our guest host for all three hours this morning is joe terranova. he is from vertus investment partners he is a cnbc contributor, and it's great to have you here. >> great to be here. >> we have a lot of market news to talk about. let's start taking a look at the u.s. equity futures at this hour you did see new record highs yesterday for both the s&p 500 and the dow. for both the s&p 500 and nasdaq. first time we've seen that in a while. the nasdaq had its highest close since october 3rd. you'll see that things have picked up a little bit you are looking at green arrows across the board once again with the dow futures indicated up by 26 points.

really it's consumer discretionary. it's energy, financials, industrials, staples health care. materials. consumer discretionary, technology, they've exceeded the 18 highs reets, utilities, they already exceeded the 18 highs about three weeks ago. it's really only four sectors that have elevated above 18. >> i would say, too, though, if you are flat, right, since the last all-too many high, it's not completely unusual that half the stocks are up and half the stocks are down in a flat market, right? if you think about it that way as opposed to we've been on this

tremendous 25% ramp over the last four months and half the stocks are still below their all-time high, so, i mean, i think there's a lot of different ways you can dut those numbers >> i think what's tremendously different, though, is where you look at a ten-year yesterday the markets making all-time highs and yields continue to push lower i think ten-year is 253 this morning. >> it was both 26, for sure. i'm not going to play the game of what's the bond market telling us certainly a 253 ten-year is a much better environment for corporations that have to maintenance debt than what they were enduring in the fourth quarter and third quarter of 2018 >> first of all, there have been more concentrated markets than in years past. if you go back to the 19 p 0s and 1980s. >> 40years ago >> technology -- i'm just saying

it's -- i'm saying it feels like because the market caps are so huge that if you do it as how much of the market cap came from, you know, apple, microsoft, and five other stocks, it seems like a tremendously concentrated thing. >> what's interesting is energy has been under pressure, and with energy prices rise, that could be a new leadership. >> well, i don't know if you are going to see energy be leadership technology is 21% of the s&p consumer discretionary somewhere around 11% it's 31% >> energy is about 6%. it's like the lowest it's been ever >> financials are getting a little bit of a modest lift. i would say the one sector that has a significant weighting that we would like to see begin to participate is health care health care in particular in the last ten days has significantly underperformed you would like to see health care -- >> good luck with that when you have an election coming up and people are talking about medicare for all >> well, that is -- >> that's clearly the challenge. >> or coming after them for opioid issues. there are going to be a lot of issues that are not counter to

anything happening in the economy. that are not connected to anything happening in the economy, but what's happening in washington >> i would agree with that when you are talking about managed health care, but there's other components of health care like medical devices, like pki, perk and elmer, striker, thermofisher, abbott labs. these are names that can endure that political environment >> okay. we'll talk more about all of these issues coming up in a little bit, but let's check out what happened overnight in asia. you are going to see for the major markets in asia -- give me a second the nikkei was down by a quarter percentage point hang seng off by half a percent. the shanghai composite closed up just slightly. it was relatively flat also, in europe this morning where there is some active trading taking place right now, the dax up by .6%. you see red arrows across the rest of the continent. the cac off by .1% ftse down by almost one-third of a percent. the u.s. sending a high

level trade delegation back to beijing for new talks next week. both u.s. trade rep liebt lighthizer and steven mnuchin will be heading there. they'll meet with china's vice premier. the white house also confirming that a chinese delegation will come to d.c. in early may for talks. i saw one flash from kudlow. larry said something about things are moving forward. moving forward i don't know we need, like -- we need something. i need more because we hear moving forward a lot, right? do you think there's been some additional incremental progress or is it just -- >> it's whether they're getting some of the tough issues off of the table. >> but are they? >> it sounded like they made progress on a lot of the easy things

u.s. business got very concerned about that idea. if this is -- that they can decide that we're not upholding the laws and go ahead and strike out from that. you know, we want to be able to say it to them, but we don't want them to be able to say it to us. >> do you think it's in the majority yet that people are in the -- we approve that we've done this with china it's -- the public opinion is almost moved to where it's not -- no longer right at the beginning of a cycle >> i think we're also at the assumption where we think something is going to work out >> well, right this was the time to do it >> yeah. >> there's some near-term pain >> there have been some big changes over the last three years. >> we're in a position where we're -- we've got some power over the leverage.

zblooef been dealing with this for a while. >> i'm not talking about people who don't know who the vice president is. >> the reality of this situation is the europeans need some form of a resolution for their markets more than we do. they're a significant trading partner with the -- the europeans need this to end i think mike makes a great pointed. i think the market has really stopped focussing on this and as long as it's not in the headlines, then the market is comfortable with it, and can you

make the argument that this potentially will be with us through the 2020 election without -- if there's an enforceability ang to this -- >> that's the -- >> then how do you remove it from the narrative before 2020 the market just doesn't want it to be front and center to where we have to see larry coming off a couple of times a day and just -- >> the market never wanted aggression to be the whole point. the market never wanted, hey, we're getting tough on chooirn, and that's the end of the policy that's not the case, right we have to have something on paper, and i think for the market, to your point, joe, the best time for a trade deal is soon in the near future forever is probably the best time for the markets. it's something you could look forward to and say, okay, that can feed the bull case for a while.

did you misunderstand me i was talking about you. i'm going to come up with something for you. you're not sleepy. although you're not drinking any coffee right? >> i had enough. you're not sleepy, joe i don't find you particularly creepy, but i don't know you that well. >> okay. >> are you >> i think -- >> here we go. >> the average annual return in the third year of a presidential cycle is 16% generally -- >> we're already there >> generally what happens is in the first two years of a presidency, the presidency gives away the performance to get it in the back half of those four

years. what you are seeing with president trump is he had a strong first two years now he is having a strong third year that signaling something much different than prior presidents. i think the market is not paying enough attention to the third year of the presidential cycle >> joe is right. we're already there because of the december lows. you're above 20% gains from where we were at the -- >> we must be near 15 for the year already, aren't we? we're getting there. >> in gains? >> yeah. >> we are there already. >> 2015, 2011, they don't really follow the third year rule >> this is a presidency that is, and it's much different. >> i'm trying to align get on that message. don't worry about the -- >> i've been happy about -- >> the market. >> the regulation and tax reform, things -- the boots off the throat of the private sector you heard cut low singing that mantra again yesterday.

zbloinchts the meet came hours after president trump attacked tweter via tweets alleging bias against conservatives. you can hear in both of the tweets coming back and forth on that that was probably a big topic of discussion there >> i'm trying to use it as a news feed. i'm just -- i'm going to -- no, but i'm not going to -- >> as a voyeur instead of actively engaging? >> i don't like that word, but -- >> you like to watch >> not after the guy had that

camera on his shoe did you see that guy an attorney. it's unbelievable. walking around with a camera on his shoe i don't have a camera on my -- no, but it's just -- can you imagine? >> when we come back, we're going to get you ready for today's big earnings reports that includes at&t, boeing, and caterpillar. first, though, a rare interview with melinda gates she's speaking about women in the workplace, global health issues, and a lot more right now, though, as we head to a break, let's take a look at the biggest premarket winners and losers in th dow ♪

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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. we're going to get back to today's big movers in just a moment we want to pause for a moment to bring you a rare interview with melinda gates. she has a new book out called "moment of lift. it describes her personal

experiences as the o-chair of the bill and melinda gates foundation donating billions of dollars around the world for the cause of global health also, hearing the stories of women across the economic spectrum i asked her why she chose now to tell the stories of her own and other women's economic empowerment. zplie feel like equality can't wait between the me too movement and the number of women running for congress and have gotten in. even with that rate of women running for congress and the progress we're all excited about, if we still continue at this rate, it's going to be 60 years until we have true equality in congress i want to make sure we use this moment in time and really make sure we get equality in society. >> the reason your book is so powerful is that we use real people stories these are women you are met in your travels around the globe in developing nations it's also your story too there's a lot of this that is autobiographic autobiographical you're a private person. >> i am.

>> how did you decide to put that in. >> some of the pieces in the book i'm incredibly vulnerable, and i think those are the hardest pieces to write, but i felt like i wanted to share my story because i wanted people to understand who i am and i think my story is also the story of millions of women. and i wanted share these voices of the women i've heard from around the world because i learn from them. it's -- and so if by sharing their stories they have called me to action, if my story and their stories can call others to action, then it was worth being more vulnerable in there >> did you do a lot of soul searching before you actually put a lot of yourself into this? >> absolutely. the hardest thing for me to write were the -- moments in our marriage where i was asking bill for more equality or moments where i do talk about abuse that i went through, that was the hardest piece to write i felt like in being vulnerable, if i would share those stories, people would understand abuse.

i travel the globe, and when i stay long enough in places, it comes out whether i'm in silicon valley, whether i'm in northern india, whether i'm in senegal or malaui women talk to you about abuse. one of the reasons it's important to write about that is because it silences women. it silenced my voice it took away my self-confidence for years. i wanted to know for women that we have to share our stories and it's in that sharing that we can actually change society. >> you know, you do write pretty honestly about your marriage when you had to take times in your marriage where you were really looking for equality. equality at the foundation equality in terms of who does what at home and with the kids >> luckily, bill grew up in a family where his mom was working early when a lot of women weren't. his grandmother actually went to college and played basketball when a lot of people of that generation women didn't do that. he wanted it in theory i don't think either of us when

we entered the marriage really questioned either one of us what our roles would be clearly, he is running microsoft. he has a huge job. i think even what i expected of myself, we didn't stop and talk about it it wasn't until well into the marriage that i realized how much i was doing at home and that i had to name for him, hey, i want to work, too. i enjoy working. if i'm going to be able to did that, you need to take on more work at home what was his first reaction? >> i'm not always elegant. i have to say one of the things i write about in the book is when our oldest daughter, jen, was beginning kindergarten we both agreed on the school we wanted her to go to. it was a good 45 minutes round trip drive from our house. i said to bill, okay, look, we both agree on this, but i can see years ahead in traffic twice a day. i said how about we wait until she's in third grade we'll put her closer to home he said, no, i think this is really important i said but it's so much time in the car for me

he said, well, how about -- he offered. how about if i drive two days a week for him it meant an hour round trip to the school because microsoft was further away from the school than our home was the interesting thing that happened is when he started doing this about three weeks into the school year another mother sidled up to me and said do you see what's going on here? i said, well, i noticed more dads are dropping their kids at school coming into the classroom, and she said, yeah, we went home and told our husbands if bill gates can do it, you can do it. >> one of your big focuses in the foundation and somethingyo write a lot about in the book is making sure that reproductive rights are something that you think is very important and vocalizing that and doing something about it it wasn't an easy decision for you either >> why do you think it's so important? >> i was traveling for the found a. i had the great privilege of

traveling all over the world for 20 years. >> i realize that as a world we had backed away from it because of religious, particularly the catholic church, and political reasons. yet, if i really was listening in the developing world and then looking at the data and realizing no country in the world in the last 50 years has escaped poverty without making sure women have ak serks voluntarily access to contraceptives, i thought, okay, if we really are for low income countries becoming middle income and high income, we have to make

sure as a world women have access to contraseptives >> you are talking about family planning making sure that you can space your kids out over time. making sure that you can hopefully feed the number of children that you have. snoo you start out talking about vaccinations you have seen huge advances as diseases that used to be terrifying have kind of gotten eradicated or almost eradicated in some cases. do you get frustrated when you see the anti-vacs mooumt and the

return of things like measles and mufrps that should be preventible? >> i get very frustrated because the women i talk to in country after country, let's say, in africa, they will say i walked ten kilometers in the heat to get here you know, they've got a baby on their back, and they have another couple with them, and they're saying, of course, i want a vaccine when i go and ask about vaccines, they say, of course, i want it. it's saving my child's life. the fact that in the u.s. we have forgotten what some of these diseases are like and that they not only affect our own children, but they affect other people's children or other people whose immune system is down, that's not right you need to vaccinate your children it saves lives >> we're getting stupider, not smarter on this front. >> we're believing things that aren't true. i think we're not reading the right information or talking to our pediatrician he or she knows the vaccines save lives >> we spoke with melinda gates about a lot of different things,

including capitalism versus socialism and what she's heard back in her travels around the world. she's got some very interesting defense of capitalism and how it's the envy of the rest of the world. we'll get into that coming up a little later this morning. coming up, sort of bank's latest bet a billion dollars in fin tech. we have the details of that deal plus, a new report that soft bank lost $130 million on bitcoin. "squawk box" will be right back. [knocking]

