60-plus area, which for so long, when crude went down, the stock market had trouble, so i'm not necessarily saying it's been a

negative for equity markets. it's probably a positive that oil has done well, but what's changed in the supply-demand equation or the global growth situation? >> it's probably a coincident factor that you've seen equities bottoming out and rising over the last three months and the same thing has happened with crude, but at the same time as well, you're seeing opec once again doubling down. we've got this production cut redux. and so, you've got those core opec members, particularly saudi arabia, united arab emirates, both really dialing back on their exports. them and kuwait last month dialed back by about 800,000 barrels a day. and so, by doing that, it's really tightening up the market, so that's why we're seeing prices getting a boost here. >> yeah. that's going to -- someone's going to see those prices and tweet about them in not too long -- >> you've got to be right about that so, brent prices have risen about a third since christmas eve. wti prices, the u.s. benchmark, are up about 42%

gasoline retail prices are only up slighty under 25%, and so they're playing catch-up here. we're already up to $2.75 on the national average there we're going to go above $3 a gallon somebody's going to start tweeting. >> in the past, you've used the difference between light sweet and heavy sour to make points on price direction, and you brought in a -- i think we took a shot of it. we're actually -- people actually did used to taste the light sweet, and it is sweet, right? >> yeah, exactly. >> and there's a lot of, what, sulfur in the heavy sour, and it tastes sour and it's very pungent and thick. >> yes, exactly. >> but there it is and that's from venezuela. that was -- i think that was their last little bit of oil they had actually produced down there, right >> this is fairly rare stuff now, yeah, it is so, that's what you've got there, this contrast, in that you've got this abundance of light sweet crude in the u.s., particularly here with production ramping up. elsewhere in the world you've

got the heavy sour production being cut back, not only intentionally by opec members such as saudi arabia, but by venezuela because of all the economic turmoil there. >> it's supposedly okay to taste it, andrew, if you -- >> i'm not i have a nice water here with some lemon and some coffee i think i'm good. >> can you see if it's sweet just try the one and see if it's sweet? >> you can just put a drop into your -- >> i think i'm going to past we have 30 seconds aramco, respond sale are you surprised at the -- i mean, over $85 billion. >> they're only looking for ten here it seems they're doing one of two things, really -- testing the water in terms of the ipo coming up, or they're just trying a plan "b" here to see how much appetite -- >> because i'm thinking this might just be plan ballots, they never go for the other one. >> might well be that. >> matt, thank you, and thank you for the show-and-tell. other morning shows do that all the time, usually with food, but we do it with oil. thanks. coming up when we return, one of our next guests is eyeing bank stocks, saying they are cheap compared to the market is now the time to buy

that's the question on the table. and later we're going to talk to senator chuck grassley this morning about his expectations for today's big senate hearing on the best way to drive down drug prices. you don't want to miss that conversation you're watching "squawk" on cn bc

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with earnings season just around the corner, we break down what you can expect and talk about a change to how the government reports key inflation data drug pricing on the hill senator chuck grassley's here with a preview of today's hearing and what changes need to be made by big pharma. plus, we're marking the one-year anniversary of the facebook sorry tour. >> and i'm sorry. >> i am so sorry. >> and i'm sorry for it. >> a look at big tech and regulation, straight ahead, as the second hour of "squawk box" begins right now ♪ it's hard for me to say i'm sorry ♪ ♪ i just want you to know >> announcer: live from the beating heart of business, new york, this is "squawk box.

♪ gonna tell you i'm sorry good morning welcome back to "squawk box" here on cnbc i'm joe kernen along with andrew ross sorkin and becky quick is off today. u.s. equity futures at this hour have the dow indicated in the red. nothing big yet, down 20 points or so, 21 points the nasdaq indicated down 12 nasdaq indicated down about four points at eight straight days of gains in the s&p we'll see what happens by the end of the session, but at least this morning that streak will be broken, but long time until 4:00 we've got some headlines to bring you this morning, tell you what's going on this hour. european jet maker airbus says it sees no legal basis for a u.s. threat to impose new trade sanctions. this comes after the white house issued a proposed list of eu products on which it might impose tariffs in retaliation for european aircraft subsidies. the u.s. has, of course, been complaining for years now about subsidies for airbus while europe has had the same complaints about the u.s. regarding boeing.

in other trade-related stories, ratings firm moody's says threatening u.s. tariffs on foreign autos poses a risk to global economic growth moody's says that germany, japan, also korea on the list, would be particularly hard hit china would feel a little bit less of an impact because its auto exports are already subject to trade restrictions. small business confidence improved last month, good news the index from the international federation of business rose to 107 in march up from 101.2 in february they say it is recovering from the negative impact from the government shutdown and bad weather earlier in the year. a few stocks -- oh, you want to talk? >> no, i just, i was looking at the cartoon. i thought maybe you were doing a horoscope over there. >> no, you know what i'm doing. >> oh. >> the thing that you wouldn't -- >> yeah, i'm not good at that. >> having trouble with the last one, a-t-o-t-o-t keeps your mind sharp, right, seth you don't have to worry about

that seth is here we'll get to seth in a second, sirat. you're so -- i mean, you don't need anything to stay sharp, right? just a little -- >> coffee in the morning >> tattoo. >> yeah, you're right, it is >> thanks. >> you got the other three >> i don't know what they are. >> so you ruined it for me. >> i'm sorry about that. >> no, it's okay. >> and it's a great movie i saw. you know what happened at the end? >> it was a sled -- >> i was going to make a joke, but a lot of these are not okay anymore. >> oh, the jokes yeah >> i could do, he was luke's father that's okay, probably. >> by now if you don't know -- >> no, i was thinking about something else, though, that one shocking ending that we can't talk about anyway, wynn resorts is offering $7.1 billion for australian casino operator crown resorts. crown and wynn both say talks are at a preliminary stage crown says a proposed bid consists of 50% cash, 50% wynn shares

zogen in zogenix is hit hard after the fda refused an application for seizure medication they said the application was insufficient and would have to be resubmitted stuff like this before you might remember back in the old days, it was an erbitux application that imclone made that was rejected. eventually became a successful drug, but remember what happened, sorkin, with that? >> yes, yes. >> erbitux and martha and all that stuff but it eventually became an effective cancer treatment and -- >> worked out in the end took a while >> it did take a while, but it was a real drug. and initially, it looked like -- that was a similar thing you have to put the application in the application's got to be in order before it even gets considered for fda, you know, a panel. they recommend approval, et cetera, et cetera. anyway. let's get to other news. cpi due out tomorrow the government is making some changes on how it puts those numbers together, and the professor, steve liesman, joins

us now with a look at how big data could sway the number in the future. >> this is an interesting story. tomorrow the government will launch a big change in its inflation data big brother, as it were, the government, will be using big data for the first time in the inflation report the move will only affect a small portion of the report, but this is just the start of more sweeping changes that we'll see more and more gig data in government reports in this case, a large department store who the bureau of labor statistics declines to name and will apparently never name, is sending the bls a file, and this file has actual prices paid for its products by consumers. it's faster, it's cheaper to collect, and it's also more accurate used to have price collectors go into the store, write down the ticketed prices. now the government will get actual prices paid by customers. crystal coney is chief of the branch of consumer prices at the bls and says "we're only going to do it if it produces data at a lower cost or improves quality. first off, they have to trust

aminity from the government, which they've been doing for years, and second, the data could suddenly become not comparable third, what if the company goes out of business or stops sending data "the economy is changing over time in many ways," says bls economist steve reed, "so the cpi will always have a certain amount of discontinuity. this is only the beginning they plan to web scrape, scanning the web for prices for gasoline and airline tickets, that's next. and a little-noticed development, the census bureau recently incorporated scanner code data into the retail sales report welcome to the future, folks, future of more and more big data for big brother. >> norman bates was her mother -- >> did you know she was her mother and her sister? >> from chinatown, right >> did you know that >> good one. >> i just gave it away her mother and her sister, and bates was -- >> bates was, yeah you would never hurt a fly. >> we could do this all morning. >> we could. >> thank you, steve. >> my pleasure. >> stay here >> you're not thanking me for

the -- >> that was a good one i like that one. >> every day every day i say thank you, joe i thank my lucky stars, what i do. >> all right. so, what does all this mean for your investments seth carpenter is here, chief economist at ubs and seth is portfolio manager at douglas c. lane associates, should also say is most importantly a cnbc contributor. do you have a take on this before we get to actually where the markets are going today? >> i like it i think the better data we have as opposed to in the prior past where it woman kind of more backward looking, this i think is better, because one of the big arguments was always that, well, it's not really reflective of the real world. like, prices are going up, they're going up at the department store and the grocery store. why isn't any of that being reflected? this will be interesting to see if we actually get that output. >> one thing that excites me about this is it will free up the guys who collect the prices to get prices from a more important part of the economy, which is services. we have terrible data on