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soft bank's wire card in exchange for a 6% stake. soft bank will help the firm expand to japan and south korea. last year wire card replaced commerce bank in germany's bluechip dax index >> separately soft bank's billionaire founder reportedly lost $130 million on a personal bet on bitcoin he made the bet at the peak of the bitcoin friendsy after he rose ten-fold in 2017. he sold an early 2018 after bitcoin had plummeted. i guess if you are looking at the numbers, 20,000 down to 5,000 or below >> i guess it wasn't just naive people who had never had any financial literacy >> exactly >> well, coming up, today's biggest movers we'll show you why nissan shares got crushed in japan overnight plus, earnings alert

we'll get you ready for reports from at&t, boeing, and caterpillar. as we head to a break, a look at yesterday's s&p 500 winners and losers at carvana, no matter what car you buy from us,

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welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning u.s. equity futures at this hour have turned positive up 20 points or so on the dow. the nasdaq and the s&p will be trading at new highs again, i guess, based on where they closed yesterday nissan shares are tumbling 4% overnight in p gentlemanan the company slashing its profit outlook to its lowest level in nearly a decade, citing expenses related to extending vehicle

warranties in the united states. what's the latest? i was foelg it a little bit when i was out, but i just reading -- >> came up with -- >> they're going to come up with new indictments, but once they do that, committee make bail and get out of jail. you are held until they decide what they're going to charge you with >> i don't even want to stop by over there >> this is a new time every time the old one zsh. >> it's a different system of justice. >> yeah. >> nissan aside, solid quarterly results helped lift markets to record highs let's get right to our roundtable this morning. joining us for that is stephanie

lange. she's principal and chief investment officer of -- and michael tyler, chief investment officer at eastern bank wealth management as well as our guest host this morning terranova. joe, of course, also a cnbc contributor. good morning to everybody. stephanie, interesting moment here we could either say this market has gone up 25% past the old highs in four months and seems like maybe it's getting overheated on the other hand, it's gone almost nowhere in 15 months because january 2018 was just 2% below. is this the top end of a trading range, or is it the start of something a little bigger? >> you know, we're overall pretty bullish right now the reason is that data is telling us to be if you look at the economic numbers, we're still very pleased with what we're seeing retail sales have been strong. the consumer has -- has been healthy. even though growth seems to be slowing as you look at leading economic indicators, overall we don't think there's a recession

in the near term. we've seen six sectors revise higher since the end of march. overall we think that the environment is good. if you look in the past at this kind of slow growth earnings environment, it's actually been a quite positive environment for stocks it. >> that kind of gets to a little bit of the talk about a sweet spot here. if as the market has been sort of suggesting, this is just a stutter step for earnings growth and we have a fed that arguably is now a little more dovish than

the consumer economy maybe demands domestically, that pretty much a good formula for equities in general, but i guess the question is can that last right now? if everybody now agrees that the economy maybe had its softest point so far >> well, the economy probably did have its softest point that much i agree with the challenge suspect what's coming ahead i think that there's still a sense that the fed is a little bit twitchy, and maybe if the stock market roars ahead, they may try to sneak in a rate cut a rate hike, i'm sorry a rate hike. the market is not prepared for that we're also looking at a presidential election campaign coming up in which health care will be a major topic. medicare for all and all that stuff. that has weighed on health care stocks, and it will continue to. i think that we have had negative earnings so far this quarter. you know, we're only 20%, 25% into it, so it's not meaningful yet. there is some concern still that there's some volatility.

there's some issues that we have to work through. i think that gives you the wall of worry that can end the years every year higher than we are at right now. we may have bumps along the way. >> the market is a growth market it seems as though momentum is back. >> one of our most interesting ideas are to have a higher beta play on the global economy we're looking at things in terms of what can benefit from a rebound in the global economy because we actually think that we're poised for a second half recovery some of the areas that we like that are poised for that

recovery are meerjing markets and industrials. industrial stokts actually have that higher growth that you are talking about, and we think in a low growth environment like this, areas of the market such as industrials and tech stocks will be rewarded however, right now we're concerned about the valuation in tech stocks, though industrials are still trading at a discount to the market. >> you've got some big, big companies and big pharma land that are hitting patent cliff issues like bristol-myers that's why they bought cell gene, for example.

we think a lot of those companies will get bought out as effectively outsourced rnd for big pharma can you make money in just about every sector you just have to think about where to look, and emerging markets is a fabulous place to invest right now for a lot of reasons. in temz of where the dollar is, in terms of their valuations much cheaper than it is u.s. growth is looking very good there. michael, stephanie, thanks very much joe, of course, sticking around. >> well, yeah. it's my -- >> both joes >> okay. all right. yeah, craw >> when we come back, boeing is set to report. we're going to tell you what to expect when the numbers hit the tape after the grounding of the 737 max. those numbers are expected in less than an hour's time, and right now boeing is relatively flat

373. this comes amid a run-up in defense stocks this week will boeing keep the momentum? stay tuned you are watching "squawk box" here on cnbc i'm working to keep the fire going

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♪ i'm working for beauty that begins with nature. ♪ to treat every car like i treat mine. ♪ at adp we're designing a better way to work, so you can achieve what you're working for. ♪ dow component boeing is set to report in less than an hour phil lebeau joins us now with a look at what to expect hey, phil. >> hey, joe. this is an important earnings report not only because it gives us an update in terms of where boeing is financially a month into the grounding of the 737 max, but it also will be the first time that we hear from ceo dennis mullenberg in an extended period of question and answer with analysts about how the company is handling this situation whether you look at the earnings report when it comes out at 7:30 eastern time this morning, here's the things to focus on. it's all about the 737 max

they're going to give us an update in terms of where they are with the grounding, when they plan to file the final software fix with the faa. likely we'll get some timing on that we may not get anything deaf definitive, but that's what analysts will be focused on. cash flow concerns the max is the cash flow generator for boeing we'll get a sense of how much the grounding is impacting that. does boeing pull its guidance for all of 2019? increasingly, that's what i'm hearing from analysts because boeing will say, look, we are not sure when the grounding will be lifted or when deliveries of the 737 max will continue. as you take a look at shares of boeing, remember, the grounding or if you take a look at the production level, sashd four the 737 max, it's already been brought back to 42 per month does that extend into august, into september how far out does it go shares of boeing, down about 11% this year. most of that coming since the

grounding in the middle of march. one other thing, guys, the reason that we're out here by o'hare airport, a little later on today, you do not want to miss this interview. first on cnbc. we'll be talking with oscar munoz, ceo of united airlines. they've got a few maxes in their fleet. not as many as american and southwest, but we'll talk with oscar munoz about the max and a couple of other pieces of important news that united will be announcing a little bit later on today guys, back to you. >> great, phil thanks we'll be tuned in to that. meanwhile, we are awaiting results from at&t expected in the next few minutes pluts, when we come back, we're going to discuss s.a.p.'s latest quarterly results in the increasingly competitive cloud business bill mcdermott will join us live as we head to break, here's a quick check of what's happening in the european markets right now. mixed, although germany looks pretty strong. up almost a percentage point rld, what do you see? we see a billion more people breathing free.

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the s.a.p. reporting first quarter results in the wee hours this morning joining us to break down the numbers, bill mcdermott, ceo of s.a.p. this is kind of a bounceback from recent quarters, bill, that maybe were not quite as up to what everyone was hoping for this is a good start to the year is that the bottomline >> good start to the year. it's a beat in rates what the capital markets have been waiting for, they've been getting all kinds of revenue growth we're the fastest growing cloud company in the enterprise software space they wanted to see the multiple on the margin. what we committed to today, we committed to improving the operating margins by one point per year for the next five years. now after 75 billion investment in innovation for our customers, our shareholders are saying, wow, this is the moment i get

the multiples on the margin and, therefore, the leverage in the share price. >> how do you do it? what would you do on premargin >> a couple of things. one is our cloud gross margins can improve to 75% between now and 2023 weerg hire we're hiring the absolute very best people in the world -- artificial intelligence, machine learning, big data, all of the areas that our customers want us to go. so it's not the number of people it's getting the absolute very best people. and if you hire right, you manage your cloud gross margins right, and you have a highly inspired customer base where you're growing with high renewal rates, you get tremendous leverage on the operating margins. >> so you're hiring while restructuring and laying people off in other areas >> what we're doing is when we did restructure, and that was announced in q-4, and we executed it in q-1, we basically said we're going to take about 4,400 people from areas that were not part of the new economy and hire to those tremendous

standards. so we're bringing in the best data scientists in the world, best machine learning individuals out there, best enterprise application software coders around the world, and we're developing in china, in israel, in the united states, in europe so, the company really is on a roll and as you know -- >> you're not finished with the restructuring yet, though, right? are you right in the middle of it >> we're almost done in the sense that we accounted for most all of it, joe, in q-1 and we are finishing it up in the next quarter right now, for example, it's being executed in germany, but the majority of it has been handled. >> so, the first-quarter profit compared with first quarter last year was, what, up -- >> we're up 19%. >> fourth quarter down 15%, in the fourth quarter so, this is a big -- that's why the stock is like, wow. >> yeah, yeah. there was some one-time charges in q-4 that impacted that, but the stock today -- we grew

revenue, total revenue 16%, grew cloud 48%. and you know, let me just put this on the line -- when you grow cloud 48%, that's 80% faster than salesforce.com that's 30% faster than workday so, when you have a franchise that's growing your core business in double digits, the cloud faster than anybody out there, and you're progressing the margin one point per year between now and 2023, i think that's why the shareholders have the stock up 8%. >> so bill, this answers some critics that you were losing the market share or customers, and oracle as well, to competitors like the ones you mentioned -- you mentioned them specifically, so they're on your mind, i guess. >> of course, all competition's on my mind, but what's really on my mind is where the customer needs us to go we weren't losing to them. what the shareholders wanted -- and we surveyed them we had a capital markets day in new york we used qualtricks, the company we hired to survey them -- they

said we love your revenue growth, we know you're gaining share, but we want more operating leverage growth, and that's what we gave them it took $75 billion in r&d and m&a to get to the point now where we have everything we need we don't need any more big m&a we just need to perform well and spin off margin and free cash flow for our shareholders and the stock goes on a run. >> and you're happy with the $1.2 billion -- >> euro. >> euros, not -- >> could not be happier to have a great firm like that endorse the stock and back management and our plan for operational excellence that's fantastic. >> so, the cloud business is where the strength is. bookings, i think, were up 26% should i be concerned that you lost your cloud president and you lost your chief technology officer within the last month. >> not at all. the reality is change is part of growing and part of building a strong company we have young development talent

running our development organization now that is absolute best in class the individuals that did leave, they had been with us for nearly three decades. and sometimes it's good for them and it's good for us so, they're two wonderful men. they're going to go out and do great things i think the alumni leaving s.a.p., speaking well of our company, doing well in our ecosystem, is a force multiplier for growth so, i'm happy for them, but i'm also happy for the young ones that are taking over now driving change. >> when you -- you know, say you're going to have all this margin improvement, and now is kind of the time for shareholders to harvest -- how do customers hear that in this world where every other cloud competitor is feasting on them >> it's a great question how they hear it is they know we've given them so much innovation it's like, it's coming at them so fast that now they're saying, help me integrate it, help me fully leverage it across the enterprise and get the value from it. so, interestingly, the customers and the shareholders are both in

the same place you've done unreal things. now let's dig in and drive real value from all the things that you've done. you know we bought an $8.3 billion company called qualtricks we now took over a new category called experienced management, where we can actually tell the consumer experience inside or outside the company in realtime -- we have data now so think about this. if you're running a company, you want to recruit to retire process in your company -- how did i feel when i recruited them how did i feel when i trained them am i coaching them am i teaching them am i giving them everything they need in their compensation plan? we know this in realtime with the database that is built into the human capital management process. so we do things that no other company can do. >> you wouldn't be crazy enough to forecast that you're going to double your stock in 3 1/2 years -- >> oh, yes, i would. i am. >> if you do -- i did the rule of 72. is that like 25% a year? are you nuts

why don't you just work on margins? you're telling me where the stock's going to be? >> yeah, but, hey, joe, let me tell you something let me put it this way -- if we have a $40 billion enterprise application software company, $20 billion of that is in the cloud. if you take the median valuation for a cloud company, they get a 10x multiple, that's $200 billion in market cap. if i take my core business at $20 billion, times a 5x multiple, i get you know the $100 billion, that's $300 billion -- >> we'll have you back in 2023 you'll be around you have to hit it to be around. otherwise, we may be talking to somebody else. good luck. >> joe, win is dream, you know that. >> very good bill, thank you very much. >> thank you very much for having me. big day for earnings across the board. at&t just out with its quarterly numbers. earnings came in at 86 cents a share on an adjusted basis, right in line with what the street expected. revenue was light, coming in at

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box" begins right now. >> announcer: live from the beating heart of business, new york, this is "squawk box. good morning, everybody! welcome back to "squawk box" here on cnbc we've got a lot of news, including some breaking news that's out from david faber just now. david, what can you tell us? >> becky, occidental petroleum has decided to move forward with a public proposal to acquire anadarko petroleum of course, we've been following this story for a couple of weeks, ever since chevron agreed to a deal to acquire anadarko at $65 a share in stock and cash. moments ago, occidental decided -- or has presented a proposal to the board of directors of anadarko to acquire the company for $76 a share, half of that in cash and half of that in stock. viewers may recall a couple of weeks back when the

chevron/anadarko deal was signed on the 12th of this month, i believe it was, a friday we had at that time reported on the possibility of that occidental would choose to do this, feeling as though it had been shut out of the final bidding for that asset, having pursued it for a number of years, actually, and feeling as though its proposal at the time, which as we reported was $76 a share, 40% of that in cash, was superior and wondering why it was unable to get the attention of anadarko's board of directors. and so, what we have here now is, well, a good, old-fashioned fight for anadarko, whose board of directors, of course, is going to have to respond to this offer this morning and chevron, potentially, in a position where it is going to have to compete with a potentially higher offer now, it's important to back away and remember, anadarko chose not to pursue what was a $76-a-share

offer from occidental when there was conceivably an auction going on, although one that from occidental's point of view, at least, did not actually give it the opportunity to mount its best and final bid but anadarko felt at the time, according to people close to that company who have spoken to me, that the stock price at occidental, the need for a shareholder vote by shareholders simply posed too much risk for anadarko to be willing to take what appeared to be a significantly higher bid remember, $76 versus $65 that is still the case, although now they have added actually even more cash to that bid that we'd reported on as being the last one when the auction was going on privately now it's going to be in the public at this point the company is saying, by the way, it would create $100 billion global energy leader they're talking about $3.5 billion of free cash flow improvements through synergies and capital reduction. they're talking about as much as $2 billion in annual synergies and another $1.5 billion in what

they call annual capital reduction, guys. so, an interesting morning here, certainly, for anadarko waking up to this, not to mention chevron, and it should be an interesting period in time ahead of us here you can see how occidental's share price is responding. we'll get a better look at that a couple hours from now. anadarko is up sharply. >> david, you don't seem nearly excited enough and it's oil it's a bidding war and it's oil. it's like, here we are, 30 years later, whatever it is, and it's still so valuable. remember all the great ones back then, faber? my mind is mush, but remember gulf and -- i can't even remember them all, but those were the best -- >> texaco. >> you had swashbuckling oil guys on both sides and we had arm and hammer at one moment, he lived forever. everyone was waiting for him -- but who was it who were the big ones? gulf, everybody wanted that. >> yes. >> conoco? wasn't that a big one, too >> yes

phillips i'm like you. >> my mind is mush. >> there was an important court decision, also there was a bunch of them, joe, but it's been a long time. >> david, they told me, chevron, i think, that nobody had the permian basin presence to make this such a great fit to make it work at that price so, obviously, they weren't telling the truth. they were getting anadarko at a steal, because occi doesn't have the same, i don't know, synergies, do they, that -- >> well, it's a big deal for chevron and exxon have way more play, when you have synergies -- >> it seemed chevron was in there for a reason, because $65 must have been cheap for anadarko, if occi's willing to do this without even the same overlap, right >> well, they do have significant -- >> they do, too. >> -- significant operations in the permian, without a doubt and so, they do believe that they can add thousands of drilling locations in what they call the core of the core, the

delaware basin by the way, they point out that they had been a lot more productive in what they've done in the permian than has anadarko using the statistic here of 4% of the wells drilled in the permian but 23 of the top 100 wells on a six-month cumulative oil production basis, joe, so you know so they're claiming our technology's better and we'll be even more productive than anybody else who would acquire anadarko. >> all this social media new tech there's never any great stuff like this. oil, oil and gas right? i mean, why doesn't this happen with anything else we had to go back to this. go ahead are you excited? you're not excited either! >> listen, i'm excited for an oil deal we haven't seen that in quite some time. >> like this, where it keeps going up. >> fights. >> it's fitting. >> yeah. had it for fox, didn't we? >> do you think chevron was surprised by this? and how do you think they respond? and do they do so immediately? >> there's no reason to respond immediately. they don't need to they're not under any pressure

to the way these typically go is the board of anadarko has to decide whether or not this could lead to what they call a superior proposal. then it would give chevron an opportunity to raise its bid that may be where we go, but don't forget, this is the same board that turned down $76 previously from nadarko. again, the fear had been -- and this is very difficult to know -- what would the performance of occi's stock price look like? we'll get a sense of that today, certainly. what about the risk of a shareholder vote that you do this deal but occi shareholders feel like, no, we don't want it to happen because the shares have suffered a good deal. it's very important to see how that price performs today. i should add -- >> it's down about 4.6%. >> -- we are going to be joined by occidental's ceo momentarily, so we'll have an opportunity to speak to her specifically about some of these very questions but it will play out over some time you've got shareholders here who are going to get loud, one would expect, and make it clear they did not feel, now that occi has come public, they did not feel that perhaps anadarko had taken

the highest price. they've made that clear to me, at least the ones i've spoken to over the last couple weeks, that if, in fact, they did make a public bid, there would be support for it, so we'll see >> all right that is -- you know, it initially was really running up. it was up 9 bucks, now $6, so that's a long ways from $76, but also a ways from $65, so nobody knows at this point. >> and occidental, the stock in the last year has just significantly underperformed most of the energy equity names, so there is an argument to be made here -- you know, half stock -- why would you want the occi stock and to david's point, which direction does it go below $60 now, i think $63 coming into the day. >> $58.80 now. >> there's concerns there. >> that's going to be like a 6% yield at that point. it's a dividend stock, occi, right? occi p remember we used to call them

occi pete. it was like that other guy, that other pete -- >> rodney peete used to be a quarterback -- >> a cartoon character. >> you think this deal leads to other deals, that's the question. >> there was pete rose, who of course, remember him. >> there was, yeah. >> that's an interesting question, does this singular deal in the energy space now initiate -- certainly, you've got higher oil prices -- does this initiate more deals in the energy space which have been completely dormant over the last ten years? >> or is it a one-off where there's uniqueness to the assets >> what do you think, david? >> you know, i think it's possible i haven't heard anything, by the way, to know whether that's the case it's rare that you get a property that comes up like this, where remember how many years we've discussed the possibility of anadarko being sold and certainly, we know -- or we know at this point that occidental has been in pursuit of it for quite some time. but it doesn't necessarily mean the next one's coming. now, jim cramer would tell you

there should be a round of consolidation, whether it's an eog, which is very large, or pioneer or the others. but we'll see. we'll see. >> all right, faber. we'll talk to you. we'll be watching. >> i'll be back shortly. >> good. >> okay. meantime, at&t shares under pressure the company just reporting quarterly earnings of 86 cents per share, matching wall street forecasts. however, revenue fell below analyst estimates. at&t posted an unexpected gain in wireless subscribers during the quarter. that was going to be perhaps one area of focus, joe, after i guess verizon had pretty big churn numbers. >> yeah. >> i don't know if there's any other takeaways looking at the balance sheet as well. >> i looked at the eriks i think it's a little bit of a yawn, slightly lower verizon the other day i think was disappointing. i think the street got caught off guard by that, but i think the focus on 5g as it relates to at&t, its 5g evolution -- i am long verizon i've been long verizon i think verizon is a step ahead

of at&t in terms of 5g to me, that seems like the better play, but this to me looks like a little bit of, okay, down 1.5%, not very much there. >> you know, the company -- obviously, a lot of people have looked at it and said the amount of debt they took on to do the time warner acquisition has been a concern. the company says in a release they expect to pay off 75% of the $40 billion price for that by the end of this year. we're already in april. >> i think that's, yeah, that's a little bit of a positive surprise, and i'm somewhat surprised that the market is not responding to that, because to your point, that was a perceived headwind that's a significant headwind. all right, let's talk markets. it was stinky pete "toy story 2." remember the prospector? smelly and stinky pete, occi pete. >> glad we got it cleared up. >> twitter everything -- oh, back to -- sorry, you go. all right, let's get back to david faber. he joins us with a special guest

after all of this news that he just broke david? >> thanks, becky we are joined by vicki hollub, president and ceo of occidental. we just shared the news with you, the decision by the company to submit what it calls a superior proposal to acquire anadarko nice to have you thank you. >> thank you i'm so happy to be here. >> well, it's going to be a busy day for you. why are you doing this >> because we're so excited about this acquisition anadarko has great assets, and those assets will enhance our dividend-plus-growth strategy. we are the right acquirer for anadarko petroleum because we can get the most out of the shale. we have a lot more experience there. we are performing really, really well and what hasn't been talked about very much is that the up side in this deal is the shale play, is the shale development 75% of the value of anadarko is in the shale and we're the best company to develop the shale. we have a proven track record in the permian.

we're right now the best operator in the permian, and -- >> i noted some of those statistics that you shared in terms of 4% of the wells drilled but 23 of the top 100 top performing wells. >> we have a lot of experience and there's been talk about mozambique and the gulf of mexico and that that's not synergistic with us, but the reality is that's only about 15% of the value of this deal. so, where the money's going to be made, where the value's going to be added is in the development of the shale >> in the last almost two weeks, we've been talking a bit about the process that took place. tell me from your perspective, though, do you feel as though you did not have an opportunity during the period of time you were negotiating with anadarko to submit your best bid? did you feel as though, perhaps there was a favoritism of the chevron bid? why would you decide to obviously move forward with a public proposal, if you had the opportunity, one would expect, to have submitted a proposal that clearly did not get the attention of the board of directors? >> well, we've been working on

this, anadarko, and studying it for two years. and it was in july of 2017 that we made our first approach to talk to the ceo of anadarko. since then, we've been in friendly transactions and conversation and engagement. and even today, this is still a friendly engagement. and if you look into the details of that, you'll probably -- you're probably the one that can figure that out. but this is a friendly engagement. >> people always say it's friendly for shareholders. i'm not sure anadarko is going to see it as friendly. >> well, it is because the way we view it is we're a great company, and the industry knows that. we have a great reputation, and our reputation for core competence and expertise is in subsurface, whether it's enhanced oil recovery or whether it's shale development we're a great company with respect to subsurface, and this shale play, this is where we really excel and we have the most compelling bid out there today, and we can add the most value through the

shale development. >> why not have looked at other shale plays? it's not as if there aren't at least some available that would give you what you're looking for without having to get into a potentially huge public fight here to acquire a company. >> because again, we've been working this two years, and in the two years that we've been working this, there is no other opportunity that has the upside potential that this does this is one of those very rare opportunities. >> give me a sense, then, of this upside potential you keep talking about. >> well, it's tremendous because there's more than 10,000 wells that can be drilled. and when you look at the fact that in the delaware basin, our performance, our wells perform about 74% better than anadarko's, and we have lower cost development on both the drilling and completion execution and operations so if you take that and you apply that to 10,000 wells, that's a huge upside >> vicki, you're going to issue approximately 309 million shares to anadarko shareholders,