services it's a huge part of the economy. seth is nodding his head over there. and the idea that we don't have the price collectors go in and write down tags on sweaters means maybe they can start and get better pricing and better sales data from the service sector where it's more labor-intensive to get the data. >> i think this will be more revolutionary. i used to run the statistics system for the federal reserve, the collections data from banks. lots of processes under way there to automate things i think the same thing will happen across all sorts of different industries, and the technology behind it, like xbrl, could make it so it's almost instantaneous, almost zero cost, once all the infrastructure is in place. >> right. >> but with the web scraping and the emphasis on even retail, i think we are going to see potentially more downward pressure on inflation as you -- >> that's the interesting key here, is my suspicion -- and i have nothing to back this up -- is that real prices paid are lower than those being collected at the store, and i think we're going to find less inflation out there than perhaps is being

registered -- >> less inflation -- >> now, i will say, people will write in and say that they think their prices are going up like crazy, and it's just not true, but i think there is this incredible downward pressure on prices in general and that we're going to get more -- there's the cpi, by the way, which i think is interesting, getting to the fed here, andrew look at that upward shift. you did have the upward shift, and you wonder, well, why did the fed go in december, 2018 you went from a 1.6 zone up to the 2% zone, which was their target and they're like, hey, i'm at target, i've got a low unemployment rate. that's why they went now it's come off just recently, and we'll see if that trend continues this year. >> okay. >> separately, where are you at on these markets >> so, i think when we were sitting here in december, things looked so bleak, but the data was not that bad right now markets have come back double digits. >> right. >> i think now it's all about values the multiple is fair for the

market, so it's really earnings that are going to drive the stocks it's not going to be multiple expansion -- >> you think multiple expansion is done? >> i think for the time being it's done. >> hold on we had a guest on just yesterday who said look, if you actually look at where multiples were predecember, there are still two ticks, two ticks to go, meaning i think we're at about 16 times? >> we're at about 16, they were at 18. >> making the argument we could still get to 18. his argument was, you can talk about earnings all you want, but if you can just get the multiple -- but you think that's a bad way to -- >> i think given where we are in the cycle, i don't think one should look for multiple expansion. one should look for companies that are going to actually grow their earnings, and with that, you can get, actually, your price appreciation if you get the multiple expansion, that's just icing on the cake so, now where we are is look at the sectors, look at the industries that can actually participate where you have better, you know, earnings power for the consumer, where they're going to go spend their money, so companies in homebuilding

products the banks i think are going to do well because they're actually at a much lower valuation than the rest of the market think of things where -- >> banks have been dead money for -- >> they've been dead money for a long time, but if you look at them price to book, look at the -- >> haven't you been making this argument for years on the banks? >> at some point if you go back to the '90s and the '95 to '98 period, that's kind of where you had to be. >> you think now's the moment? >> andy -- >> i don't know if now's the moment, but i think you want to be there, because when they do start doing well and money comes back into a sector that is, again, the balance sheets are so much better than they were in '09. >> we have to go, but i don't want seth to leave without a quick outlook for the year. >> sure. >> what about gdp and is the fed going to hike or not >> so, don't think they're going to hike, but we have been more optimistic about gdp. >> i know you have. >> what's your number? where are they coming back >> things are crummy now, but q-2, maybe 2 1/2 or a little bit more this is why i'm joe's favorite economist. >> one of the reasons. >> one of the reasons.

thank you. so, we did a piece we called "the roadmap to the rebound," looking at the data and, what's remarkable, you were talking about oil. oil is a positive. higher prices now -- >> do you see that as a sign of greater demand >> absolutely. we were getting worried because rig counts were coming off a little bit last week we did a turnaround. if you look at the data on shipments of gravel and sand on to west texas pick back up again, that looks like a pretty sizable turnaround in the economy. and so, we're looking at 2.5% for q-2 and q-3, rounding out the year at 2, maybe a hair over >> thank you. >> well, it's not recession, but it's not great. >> who led the saudi bond deal >> who led the saudi bond deal i know jpmorgan was intimately involved in it, but i don't know if they led it. >> did any of the leaders boycott the desert meeting with -- >> yes oh, no, look, jpmorgan was intimately involved in the aramco -- >> remember when i said -- >> yeah, you said a year later -- >> no, i said live in the real

world. these guys -- when money is involved, they're back full in on this. >> yep. >> full in on dealing with the saudis, right? how do you feel about that >> i don't know how i feel about it. >> i don't think you feel good about that i'm telling you you don't feel good about that. >> i have mixed emotions about that. >> i'm telling you that's how you feel. >> you asked, i'm answering. >> we're going to talk -- i was just thinking about that, that the world is complicated. >> it is, but i don't know what the right answer is. >> morality has a short half life, right? >> i mean, these guys were so all in on this bond deal it's like, oh, yeah, that was a bad thing with khashoggi anyway -- >> that's a question, should they boycott >> that's what i mean! but the world is complicated we're going to talk bonds. robert frank is going to be around, because he does this all the time, bringing sexy back it's in the prompter, right? i didn't make that up. ♪ >> you didn't make it up. >> nope! changes to the tax law are making muni bonds hot, not robert but robert -- >> can we get a little paris hilton >> "squawk box," so hot.

robert frank joins us with that. so, where is paris we always hear about her. >> haven't heard about her in a while. later, senator chuck grassley set to have a hearing -- instead of paris hilton, we have chuck grassley -- hearing on drug pricing. we'll get his thoughts on big pharma and the government's push to drive down drug prices. >> that's hot. >> yeah. "squawk box" will rhtac beig bk. so with xfinity mobile

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we've got a developing story to tell you about. carlos ghosn says he is innocent in a video message released by his lawyers overnight. ghosn was set to give a press conference on thursday but was rearrested by japanese prosecutors last week. his attorneys say this new video message was recorded a day before that arrest in the nearly eight-minute video, ghosn accuses nissan executives of a plot to take him down because they were afraid, he says, of a merger with the automaker's partner, renault. >> this is a conspiracy. this is not about specific events this is not about, again, greed. this is not about dictatorship this is about a plot this is about conspiracy this is about back-stabbing. that's what we're talking about. we're talking about people who really played a very dirty game.

>> ghosn's lawyers say he originally planned to name those nissan executives he believes were plotting against him in the video, but his defense team decided to remove that part of the message with ghosn's approval nissan has said ghosn himself is solely responsible for his arrest prosecutors allege on several occasions between 2015 and 2018 that ghosn arranged for a company he controlled to get part of the money that nissan sent to an overseas distributor. of that $15 million, they suspect ghosn personally received $5 million. and one of the questions i have about this video is did he or his lawyer suspect that he was about to be rearrested meaning, was the reason that they went ahead and made this video a day before this press conference was scheduled was because they were anticipating that there was going to be another arrest why would you do it otherwise? right? >> that whole story -- i mean, from day one, whenever i read it, it's like, really? isn't it i mean, it's crazy.

>> there's something -- there's something in the water i can't figure out what it is. coming up when we return, muni bonds are hot, hot, hot ♪ feeling hot, hot, hot see, that's why they wanted me to say that, hot, hot, hot thanks to changes in the tax laws robert frank is going to join us with what happened, hot, hot, hot, and we'll speak to new jersey congressman josh gottheimer and then later, the one-year anniversary of mark zuckerberg testifying before congress is tomorrow that was hot, hot, hot what we've learned since that key moment and what could change for big tech in the future. >> you read "hot, hot, hot" with this song? >> you know, i'm slow, but not that slow. we're going to hear from an analyst -- is rly! >> -- in just a moment

regulatie ining facebook one year after mark zuckerberg on period on the hill. the new tax law has turned the stojy world of muni bonds into one of the hottest investments. robert frank joins us now with more the yields are still miniscule and not -- >> yeah, miniscule -- >> tax-free. >> yeah, but tax-free. >> triple tax-free. >> and in the salt states, that

counts for a lot looking at flows into muni bonds, they're topping $20 billion, the highest in 13 years. analysts say taxpayers who face higher taxes because of the new cap on state and local tax deductions are pouring into munis as tax havens. now, income from muni bonds is exempt from federal tax and often from state and local tax, which is now a big deal in places like new york and new jersey so, if you have a ten-year muni that yields only 2%, as joe just mentioned, the taxable equivalent could be 4% or higher now, all that demand has driven down yields to the lowest level against treasuries since 2001, and that has been great for states, especially the high-tax states that have been fighting this new tax law eight of the ten biggest issuers in first quarter were california, new york, and connecticut, new jersey, illinois and new jersey were along big issuers. the new tax law has lowered the borrowing cost of the states most opposed to the new tax code california last month just

issued a $2.3 billion bond deal at an interest rate of 32 basis points below what they had borrowed in 2017 that saved them about 8 million bucks. question now is whether the muni bond mania has actually gone too far and left investors vulnerable now, the yields on junk-rated illinois bonds now as low as 3.6%, which some say is too low for a state with that kind of risk. >> so it doesn't help with -- you can't offset any income with these things, but you don't add to your problem -- >> correct and you have more income flowing through that's not taxable. >> that's not taxable, that you don't have to worry about. you remember -- i said this before -- what i was able to offer my clients at merrill lynch in 1983. do you remember? >> no. muni bonds and -- >> no, 13.5%, triple tax-free, aaa, noncallable, 13.5%, tax-free. >> why did anyone go in the stock market >> you know what my clients wanted, floating-rate bonds. >> because they wanted to go

even higher. >> or they were worried about losing principal, so they floated down to 2%, where we are now. >> want to stick around? >> yeah. >> we have a conversation on this topic and more. joining us now, new jersey congressman josh gottheimer. good morning to you. >> good morning. thanks for having me. >> were you able to hear this conversation >> i was >> so, where do you land on how this is going to affect -- well, we can talk about it in the context of new jersey? >> well, i think obviously a good resource investment into states is a good thing, obviously helps with infrastructure and other things, but this is certainly not a long-term solution what i'm hearing about now as we head toward april 15th, there's a lot of people very frustrated the fact they're getting their tax returns back and their accountants are saying you know how you used to pay this much? now you're paying this much more because in bergen county, which is part of my district, the average salt deduction and the cap is having an impact on their returns and that's what people are panicked about and muni bonds are certainly for

them not a long-term solution. >> is the toothpaste out of the tube meaning, even if your party were to win in 2020 and somehow take over the house and even the senate, i don't know, do you think that the s.a.l.t. deductions would come back >> if we won, yes, i do. there's a lot of us from a lot of states who are really feeling the pain right now and our taxes have gone up, not down, under the tax hike bill, and of course, it's affecting populations, it's affecting businesses, it's affecting people leaving and i'm hearing it all the time. people are really frustrated, right? these states that pay more in federal taxes suddenly got hosed and are paying even more, and obviously, subsidizing these other states. >> congressman, moody's just came out with a report saying that new jersey, new york, california, are actually going to become more dependent on the wealthy because of these tax changes coming up in the next few years. and if you raise taxes on the wealthy, whether it's in new jersey or federally, isn't that going to make the problem worse

where you have these states dependent on the most volatile incomes in the entire distribution, and so, therefore, should you look to broaden the base or how do you see new jersey dealing with that problem in the future, given that you want to raise taxes on the wealthy >> well, i couldn't agree more that we should be cutting taxes, not raising them and i don't believe raising taxes is the answer. i think just the opposite. you have to cut taxes. you have to make it more attractive for businesses and jobs to stay and grow in the state, and that's what i'm very focused on how do we actually attract more businesses and how do we grow jobs in new jersey how do we make sure we invest in infrastructure and other things so that we can make the commutes easier, because that's a big decisionmaker for families we've got a lot going for us in terms of safe communities, and obviously, great schools and great pizza, but how do you make sure you keep people there, and we can't run them off with high taxes. we've got to cut taxes. >> he's the most bipartisan freshman and i don't know how you walk around there don't people -- don't your colleagues throw stuff at you,

josh i mean, how do you -- i mean, it's tough, isn't it >> no, no, there's a lot -- by the way, there's a lot of pro business democrats like me who think, you know, we need to make things more affordable for people and if you make things more affordable, you get more people and actually that broadens the base the key is not to run out people who are doing well, but we have to make sure that we provide broad-based opportunity but keep people in the state, keep more successful people in the state. >> a guy like you, the over-under's 20 now on the number of democrats running. are there a couple that would pass muster with your view on pro business or whatever because you know where a lot of them are it's wacky >> yeah, you know you always hear from the extremes on both sides, but what you don't realize, the way we just won the house was, of course, through the middle in the districts that president trump won, democrats won so those are the people we're talking about. in new jersey, how about mikie sherrill, not far from me, max rose in new york, who's not far --

>> no, no, for president for president. give me -- >> oh, you want me to call them president? how about we focus on right now? >> dodging and weaving dodging and weaving -- >> i endorsed the great cory booker from new jersey, and we all did in new jersey. >> oh, okay. it's a favorite son type thing. >> but let me tell you he's great he's from my district. but i believe if we focus on pro growth poll soze and broad-based opportunity and focus on jobs, jobs, jobs, that's how we're going to grow this economy and how new jersey's going to grow. >> we have to run, they're playing the music. but in terms of tax in new jersey, what do you want to bring the top rate down to >> how about we just focus on bringing them down that's the key point we can negotiate about the level. >> are you 40 yet, congressman are you 40 yet >> i am 40 i'm over 40. exactly. >> we're going to leave lights on for you you might come home some day to a different party. we'll see. because that stuff you just said

is so incongruous with -- >> there's nothing wrong with the middle, man. there's nothing wrong with the middle just remember that. >> oh, yeah, tell that to your colleagues thank you, congressman appreciate it. coming up, senator -- you like that? >> that was good. >> yep senator chuck grassley on drug pricing. he's holding a hearing today on the topic, but before he speaks to the industry leaders, he's going to speak to "squawk box. as we head to break, take a look at u.s. equity futures down 24 wn oth the dow, do 4n e s&p. eight straight updates for the s&p, but in jeopardy

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the new galaxy s10 on xfinity mobile. the phone and network designed to do more. switch and save today, and you get a new galaxy. say "get a galaxy" to learn more. all right, it took some extra time, but virginia completed its redemption year, winning the men's college basketball championship just a year after being the first number one seed to lose to a number 16 seed the 85-77 victory was the first national title in school history. i saw a couple games where, wow. it's hard to get there, sorkin there was the auburn game, obviously, which was crazy in the end. but there was the other game where they actually had to miss a free throw, got all the way thrown into the back court they threw it back as quick as

they could, and the guy threw it in to tie that game. it was unbelievable what it took for virginia to get there, and it's well deserved, although some auburn fans are probably still a little bit miffed about some of the calls. i don't know it's a call -- did you see that? you didn't see that -- >> i didn't see that. >> the guy's body did barely touch the three-point shooter, and you might make that call earlier in the game, but to make it right then was tough. but then the virginia guy hit three under all that pressure, hit three free throws to win the game it was -- charles barkley, i thought his head almost exploded. anyway, coming up, a lot more on "squawk. privacy concerns still looming one year after facebook executives testified before congress we'll talk big tech and regulation in just a bit hey dad! hello, betee! kaisi hain aap (how are you)? i'm good, how are you? good! so good to see you. it's late, where are you? i'm at work. oh gosh, so late.

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♪ memories. what we deliver by delivering. executives at five pharmacy benefit managers are in the hot seat today on capitol hill the senate finance committee will grill the companies' heads on skyrocketing drug prices and possible solutions to lower cost joining us now, senate finance

committee chairman senator chuck grassley senator, these -- whenever we try to get to the real bottom of what's happening with drug prices, we always come up with the idea that there's just too many middle men involved and that some of these rebates don't make any sense what is going to be the thrust of the questioning today for these companies? >> to answer that very question, about the middle people, in this case called pharmacy benefit managers they're the ones that are in the middle between the drug companies and the insurance companies and the hospitals and all the consumers, including your local pharmacist, and there's a lot of secrecy there's not a lot of understanding of the role they play what do they do with $170 billion of rebates how do the consumers benefit from it? our goal is to end this secrecy, get to transparency.

with transparency comes accountability, and maybe the marketplace will have a better chance to work and drug prices will come down for the consumer. >> seems like this could have been on the table ten years ago, twelve, fifteen years ago. they've had a long reign, if there are really some bad actors there. there's got to be bad actors somewhere, it seems like i normally wouldn't say that about everyone, but if -- you know, you want to maximize profit, obviously, that's what private companies want to do, but you need the transparency and a fair playing field that's what we're talking about, and it should have been something that we are very aware of all along, because, obviously, something's broken somewhere. >> and that hearing is about this very subject, and you described it very well hopefully, get to the bottom of it, but we've got a lot of players, a lot of questions to

be asked you know, we had seven pharmaceutical companies in three or four weeks ago, pharmacy benefit managers today. hopefully, we'll end up with some legislation that will drive down drug prices, but there's also other things that are in other committees, like the judiciary committee i'm on the pay-for-play game that keeps generics off the market, the creates bill that passed the house last week will go a long ways in helping us get generics on the market. the president's got on his desk now the grassley-wyden bill called the right rebate bill, which takes care of some of the problems i investigated four years ago when mylan drove up the price of epipens took $1.7 billion from the