assuming your proposal is accepted and goes forward as currently constructed. there was concern on the anadarko part that those shares would not be worth anywhere near what they appeared to be when you made the first bid what assurances can you give that you think your shareholders -- your share price, i should say, will hold up, given concerns about that shareholder base in terms of your pursuing this very, very large deal >> well, we're combining anadarko's great assets with the best portfolio that we've ever had as a company and i think we've clearly shown through our improvement and performance over the last few years that we are a high-performing company. we delivered a return on capital employed in 2018 the best since 2011 and oil prices in 2011 were $95 versus $65 in 2018 and the importance of that is we're delivering better return on capital employee than the majors are so our performance is better what we haven't had a chance to do is talk to our shareholders

and help them understand the strategy here and how we view this now with this information today, we'll have the opportunity to be clearer with them about what we intend to do and why this makes sense. >> so you intend to engage with them. >> exactly. >> you'll still need a shareholder vote of the shareholders given all the stock you're issuing you're confident you can get a yes? >> i'm very confident we'll get support of our shareholders. they know and realize how much we've really gotten to the point where we're the experts in the shale play in the permian. we're the largest operator in the permian, and it's not just the shale play, it's enhanced oil recovery and we have the ability to take enhanced oil recovery and apply it to the shale. there's no company that can do that today like we can. >> and finally, $2 billion in annual synergies, another $1.5 billion in annual capital reduction. why do you have confidence that's a very large number, $4 billion in overall synergies. >> the $2 billion is based on things that we have already done in our own operations and just taking that and applying it to what we can do with the combined assets that includes the logistics that

we've been able to establish in the permian and make work. a lot of people have heard about our avantine hub, which supported our operations we're going to apply that to the anadarko assets. we have some proprietary drilling software and modeling that we do that has helped to reduce our cost on the drilling side and our completions. when you talked about the fact that we have 23 of the top 100 wells, the other fact there is the other wells and the other companies that have wells in that top 100, they had to use 27% more profit, which is about $500,000 a well more than we had to pay to get that performance so, basically, we can do this for lower cost than others, and we've demonstrated that, and now we can apply it to anadarko's not only permian, the dj basin as well. >> we appreciate your joining us this morning are you ready for a fight, because it could be? >> we didn't intend to fight that's not who we are. this has been a friendly process

since july of 2017 we're continuing that process. >> well, they didn't continue it, but you're continuing it. >> we're continuing it. >> thank you for joining us. appreciate it. >> thank you so much. >> vicki hollub, ceo of occidental petroleum joe, back to you. >> david, that was awesome, thanks we'll see you. now for reaction, ali mccartney, managing director at ubs private wealth management. sirat is with douglas c. lane and associates, and sirat is also a cnbc contributor. and joe terranova, our guest host, continues with us. we were talking oil. comments on what you just heard? >> i think what this says to us now is there are going to be other people in play you mentioned con cho, but you look at pioneer, eog all of them are trading 20%, 30% below their peak from last summer and if you look at anadarko, it's still below the peak of last summer, so this is going to be an interesting play i think there's a lot of value here, especially if energy companies see that the price of oil's going to stay in this

band and i think once that band is there, the synergies that you can get out of some of these acquisitions i think are going to be much better. >> you know, the supermajors in the u.s., in europe, they're going to look at this deal and say, okay, i need the presence in the permian basin, and -- listen, we haven't had a deal since, i think, xto and exxonmobil in 2009. >> and that was a disastrous deal for exxon. >> disastrous deal, but it was more of a natural gas deal than anything else. but this is about the permian. and you just look at these supermajors, and it's almost like, okay, now we have to be there. i'm still not sure, though, that occi is the right player in -- >> buyer desperation is a motivation, but then you look at the stock prices of occidental and chevron, and you say, you know, it's obviously going to be a winner and loser equation. it's not like -- >> and again, occidental's a company that's kind of made the commitment to not pursue the inorganic growth and the return on capital is so important to them i think it's got a 5% dividend yield. that's so strategically

important to them. so, i'm suspicious of, you know, if this fully aligns. >> i think you're right. and i think as an anadarko shareholder, you probably want more of a chevron there because you know the deal's going to get through. >> right. >> because if it doesn't get through, there goes your stock price and maybe nobody wants you after that. >> ali, you recently decided -- i don't know if you want to talk about occidental -- maybe you've changed your opinion now but are you going to equal weight in the u.s. in terms of -- because we're back to the highs, so you figure -- or are you even going to underweight at this point >> no. >> go from overweight to neutral in the u.s. because we're back to the highs or something? >> yeah. ubs has basically made a relative call u.s. markets verse international. and we've seen a six-month complete u-turn in the u.s. markets -- all-time highs, australia at all-time highs as a result last night you have the administration come out and further confirm potential progress on trade talks. and so, basically, you have a

totally accommodative fed, you have fading recession risks, and you have optimism, again, over the trade with supportive monetary policy. so, the market has priced all that in, has come all the way off the lows, and you know, basically what we've said there is a lot of the tailwinds that have pushed us up over let's say the last year and a half, are really fading. we have a strong u.s. dollar we have the tack package really behind us. and the rest of the world -- let's take europe out of it because we're still seeing some signs of concern there, but the rest of the world specifically outside is being led by china into em and japanese growth. so we think the acceleration will be experienced more there where it's still trading at -- >> but global markets are priced for a stabilization of growth, not acceleration, so this is -- >> that's the way we think and we think especially if you look at the numbers coming out of china, we think things are really on the mend and we expect a pickup globally. >> okay, good.

all right, thank you brandy pete. remember, boston, landmark, right? prohibition? brandy no. >> no. >> stinky pete occi pete. thank you, sirat >> sneaky pete >> is there a sneaky pete? >> sneaky pete, too. ♪ walk this way when we come back, boeing earnings expected in a few minutes. up next, the ipo rush and markets hitting new highs. we'll speak with nasdaq chief adena friedman, right after this break. break. stick around people know aflac.. aflac! ...but not what they do. so we're answering their questions. aflac is auto insurance, right? no. uh uh. is it homeowner's insurance? no... uhuhuhuh! is it duck insurance? nope. ahhh! do they pay me money directly when i get sick or injured?

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internet that puts alright boys, time to eat. that handles anything. [ crowd cheering ] that protects what's important. and reaches everywhere. this is beyond wifi. this is xfi. >> announcer: now the answer to today's aflac trivia question. in 1987, chrysler bought lamborghini for how much money the answer, $25 million. all right, welcome back, everybody. nasdaq out with earnings earlier this hour, beating both the revenue and earnings per share numbers. joining us now is nasdaq ceo adena friedman thanks for being here. >> sure, great to be here. >> better-than-expected numbers. and i think what you point out

in this is that your revenue in the nontrading segments was up 10%, and this is all part of your strategic shift what exactly is that shift >> sure. well, we are really pleased with our performance, despite a pretty challenging volume environment in our trading businesses so in the nontrading businesses, we focus on our market technology business where we provide technology to 110 other exchanges and 150 broker dealers. and in this quarter, we signed two significant new deals, one with deutsche bank to provide their singer-dealer platform and the other with the options clearing corporation to support their clearing system. so those are the things we do in that business that has driven our revenue up 17% in the quarter. and then we have our data and analytics business and our index business and clearly, the index business continues to perform very well. >> what's behind the strategic shift? what made you think, okay, we need to head this direction? >> i think we want to be a partner to all of the players in the capital markets that we serve, whether it's corporate clients or broker dealer clients, by side, or other markets.

and we want to use technology and data and analytics to drive our strategy and drive our business, because that's what really they need in order to be successful at the public markets today. >> having said -- oh, am i -- >> i was just going to say, m&a's a big part of that so you're buying companies in this area. so are other folks i guess what is nasdaq's edge in trying to consolidate these fintech businesses >> the first thing is, the majority of our story really is organic. so the 17% growth is organic and so is the 10% growth in the nontrading businesses, but we do some tuck-ins. we focus on the technologies that really underpin the capital markets -- trading, clearing, surveillance and compliance technologies and then on the data and analytics, we focus in on decision-making type of tools, whether it's alternative data or kind of byside intelligence tools. so we have a little bit of a different spin than a lot of our peers in the types of assets we're looking for. >> you are here on a proficiency day. nasdaq closing at a new high yesterday. we have seen a big pickup in

markets since the lows that we saw at the end of the fourth quarter. what's happening what do you think is going on and what's your gut feel about it >> i think, first of all, gdp growth continues to be very strong and probably stronger than what people were expecting earlier in the year. the second thing is that the interest rate environment is very stable right now, which then creates less noise in the markets. then the third thing is, i think a lot of companies are starting to come out and they're beating expectations so, that performance of the company's against lower expectations is also helping drive the markets -- >> just an earnings recession we thought was going to be here, maybe not. >> i think generally, the economy is doing quite well and showing a level of resilience that i don't think people were expecting going into the year. >> what's happening with all of these hot ipos that are coming out? or hot ipos, some of them not so hot after they come out. >> we've looked at it and the tech ipos that have gone public on nasdaq in '18 and '19 so far have actually had 31% average performance, so there's some really great companies like zscaler that has had outstanding performance.

obviously, zoom had a great ipo last week. so i think the performance of the ipos have done well overall, and so i think that's then driving more demand for companies to come out. >> even though lyft is probably the biggest highlight that people are watching and putting that in contrast with uber >> i think that lyft is one story. i also think that the performance of lyft as a public company is going to be determined by their performance as a business over the long term, not over the first three weeks of trading >> what do you think is going to be something that really rises over the summer? what do you think is on investors' minds or what are you thinking about >> i think certainly the china trade deal continues to be one of those things that people are -- everyone's watching that over the next few months to see how that comes to fruition and whether or not that creates even more opportunity economy or whether that creates some risk i also think our pipeline of ipos is actually 20% higher right now in terms of filed s-1s as it was a year ago so we continue to see strong demand from investors a lot of companies want to come out and tap the market.

>> i can't imagine that the china trade is high on your list of worries, though, potential worries. if you have anything that you're kind of out there looking at >> so, nasdaq is a business that's not a worry for us. i think that nasdaq as a business, we're focused on continuing to drive demand for our technology services and making sure that our data and analytics meet the needs of our clients. so to me, those are the things that are most present on our minds as we go through the year. >> what do you hear in terms of companies potentially going public, given all the focus on ipos this year >> the companies that are -- i mean, we see a lot of business-to-business tech companies coming out, so more enterprise businesses. we definitely are seeing some additional consumer tech companies coming out and then private equity firms are also looking at exits out of their portfolios as well, so we have a couple of great companies coming out of the pe space as well this year. >> adena, thank you for your time on a busy earnings morning. in fact, we have more results out right now from a dow component, boeing. phil lebeau has those numbers. phil, what can you tell us