taxpaye taxpayers, just got back maybe $465 billion, but they still get away with it because hhs isn't doing its job. we should be able to get all that money back, and hhs through the right rebates bill will have more responsibilities to police the rebate system in the first place. in other words, rebates have a lot of secrecy just in that name, and we need to get to the bottom of it >> there's a possibility that we start importing some of the price controls from other countries. i've always thought that was a bad idea, but now even some republicans seem to think that that's something we should do. i mean -- >> i think it's a bad idea, too. right now it's being promoted by secretary azar, following on the speech that the president gave last june to drive down drug prices the secretary's working very

hard to do it. right now what you described is in legislation, but it's also secretary azar pursuing it and from that standpoint, he put something out there for comment. i doubt if he'll go ahead with the regulation but what it is is it's bringing a lot of these players, pharmaceutical companies, to the table to negotiate where maybe we can get drug prices down without necessarily aligning them up with what some foreign country is paying for the drugs. >> we're seeing a lot of that, where both sides say, well, we don't really mean it, but let's have the conversation, because that's not a great -- i can describe some unintended consequences if we start doing it that way. you see that the innovation in drug development in a lot of the

countries that have price controls kind of dries up. i mean, if you're not able to recoup the drug development cost when it takes 10, 12 years and billions of dollars to develop these things, and then it's going to be, you know, you're going to be capped on a certain price, then you're going to stop developing them. and we're still the innovator. this is the country where it happens. it doesn't seem right that, you know, that they have those laws in other countries where they're able to cap those prices, but it doesn't mean that -- you know, two rights don't make a wrong and we start doing it here, right? >> but it does irritate me as a senator. >> i know. >> it irritates me as a policymaker that we're paying -- >> well, we need more market forces to make it come down here in this country. you've got a question? >> just what those market force -- how you set up the right market forces. >> it's tough because it's not necessarily -- you know, there's a 12-year patent for -- there's all the other -- >> but that's the question, what can you do from a policy perspective to create a market system that actually lowers prices. >> maybe big, i don't know, big

government groups bargain on prices, right, senator, something like that? >> well, i started to say that it's irritating to me as a senator that the american consumer's probably paying 75% to 90% of the cost of developing drugs. >> exactly. >> and then the other countries get it we ought to find some way that they pay their fair share. >> so, the president just said the wto finds that -- tweeting -- "the european union subsidies to airbus has adversely impacted the united states, which will now put tariffs on $11 billion of eu products the eu has taken advantage of the u.s. on trade for many years. it will soon stop! is that something that you're about to support, senator? >> well, of course, because it's based on the rule of law wto decision, something that's been around for 15 years, just finally doing what we can legally do maybe the president's been

criticized for tariffs before in a way where they weren't quite as legitimate, but when you have the rule of law through the wto, and they declared the subsidies in europe against that rule of law, then, of course, it's perfectly legal for the united states to put on what we call countervailing duties. and these tariffs as the president is talking about is one way we get even with them, just like we won a case against europe on whether beef with hormones in it should be allowed to get into europe for their consumers. we eat it in the united states all the time, and europe putting countervailing duties against a decision we run in the wto the rule of law in international trade is a very good thing >> all right, senator. me, too, i'm worried i don't know how much longer we're going to be able to eat it you know what i'm talking about, senator. but thank you. appreciate your time this

morning, senator chuck grassley. do you like beef you like beef. >> love beef >> going to keep eating it >> yeah. i mean, it's a longer conversation coming up when we return -- try an impossible burger. >> what? >> it's called the impossible burger it's a vegan thing but tasted like a real burger. privacy challenges for big tech lawmakers trying to find ways to -- >> that's what i thought he said impossible burger -- >> we'll talk after the break about the future of google, facebook and others. then tomorrow marking the one-year anniversary of mark zuckerberg's testimony to congress here's a look back at the aftermath of the cambridge analytica scandal. >> it was my mistake and i am sorry. >> i am so sorry that we let so many people down. >> this was a major breach of trust, and i'm really sorry that this happened. >> dwevently know we're late we have said we're sorry, but sorry's not the point. >> we didn't take a broad enough view of our responsibility, and

that was a mistake, and i'm sorry for it. >> we have acknowledged our mistakes we are listening, we are learning, and we are making progress

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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 $100 back when you buy a new lg. click, call, or visit a store today. welcome back to "squawk box. it's been one year now officially since facebook's ceo mark zuckerberg was grilled on capitol hill and this week facebook and google will be grilled all over again about the way they police their platforms. kayla tausche's in washington with more. >> good morning, andrew. the house judiciary committee is

exploring how these platforms police hate speech in the wake of the new zealand shooting, and the ftc is also hosting a two-day hearing on privacy all of these are still serving as a sort of social media 101 for members of congress and regulators looking then and still looking now for ways to rein in these companies in the way they register political ads, they monitor content bias, and the way that they trick users into accepting user terms. that last one is coming into the spotlight today with a new bill from senators mark warner and deb fischer, looking to ban the so-called dark patterns, what they call deceptive interfaces that mislead users into accepting certain terms. this bill would create a new regulator within the federal trade commission modeled after finra to police this specific program. it's a long way from becoming law, but senator warner discussed it with google ceo sinnedar pichai in d.c. two weeks ago, underscoring the fact that companies are ramping up their face time here in d.c. and also spending more money

twitter's lobbying spend doubled, though still dwarfed by the $35 million spent by facebook and google. totals for those two companies rising over recent years that money is largely to influence bills that are being written, but the biggest hammer could come in the form of investigations at the department of justice, the ftc, and the housing and urban development that could result in massive fines. those are all still waiting in the wings. we'll talk to senator mark warner at 2:00 p.m. today on "power lunch" about the ongoing efforts to regulate these companies and what they've learned in the last year guys >> for more on facebook's privacy challenges and solutions, we turn to jason hellstein, head of internet research at oppenheimer and company. good morning to you. >> good morning. >> so, we are here a year later. the stock, by the way, has come back a lot. >> recently. >> recently. >> but if you go -- you know, it has underperformed, even names like google this year. >> but my question is, a year from now, where are we going to be >> we think higher i mean, i think the question

here is, you know, was it a mistake on purpose, and then was there a cover-up so, at the end of the day, ultimately, what was facebook's mistake? they let data get out of the system, which google's actually never done and kind of why you haven't seen these headlines at google so, facebook let information get out of the system. >> right. >> and they recognized that, they fixed it. the question is was there a cover-up, a volkswagen type situation that went to the top >> what do you think >> well, up to now, it doesn't look like it you played a video with a lot of sorries in it. and again, wall street's kind of telling you that, kind of google and facebook are basically trading at the same valuation. ultimately, facebook should grow faster than alphabet, but it's spending a lot more money to fix the situation, so i think that's why you're seeing the stocks trade at the same level. but the bottom line is this got -- you know, if you think about where we were a year ago and you think about today, it's actually much more complicated, right? it's user data

it's giving users controls around the data. then you have how do you control bad actors on the platform and then giving more visibility around what ads and who's paying for what ads and that's a lot, right? then we separately take into account what information's on the platform, right? so, there's talking about live videos and live videos that end up that might not be appropriate. how do you screen that >> but you think if they screen it or they limit it or do anything of this sort, that it changes the fundamental business model and the business case for the company? >> i mean, look, i think a lot of times when you have the types of videos that are truly objectionable, that's a very minority of content, right but the whole idea is, you know, should facebook be the editor of what's on facebook the whole idea that we're supposed to be open and shared and then right now you largely have people making those decisions but should an algorithm make that decision >> take thing rims out if i told you you would no longer be able to broadcast live video to everybody on the

platform all at one time, meaning you could only do it to your friends, if you have 100 friends, you could only do it to 100 people at a time -- i'm thinking of the limits that might ultimately be put in place -- what's that do to the business model, a page view business model >> look, it would impact i think when somebody is streaming, again, the amount of money they're making on video i think is relatively small today. but the idea is should there be a three-second, a five-second delay? look, in live tv, are we live or is this a three or five-second delay? so, what can we put in place that maintains the essence of the platform, which is the idea of sharing information, user-generated content and look, more and more you have brands who want to be a part of that content and do it in a safe way. you know, look, it looks like they're doing the right thing. i think what we need to talk about is this california consumer protection act, which, if congress doesn't pass a national kind of privacy law, will go into effect january of next year and is quite onerous

and i think you're seeing companies like facebook try to get in front of it at a conference, facebook talked about this clear my history list, which is kind of a step to giving users more control. then a few weeks later you had google talk about should we remove cookies from browsers and that created a lot of questions around, you know, what information you could get from the chrome browser and so, look, i think companies would rather be in front of the regulation and help shape it, and you're just starting to see that. >> one of the things that did happen in the last month is mark zuckerberg not only called for new regulation but said, look, we're going to pivot this company from a public company -- not public as in publicly invested, but public in terms of everything being out there, to almost a fully encrypted messaging service, almost we chat like it seems in terms of the suggestion how do you think that changes the fundamental business model and case for the stock >> to your point, the idea of do you need to have a conversation with 300 of your friends or are you having a conversation with six or ten friends about a

specific event, you're going somewhere? and if you can shrink the size of that conversation, can there be e-commerce and other components around that, whether you know, we book a movie together, we book a restaurant together, and then there's revenue associated with that, and that's what you see the behavior in china. so, i think, again, just how the corollaries -- alibaba was doing kind of offline shopping in china before amazon with whole foods. and so, look, i think facebook is looking about what the future of the product should be and you know, china's had to deal with censorship for a long time. >> right. >> right and you know, i think he's looking about what should facebook be in five to ten years from now. >> okay, jason thank you for helping us through this. >> thank you. all right, coming up, pinterest ipo hype is building after announcing a price range of $15 to $17. value the company at close to $12 billion. below that a little. we're going to talk to tusk venture ceo bradley tusk about the company brocho and future as

a publicly traded company. here are the futures, down 30 now on the dow s&p indicated down four and change nasdaq down ten. "squawk box" will beig bk. rhtac the future of technology investing

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a new trade threat the u.s. unveils a hit list of products it might tax from the european union now the eu is fighting back. carlos ghosn goes on the offensive. >> this is about a plot. this is about conspiracy >> the ousted nissan chairman calls former colleagues back-stabbers in a video statement taped just before he was rearrested. and the business fallout from president trump's push to slow immigration at the southern border could the american auto industry be an unintended casualty? the final hour of "squawk box" begins right now ♪ >> announcer: live from the most powerful city in the world, new york, this is "squawk box. ♪ ♪ because you look so fine that i really wanna make you mine ♪ good point good morning welcome back to "squawk box" here on cnbc, live from the nasdaq market site on times

square i'm joe kernen along with andrew ross sorkin. we have imported a buffer. leslie is with us in becky's chair. are you prepared for this? >> i came armored. >> you have some training? okay futures right now are indicated down about 31 points on the session, on the dow. the s&p is up eight straight sessions, but it's down, indicated down a little over four points this morning and the nasdaq is indicated down ten. treasuries this morning on the ten-year, 2.52% on the ten-year. we have still got zero in some places on the continent, so 2.52%'s pretty hefty. okay, let's show you this video because it's pretty wild carlos ghosn says he's innocent in a new video message released by his lawyer overnight. ghosn was set to give a press conference on thursday, but then you might remember was rearrested by japanese prosecutors. his attorney says this new video message was recorded a day before that arrest in the nearly eight-minute video, ghosn accuses nissan executives of a plot to take him down because he says they were afraid of a merger with the automaker's partner, renault

listen to this >> this is a conspiracy. this is not about specific events this is not about, again, greed. this is about dictatorship this is about a plot this is about conspiracy this is about back-stabbing. that's what we're talking about. we're talking about people who really played a very dirty game. >> gone's lawyers say he originally planned to actually name those nissan executives personally he believes that were plotting against him in the video, but his defense team decided to remove that part of the message with ghosn's approval nissan has said ghosn himself is solely responsible for his arrest prosecutors allege on several occasions between 2015 and 2018 that ghosn arranged for a company that he controlled to get part of a $15 million that nissan sent to an overseas distributor. of that $15 million, they suspect that ghosn personally received $5 million. so, this soap opera is wild. we were talking about it the last hour.

i have to believe that they had a suspicion that he was going to be rearrested. otherwise, they wouldn't have made the video i don't really understand how to make sense of it. meantime, we have some other stories that investors will be talking about today. want to tell you about the european union preparing to retaliate against the u.s. over subsidies to plane maker boeing. according to eu officials who spoke to reuters, the action comes -- what happened >> i don't know, they took a shot at me for reaction, and i didn't really have much -- >> oh, so you just waved >> yeah, i did that was a fat finger. we have tds, we have directors, just in case you're wondering how that works that's how sausage is made, right, leslie? >> yeah. >> but take one for -- >> a different language. >> thank god i wasn't doing something really bad. >> see, now we're just playing through -- >> oh! hate when that happens. >> i don't think this is a good idea because now people are going to think that -- if they're not paying attention. >> yeah, we're out of control. >> exactly company reaction comes a day after the trump administration came out with a list of products that it could hit with tariffs

over subsidies, and the u.s. says that being given -- those that are being given to boeing rival airbus airbus says it sees no legal basis for the u.s. moving. you were reading a tweet from the president. >> earlier, yes. >> earlier, about all this. >> about the wto, yeah. and wynn resorts is offering a $7.1 billion to australian casino operator crown resorts. crown said the talks between the two companies were at a preliminary stage with the proposed bid consisting of 50% cash, 50% in wynn shares you're looking at crown resorts up about 20% on that news. >> they're closer to the high rollers. they are macau is closer to the high rollers. australia's closer to the high rollers. therefore, i guess it's attractive for wynn. then, the happiest place in the world may be about to get happier. disney stock upgraded to o outperform from market perform cowen predicting that thursday's investor day will be a deck-clearing event for positive sentiment. disney expected to update the market on a strategic shift from

direct to consumer distribution. cowen raising the price target to $131. separately, moffettnathanson raises its price target to $134. >> have you been to "harry potter"? >> i have not yet, actually. >> it's pretty damn happy, yeah. i'm not ruling the seed to disneyland the happy -- >> happiest place on earth >> have you been on the universal studio tour recently >> not recently. >> have you? >> i have. >> about a year ago. >> i was just there. it's unbelievable the 3d stuff that they've got on that i mean, they've totally updated that so, just strike that, that happiest place on -- >> but you guys could do a show from each side. >> yeah. never gets old >> in the tank -- >> i love -- i'm telling you, universal is great i'm not seeding anything. >> just so you know, the sorkin family is trying to finish the "harry potter" series before we go -- >> yes have you ever had that beer -- >> that's why we haven't gone yet. >> before you go -- >> we're a couple books in.

>> it moves fast. >> we have some work cut out for us, but we figured we needed to fully experience it first. because we're not -- >> and the movies? >> after each book, then we watch the movie. we don't watch the movie until the book is done. >> and then the broadway play. >> we haven't gotten there yet, but yeah -- >> podcast. >> is there a podcast? >> audio book. >> there is an audio book, and like an acted audio book it's not like one reader -- >> well, you've got to go. >> all right, we have things to do, joseph. >> no, you've got to go to universal. you've got to go to harry potter >> and we do have to go. image-sharing site pinterest is well on its way to its ipo after setting the initial price range yesterday. today it's time to sell big investors on the platform and leslie picker joins us now with more >> that's right, joe pinterest's first big road show launch takes place today in new york city. the event, which will begin at 12:30, gives investors the chance to watch management present and ask any questions they might have in connection with pinterest's ipo ceo ben silberman and cfo todd

morgenfeld are both expected to be there, among other executives invitations for the lunch were sent out yesterday on behalf of pinterest lead underwriters goldman sachs and jpmorgan typically, hundreds of investors attend the new york stop during the road show, especially for venture-backed brand names like pinterest. the company is looking to sell more than $1 billion worth of stock in the deal, some of which may be doled out to investors in the room today pinterest, which serves as a virtual bulletin board of sorts with various how-tos and decorative inspiration, generates revenue from advertising, revenue that has been growing more than 50% year over year, but user growth has slowed, and the company remains unprofitable, which is partially why pinterest is seeking a valuation of about $10 billion at the high end of the range, below its latest level of private fund-raising, guys. >> i tried to figure out have you -- you're not a member, right, sorkin, of pinterest, or do you go on >> i have an account. >> you do?

>> i do. >> arts andcrafts and stuff -- >> you, you can create all sorts of boards, if you're going to renovate your house or something, ideas -- >> people -- >> yeah -- >> you've done this? >> they have exercise routines that you can do and like bring with you on the road -- >> great quotes, even. there are people who just pin quotes on the board. >> recipes for food. i've used some of the recipes -- >> i mean, we're going to sound like we're crazy, but this is what people are doing. >> are you guys part of the road show >> no, but you asked the question. >> as part of the road show video, they give specific examples of how people use their platform. >> it's hard to understand just reading. i need to visit the site. >> you've got some homework. >> probably not going to happen. thanks, leslie bradley tusk is ceo of tusk ventures any ipo just is garnering a lot of interest and attention right now. >> yeah. >> is this in the top quintile of ipos or -- >> you know, it's a really interesting one, because it's the second big one for this

year lyft obviously captured big attention, big pop and then -- >> down yesterday. weird. >> with pinterest, they're different than your average unicorn who goes public in the sense that they have approached the whole process in a much more prudent, conservative approach than, you know, an uber or lyft. a lot of companies are just growing at all costs and we'll see whether or not the market rewards that. but if you were looking for a company where the growth does seem to be truly organic and sustainable, from that standpoint they're looking really good. on the flip side, i think it also tells an interesting story about late-stage investors kind of not being smarter or thoughtful enough around the valuation, just getting caught up in the biggest possible number and buying into it. and people who did invest at the $12 billion valuation may initially come out behind. over time it may come around. >> i look at pinterest a bit idiosyncratic relative to other ipos out there, meaning you can pair lyft with uber and talk about ride-sharing and the

sharing life and all of that you can look at zoom and you can look at slack and talk about the enterprise pinterest is sort of in a different place. >> it is but at the same time, the underlying notion is people want to connect with other people, right? in some ways, it's like a pure version of facebook. facebook has turned into sort of an evil cautionary tale in many ways and pinterest is still -- like you guys three minutes ago, talking it's good for recipes and quotes -- >> they specifically try to make the point that they're not a social network, right? >> they do they say they're different from a social media network because it's more about self-improvment than necessarily connecting with other people that they know, friends that they know and liking their photos and things like that. and then they also distinguish themselves from a search engine because they say that people go on their site for discovery. and they don't always know what they're looking for. and they believe that those two differentiations are what will kind of compel more advertisers to their platform. that was their pitch in their road show.