>> becky, for the first quarter, boeing's earnings per share coming in in line with guidance, $3.16. that's what the street was expecting. revenue $22.9 billion. that's roughly in line with expectations of $22.98 billion we'll go through the rest of the numbers from the first quarter in a second, but there's two important pieces of news regarding its guidance for the remainder of the year that clearly will have impacts for boeing investors first of all, boeing is pulling its guidance for the remainder of 2019. remember, it previously was expecting to make over $20 per share in terms of earnings because of the suspension of 737 max deliveries and the uncertainty about when that will resume, boeing is pulling its guidance until at a later date when they have a little more clarity. then they'll give new guidance for all of 2019. it is also pausing its share repurchase program it repurchased $2.3 billion in boeing shares in the first quarter. the bulk of that happening

before the second 737 max crash in mid-march now they have suspended that program. that may resume at some point in the future when they get better clarity and guidance in terms of when max deliveries might resume a couple of key metrics within the first quarter -- operating cash flow. remember, cash is so key, especially since the max drives so much cash flow generation $2.8 billion, down 11% from $3.1 billion in the same quarter last year free cash flow also down about 11% to $2.3 billion. in terms of the individual divisions, the three key areas for boeing -- commercial airplanes, down 17% in terms of earnings for the first quarter -- defense, not surprising here, up 12%. we've seen all of the defense stocks moving higher as their earnings have increased. and services business for boeing was flat in the first quarter. inventory growth, guys, up $3

billion to $65 billion remember, they are continuing to work with their suppliers. their inventories will continue to grow while they have suspended or they are not able to deliver 737 maxes but again, that's the two pieces of news that are going to get the most attention this morning -- pulling the guidance, as expected by many analysts, for the remainder of 2019, and pausing the share repurchase program. cash is key right now, guys. they are sitting on $7.7 billion in cash. when i talked with the cfo, greg smith, about the first quarter, he said they're comfortable that they have the moves that they can make if they need to increase their cash levels but for now, they're comfortable with where they're at at $7.7 billion in cash on hand. guys, back to you. >> okay, so the dow was up 20, it's now down 20, and boeing responsible -- it would be worse, phil, without caterpillar, which is down caterpillar is offsetting some of that weakness we're seeing in

boeing caterpillar shares are up. there you go, up $1.97 so you can see that's taking a little bit of the sting out of the boeing results $3.25 was above expectations on caterpillar of $2.85 and revenue was kind of in line, $13.5 billion. yes, it was $13.4 billion, so actually a little bit above expectations then. the company, caterpillar, raised its 2019 view to $13.06. the street right now is at $12.30 $12.30, so -- >> pretty broad range, though, about a dollar. >> and it just beat by a significant amount. >> they did, and they say they're raising this because of a 31-to-share discrete tax benefit, too that's why they're raising the outlook for it. >> so, and now it's not up as much as it was earlier after it looked like it was -- well, let's talk let's get back to mike santoli

and joe terranova on what we've seen today what, caterpillar, boeing, at&t? where are you? >> listen, i think boeing gave the investor base exactly what they were looking for. it pulled the guidance this conference call is going to probably be one of the most listened to conference calls ever for boeing. i think you're going to want to understand and see if boeing is going to give you a timeline on when the software fix will be and when exactly will the grounding, hopefully at some point in q-3, be lifted. i think those are the important parameters, but they basically -- >> they're not necessarily going to know. we can hear when they think things might happen. >> yeah, and they're going to obviously file with the faa for the software fix you would expect they would do that in the next 45 days or so but listen, this stock on march 1st was $440 why? because it was a free cash flow

behemoth that's why everyone invested in this stock so, it's a pause and i think the question is, how long is it until it refreshes, and how long are you willing to wait while the overall market moves higher in a name that maybe is going to give you a little bit of underperformance until you get more clarity. >> honestly, it's been a resilient stock during the news that's come out. >> it has. >> still is trading at $370. >> and that's because of the free cash flow what you can observe today is still there today, is still supportive of the stock. but i think this was a stock that had by acclimation, everyone loved the long-term story because of the predictability, because you could see the backlog, because you knew exactly what was coming years and years down the road. and i think when a company gets in that zone of people thinking this is a layup for years to come, you know, it's going to be noisy for a little while as we figure out, as joe said, is this going to be a lasting hit to that earnings -- >> the thing that shocked me the most that i saw last week was that gdp might actually have to come down, might need to be

revised, expectations, simply because of boeing's grounding of the 737 max. i think it was by 0.2% because of the boeing slowdown -- >> sure, yeah. >> just because of that alone. if that tells you a little bit about how important this is, not only for the stock market, but also for the country overall >> yeah. it's incredibly relevant, but it had an incredible recovery christmas eve, this was $294. >> wow. >> before anything. >> right so, you know, just -- >> that's just market. >> and again, this reached the all-time high really before anything else. >> right all right, let's get a quick look at u.s. equity futures at this hour as all these earnings are digested >> oh, gdp's friday. that is big. >> yeah. >> i saw some on one of the others -- 1 1/2 to 2 1/2 like, that matters, doesn't it at 1 1/2, we're going to be like, uh 2 1/2, we're going to be like, whoa >> that's why the fed's not going to do anything this year. >> it's going to be above 2 1/2?

i think that's the over-under. >> there are also a lot of factors. kevin hassett was on earlier this week -- >> i missed it. >> pointing out look, you'll have a lot of overhang in the numbers from the government shutdown and -- >> and maybe pull forward. >> right. >> equity futures about flat at the moment, all netting out. "squawk box" will be right back. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today.

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we've heard from two dow components this morning, at&t, boeing and caterpillar all reporting its results. two of the three are dow components we will discuss -- >> because we were talking about it, guess which two? >> that's your trivia for the morning. >> at&t -- walgreens is a dow component no, no -- >> huge part of the economy. >> no, at&t. >> we'll discuss those names, preview tonight's report from facebook, microsoft and tesla. facebook, microsoft and tesla. "squawk box" returns and gold markets. ok. i'm plugged into equities. trade confirmed. and i have global access 24/7. meaning, i can do what i need to do. then i can focus on what i want to do. visit your online broker today, to learn more.

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welcome back, everybody. here's what's making headlines at this hour shares of health insurer anthem are higher in premarket trading, beating estimates on both the top and bottom lines for the first quarter and also raised its full-year forecast on the strength of increased membership that stock is down by about 17 cents right now. at&t shares are under pressure after the company just reported quarterly earnings of 86 cents a share that was in line with what the street was expecting however, revenue fell below the street's estimates at&t did post an unexpected gain in wireless subscribers during the quarter. by the way, that stock is down less than a percent now. the initial read, it was down just over 3% they also made some points about how they're expecting to pay off 75% of the debt that they used

to purchase time warner by the end of this year and again, it's april, so you are talking about a relatively quick timeline still, the street's not reacting to that just yet. boeing reporting $3.16 a share. that matched the street's expectations boeing also pulling guidance for the rest of the year and suspending its share repurchase program, and that stock is flat on all of this news, down by about 2 cents right now to $374. it's flat. caterpillar also just out with earnings, $2.94 on an adjusted basis. that beat the street's estimates of $2.85 we had that higher number before, but the street had not considered the tax implications of some of these and some other things -- >> on the plus and minus side -- >> the mining business. >> mining business >> the mining business comes out of nowhere and offers support -- >> maybe that's a positive. >> maybe that $7.6 billion bucyrus 2010 purchase is actually not so bad. >> you know what, that's so funny. we had paul ryan on the set the

day that happened. it was before he was speaker of the house, before he ran for vice president. >> that timing was bad. >> the mining business is good they do talk about higher labor costs, higher freight costs, higher material costs, as a result of the trade tensions >> hmm. >> yeah. >> what's interesting, so, they have this wide range of guidance for this year, right it tops out at 1,306 in october, the estimate for this year was 1,293, so it tells you how far the estimates have come down in a few months and back up. and that's kind of the story with caterpillar, the whip end of the industrial cycle. >> the analogy for what we're seeing for earnings expectations overall. caterpillar is now up 1.1%, a gain of $1.60. still more earnings news to come this way, plus we'll be talking to gordon bethune about boeing and what we heard up next, though, melinda gates sitting down to talk about her new message for women. we'll bring you thdeilofe tas her new book "squawk box" will be right back. ó

welcome back, everybody. we're bringing you this morning our interview with melinda gates. she's a philanthropist and author of the new book called "moment of lift. it's a book about empowering women. she's speaking out about the economic benefits about access to reproductive health services. it's a cause she doesn't think

is seen as a priority for the trump administration i asked her about her message. >> i feel like that's my role. i have to speak truth in these situations and i am incredibly frustrated and disappointed to see that systematically access to contraceptives is being rolled back in this country, and the people that it has the most effect for are single moms living in not great circumstances, in low-income neighborhoods. and again, i've met with those moms in and around georgia or in and around tennessee, and they will tell you, again, like every woman, they want to be able to time and space the births of their children and if we don't allow access to these tools at low cost, they can't afford them. and so, they're making these trade-offs in their families, and we are literally locking women into a cycle of poverty if we don't allow them access to contraceptives >> reading the stories in your book, one thing that struck me of all the women you've met in these developing nations is how

far so many of these countries have come in terms of progress, how big of an impact it's had on lives of so many people around the globe. here in this country, we focus a lot on what's wrong with capitalism right now, what's gone astray. why are middle-income wages stagnating when i read these stories, i think, my gosh, we have so little to complain about based on what we see around the world and how fortunate we all are and i think part of the reason that we've seen middle-income wages stagnate here is because of globalization that's helped other countries. that's brought others along. how do you come down on the globalization argument as you've seen the progress that this has kind of kicked in? >> what i know to be true is i would far rather live in a capitalistic society than a socialist society, absolutely. and i think when we stop and think about what we have from a capitalistic society, we have to remember what we actually have

now, is it a perfect system? absolutely not we need government to do its job, to regulate things, to have an appropriate tax system. as our co-trustee, warren buffett, says, capitalism does have gaps in it. and so, we need to look atthos gaps in society and figure out what do we do to fill them so that everybody has the chance to live a healthy and productive life and so, i also know that the american people are compassionate people, and i think we all do better as a globe when countries can grow from low to middle income to high income. and so, i think we need to look at our system and say, okay, what are the grait things about it, and what are the things that at this point in time we need to adjust and change? i would far rather us have that conversation than, hey, let's take our system and dismantle it when i go to places like malawi or tanzania or senegal, they say -- they all want to live in america. we are lucky to live here. they want to live in these types

of capitalistic societies, and we just need to tune it and get it right. >> again, that's melinda gates' defense of capitalism, which has come under attack if you look at the political climate that we've seen this year as people are gearing up for the 2020 election, too. >> i'm still not sure they're attacking capitalism it is that semantic argument they want higher taxes on wealthy and they want to redistribute, and that's never going to change. it's always -- and i'm not saying that's wrong, because if we knew exactly what to do with this big pot of money that we raise, then you know, no one's going to complain with that. it's just when i don't hear solutions on what to do with the money. all i hear is that rich people make too much money. again -- she's a poster child for someone that has benefited from previous generations and what they were able to do with capitalism i mean, her -- what was it, grandfather, great grandfather, walt disney changed the world.

wealth accumulation, shareholders, customer experiences, movies. i mean, all these great things that flowed from that. and now in a position as an heiress to disparage something that she's really i don't think has had any part of. but you know, whatever if we knew -- education. but what do we do with education? okay, we want more money we spend a lot of money. how do we fix it >> on public education -- >> is it we need to make sure that good teachers don't -- are selected for instead of bad teachers staying there for 30 and 40 years and having no accountability because of unions i mean, do we do charter schools? do we do private do we do trade schools do corporations start partnering up with government to do training for the people that they need? how do we do it? we have a pretty good social safety net, and some people think it grew too much over eight years with this ability and food stamps -- >> yeah, the majority seems to think it grew too much, but --

>> the majority doesn't necessarily -- greenspan says the reason we're growing more slowly now is because of the growth of the entitlement state -- okay, maybe greenspan is old, but -- >> no, he's not old but -- >> do you think the entitlement state needs to be bigger >> i think it's a branding and labelling issue. i think you can agree that capitalism is the best system and the pendulum has swung too far in the public perception of favoring capitalism over other things -- >> which is why many democratic candidates are going back to these points -- >> they tell you to define capitalism well, the means of production is owned by the private sector. so, what are you saying it's gone too far i don't -- the private sector -- >> i think the tax advantages for people who already have accumulated capital might be the issue. >> that's not capitalism that's the taxing. >> that's what i'm saying, it's a branding and semantics thing -- >> that's the tax system. >> exactly right. >> capitalism gave birth to technology and what we are wrestling with -- but what we're wrestling with in this country right now is the impact, the

disruption of technology on all of us. >> it's not just technology. it's bringing -- it's when the rest of the world had a standard of living down here and labor costs down here and for the past 50 years, a lot of the inequality that has lessened has been globally, and we've stagnated here because a lot of jobs moved to where people were making $1 an hour. now they're making $5 an hour. >> and some people will say we didn't do enough while we were focused on globalization to make sure we were retraining our workers and giving them opportunities, which is back to the point you were making, do we need trade schools >> and what do we do about -- you see social security, now it's next year or 2020. >> 2020. >> medicare, same deal so if we raise a lot of money from wealthy people, do we immediately blow that as well, or do we somehow try to slow down the growth in, you know, interest payments and -- 80%, we have no choice but to fund, right? we've got to figure out whether we do that as well, so