>> yeah. i mean, i'm not sure that that's actually how pinterest really works. but sure, if they think that will get them the right valuation. >> i would feel better with the ipo just seeing that, you know, you always feel like, wow, i wasn't as smart as bradley tusk to be one of these venture guys that are in the early rounds of financing. >> you can see -- >> so some of the private guys that are so smart, an ipo person can be smarter than they are about when they're buying pinterest. that's attractive. it's down -- what do they call it >> we'll see if it's a down-around. i have a sneaking suspicion that -- >> it's not going to be? >> so, that's a good point. >> well, i don't know what number it's going to come in it may come in flat relative to the $12 billion, but i have a sneaking suspicion that you're going to see the numbers move up rather than down. >> legally, they can actually price as much as 20% above the range that they have filed, so they could raise the range and then price above that, or they could keep this current range and price 20% higher than that, which would actually get them at parity with their latest private round. >> and if this ipo goes well and

the next string of tech ipos go well, i think what we might see are companies going public sooner so we don't get into the series "g," series "h" rounds at an upper range of where the ipo's going to go. in some cases, i think the private market's gone a little too long and this will revert it back to a normal time frame. >> so, what else is coming that we're going to -- >> clearly, the big one is uber. >> uber, yep. >> and then slack and -- >> slack is coming. >> slack is coming and then airbnb, although they're making noises now of maybe 2020 instead of 2019, so we'll see. >> do you think not that just there's a window, but if you look at the numbers, there's about $700 billion in market cap that want to go public this year do you think there's a cutoff point at which you have to get in, in the first half of that $700 billion because investors just are going to run out of cash >> i mean, you can loot ait two ways on the one hand, the fact that so many of them are grouped right around march, april, may, would say yes, the companies feel that way, too

on the other hand, i think if investors are really excited about a company in september or october, it's going to do just fine. >> i think the aftermarket performance is important here, too, because if a company, you know, pops on day one and stays higher, investors feel like they're making money, then they'll feel more compelled to buy into the next one and the next one and the next one. if you get a situation where you're not making money or it's essentially flat, people are going to be a little bit more hesitant because that ability to outperform the market through ipos isn't really paying off in exchange for the risk that you're taking in buying an untested, you know, company that's new to the public markets. >> thank you you want to stay >> sure. >> you can stay! >> sure, okay. >> stick around! don't go anywhere. >> you want to stay? >> sure. >> we're going to have a party coming up when we return, these guys may or may not still be here. we'll find out we'll also find out what to watch for in the second quarter of the year and beyond some big surprises that could spell success for your portfolio with bespoke investment's paul hickey that is coming up. and jared kohn will be with us

right after the break to talk ouabt the accidental presidents. we're back in a moment

welcome back to "squawk box. futures right now down 33 on the dow, s&p indicated down five,

nasdaq indicated down 11. our next guest is at the intersection of business and policy he's been named to "time" magazine's list of 100 most influential people and led the state department's early social media strategy as a tool for diplomacy. he's taken that background and interest in history and now written a new book that has some lessons for corporate leaders and policymakers joining us is jared kohn, founder and ceo at jigsaw, public policy tech incubator of sorts at alphabet, formerly known as googp is that it >> that works. >> fair way to describe it the book -- "accidental presidents: eight men who focused america," which focuses on leadership and consequences in u.s. politics great to have jared here what's interesting about this book is -- and joe, focuson this -- >> yes. >> because you think the title is "accidental presidents," and i know there are people who think that our current president is an accidental president >> how so? >> of sorts. >> how so? >> how so because i think -- >> if you win pennsylvania after -- >> meaning i think that even he

at some point thought it was an accident the point is, the book is not about president trump. that's where i was going with this. >> it's what you're still hoping, that pence is going to be president before 2020, accidentally. >> very interesting point you make about pence, because one of the most fascinated pieces in this book is that we as -- can i speak for a second >> absolutely. >> we as a collective, as citizens, often focus too much, i think jared says in the book, on who the president is and not actually who the vice president is because oftentimes the vice president becomes the president. >> that's correct. >> like in the bush administration >> different topic slightly different. >> in the book, i write about the eight times in history that a u.s. president has died in office so how history is literally changed by the beat of a heart what's interesting is these men who were not the voters' choice, who were thrown on the ticket because they wanted to win a state or appease a constituency, end up presiding over the country during reconstruction, you know, at the height of world war ii, at some of the most seminole moments of the cold war, and yet, they're an

afterthought up until the very moment where they take the oath of office. >> who is the most accidental of the accidental presidents that you describe in this book? do you look at and say, that was a true and utter accident? >> i mean, to me, the one -- you have to start with john tyler because nobody thought it was going to happen. when william henry harrison is elected president in 1840, he dies 30 days later the framers of the constitution were completely unclear as to whether or not the vice president becomes the president or is just acting. so, imagine this -- you become -- the president dies the framers have left no blueprint for it and the new acting president or president has to spend his first months figuring out, you know, how to convince congress that he's president he gets kicked out of his party. >> right. >> he rage annexes texas in response so if we think impulsiveness is a modern phenomenon, i assure you it happened in the 1840s. >> we forgot about john tyler. >> how could you forgot?

>> i thought lbj -- >> too predictable. >> how about spiro agnew, who never became president >> the more remarkable one is harry truman, right? what's interesting is everyone knew fdr was going to die when he was re-elected in 1944, but nobody dared talk about it because nobody wanted to have that conversation. truman's vice president for only 82 days. he meets fdr twice, gets no intelligence briefings, meets no foreign leaders, wakes up one day and he's presiding over the height of the war in the asian pacific theater. you know, stalin's reneging on every one of his promises. >> the other thing i found fascinating about this book is just how -- you know, we think we live in this -- with the media and fake news and all of this and the anger of both sides, that it's somehow terrible, that it's the worst it's ever been, and i -- as i read through the book, you think it was much worse back then. >> well, you would think writing a book about presidents dying in office would lead to a melancholy type feeling. the book netted me out pretty optimistic, because i did come away feeling like politics today is not as bad as they seem

take polarization as an example. people love to talk about how we're at the height of this sort of polarized moment. in the 1850s, you literally had a senator pull a gun on another senator in the chamber and try to shoot him over a debate on politics you had a member of congress come into the senate and beat another senator with a cane nearly to death. so you know, back then, if you didn't have your bullet wounds and your head bludgeoned, you hadn't made your point >> this may be a curveball for you, but we had a conversation with ray dalio on the set yesterday about the american dream and the state of capitalism and what that meant to america and the idea of free markets and freedom. when you look back at history, how do you think the american dream has changed? do you have any thought in terms of what's happened here? because there seems to be a big debate -- >> you don't think there's been a big debate. >> but there has been a big debate and i thought there were some interesting thematic shifts -- >> a guy worth $18 billion is worried that the american dream's dead, so -- >> but if you look at who's

participating in politics today, it's far more accessible, not just for the people who were elected, but it's far more accessible for people to participate. >> i'm just sad that mccain didn't win so you could have sarah palin to talk about as an accidental president he would have loved -- can you imagine? your worst-case scenario is not john tyler or lbj. what if that had happened, andrew >> it would have made for an interesting chapter. final question and it really ha to do with social media and you can speak to this given your experience with technology and everything else. how do you think social media has changed? i wonder whether you think it's better or worse right now given everything that's going on in terms of the election and how people should think about 2020 >> so, i think when we look back at history at this moment in time, i think successive generations will look at this moment and define it as the period where we were trying to figure out how to navigate all the noise. but if you look at what's happened, we're already at a point where people are demanding more substantive information

we're all overwhelmed and sort of overtaken by the sheer volume of information so, i think that in the context of an election, politicians have a harder time taking the pulse of the population. we're all prone to underreacting and overreacting, and that's true whether you're a politician or you're a voter. >> exacerbated more today than 100 years ago? >> i think you have more voices today than you had 100 years ago, but the nastiness 100 years ago, you know, was as present then as it is now. >> okay. jared kohn, thank you very much for coming in. >> thank you. >> the book is called "accidental presidents," and it actually, i say genuinely a fascinating read programming note, given we were just talking about social media. tomorrow marks one year since facebook's ceo, mark zuckerberg, got grilled on capitol hill over data practices and regulation of social media we'll be bringing you coverage of this anniversary of sorts i'm sure they're not celebrating, but with a number of exclusive guests wednesday, including rbc's mark mahaney, ed

lee from "the new york times" and senator mark warner. >> ohio, north carolina. just doesn't sound accidental. anyway, coming up, how the latest tensions at the u.s./mexico border are threatening real damage to the american auto industry what'd romney win? missouri anyway, millions of dollars on the line for even short production disruptions what kind of damage could automakers be looking at if shipping delays continue a live report coming up. stay tuned you're watching "squawk box" on cnbc my time is thin, but so is my lawn. it's been worn down to ugly thin grass! now there's scotts thick'r lawn, the revolutionary 3-in-1 solution for weak lawns. with a soil improver to strengthen roots! seed to fill in gaps! and fertilizer to feed! the result... up to a 50% thicker lawn after just one application. ♪ ♪

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welcome back to "squawk box. futures right now have worsen ad a little as far as the dow is concerned, at about 47 points on the session. the s&p is indicated down six. nasdaq indicated down almost 18. some news, andrew, that you want to bring us? news from american airlines, no less. it is trimming its current-quarter forecast for a key metric revenue per available seat model had predicted up 2%, now thinks between flat and up 1% the airline cites the grounding of the 737 max jets as a key factor, along with the government shutdown and work being done on its 737 800 jets it says it cannot forecast the financial cost of the max grounding. okay, we're closing in on

8:30, sorkin we're going to make it hopefully. >> you think the new threat to the american auto industry with president trump trying to keep a campaign process and harden the southern border, carmakers and their demand for seamless international trade could become an expensive casualty we've got an update on the mounting shipping delays at the u.s./mexican border. plus, a discussi on onthe fallout of automakers, when "squawk box" returns but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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welcome back to "squawk box" on cnbc, live from the nasdaq market site in times square. here are the stories that investors could be talking about today, some of them, anyway. bank of america says it's going to raise its minimum wage to $20 an hour by 2021 the bank will be increasing it in stages, starting with an increase from $15 to $17 per hour on may 1st. saudi aramco's first

international bond offering is proving popular among investors, according to a source quoted by reuters. it's attracted orders in excess of $100 billion. aramco expects to raise $10 billion from that offering which consists of debt with maturities ranging from 3 to 30 years it's going to be priced later today. eyecare company alcon is making its market debut today. that follows its spinoff from novartis, the swiss drugmaker. it's already begun trading in switzerland and will begin trading on the new york stock exchange under the symbol alc. tension at the u.s./mexico border recent days is beginning to impact parts of the american business community one sector that relies on seamless trade is the auto industry, and it's starting to hurt phil lebeau is on the squawk news line. tell us the latest >> reporter: andrew, yeah. the latest comes from the head of the mexican auto association, basically an industry trade association. and late yesterday, he said when you look at the delays in terms

of goods that are going across the border, whether from mexico to the u.s. or u.s. to mexico, there are serious delays and by serious delays, we're talking about goods, whether it's auto components or parts, et cetera, that are not getting through the border in 45 minutes to an hour, which is usually the case, but five, six, seven hours is how long sometimes it takes for them to get through the border and this has a ripple effect for the auto suppliers and the automakers who have plants so close to the border and rely on just-in-time manufacturing here's one industry analyst talking about what this means for those suppliers and automakers on the border >> when you close the whole border, automakers know what they get from mexico and they know what they're not going to get. when there's this, you know, some shipments are getting through, some aren't, there's seven-hour delays, then you're going to send home half a shift. you're going to have really not very smooth production until the whole production system can

adjust to this >> reporter: so, what happens in terms of auto production in mexico remember that we are coming off of the best year ever, best year ever in terms of auto production in mexico, and then shipments from mexico into the u.s about 15% of the vehicles sold in the u.s. are coming from mexico, more than 2.6 million last year. primarily, you're looking at pick-ups, suvs, and crossovers those are the hot vehicles that are coming out of there. and when you look at the automakers most impacted by trade issues with mexico, look at general motors, which imports the chevy silverado from down in mexico, not some all of them, but some of them and the fiat chrysler brings in some pickup trucks from mexico as well. this is something we'll be watching very closely to see if these border issues continue for an extended period of time guys, back to you. >> phil, thanks. let's bring in paul ingrassia, editor at the revs institute for

automotive research. you were able to hear phil's report, paul >> absolutely. >> and what are the most important things to take away from the angle of what might happen and what it means >> well, this is clearly not only a potential disruption, but it's already starting to happen, honestly reuters reported yesterday that only half the number of northbound trucks crossed the border yesterday as they did a week ago now, how many of those had auto parts versus other things, you know, is unclear, but a lot of them did as phil point ed out, there's a huge trade in auto parts and just take a hypothetical example. it's not just finished cars, but take the door of a car, for example. that steel that makes the door may be produced in america, it might go across the border in mondexico for stamping and then come back to america to put in the windows, the glass, the

controls for the rear view mirrors and power windows, et cetera, et cetera. so, a lot of these components cross the u.s./mexico border two or three times before they actually are put into a finished automobile this is clearly a very disruptive and potentially more disruptive situation >> so, are we bargaining here again for some type of outcome, or is it something that president trump really wants to follow through on? >> well, that's always the question, how much of this is threat and bluster and how much of it is real? what we do know, honestly, is this, that even the threat and bluster has proved disruptive, joe, because you know, companies have to plan for the worst it's the old saying, hope for the best, plan for the worst so, that kind of thing already is happening now, actually what's unclear to me is, you know, what's the -- what does

success look like here how do you define success? you know, what the president has done is shifted people off customs inspection to immigration controls, and so, it's unclear to me on the customs inspection what that really looks like. we're already at full employment in this country, pretty much, the lowest unemployment rate in decades, and it's hard to see that this is going to create more jobs. it will probably cause temporary layoffs, on both sides of the border >> with china, we at least had the idea that they're going to hurt more than we hurt, or at least that was the perception. you don't think that that's necessarily true in this case? you think that our auto companies, our workers, that mexico isn't going to back down because the pain is greater down there? and i guess you make the point that even more immigrants may want to come here if the economy

worsens in mexico from this. >> well, exactly this really creates more pro immigration, pro departure mexico pressure. but you know, it's not a matter i think in mexico of backing down i just think if the trade flow slows for auto components and finished automobiles, it's going to have a lot of -- you're going to have a lot of disruption. and i'm not sure what mexico can really do here to satisfy the president, except reduce the flow of immigration, which, you know, is sort of a hard thing to do on a dime. >> yeah. nissan in addition to detroit, how does that work, gets hurt? >> well,neasan, no just nissan, but toyota. the detroit companies have operations on both sides of the border, but so do most of the

nondomestic automakers who build cars here -- nissan. toyota has a couple plants in mexico so, this is really -- it's not just affecting american companies. but don't forget, nissan and toyota employ american workers and mexican workers. so, the disruption damage here isn't quite symptomatic of the integrated global economy. >> paul, by the way, because we were talking about nissan, want to -- >> yeah, go ahead. >> what do you make of -- we showed the carlos ghosn video today, the video he put together before he was rearrested, where effectively, he says the entire situation is a massive conspiracy theory. you know this manuel you know the companies well. just help us sort through it >> well, you know, this could be a case, actually, where there's a grain of truth on both sides, actually, or maybe more than a grain of truth i mean, look, it's clear that there was a lot of resentment

inside nissan for carlos ghosn when he really was planning the move to merge nissan totally with renault now, on the other hand, did carlos do some things that left him vulnerable to these charges and accusations? i think the most recent arrest and the most recent allegations of basically channeling money through a saudi arabian distributor that, you know, $15 million of which $5 million came back to ghosn himself, are potentially the most serious allegations, more serious than the financial reporting stuff and other stuff that was going on so, you know, this is another dimension here now so, both sides might be right on this we'll just have to wait and see what the proof is, because the truth is, we just don't know. >> so, you've watched this industry for a long time i like driving

is that soon when we're going to be riding in someone else's car and no one's going to be driving? when will that happen? hereafter, or is it really in our lifetime paul? >> well, let's hope it's in our lifetime joe. >> well, that's just about our life, that's not -- yeah, ten years? ten? >> but you know, i think this is going to be a gradual thing over, you know, 10, 15 years i think the first applications will be commercial applications. pretty simple things, mass transit, city buses, that sort of thing, vans, you know, et cetera, et cetera. and look, you like driving, but you don't like driving through the lincoln or holland tunnel in a traffic jam. >> no, i don't. >> so, you know, i think there will be cars that will be for recreational and fun and free-driving use, and then there will be other motorized vehicles, autonomous vehicles, that will be for the basically, the daily grind, shall we say. >> okay, paul. just want to thank you

yeah, anyway, i just saw, got some email from a famous person. anyway, thank you, paul ingrassia. appreciate it. we'll talk about that in a second. coming up when we return, what to watch in the second quarter. and ahead of today's market open, three market surprises you need to hear about we'll tell you them straight ahead. take a look at u.s. equities futures, trading near the lows of the ssi, sd oesonnaaqff about 20, s&p looking to open down about eight points u. and, you're probably right. electric just doesn't have enough range. it will never survive the winter. charging stations? good luck finding one of those. so, maybe an electric car isn't for you after all. or, is it? ♪

in the transportation industry without knowing firsthandness the unique challenges in that sector? coming out here, seeing the infrastructure firsthand, we can make better informed investment decisions. that's why i go beyond the numbers.