>> your tease. >> okay. >> it's exhausting >> i didn't think about -- it is i didn't think about this for four days. anyway. >> welcome back. >> yeah, welcome back. we're going to talk at&t, boeing and caterpillar, all these capitalistic companies plus, a preview of tonight's big names to watch -- facebook and microsoft. here are the futures at this hour, up 15 points "squawk box" will be back after "squawk box" will be back after a break. what if other kinds of plants captured it too? if these industrial plants had technology that captured carbon like trees we could help lower emissions. carbon capture is important technology - and experts agree. that's why we're working on ways to improve it. so plants... can be a little more... like plants. ♪

we've got earnings two industrial bellwethers out with quarterly numbers we'll bring you the details on caterpillar and boeing. a multibillion dollar fight in the oil patch breaking right here occidental petroleum going after anadarko, challenging chevron's bid. we'll show you what occidental's ceo said right here on "squawk box. and how to win the war on opioids. former fda commissioner scott gottlieb weighs in this hour on america's first criminal case against a major distributor of the drugs. 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. good morning and welcome back to "squawk box" here on

cnbc, live from the nasdaq market site in times square. i'm joe kernen along with becky quick and mike santoli andrew is off today. our guest host, joe terranova, senior managing director at vertis investment partners and a cnbc contributor futures are positive again boeing took us below zero for a while, but now we're back up, and i think boeing and caterpillar are both higher, now trading a little bit higher. boeing indicated it was down four it's now up four, which is pretty nuts. and let's see, caterpillar indicated -- now that's mostly flat, so it's kind of they switched roles becky, what's happening? we've got some breaking news to tell you about. there are some headlines out that are suggesting that berkshire is going to be acquiring pg&e in fact, pg&e up by about 18% on these reports. but i can tell you right now, i've just gotten off the phone with warren buffett, who says that is 100% not correct, that's not true he said he would know about it if it was.

so, again, the stock had been higher on some of this news. this is not true those are not accurate headlines that are out there and we just want to watch that very closely again, berkshire hathaway is not buying pg&e. that is not correct, the rumors that are out there right now. phil lebeau has breaking news on what's happening with ford phil, what can you tell us >> becky, here is something that is true, that is happening ford taking a $500 million stake in the electric vehicle manufacturer rivian. this is a company that got a lot of attention earlier this year when amazon led a $700 million round of fund-raising for rivian the electric vehicle manufacturer was also reportedly in discussions with general motors and potentially other automakers for an equity investment but ford has made a $500 million investment in rivian the two companies will be working together to build an all-new, fully electric vehicle for ford

we talked with r.j. sciringe, the ceo of rivian, at the auto show last week and he was coy about discussing investment from automakers or tech makers. but we'll be hearing from r.j. as well as executives from ford in a conference call coming up in about a half hour $500 million investment from ford into rivian guys, back to you. >> all right, phil, thanks big news out from boeing in the last half hour the company suspending its repurchase program and pulling its 2019 guidance due to uncertainty over the 737 max boeing is also reporting earnings this morning, adjusted $3.16 a share for the first quarter. that was in line with expectations revenue was slightly below the stock had been on a real roller coaster this morning, down four at $7.70 on first blush after the results came out. now indicated up 1.7%, over $5 and the dow has responded as you

would know that it will, because it's a simple divider that we're using. also news breaking on "squawk box" just ashort time ago. occidental petroleum bidding $76 a share for oil and gas driller anadarko that tops a previous offer from chevron announced about two weeks ago. that valued anadarko at $65 a share. occidental's half cash and half stock offer was sent to anadarko's board this morning. it values anadarko at $57 billion, including debt. occidental's ceo weighed in on the deal on "squawk box" in the last hour. >> anadarko has great assets, and those assets will enhance our dividend-plus-growth strategy we are the right acquirer for anadarko petroleum because we can get the most out of the shale. the upside in this deal is the shale play, is the shale development. 75% of the value of anadarko is in the shale and we're the best company to develop the shale. >> occidental's ceo said she

considers this a friendly offer, even though anadarko may not see it that way. i guess it's friendly for shareholders chevron hasn't immediately returned a call for comment, but two weeks ago when the company announced its bid for anadarko, ceo michael wirth said that the two companies were a natural fit together >> well, we think it's a fair price for the company. we think it's fair for anadarko's shareholders and a good price for our shareholders. this really brings together two sets of assets that fit very, very well. it creates accretive earnings. it creates accretive cash flow and we'll deliver over $1 billion in synergies on the cost side, $1 billion in capital synergies. and we believe in it so strongly that when the deal closes, we'll actually increase our share buyback from $4 billion to $5 billion a year. >> take a look at shares of anadarko, occidental and chevron. you're going to see occidental petroleum has come under pressure, down by about 8.6% and this was the big question -- what would happen to their shares as a result of all of this and what would happen to the bid as a result of that, too? chevron's stock down by just 43

cents. anadarko up by over 11%. >> yeah, and occidental down 8.6%. >> yeah, that's the key, which means your bid is now down 8.6%. faber's point earlier is that chevron's unable to take its time some cash and some stock, but chevron's going to be able to take its time before it decides how or if to respond to this. >> and they get even more time now that occidental is trading -- >> lower. >> -- the way it's trading. >> right. it has been a busy morning for earnings reports dom chu has a look at some of the big movers of the morning. and dom, lots happening today. >> lots happening. i mean, certainly with regard to dow components you mentioned what's happening with boeing, but we'll start with another dow component, caterpillar. those shares up just around a percent or so, maybe roughly 0.33%. 100,000 shares, plus premarket volume after the construction equipment maker posted better-than-expected profits on sales that narrowly beat analyst estimates.

they were helped along by better demand for heavy machinery and equipment in north america, so shares wavering a little bit we also got shares of at&t, now down around 2% or so, over 300,000 shares of premarket volume the telecom and media giant posted earnings in line with expectations, but total revenues just shy of wall street estimates. at&t was hurt by lower-than-expected revenue in warner media and also posted a drop in subscribers for its directv now streaming service but added more phone subscribers. remember, at&t is america's second biggest wireless carrier. then we're going to end with pizza for breakfast because that's what i'm in the mood for. we've got domino's, up by about 6% over 50,000 shares of premarket volume the pizza chain posted better-than-expected profits but sales did fall shy of estimates as well as sales growth at existing store locations that was also below estimates. for now, traders appear to be accentuating some of the positive there, but becky, certainly a big move for domino's pizza back to you guys. >> dom, thank you very much.

let's take another look at shares of pg&e, recapping the news that we've heard this morning. already that stock was up pretty significantly earlier this morning, up by as much as 18% at one point on reports that berkshire hathaway was interested in buying pg&e. we spoke with warren buffett this morning he said that is 100% not true. he also said he would know if that were true so, again, those rumors that have been out there that had been circulated, reports that this was a potential for happening, not the case. you can see the stock has come down significantly since then, still up 57 cents, which is a gain of 2.75%, but that news that berkshire hathaway was looking to buy pg&e is not accurate obviously, this is a company that's struggled, had a lot of issues since the fires in california energy business there under a lot of threat, and just the future of this company under huge threat, too. >> yeah, and the reason i think you could see the stock being twitchy is nobody's quite sure of the end game here and how much value will be left for

shareholders what's interesting in a way is how much the stock did go up in response to these rumors -- >> right. >> headlines coming from, you know, sources not necessarily considered to be authoritative and by the way, i would love to know, what was the last warren buffett acquisition that got into the market before the deal was done i don't think that's very common for them to be sniffing around and word to get out. >> take a troubled company, combine it with warren buffett's name, spread a couple of rumors on social media, get the word out and there you get the stock reaction in something that clearly needs -- i don't want to use the word a bailout, but needs some form of a financial market rescue. >> you can always say that berkshire is buying or selling like a stock as an investment because you don't know whether it's todd or one of those other guys -- >> they were talking an acquisition. >> but an acquisition. could an acquisition be done without -- it couldn't. >> and that's what warren -- this happened so fast, we didn't have the time to put the decos on it. his quote exactly was "that's 100% not true and i would know if it were true.

>> right but if you found out he paired his stake in something from one of those other guys, it's possible he might not be up to speed on every single thing, right, but not -- >> not something like this he would know about an issue like that, and he does not. >> and if you're acquiring this company, obviously, you're sitting there figuring out what the longer-term potential liabilities are going to be -- >> and all of the fires -- >> the insurance proposition would be his -- >> probably why his name would get -- all right, let's get back to terranova, mike santoli with the big day's earnings movers. the news business is hard. >> it's hard work. >> the reason it's hard is the headlines on boeing -- boeing's stock plummets after profit misses expectations. and it's like, you guys got to get back on this story here, right? i mean, the guys that wrote this 15 minutes ago let's look at boeing's shares. they're now up $6. so it was down $4. what happened between when these headlines were written and where we are right now not that stocks always do what you expect, but -- >> i think we offered some thoughtful commentary -- >> it was us that turned this -- >> it was you --

>> that turned the stock -- >> it's not specific -- we offered some strong -- >> you really do. >> joe, the street wanted to know if they were going to pull the guidance, okay they pulled the guidance we're talking about, as mike cited before, a free cash flow behemoth this conference call is going to be critical. are we going to get in terms of timing when they are going to submit for the software fix? is that going to be in may, in q-3, are we going to see the grounding being lifted those are critical components. that gets the business back on track once again -- >> now, in hindsight we're explaining, but that boeing stock swings higher after first-quarter results after joe terranova -- no, it doesn't say that, actually what do you think happened, mike >> i think it's a matter of a stock well off its highs that looks suddenly not as extensive as it did a while back, and they're not saying that this is

a lost generation in terms of the model right here it's basically a problem that looks like it's managed initial costs of $1 billion, right so that headline is out there. and that's completely palatable. >> let's talk about the occi/anadarko deal so, this -- you know, maybe anadarko's saying, oh, we didn't talk then, we don't want to talk now. maybe chevron's saying it's a done deal. why is anadarko suddenly $71, 6 bucks above? so, somebody saying -- and suddenly, occi's down $5 or $6 somebody's taking this seriously -- >> a superior bid has to be considered by a target you have to wonder if chevron has built that into its calculus as well. so, it all makes sense in terms of deal dynamics, but i also think there's a concept of a preferred buyer, and you can make the case that chevron being that much bigger with that many more financial resources might be a better home longer term, and anadarko might want to make that case to a shareholder.

>> do you have strong feelings about at&t as i said, we initially -- not us, but we were thinking it was a dow component in silicon -- i -- >> until mike brought it up, i'm like, oh, yeah, that's right. >> i'm ignoring -- i'm keeping it a dow component walgreens i don't think could -- and travelers doesn't -- so can i just take it upon myself -- >> you really can. because -- >> i'm calling it a dow component. but joe, after this big acquisition, and people worry about the wireless business being commoditized they worry about the debt load of at&t, but they've got some incredible assets in that purchase. >> they do. >> does the filing work out? the debt comes down. everything's manageable. it becomes a great media company. i mean, it already is, but it becomes even greater or are there questions? >> joe, the biggest headwind was the debt and taking care of 75% of that debt i think that offers some -- >> which is what they said. >> i think that offers -- >> why just the stock then >> i think that offers some relief. >> it's only down a little. >> yeah, it's -- again, as i

said before, i don't think it's a significant move i still believe 5g is the story. 5g evolution is what at&t has, but i think verizon's got the leg up on 5g. >> you look at the way the two stocks have traded, right? last year was verizon's year this year, year-to-date, at&t took back some of that underperformance, and at&t muddled up the story by becoming a media company and a streaming proposition. >> just back for a second on the occi conversation with apache and chevron. i think the interesting thing is to watch how the other names trade today. >> i think so, too i think so, too. >> you mean anadarko -- you said apache you meant anadarko maybe you know something about apache >> anadarko. >> apache's symbol should be apc, but it's not. pioneer, concho, diamond back in. >> someone mentioned another name -- >> eog. >> eog >> okay, all right, joe. stay with us

mike, you're stuck, so i don't have to ask you. >> yeah. >> okay. we'll get back to deals and earnings in jua little bit first, rochester drug cooperative and two former executives have been charged in the nation's ongoing opioid crisis rdc, one of the top ten pharmaceutical distributors in the country, is accused of not reporting suspicious orders for opioids in what could be the first of many cases to come. joining us right now is former fda commissioner dr. scott gottlieb and dr. gottlieb, thank you for being here. >> thanks a lot. >> first time we've sat down with you since you left the post. >> that's right, thank you. >> again, we appreciate the work you did there and thank you for joining us this morning. >> thanks. >> this story i think is really interesting on many levels first of all, it's the first of many cases that could come like it, but i was kind of shocked at the low number they talked about a settlement for $20 million to get the company off the hook on this, when you are talking about admitting to basically hooking people on opioids, something that kills 130 people a day in this country. >> look, they've been going after these for a while now. the other cases have been civil penalties and they've had settlements with cardinal