shares of nbcuniversal parent comcast are higher in premarket trading. mcquarry has upgraded the stock from outperform to neutral and increased the price target by $7 to $49 a share that stock reached a 52-week high in yesterday's trading. >> it's interesting because stocks -- feels like it's broken out a little bit in the past couple weeks. >> you can see it there. and even if you went back two years, i think $44 was the all-time high, somewhere above where it is right now. but you know, with the sky, all the things that, you know, the cord-cutting worries >> right. >> it's been a couple years. there you can see, sideways trading. but as i said, you go back five, six, seven years, the stock was split adjusted at like $11, $12, so as you can see right there. >> and we should also tell you to take a quick look at the shares of disney this morning,

because that company upgraded to outperform at cowen. the analyst there said thursday's investor day will not be a deck-clearing event that's the quote for sentiment disney expected to update the market on its strategic shift into direct-to-consumer distribution cowen raising the price target from $102 to $132. separately, moffett nathanson reiterating its buy rating on disney and raising its price target to $134 they point out that investors may begin to focus more on the potential value that the disney plus service could create, and that could help the company get a higher valuation and it's interesting that it feels like the sentiment on media stocks, which has sort of been dormant for a while, might actually be coming back. and maybe it's a function a little bit of some -- i mean, disney's a very different company, obviously, than comcast. but in terms of what they're trying to do with the ott product. >> and waiting for that to play out, too. >> well, the big question, i think, on thursday is are they going to tell you a pricing story? are they going to tell you exactly what the product is, or

are we going to be looking at something similar to what apple did two weeks ago, where you know, they sort of talked about it broadly but they didn't give you the specifics? >> right. meantime, if the s&p were to close higher today, it would be a nine-day winning streak, longest in 15 years. that's just one of the surprises we've seen so far. joining us now for more, hopefully a few more, is paul hickey, co-founder of bespoke investment group you have a couple of things you like right now. >> yes so, i mean, the first two are more surprises -- i think could be surprises going forward as we head into earnings season. the first is the material sector sentiment and going back to the disney comment, the upgrade on weak sentiment for disney. but sentiment in the materials sector is extremely weak 40% of the companies in the sector have seen estimates cut over the last month. >> okay. >> if you go back to 2008, any time it's been over 35%, the group has -- the sector has aed a gain of 6% during earnings season every time. there's been eight prior times where we got negative sentiment, and all eight times it was higher during earnings season.

so when you see that negative sentiment, plus the dollar -- >> so this is a short-term trade for you? >> going into earnings season, next three months. but also, the dollar's been flat, one of its flattest six-month ranges on record recently and i mean, people were expecting weak dollar weakness as the fed turned more dovish. it hasn't come yet but positioning, commitment of traders report, dollar longs are at their highest level since 2015, so traders and investors are positioned for this strong dollar still, and i think that could be a surprise and that would help the sector along, too. next on your list. >> so, goldman sachs two weeks ago when everyone was freaking out about the yield curve inverting, the sector over a five-day period, the financials dropped 10% in five days s&p 500 was down 1%. that kind of underperformance in such a short period of time is very rare for the sector goldman, when those prior periods this happened, has averaged a gain of 20% over the next three months with gains 75% of the time. trades at a much cheaper

valuation to its peers the 1mdv scandal is weighing on it, but the move into the consumer sector provides a much more stable potential revenue stream for the company, and again, sentiment -- >> how quickly, though, are we going to see that? meaning the trigger, the inflection point for goldman on the consumer business. >> i think that's a long-term trend. but regarding sentiment, of the brokerage firms, it has the lowest amount of buyer ratings by analysts, less than 45% of analysts rate the stock a buy versus the others which are mostly over 50%. there you have again the sentiment towards the sector is weak and that's the best time to be going long these names, when other investors don't want them. >> by the way, goldman, your topic within the banking sector. who would be two and three >> of the companies -- i mean, goldman is the top one we like morgan stanley's another name that, again, this performance disparity that we've seen is another name there that looks attractive. >> okay. you have one more surprise for us, i think. >> this isn't necessarily a surprise, but it's a company --

it would surprise some people. it's an emerging fintech play in emerging markets backby warren buffett. most people wouldn't think of warren buffett backing a high-growth fintech company. it's buffett backing high growth fin tech company they have great service, low fees >> what's the market capital >> over 4 billion. it is not a micro-cap. the company has great earnings two weeks ago. it given back to last week, it is a company that is growing 100% and it is last quarter. tl custom the customer service -- >> if you get on this? >> it is a brazilian play.

>> broadly speaking just markets generally. you picked out some good picks, we'll see. are you broadly positive on the market are you on the view it is going to be multiple expansion >> i think we are looking for earnings growth to slow down that's baked in the cake we are listening to what the market is telling us the best tell of the market has been semiconductor sectors any time the relative strength starts to lag, three or six months later you see the big sell-off taken place right now semis strength is at a high verses the s&p 500. we think that's something is an arrow in the market capital so to speak to the fact that sentiment going into the earnings season is negative not just for the material sector

but the overall market as well >> thank you, sir. >> good to see you let's get down to the new york stock exchange, jim cramer is joining us now. we talked about disney and comcast and different stories i guess upgraded for comcast been consolidated for a while you go back a couple of years it was almost single digits of 11 or 12. stocks move in spurts, testing the high end of its range. >> this is what happened the last couple times comcast made big acquisitions as it gets closer, things start to infiltrate into the numbers this is a good move. comcast got great growth overseas it is just playing out exactly if you remember how so negative people were. people are saying jesus, this is

a terrific opportunity the toughest one is people are gun jumping disney hey even if they cut numbers, w like it. will they like it once the numbers are brought down if they do then it can be off to the races. you know this is a market, these are the first days they tend not to like the number cut >> we have been talking about pinterest a lot. i have never been a vc type or never had the early rounds or all these people, people like ashton kuchar. with financing wow, i can get it smart and i am like the vc guy is that a bad thing they can't get above financing or maybe they don't or they will?

>> there must be some sort of slowing. they would not take it down unless things are worse. lyft makes you feel like way a second, we don't want to blow people off here. i think this is precisely what i would do if i want to keep control over the ipo situation i am pleased with that i don't like to see when things get too hot. we know we get blown up in the end when things get too hot. that is recent situation i would have thought they would have done it at the same price as last roundment there is some sort of negativities that's lurking that i don't understand were you on facebook these days. we are now upon this year anniversary. facebook is not celebrating but other people are looking at in terms of what happens since mark

zuckerberg were grilled on the hill >> i think ever since the opt-ed in the washington post, the analysts are incline to give these guys the benefit of the doubt. a lot of people are saying you got to be kidding me how can id matter? i will stick my neck out because facebook is becoming one of the good guys and the no longer outliers people in the valley merceday may disagree with that >> all right, jim, we got about less than five minutes for "squawk on the street," we'll see you in a couple of minutes >> good to see you >> make sure you join "power lunch" today senator mark warner will be talking on "power lunch" at 2:00 p.m. eastern time "squawk box" is coming back.

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passes $100 billion. we were discussing all of this in if wake of the khashoggi's killing. i don't know -- this is complicated. i have mixed views of this i recognize -- >> you said that at the time >> i recognize business imperative for u.s. investors. >> you thought the united states is going to stop dealing with saudi arabia based on things that happened in all these countries around the world that we have to deal with >> the question is are people going to take a moral stand in this case? >> are we going to take a moral stand in china >> these are all fair questions. for many decades there was a moral -- >> do we have that shot of in

the desert >> "squawk on the street" begins right now. congratulations to virginia for winning their basketball championship good morning, i am carl quintanilla with david faber and jim cramer s&p is shooting straight up. europe is mostly red oil is 64 or 67 earlier. the imf cutting is global growth those banners at the bottom of your screen. e