health, for example. mckesson had a big settlement. >> this is critical. >> what's different here is it's criminal a deferred prosecution of the company itself they seem to be going after the ex-ceo -- >> and the former -- well, the guy who was cooperating with him. >> looks like he's cooperating with him so the message this sends is they're going to now criminalize activities of individuals in these companies. i think that's going to send a chilling message through the industry i think if you're a distributor or a drug wholesaler or even a company marketing products in this space, i think the message is it's not enough just to police your supply chain, it's not enough just to report, you know, findings of potentially, you know, illegal sales to physicians or pharmacies you're going to have to actively step in now and take affirmative action to try to cut those supplies off that's what the government's really saying to these distributors. >> is that an effective strategy is that something that you will think will help in the opioid war? >> well, i think it's certainly going to help, but what the government's effectively doing is they're taking their obligation to sort of do the policing work and they're now affirmatively putting it on the distributors themselves, saying you now have to take on some of

this obligation. so it's a good way for the government to try to spread its resources by putting the obligation on the wholesalers, but i'll bet you the wholesalers -- and they've been doing this for a long time -- taking on more of a role and investigate the sales and cut off supplies so the costs are going up of distributing these drugs this is the cost we'll have to pay to deal with what is the biggest public health crisis facing the country. >> i hadn't thought about it from that perspective. joe, when you think about the distributors, and you were talking earlier about how health care has not participated in this rally at this point, this may have been a part of the reason. >> yeah, i think it is i think, certainly, there is concerns about what the potential liability is going to be and i think there is -- the problem is the absence of clarity in the near term so, you don't get any visibility on, okay, is there liability or not going to be liability? i think you have to be very tactical in the health care space when you're allocating towards it the medical device makers, as i said before, that's a focus point. but there are for health care,

right now there's political headwinds, there's the potential headwinds we're discussing in terms of liability, and i don't think the health care space has really seen that in many, many years. >> look, the president's giving a speech today on opioids. i would expect he'll talk about this prosecution as well as the case last week against the providers that the eastern district brought, the biggest case ever in the history of the country against individual providers, and talk about the increased oversight of the justice department the president signaled that they're interested in getting involved in some of these state cases, litigation against the opioid manufacturers as well. >> there are some -- there is progress being made in really potent pain medications that aren't as addictive as these, or is it just, like it's a tough one? >> there is progress in nonaddictive alternatives to opioids. it's still early-stage development. i think the biggest challenge we face right now is that the opioid crisis was a crisis formed from prescription drugs, oftentimes from a lawful prescription people became medically addicted but now it's shifting to a crisis of illicit drugs, where

people are buying counterfeit what they think is vicodin, really pressed fentanyl and that's why overdose deaths are going up because even as prescriptions are going down, people are now becoming addicted to street drugs, super potent prescriptions of fentanyl, that are killing them. >> how many of them started with genuine back pain or -- >> well, most -- >> and if we were to from now on, none of those people would get started, would we just be left with the people that are already addicted is there a way to get at the organic cause of this, the pain? >> well, you can certainly treat people who are suffering from addicti addiction right now. there's approved therapies, good psychosocial therapy that helps people transition to liabilities of sobriety. most of the addiction was formed in the medical setting we were too loose in prescribing these for too long, and there was criminal behavior as well, people who have been criminally sanctioned but i think the challenge now is more of the new addiction is being formed by street drugs so

the nature of the crisis is shifting what the fda and customs and border protection will be doing for the first time is if you look at flows of illegal drugs coming across the borders, it's always measured in pounds. that really isn't a good proxy for the addictive potential now that there are super potent formulations of fentanyl so now they'll be testing them and reporting in morphine equivalents. >> when a heroin addict that injects it like fentanyl, is that now the drug of choice for opioid addicts or is it heroin >> there's a big heroin problem as well as a methamphetamine problem that people aren't talking about -- >> but for opioids is opioid not heroin now what's the biggest -- >> fentanyl's become a big problem, and a lot of times, the formulations of fentanyl people are taking is pressed fentanyl they're buying xanax on line or vicodin or percocet. they think they're getting an opioid, but it's really pressed fentanyl in formulations that are not reliable and that's why you're seeing people overdosing on those drugs. >> which comes back to the china trade talks and the way that

we're coming after that is part of the trade talks, too. >> a lot of it's coming from china and across the border, but a lot is coming from china. >> and back to nancy reagan, just say no, people that are thinking about -- right? you've got kids and stuff like that in college. you've just got to say no, don't you, or else you'll be addicted to opioids. >> is there a way to quantify the economic impact of this crisis >> cea has done that i forget the number, but it was enormous the council of economic advisers has put a number on that >> dr. gottlieb, want to thank you very much for joining us. >> thanks a lot. >> we look forward to seeing you again soon. >> thanks. when we return, more from our interview with melinda gates, including her new role as a venture capitalist and funding underrepresented groups with bankable ideas that's next right after a quick break. stay tuned you are watching "squawk box" right here on cnbc ♪

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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," everybody. it's a busy day for earnings and deal news, and we'll get back to all of today's big movers in just a moment, but first, we want to pause for a moment to bring you a rare interview with money linda gates. her new book is called "the moment of lift."

it describes her personal experience as the co-chair of the bill and melinda gates foundation, donating billions of dollars around the world for the cause of global health also hearing the stories of women across the economic spectrum her work as a philanthropist has led her to become a venture capitalist, now founding companies, partners, and causes that she finds pivotal to societal change. >> the foundation is where my enormous focus is for women and people all over the world, trying to make sure people have equal opportunity. i feel, though, that there are gaps in the united states for women and people of color. and so, i've created this personal office called pivotal, to work on those issues in the united states. and i look at what are the systemic things in the united states through pivotal that i can work on that hold women back one i'm incredibly passionate about, probably not surprising, i'm a computer scientist, is women in tech. but i'm passionate about it because tech is pervasive in society. if you see -- you know, who -- imagine when i was working at microsoft, i didn't imagine -- we didn't imagine a phone in our

pockets with that computing power. and yet, what it allows us to do and so, to me, when i think about women, i want to make sure that they have an equal seat at the table, at creating products, making decisions and when i see only 2% of venture capital funding goes to women, less than 1% goes to people of color? now, i know lots of women and people of color that have great business ideas and yet, there's something, there's a systematic bias in venture capitalism that keeps their great ideas from being funded and coming forward, and that shouldn't be. so, i'm not only speaking about it i'm actually putting money down, investments down that i expect a good return on, to make sure those ideas come forward and get funded. >> you mentioned you're a computer scientist and when you were going through and getting your degree, getting your mba, working at microsoft, you were one of, if not the only woman in your class in each of those situations since then, though, the numbers have not improved. they've actually gotten worse in

some situations. why? what do we do? >> yeah. so, the time i was in college, late 1980s, the number of computer science graduates was in the basically high 30%. we thought we were on the way up, like medicine and like law, which about have parity now for women and men. but in fact, computer science took a precipitous drop and we're now at about 19% of computer science graduates are women. and nobody knows the exact answer this is another thing about society. we don't actually collect data about women, but we believe that it has to do with when the gaining came into the computer and street -- first of all, it was promoted to boys and all of the games that were created were shoot 'em up games and things that boys liked, and girls don't tend to like those games as much. and so, it became this self-fulfilling prophecy that more boys liked it and went into it and so, women today don't see the easy pathways into computer science. and yet, there are things we can do so, what i am seeing, the colleges that are attracting lots of women in computer science, even if they don't come

to college to study computer science, they're putting that first cs course out there, and instead of having these theoretical math problems, they have real-world problems that women say, i want to solve that, i want to figure that out. and they have more female role models saying to women, you can do this. when we start to do that, women not only start in computer science, they persist and stay and these are fabulous jobs in society, which is why i want to make sure women know that and have these different pathways in >> my thanksto melinda gates the new book, again, is called "the moment of lift. all right, coming up, details on boeing's first earnings report since the fatal crash of one of its jets, which happened last month. the stock rising in the premarket, now up 1.4% former continental ceo gordon bethune will join us after the break, trying to make sense of the latest numbers and discuss boeing's next steps and the future of the company. ay tuned

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welcome back to "squawk box," everybody. this is cnbc, and we are live from the nasdaq market site in times square let's take a look at some of the stocks to watch this morning first up, health insurer anthem reporting a quarterly profit of $6.03 a share, beating forecasts by 22 cents. anthem raised its full-year forecast on the strength of higher membership. anthem shares jumping following the news, but they have since given back some of the gains in fact, the stock is now down by about 74 cents. snap lost 10 cents a share for the quarter, smaller than the 12-cent loss wall street was expecting. the revenue beat analyst forecasts and they say ads are reaching more 14 to 24-year-old users than ads on facebook's instagram service. that was really good news the street thought at first. then they thought maybe it would be tough to monetize some of the younger viewers. still, the stock is up by about 2.4%. cvs has suspended its searc for a new ceo.

it's extended the term of cbs ceo joe a nello. cbs and viacom may explore a merger deal. cbs is up as well as viacom. and boeing one of this morning's key companies to report quarterly earnings, but the big news, it's pulling its 2019 earnings guidance phil lebeau joins us now with all the details. phil, of course, investors also absorbing i guess the company quantifying some of the impact of the 737. >> reporter: right right. you guys were talking earlier about why the stock is moving up in premarket one reason is because boeing has said, look, we think that we're going to take a $1 billion hit from the 737 max, all of the costs that go into the suspension of deliveries, fixing the plane, then increasing deliveries on the back side. but they spread those costs out because of how they do accounting when it comes to new aircraft deliveries over the life of the program. that's as long as they are

delivering those airplanes, and that's going to extend out six, seven, eight, nine years so that $1 billion, when you account for it that way and extend it over that length of time, i think a lot of institutional investors are looking at it and saying, all right, i think i can live with that quickly, running through the numbers. they met expectations at $3.16 for the first quarter in terms of earnings per share, revenue at $2.9 billion, roughly in line with expectations. but guys, this is all about the conference call with ceo dennis muilenburg and all about what the company has said for its guidance for 2019. it is pulling that guidance because of lower deliveries for the 737 max and the uncertainty about when those deliveries will resume the company is also being mindful of its cash position, so it's suspending its share repurchase program repurchased about $2.3 billion in shares in the first quarter they've got $7.7 billion in cash on hand, so it's not like they're running out of cash, but the cash cow, the 737 max, those

deliveries aren't happening right now. so, boeing is going to be a little more prudent in terms of the cash spend don't forget, as you take a look at shares of boeing, the conference call starts at 10:30 this morning we're going to be on that conference call. and when the call starts, it's all about the commentary from ceo dennis muilenburg. it's the first time we have heard from him in an extended fashion talking about what's happening with the max and their expectations, potentially, for deliveries resuming later this year guys, back to you. >> okay, phil, thanks. stick around for more on boeing's earnings. gordon bethune is former chairman and ceo of continental airlines and a cnbc contributor. and dryden pence is chief investment officer of pence wealth management. gordon, every day there's drips and drabs of more information about all of these things, and we've talked to you a couple of weeks ago. what's your current, just general thought, not just about boeing's earnings, but about where the company is in this

process? and i guess, in your long career, you've never seen anything exactly like this, but i'll bet you, like they say about history, you've seen some things that rhyme with this, i would say, right >> oh, it's unprecedented, joe, as you would imagine i have a lot of confidence in boeing long term i mean, as phil lebeau points out, they measure their accounting in decades, not in years. so, this airplane is going to get fixed. i think they're on track with the schedules that i've seen and of course, they've got to get consensus with other regulatory agencies throughout the world, so it's a bigger program than just getting the faa to buy in on it. but i believe they're on track meeting those goals in a systematic way >> dryden, you obviously are long the stock, and long before this happened, i guess have you ever wavered in your position or added to it or sold at it?

>> we actually continued to add to boeing, particularly for new money coming into our firm the important thing to recognize is to some sense, they have been through a little bit of this before, back when they had the problems with the 787. the stock moved in a range for a while and then they were able to solve that, move forward boeing's got a great history of solving big problems over decades of existence and when they solved that problem with the 787, the stock moved up nicely on a very long run. and the question here, is this a one-quarter, two-quarter, three-quarter problem? because there's nothing changed about the long-term demand for a narrow-body aircraft and they have a long backlog. so it's just when does that come back online? so, we think the pricing's going to move around a little bit, based on the tone and comments, but we're so favorable towards the stock. and long term very favorable towards boeing >> you gentlemen think when boeing made the decision to do

the narrow-body hub-and-spoke system versus, i don't know what the heck was that thing, the spruce goose, almost -- i don't know if they're even making those anymore. but was that decision long term, almost as big a deal as what's happening right now, gordon? i mean, boeing is still in the captain's seat, right? >> well, yeah. they've got a really good product, joe i mean, lots of experience, a lot of operators of that same equipment out there, so their base is solid. and of course, you don't just replace modeled aircraft overnight, so those are really long-term decisions for air carriers and boeing's got the product as dryden mentioned, this is a long-term game and they've got, i think, a good, solid base to work from. and while maybe late summer is probably reasonable expectations to have this behind them, that's kind of what i'm hearing and the noise, and that makes a lot of sense. >> what's it going to be, gordon as a pilot, exactly what does it

look like where this is completely fixed and all of us are going to be getting -- oh, are you on -- i don't even know if i was on a 737 max. i got on a boeing plane and didn't even notice because i'm totally comfortable again. when's that going to be and what's the fix >> for guys like me, it's tomorrow if they fly tomorrow. i have a lot of the confidence in them right now. they have accomplished i think more than 100 flights in testing out this new software without incident and so, i think they've got their finger on the problem. i think they've got it fixed and now it's a question of getting everyone comfortable and people like you to get on the airplane without asking what kind of airplane is this just get on. >> gordon, isn't it also trying to convince the faa and the authorities around the globe that it's okay, too? just because of all the issues that have raised, it seems like that might be a bigger headwind than -- >> becky, that's 100%. that's unprecedented there, so that this kind of consensus approach, these regulatory

agencies hasn't happened before necessarily. they just kind of fall in line behind the faa and go down and stamp essentially whatever the faa approves i think it's going to be more collusion now and get consensus amongst those agencies. >> so, dryden, is there, in your view, is there reputational risk even after it's fixed that the way this was handled initially, in terms of whether it was with the faa or whether they were late to own the problem that resulted in the crashes, does any of that have a long-term impact on boeing as far as its reputation >> i think there's two points. the call today is going to be tremendously important the tone of the ceo about we have the fix, we know what it is, we're very transparent about this, and we're going to move directly and forcefully to resolve this quickly i think is very, very important in restoring both investor confidence, if that's wavered some, but also the flying

public's confidence. so, the tone of the leadership is tremendously important here, and that's the thing that we should watch for in terms of how the flying public looks, you really only have two players in the space and you have multiyear backlogs. sooner or later, people kind of get back onto it, and they overcome this. it's kind of like, unfortunately when you think about a natural disaster, after a number of months, people sort of begin to forget that it happened. so, i think that's what we're looking at, and that may take a little bit longer, but tone of the leadership of the company is going to be very, very important here, and it's kind of what they say today and move on is how quickly people can restore confidence in this very essential aircraft to global trade and people moving around the world. >> phil, i'm not sure whether he's here anymore, gordon, but he has oscar on, oscar munoz, later today. what's your -- just switching gears quickly away from

boeing -- what's your view of united the stock's doing well company seems to be doing well they had, you know, trying to put two companies -- your old company together with the larger united was a big task. we've seen a couple of ceos try to, you know -- one's gone now oscar's there trying to make it work. is it done, finished, everything's great, all the issues >> pretty much, joe. you know, it's not done until it's all over, but i think they've got their bad days behind them. they certainly had a good quarter. they've got some really smart people managing the company and getting together as a team i'm real positive on united and their outlook because the base -- that's their fleet and their route network -- is so solid. so they've got a lot to work with and they've come a long way. >> and oscar was the right guy, you think, too i mean, that was up in -- he had some critics for a while, you know a railroad guy's moving big sacks of grain, now he's moving people i mean, it's worked.

logistics is important, whether it's -- >> yeah, and -- >> yeah, go on. >> he put a people's face -- humanized, i guess, the company, where maybe it had gotten too much of an accountant's face oscar's a very likable, genuine man, and it comes across well with employees and that's exactly what they needed as a shot in the arm. so, i think they got the right management scott kirby is a really bright man. >> yeah. >> and the team there is a good one. >> do you ever ride in the back of a plane, gordon, or that's unheard of for you, i guess, isn't it >> i grew up in the back of a plane, joe, yes -- >> i'm not saying where you grew up have you ever seen the back -- have you been to like the head back there, anything >> yes, i have and what it is is when you're running and it's snowing, you take the next airplane that's going. if it's a coach seat, you take it. >> all right it wasn't on that flight across the atlantic, i don't think, though, yeah. >> no. >> no. no all right. dryden, thank you, as well

gordon bethune we'll see you gentlemen later. thanks. >> thank you >> bye, guys when we return, if this morning is dominated by industrial earnings, tonight it is all about technology. is it buy or sell facebook and microsoft? both reporting quarterly numbers after the bell also, what about tesla joe terranova. >> mm, not so hot. >> we'll see paul meeks is going to join us just ahead with his take stay tuned to "squawk box" right stay tuned to "squawk box" right here on cnbc empower yourself with the free tools and resources on investor.gov. before you invest, investor.gov. on investor.gov. plants capture co2.

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>> we're on air. >> well, maybe craig heard welcome back to -- i said craig, you're my favorite actually, bert no, no, brian. mark no -- >> there's so many favorites. >> so many, so little time anyway, there are the futures, down 2.39. the nasdaq up 11 1/2 and the s&p up a point so far this morning being buffeted, so to speak, by boeing and caterpillar boeing was down four, now it's up five. caterpillar was up four, now it's down four both of those dow components have us now, after all was said and done, down two points on the dow. speaking of buffeted, recapping breaking news at the top of the hour, shares of pg&e are on a roller coaster ride after reports that berkshire hathaway was considering buying the utility company. warren buffett telling me that is 100% not true "and i would

know." so again, we saw the shares rise on all of this and come back down quickly and guys, you made the point earlier, this is an area that is rife for rumors like these to be circulating, given the troubles pg&e is facing right now. >> just a difficult situation for the market to digest and figure out exactly what the implications are. >> trouble >> you have bankruptcy, you have liability, the state involved. >> and people hoping to hear any sort of thing -- >> hoping there's a reason to value it to continue for shareholders we'll see. it is a big day for tech earnings after the bell tonight, we'll get facebook, microsoft, also tesla on the way since january 1st, facebook and microsoft both up big with market caps rising over $100 billion each tesla, on the other hand, has struggled in 2019, losing a fifth of its stock value my next guest may be best known for managing the biggest tech fund from merrill lynch from 1988 to 2002 he is paul meeks, now lead portfolio manager at the wireless fund. paul, good to see you this morning. interesting moment here for the

markets and for tech in general, right? facebook and microsoft did a lot to power the nasdaq 100 to these all-time highs, been a consistent outperformer, but facebook's still 15% or so below its all-time highs where does that bring you down in terms of what these results mean today and how the stock is positioned >> so, for both facebook and microsoft, i'm not really expecting any surprises. i'm more inclined to buy microsoft on a dip than facebook, because long term, i'm still worried about would the added expenditures to solve the privacy issues, what is the model going to be for facebook this year, analysts are expecting about flat earnings per share over the prior year, so that's not really a marketable growth company, even though the top line continues to grow so, i think not just facebook, but all of the social media companies need to have a reckoning, and is it at some point when we have in the u.s. a urman-style regulations to protect folks' privacy we'll see, but i want to see

some or hear some conversation about that on the conference call microsoft, i just need to see that they're chugging along in the cloud with microsoft azure and continue at least to take some market share from for amazs as far as the number goes top and bottom line, i am not expecting any troubles when they report their earnings. >> it is scaling new heights and almost a trillion dollars in market value what's built in right now? >> that's a very good question there is been a lot of expectations the built in. the model is more solid and they have more opportunity for growth the metaphofous that the company

is going through, - i think they have some other growth initiatives which will manifest themselves overtime. >> paul, let's talk about sentiment surrounding microsoft, surrounding facebook the positives and the sentiment surrounding stocks for quite some time. it has been about the azure growth which could decelerate from the really strong numbers that we witness. facebook the sentiment is very suspicious you mention there is been a guide down in terms of revenue deceleration over the year could there be an upside in particular when you look at instagram and advertisers embracing stories? >> that's the key issue going forward. the monitization of instagram or even if you take away facebook,

we start that business model into private group with encrypted message then you have to move to another big briber. the montization of einstagram is the one. i would like to hear more about it >> just to get your take on tesla, it is a constant battleground where do you think it shakes out in this long-term as ppirations and production >> this is the year that tesla will explode it is a shiny object who'll distract from the poor results that we'll see tomorrow. as far as announcements yesterday, there seems to be a lot of assumptions in that strategy to have one million robo taxis provided by tesla in the united states in only 12

months right now that's a p the company promised to get back to neutral and building and now looks like they're back to losses at some point the gig may be up for tesla, i am very worried about it >> all right, see if it breaks out of that range. paul, thank you for your time this morning paul meeks >> let's get down to jim cramer, he joins us now, have faber been talking about this occi and anadarko >> this is interesting, i can scoop one. anadarko, we owned it because we thought it is so bad and something has to happen. sure enough, it was so bad and something did happen anadarko which is a great offer for many, many years

they missed and they missed, the price they pay was auctioned out. i understand thinking -- they got fantastic properties a lot of the guys are over managed and it is hard to buy eog. this one was unique. great properties and not well run. david, what do you think of that analysis >> sounds good to me >> kind of a code analysis >> it was. >> we already got al we are going to get out of faber. looks like he's not going to say anything else. >> faber saves it for the big ship >> i know, kill him to do that you could not get that ceo any later, faber i could tell you you were like damn -- i want this on my show who do you think finally prevails here at this point?

could this go like some of the previous ones? >> chevron wants it. >> it is theirs. it is a function of what they want to pay. >> let's make chevron pay and when and whether they'll be forced to pay more, joe. at this point, still quite a way to go. anadarko can't get a shareholder itself on a $65 deal but otherwise this thing is going to have to play out, they may even want occi to get their shareholder in advance >> you have a work progress administration program so for the rest of the summer, we'll hear about this. >> i hope so >> we will >> especially with all companies. joe, did you want to weigh in? >> is this about boeing? >> i think occi is going to have to sell a significant amount of assets to get this done.

jim, i don't know what you think but its got to be at least $10 billion or upward of 20 or $25 billion and assets, can they sell it? >> i can't believe how vickie hall, she was just pillar ri when she bought all those. now she's looking like a genius. chevron, they're not going to lose >> meanwhile, microsoft 960, apple 970, amazon -- trillion dollars companies left and right again. it is kind of exciting we are in a good business. this is pretty amazing anyway, gentlemen, thank you faber, let me know thanks, man. is that true >> still >> no. that's what i thought.

we'll see you. i didn't say anything. >> he said no. i said are you still here? >> he said no. >> we want to thank joe is here fousor bngr fei here for the whole show this morning. we'll be right back. oh, sir. that was my grandma's. don't worry, ma'am. all of your stuff is in ok hands. just ok? they don't give two and a half stars to just anybody. here you go. what's this? it's your piano. hold this for a sec! we don't have a piano. no. but the neighbors do.

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caterpillar, better than expected earnings, boosted by the tax reform i felt that was okay if you have better instances of tax reform, you are supposed to back it out -- i don't know. make sure you join us tomorrow, "squawk on the street" is next >> all right, thank you. ♪ good wednesday morning, i am carl quintanilla with jim cramer and david faber. coming up the first record closing high since september future is relatively high here caterpillar off its guidance occi is in a bidding work for anadarko and more. oil is steady as the saudi say there is n